Where to Invest as the Fed Cuts Rates

Let's dig into it guys the S& P 500 and the Dow they're basically flat for the month of September the Nasdaq's down two thirds of a percent as of the end of the day Monday this is thursday now we talked about september living up to its reputation of being this the worst performing month of the quarter We agreed the three of us for the record.

We agreed that it would Anybody change feelings about that?

[00:00:37] Chris Versace: Lindsey, we're only just a little more than halfway through the month. Give it time. Give it time.

[00:00:45] Lindsey Bell: Well, and the second half of the month is usually the worst part of the month, too. Right. Seasonally

[00:00:50] Bob Lang: speaking. And often, in my experience, it's after a large options expiration day, which is coming up this week on the 20th, it's a triple witching options expiration.

So usually there's a bit of a hangover effect after that expiration with large volume, a lot of movement with prices and so forth. So I think Chris is right that the latter half of the month, which starts around now is going to probably see some downside, at least from an overbought condition.

Bob,

[00:01:17] Chris Versace: you had me at, I was right.

[00:01:22] Lindsey Bell: That's all you have to say to get on Chris's good side, Bob. We know that. No,

[00:01:25] Chris Versace: that and that you could send presents. That's fine too.

[00:01:29] Lindsey Bell: Noted. Noted. Well, Chris, what did you think of retail sales? And the reason I'm asking is because in the month of August, the market was in a downtrend pullback and then retail sales came out and saved the market for the month.

What would you make of the report today?

[00:01:45] Chris Versace: So I would say it was mixed at best. I, I think the one item, if I had to zero it down to one, maybe two, Lindsey the things that jumped out to me was the flat month over month restaurant sales. You know, the food service and drinking places category. That's really kind of surprising.

We knew we were going to be bumping up against difficult comparisons. We know consumers from comments from, you know, Ally to Kroger to others are really feeling the pinch. But now to start seeing that in the data for you know, food service and drinking places, that's really different than what we've seen over the last, I won't even say 18 months, I would say even longer than that, really since the pandemic opening.

So that's the one thing that really stood out. And this Second, would have just been the strength and non store sales. In other words, digital shopping up 7. 8 percent year over year, stronger than it's been over the last, you know, trailing three months. If we were to kind of pinpoint that it just tells me that folks continue to lean more into digital shopping, Amazon, Walmart, what have you to stretch their spending dollars.

And I don't see that changing as we go into the holiday shopping season.

[00:02:53] Lindsey Bell: Well, I think, too, on your last point, it's also that consumers know that that's where the lowest prices are. Walmart's online business has been growing rapidly, and then Amazon is everybody's automatic go to. Whether the prices are the lowest or not, they're perceived to be the lowest, right?

[00:03:10] Chris Versace: I agree with you on that, Lindsey, but there's also the time, right? I mean, I can get stuff, you know, out here where I live. I'm not too far from an Amazon shipping hub. Stuff sometimes shows up the same day.

[00:03:22] Lindsey Bell: It's amazing. It's incredible times we live in. I'm telling you.

[00:03:26] Bob Lang: Of course, we also can't discount.

Costco is being one large retailer that continues to defy any numbers that come in from the consumer that are showing some weakness. This company is just a behemoth here that just. continues to crank out high sales month after month after month. And Chris and I talked about it about a week or so ago about their strong report from August.

And that is going to continue, we think, into the holiday season. So certainly yes, Amazon and Walmart strong. But you can't certainly forget about Costco, right?

[00:04:03] Chris Versace: just for a quick disclaimer, Lindsey, I have to say this. We own Amazon and Costco in the StreetPro portfolio, and I do agree with Bob.

[00:04:11] Lindsey Bell: we can't get through one of these podcasts without Bob bringing up Costco, can we?

[00:04:15] Chris Versace: Hot dog. Hot dog, boy. Let's go, Lindsey.

[00:04:19] Lindsey Bell: We're going to talk about all of this and more in today's podcast.

We are three hot topics for the week are going to be where do you invest now that the fed is entering a rate cutting cycle? What is shipping and rate costs mean for the holiday season? And what, what is founder mode and what does it mean for investors? So with all that ahead, stay tuned. All right, welcome back everybody.

Let's dive in bob. Where should we invest as the fed enters the rate cutting cycle? I think what we have spent a lot of time talking about on this podcast really is Is the timing of when this cycle is going to start and we are officially here. We're officially changing direction with monetary policy But one thing we really haven't talked about, Bob, is the speed at which this, this cycle is going to occur.

What could tip the Fed either way to move faster or slower? Or slower in this current cycle. I think that's what's weighing on investors minds right now. We've got the, we've got the program started. Where do we go from here?

[00:05:28] Bob Lang: That's a great question, Lindsey. So I think that we heard from Chair Powell when he was in Jackson Hole.

He said that the focus now is on growth and employment. So he'll be looking at jobs numbers over the next several months to see if The job growth penetrates to the to the zero line or else possibly into the negative, and that's where it could raise some flags or concerns for the Fed in terms of Fed policy, but I think that they are pretty satisfied with the trend or the pace of inflation.

Coming down towards 2 percent towards a 2 percent objective here. So it's been my view. And I think we've all come to a consensus view as well, too, that the pace of rate cuts is going to be rather slow, rather gradual. The Fed is not they're not an alarmist group. They're probably going to take their time cutting interest rates towards their goal.

once that happens. Then they can step back and watch how things unfold and, maybe achieve that elusive soft landing that they've been looking for.

[00:06:30] Chris Versace: Chris? Yeah, no, I agree. I mean, you know, if you take a look at what the market expects out there, you know, it's, it's crazy.

It's like 250 basis points of cuts by the end of 2025. you do the math on that. We've got 15 months to go. So that's quite a bit of firepower to unleash. And I think the flip side of it says, You know, the folks who are thinking that's what we're going to get, their mindset is tied to a hard landing for the economy.

And so far, we don't see it. So I think you're right. The Fed's going to take a evolutionary path to get to where they want to in terms of rate cuts.

[00:07:05] Lindsey Bell: Yeah, and if you look back over history and different Fed chairs, Powell's actually been more aggressive with his Fed rate cuts over his time versus others.

But think about it. That's because he is overseeing the pandemic, right? He had to move swiftly at the beginning of the pandemic. And so it was, kind of similar to what we saw from Bernanke during the financial crisis. So that's why I think, Bob, you constantly are saying we need to see the Fed move slow and steady.

Because that signals, that signals that we are headed for a soft landing, maybe a no, no landing scenario, but not a hard landing scenario. And one interesting statistic that I saw is, did you realize that Janet Yellen, every one of her rate cuts was 25 basis points, 100 percent of them. She never did

[00:07:52] Bob Lang: more.

And don't forget that. I believe that when Chair Powell took over, we weren't even above 2 percent on the funds rate. I think we were about 175 or something like that. So, barely under the rate of inflation target of where they're at right now. Stepping it down as you mentioned about to the pandemic level of zero when they cut rates in May of 2020. it seems as though that taking a gradual approach a more cautious approach is the way to go for, for chair Powell and for the committee here.

[00:08:22] Lindsey Bell: So I know that all three of us are looking for that slow and steady pace, 25 bips, and, you know, so that that technically means I think, confirm me if I'm wrong that we all believe that we're headed for a soft landing.

And so, Chris, what does that mean? How do you invest now that the Fed has switched their monetary policy stance? How do you invest in a rate cutting cycle?

[00:08:47] Chris Versace: Well, you want to invest in areas that you think are going to benefit from lower interest rates, right? So if we think about areas that got hit hard as the fed, you know tightened monetary policy You can kind of start thinking about that on the flip side and I think one of the most Obvious areas is going to be housing and construction related areas.

So, you know the group of home builders You know, they could be you know, dr. Horton. They could be toll brothers You know, what have you, I do think that there's some want to be careful in this because home prices, as we all know, are extremely elevated, and even if we do see some initial rate cuts, it's still going to be a hefty down payment, a hefty borrowing amount.

But as we move through the rate cutting cycle, that's going to come down. So I, I think the, the housing market and related areas of construction, you, you can call that your Home Depot, your Lowe's you can call it some of the building product companies, Sherman Williams, Masco or even Builders First Source, Ding Ding.

We own that in the pro portfolio. I think they're all poised to benefit. But that also goes to for. infrastructure projects because it's all construction related. So, you know, we have a lot of dollars that are flowing on infrastructure spending, both from the Biden infrastructure law, but also various aspects of, you know, the CHIPS Act that should eventually start to kick in.

There are some broadband spending projects that Biden greenlit, and they finally seem like they're coming together. And others out there. So I think that also bodes well for those types of companies you know call them rental equipment companies united rentals concrete companies and aggregates, martin marietta vulcan materials and the like but there are other areas too

[00:10:30] Lindsey Bell: right?

Well, I was just gonna say what about the banks bob? I mean the banks they they're having a good year. They've been slow and steady increasing I think In anticipation for the rate cutting, but when I look at their performance over the month of September, thus far, the 1st half of September, they haven't performed as well.

And especially on the bounce back in the last week or so haven't seen the rebound that the S and P 500 has seen. And this is a group. I think that you need to see stay strong through the beginning of the rate cutting cycle to kind of signal that we are headed for that soft landing. Mhm. What do you think about the banks or other sectors that of the market?

[00:11:08] Bob Lang: Well, no question that a rate cutting cycle is going to benefit banks because it's going to lower borrowing costs for them and for consumers and also lower reserve ratio for the banks, which means that they can start lending more, have to keep less cash reserves on hand, which makes more money available to lend to, to borrow.

So I think it all overall, it's a good. policy for the banks. Why have they not been performing well? It's because interest rates have been coming down and that's affecting their net interest income, they call it the NII. So we may see less money made from the banks from the net interest income.

Over the next coming quarters, and that's all it is is the differential between what they're borrowing and what they're loaning out the differential it's a really nice income level for the banks, but by and large, I think the banks are going to benefit, especially if the Fed is not in a panic mode if they're not aggressive in trying to cut interest rates over the next several months.

[00:12:06] Lindsey Bell: Yeah, I mean, I think when it comes to, to the banks JP Morgan did a little soft downgraded their guidance with that NII that you mentioned in that interest income, because these guys got to make more money on their loans and they're paying out in their deposits, which the big money center banks didn't raise their, their deposit rates very significantly as rates were going up.

It was, it was the allies of the worlds. It was the online banks that really did, Or the regional banks that like, that really had to do that. So Bob, wrap it all up for me. The Fed is moving into a change of monetary policy. They're cutting rates. What does it mean for investors? What's the big takeaway?

[00:12:44] Bob Lang: Well, it's going to be good for investors over the longterm. the only thing that worries me right now is has the market gotten ahead of the Fed? And I, it oftentimes means that there's a sell on the news effect. When the Fed starts cutting interest rates now that even share pal has said that one rate cut is not going to do much good.

You have to enter into some sort of a rate cutting cycle and they want to get back down to whatever the neutral rate is. It's about 3 percent 3. 2%. So, if that's if that's the case. Then I think that overall, the sectors that Chris talked about just a few moments ago, and the banks are gonna do extremely well over the next several quarters.

[00:13:22] Lindsey Bell: Yeah. I think that, that investors just need to watch at which, what the pace is that the, that the fed's gonna move in. And that'll really kind of give us insights into where to invest going forward. But no, great conversation. Let's move on to our, our next topic. So we're going to talk about shipping, which is kind of could be an esoteric for many, you know, investors that aren't in the weeds of the market on a daily basis.

But, you know, we got some data recently on freight costs on shipments. The costs are coming down. The shipments are going up. The way I see it, there's, two sides to every story. On the one hand, this is good for pricing, right? Inflation heading into the holiday season. It helps that, that the price of shipping is coming down.

But on the other hand, is there this risk of an inventory buildup, Chris, that's going to lead to unplanned discounts? You know, shipping is improving, but maybe it's not improving too significantly.

[00:14:18] Chris Versace: Well, it could be a question to Lindsey of why is it improving, right?

[00:14:22] Lindsey Bell: Yeah.

[00:14:23] Chris Versace: So, you know, when we think about this, I actually like following sounds like a nerd, but shipping data, whether it's for trucks or for rail it's a simple way to kind of get a beat on the economy.

You know, the more stuff that is being moved around odds are the stronger the economy. If we're seeing that stuff slow down or contract in the data, it's kind of a warning sign that the economy is slowing. So I do like to keep a beat on that. What I did notice is in the weekly U. S. Rail traffic. It was kind of, you know, muddling along in mid july up one, Mhm.

1.3, 1.4%. This is all weekly data on a year over year basis. Then all of a sudden, in late July and August, it exploded higher, where it wasn't like one or 2% higher, it grew, it was up 3%, 5%, 8%, 9%, almost 10%. And this tells you something, right, that the economy may not be as soft or as slowing as. Some folks like we talked about a minute ago with this hard landing scenario, there might be some underlying strength to the economy, but then when you do a little digging, Lindsey and Bob, you find that there might be a long shoreman strike in October, and folks might be pulling product ahead to get ready for that, because if we do see that strike, it's going to have a significant effect on the ports, leading to what you said, Lindsey, the risk.

Of inventory building and just sitting there potentially reigniting some inflation.

[00:15:50] Lindsey Bell: Yeah And you know what's interesting is like I I look at the container index to wci and that has come down substantially since july, but it's still Very much elevated. It's over four thousand dollars per 40 foot container And this is again weekly data, but back in 2023 going into the holiday season.

It was just over a thousand, you know, almost 1, 500 per 40 foot container. So we're still very elevated. It sounds like based on what you're, you're talking about, that could potentially pop a little bit before coming down. So it's all, it's all things to watch. But you know, Bob.

What do you think about when you think about shipping data? Like Chris said, it really is a leading indicator. So if you are going to be invested in the markets, it's something to keep an eye on the, the information that's coming out as suggesting that demand for goods is growing slowly.

What's your take?

[00:16:44] Bob Lang: Well, I think taking a look at shipping costs is very important as well, too. So we've, we've seen shipping costs starting to, take a leg right back up again. I also take a look at Something a little bit arcane here, the architectural billings index, and that has been running down since really been basically 2022 has been making lower highs, lower lows.

If you take a look at the chart, and which tells us that the billings index has been weaker. And how does that relate to transportation and, container next? Well, you know, these are construction companies that are, billing. And if the billings are weak, then we're seeing less purchases from containers and from The transportation index is going to go down.

So there's a little bit of a dichotomy over here between what manufacturers are happening construction in terms of billing versus what we have with the transportation index. I was fascinated to hear Chris talking about that just a moment ago, because that transportation index may speed up, not just because that Longshoremen potential strike, but also there is a potential in October, Lindsey of a of a shutdown of the government to so that also comes into play as well, too. So agree with Chris when he talks about the pull forward of some of the transportation index numbers that may be trying to get themselves ready for a potential strike or potential shutdown.

[00:18:03] Chris Versace: one thing that we did not talk about. And I can give you some real world boots on the ground intelligence on this because I actually did this last night. I filled my car up. At the gas station, and I paid 2. 99 a gallon, which breaks the 3 barrier, and I'm even, as I'm saying this, I'm looking at the AAA gas prices, the average, the national average, as of today, is supposedly 3.

20 a gallon. And that has come down, you know, in a meaningful way, and it's down year over year, and it's been falling over the last few months. I think, while some folks like to think, oh, that puts more cash in the consumer's pocket, it does at an incremental basis. Maybe you could buy a pizza, right? But when we think about shipping companies and their costs, falling gas prices is a boon for them and their margins.

That's all I'm saying.

[00:18:55] Bob Lang: You need to you need to buy a Tesla so you don't have to worry about filling up your gas tank.

[00:18:59] Chris Versace: I'll get in line right behind you, Bob.

[00:19:03] Lindsey Bell: It is a good point. It is. It's something that it does benefit the consumer when if for nothing else, because it's not actually putting physical dollars in your wallet.

But when, when gas prices come down, it's, it's definitely a psychological thing for the consumer, right? So they're willing to spend a little more because they have a little bit extra money in their pocket. But so. So, Chris, when we think about retail sales, I know Deloitte just put their, their projections out for what the holiday retail selling season is going to look like.

They expect sales up 2. 3 to 3. 3%. Which is a bit of a downtrend from the 4. 3 percent increase that we saw last holiday season, which is defined for is defined as the November to January time period. What does all this mean for for shopping?

[00:19:52] Chris Versace: Well, I would caution you, Lindsey, that, you know, Deloitte is usually out early.

They tend to be one of the first companies that forecast the holiday sales, and we're going to get a number of them. So I try to actually triangulate around them to get a better sense. You know, the National Retail Federation tends to be, you know, the bellwether. But I would also say, too, that as we get these forecasts, you do have to be careful because some are just November and December.

Some include January because of the big return season and sales season. So you really got to make sure you're measuring apples to apples. But I think this kind of speaks to what we've been talking about generally with the consumer. Right. The consumer continues to feel the pinch. They are trading down.

They're just more cautious, more selective. You know, this might change should the Fed, you know, as we talked about a few minutes ago, get a little more aggressive in their cuts. They might feel a little better, right? Some animal spirits might return. But based on the data we're seeing, I just, I don't see that.

And my concern is that, you know, this part of the economy, Remember, the consumer indirectly, directly three quarters of the U. S. economy, if they're not opening their wallets at the holiday season, the most important time of the year, that could be a little problematic for some of the, the data that we'll get.

[00:21:07] Lindsey Bell: Yeah. And I agree with you that we will get other numbers. I like you like to look at the NRF, National Retail Federation. But what I will say too, is this little bit of a downbeat projection also reflects some of the, Probably an expectation for discounts I think that you're going to see a consumer based on what we just heard this earning season For many retailers and consumer facing companies.

They're they're very discerning That was the key word this earning season, right? About what they're spending their money on And so I think that's going to continue into the holiday season I think they're instead of buying early remember the last couple years because of all the shipping concerns They're buying early People were buying really, really early.

And now I think it's going, we're going to go back to waiting to the last second for the cheapest price.

[00:21:51] Chris Versace: I, you know, I'm going to push back gently on that, Lindsey, because I don't know if you saw it, but Amazon has announced their big prime deal day. Right in October, and they started doing this last year and they actually kicked off the holiday shopping season last year way earlier than expected.

And this event is going to be in early, early October. I want to say October 8th or 9th. That could be the holiday shopping arms race for 2024.

[00:22:20] Lindsey Bell: Okay. Okay. That's a fair point. Let me just say, all I'm glad about is as a former retail analyst, I'm just kind of happy that that black Friday is not so, so much of a big deal for being at the actual store.

Because I was covering those store. I wouldn't go, you know, you know, the drill, you got to go and do your channel check. I have to be in line when the door opens and it just kept getting earlier and earlier and earlier. I would drag my mother with it.

[00:22:49] Bob Lang: That's me. Eventually, you had to get there right after you eat Thanksgiving dinner, right?

And you say, okay, I got to go. I got to hit the mall at at 10 30, 11 o'clock at night, right? I know. Yeah. That's

[00:23:00] Lindsey Bell: not free commerce.

[00:23:02] Chris Versace: Let me, let me say this thing and then we can move on, Lindsey. The whole thing with that, for anybody who wants to do that, in my opinion, you really need to understand the difference between store traffic.

Right. A lot of people in there milling around, taking a look, maybe taking pictures with their camera, using the barcode shopping tool versus the number of bags that you actually see moving in around the mall or the store. That's the truer indicator, in my opinion. And I've, I have done that. I've you know, written all about my.

Mall walks and follow the bags, my friends. That's my message.

[00:23:38] Lindsey Bell: I, I agree. All right, Chris, can you just wrap it up in a couple sentences? What does all this shipping data mean for the holiday season? What does it mean for investors? How do you invest around this?

[00:23:49] Chris Versace: Well, I, I think we've got a couple hurdles we've got to watch out for, whether that longshoreman strike, like we talked about the government shutdown.

If we do see those, I think it's, it could kind of reignite some concerns about the economy, but let's not, you know, worry yet about the Deloitte forecast that will be more coming and we'll get a lot more economic data, but get your shopping list ready because Amazon's coming for it.

[00:24:16] Lindsey Bell: All right, sounds great.

All right, let's move on to our final topic. This is kind of a fun one. Founder mode. I don't know if you two have seen this kind of this topic lighting up on Twitter and other social media. It's a new term, I guess, that's been coined by

[00:24:32] Chris Versace: What's this Twitter you talk about?

[00:24:34] Lindsey Bell: X, X

[00:24:35] Chris Versace: Twitter.

[00:24:36] Lindsey Bell: So it's founder mode is a new term, I guess, coined by Brian Chesky, who's the founder and CEO of Airbnb.

He was at an event that was being held by Y Combinator last week. and Paul Graham, who's the founder of it wrote a little a write up on it. And if you don't know why why combinator, it's a basically a startup incubator. They've invested in a lot of the big.

Unicorns out there, Dropbox, Stripe, Airbnb, obviously Reddit. There's thousands of other companies that they've invested in. And after Brian Chesky's talk, Paul Graham wrote that the theme of Brian's talk was that the conventional wisdom about how to run larger companies is mistaken as Airbnb grew.

Well, meaning people advised him that he had to run the company in a certain way for its scale. Their advice could be optimistically summarized as hire good people and give them room to do their jobs. He followed this advice and the results were disastrous. So he had to figure out a better way on his own, which he did partly by studying how Steve Jobs ran Apple.

So far, it seems to be working. Airbnb's free cash flow margin is now among the best in Silicon Valley and he goes on to talk about how the audience at this event included a lot of successful founders and one after another. Agreed and said the same thing had happened to them. So I think the question is, is, is the advice that these founders are receiving from, let's say, you know, venture capitalists, investors, or C-Suite executives

is it wrong for founders and for startups? Bob, what do you think?

[00:26:17] Bob Lang: I love it. I thought it was a fantastic interview. I'm a huge Brian Chesky fan. In fact, I do own shares of Airbnb personally. So, and I have have held them for a couple of years now. So I'm a huge fan of that. He's the ultimate disruptor in technology.

And since he created this company and came out and started moving things around and changing and doing different things. And that's that really was the point of Steve Jobs when he was with Apple. Do something different. You know, if it doesn't work, then let's try something else. And I think that this whole founder mode is fascinating.

I think that following that same principle, and you can see the successes that Airbnb has had. Since they followed that is really, truly remarkable. And I think as a leader in technology, not just in travel and so forth and technology. But as a leader, Brian Chesky is showing people the way to go to be successful in creating a good, strong businesses with good relationships with their employees.

What do you think, Chris?

[00:27:21] Chris Versace: Well, I think that's a good example of where it worked. I'm sure there's other examples where it hasn't worked, where companies have kind of reached a size and scale that they need more seasoned management teams to come in to take them to the next level. You know, I, as you were talking, I was thinking about the latest Starbucks wonder kid, Brian nickel, when he took over Chipotle, he wasn't a founder.

But he turned that company around and he brought it to, you know, probably its highest level in some time. So I, I think it's, there are certainly instances where the founders have to follow their instincts, but I think they need to temper that with some smart guidance from other people. The question I think this all brings about is where do they get it?

I think they should have a board that they trust, but I also think they have to understand their product and their consumers, or sorry, their customers. How they're using their product, what they want from the product that I think is what Steve Jobs was excellent at.

[00:28:18] Lindsey Bell: what I would add to is that, there was someone on Twitter said that this could this founder mode could actually just lead to horrible leadership, horrible management, basically assuming that, like.

That this is control mode. That's my term for it. Founder mode is control mode, meaning I'm going to micromanage every, everything everybody's doing. But I think there's a difference between running a startup and a public company, right? So if you're Brian Nickel coming into Starbucks, you're going to approach it much differently with your thousands of employees across the world versus a startup, maybe domestically.

And so I think though, maybe where you can bridge the gap is. Paul Graham goes on to give an example of Apple and Steve Jobs, where he would run these annual off site retreats that, included 100 of their most important people at Apple. And that didn't mean that 100 top layer people at the organization, it meant the guy or gal that if you lose them, you're going to be screwed, you know, and, and, or the guy or gal That just has a unique way of thinking or has a different skill set that can bring new innovative ideas to the table.

And I think it's bringing the brightest minds into the room. So really maintain some level of innovation. Right? And so I think that's. Maybe something and it's piece of inspiration. The bigger companies can take to feel a little bit like a startup. Give people a voice that aren't just the leadership team.

I don't know any response to that thought, Bob.

[00:29:53] Bob Lang: I, I kind of agree with that. I think, you know, having a voice and having a chance to, show some leadership. Listen, you know what, years and years ago, I'm not sure if the policy is still there, but at 3M, they used to have a policy that if you create, had an idea about a product.

That you basically put it new ideas box. And if your idea was taken, you were that product manager for about five years. Well a well known story here is that that's how the post it note was created. It was, it was basically an employee who put an idea in the idea box.

They used it and they pulled it out and this guy was the product manager, made him feel important to run that product for about five years or so. And then, history shown that this was one of the best products ever created by 3M. So so that, that sort of responsibility and that sort of visual for the employee is extremely important.

[00:30:42] Chris Versace: Yeah, I think it's important for companies and management teams in particular to tap. Their employees, or like I said, sometimes, you know, customer observations because, you know, they want to grow. And that often means tapping innovation and disruption at the same time while catering with a product that people might find value out of or use, you know, whatever you call it.

So, yeah, I, I do think that's important because it's just seems silly to me to think that any one individual knows the entire ins and outs and the opportunities of a company.

[00:31:13] Lindsey Bell: Yeah, and so I think I'll just wrap it up as much as I love me a post it note. I love the little ones Especially because I put them on my computer but I think that founder mode basically I think what brian chesky was trying to say is that it's that typical advice that you get don't take advice from somebody who hasn't Done what you're trying to do, right?

So founders maybe shouldn't take advice from CEOs or VCs that have never been founders themselves. So if you're at that beginning, starting stage. You're gonna, you should talk to other founders and other people that have succeeded from there and grown their own business or scaled their own business. But I also think that there is, there is something from founder mode that CEOs can take and apply to potentially public or larger companies too.

And maybe it's, it's that, that aspect of innovation that's that some, some companies are doing well. So I think there's a little bit in founder mode for everybody.

So with that, let's take a quick break and we'll come back and wrap it all up for you.

All right. Welcome back, everybody. Let's just wrap it up. Chris, this has been a great show. We talked a lot about different things, the fed shipping costs, retail sales. Founder mode versus manager mode. What's your big takeaway from today's show?

[00:32:34] Chris Versace: I I think my big takeaway from today's show is that We just need to continue to pay attention to the data, you know Whether it's oncoming forecasts for the holiday shopping season like we talked about potential disruptions in the shipping world or even following the Fed.

It's just they're all remind me that this is not fix, fix it and forget it. Not crock pot investing. You just got to continue to be active and follow the data.

[00:33:02] Lindsey Bell: How about you, Bob? What was the biggest thing that you learned today?

[00:33:05] Bob Lang: Well, the thing I learned the most was really impressive was when Chris talked about the transportation index and the influence that it has on the economy and growth going forward.

So it was a little bit surprising to see the strong numbers, but again, the reasoning behind it was makes a lot of sense that they could have pulled forward some of that some of the shipping and transportation. Trying to head off potential roadblocks with maybe a longshoreman strike or maybe even a shutdown of the government for a short period of time.

So those things are extremely important. I thought that was very telling about where we're going to be moving into the early part of 2025 for the economy.

[00:33:47] Lindsey Bell: Yeah, no, I agree. I think that there's still a level of uncertainty in the market and where we go from here, whether the Fed's going to maneuver a soft landing or not.

And because of that, I think volatility is going to stick around. We talked about the seasonality a second half of the month is still in play, not to mention that we, we have an election, not that far away. So, so there's, there's a lot of things that are going to, that are going You know, keep investors on their toes in the months ahead.

But I like that we're looking at leading indicators and yeah. I mean, it was a great conversation. So with that, I would just like to remind everybody that make sure you check the show notes and resources for more info and all the stuff that we talked about. Check out explosiveoptions. net to find Bob.

You can read my newsletter, the shift at Lindseybell. me or you can find Chris over at the StreetPro portfolio. Thanks for listening today and we'll be back with you next week.