Episode Transcript
[00:00:00] Speaker A: Foreign.
[00:00:04] Speaker B: Investment Live. I am Garrett Lail here with Matt Dahl, founder, CEO, chief investment officer, whatever title you want to want to go with today of ARPG in Las Vegas. Matt, how was, how was Tahoe? Man, I missed you last week. It was a little, little odd to have to go on a go through a Friday without, without seeing that, that beautiful shining face under that perfect little helmet head of here.
Oh, wow. Yeah.
[00:00:52] Speaker A: It.
[00:01:25] Speaker B: Absolutely, yeah. And, and I did.
[00:01:29] Speaker C: I, I, I.
[00:01:30] Speaker B: Didn'T get to play golf on the 4th of July. I get to play right now. The, it's, it's kind of funny this year actually. The usually summertime is a chance for me to get to play a lot of golf, but my kids being out of school has kind of thrown that way off and they're at the age now where like there's no daycare or anything. Right. They're just kind of hanging out. I want the time with them. So usually I play a lot more golf in the summertime and this year I pretty much put the clubs away. I get to play like twice. I get to play Wednesday and Thursday every other week. Those are my two free, free days. I did get to play this week and then I just put them up and probably won't see them again for two more weeks now. So, so yeah, would love to have been there 100%.
[00:02:14] Speaker A: Yeah.
[00:02:31] Speaker C: I was like, do you play at all?
[00:02:33] Speaker B: So like you never don't even know how to swing a club, basically.
[00:02:43] Speaker C: That is, that is a very, I.
[00:02:45] Speaker B: Don'T know, it's becoming less of a gentleman's sport though. I feel like there's been since co Man. I was talking to somebody the other day about that. The world has changed so much since COVID and I don't think this is necessarily Covid related, but sometime around that time frame is when people started bringing speakers out to the golf course and started turning into a big party. So it's, it's not quite as much of a gentleman's game as it once was, but, but that's cool. I enjoy it that way.
[00:03:07] Speaker C: So anyway, how about some investment stuff? So we, we're pretty much shooting from the hip today. We haven't had a pre production call or anything like that.
[00:03:16] Speaker B: I kind of like it better that way anyway though. I think it's. We're a little bit more raw and candid and unpredictable.
[00:03:22] Speaker C: But you did tee this one question up for me in, in pre production.
[00:03:26] Speaker B: Which was basically five minutes ago. Is the market too expensive?
We're at 62, 66 at this very moment 109 Eastern Time, July 11, 2025. That is another all time. Well, it's technically not all time high because it was a little higher yesterday, but 6266. Are we exp.
That's getting up there. You're running out of room to get much higher when you're in the 98th. Yeah.
Are you saying to do we should do some objective analysis instead of just like there we go.
[00:04:26] Speaker A: Okay, so.
[00:04:28] Speaker B: So we're not just going to just spout off whatever comes to mind. We're actually going to put some data behind our thoughts and opinions.
[00:04:53] Speaker C: Do me a favor real quick, slide.
[00:04:54] Speaker B: About 6 inches to your right.
There we go. Now I get, now I get to see you a little better.
[00:05:13] Speaker A: It that.
[00:06:40] Speaker B: Yeah, let's explain that. Let's explain that really quick. For those who might be newer to the show or may not necessarily keep up with that. So the s and P500 is a market cap weighted index, which means the largest company in terms of market capitalization, which is total value of the company in the open market is going to.
If, if a. You, you may have the data right in front of you. Whoever the, whatever the biggest company in the world is, if it's 5% of the overall it's 5% of the market capitalization of the S P500, then it's going to carry a 5% weight even though there's 500 companies. So theoretically, theoretically, even equally weighted, it would be 0.2% of the index. But it's going to carry a bigger weight because it's a bigger company. So equal weighted has those 500 biggest companies that make it up, but each individual company is only making up what, two tenths of a percent of the overall index.
Okay.
[00:08:15] Speaker A: It.
[00:14:57] Speaker C: Hold up. You said, you said Microsoft, you said Microsoft and Nvidia have identical multiples.
Okay, I thought you. Maybe I misheard you.
Okay, maybe I misheard you. I thought you said Microsoft was 23.
[00:15:10] Speaker B: And Nvidia was 33.
Okay, gotcha.
See, that's why I didn't do well in school. I don't take good notes.
[00:15:29] Speaker A: Significant.
[00:18:06] Speaker B: We rarely wear ties.
Yeah, we do. It's coming up. Our tie week is coming up. Yep, that's right.
We try not to. We try. We try not to remember it.
[00:22:14] Speaker C: I have a question here. This is a little bit of a. You've, you've tap danced around this a little bit. So it's not like a total curveball. But we haven't discussed it before.
[00:22:23] Speaker B: So it's a little bit of a curveball when you're looking at growth rates. One of the things that I back in my playing days in this industry when I was managing portfolios, I did a decent amount of stock picking. And the, the G component of the PEG ratio, the growth component was one that I toyed around a little bit with. Okay, which number should I go off of here? Because the, there's earnings growth, which is the generally accepted concept around the, you know, across the industry, when we talk about the growth rate of a company, we're usually looking at the earnings growth, but that can be a little bit misleading occasionally because there are some companies in the index that will have negative, negative earnings. And boy, that can really throw things off a little bit in your spreadsheets and you're trying to spreadsheet all this stuff out.
[00:23:11] Speaker C: But the other reason it can throw things off is that revenue growth, at.
[00:23:18] Speaker B: The end of the day, this question, what I'm asking is which is more important? Do you think revenue growth versus earnings growth or is it. It may not be a, which is better. It's just understanding the difference between the two.
[00:23:28] Speaker C: And I'm going to do some math here. But while you were talking, I went.
[00:23:31] Speaker B: Ahead and jotted it down and pre calculated it. So hopefully I don't screw anything up here.
[00:23:34] Speaker C: If I have a company that makes.
[00:23:36] Speaker B: $100 and it gross, gross revenue, it and it cost me $50 in expenses to produce that, I have $50 in net profit. If I can cut my expenses to $25 now my net earnings are $75. That's a 50% increase in earnings. But I haven't grown revenue at all.
[00:23:55] Speaker C: But on the other side of that.
[00:23:56] Speaker B: If I don't, if my expenses stay the same at 50, but I grow my revenue from $100 to $200 now I've seen a 200% increase or I've tripled my net profit from, from growing the top line as opposed to cutting the bottom line. And ultimately, if you are earned, if your earnings growth is coming from cost savings, there is a limit to that. You can never go above zero or below zero in your cost. At some point or another you are gonna, gonna, you're gonna hit the, the rev limiter, so to speak, on that. But if you're growing your revenue, sky's the limit, right? So to me, when we talk about, I think I may have even done this when I was, you know, analyzing individual stocks. I think I would try to find a revenue growth projection instead of an earnings growth projection because I felt like it was a, A level or play a more level.
[00:24:49] Speaker A: Level.
[00:24:50] Speaker B: There's not a word.
[00:24:50] Speaker C: A more level playing field.
[00:24:52] Speaker B: But at the same time, if a company is growing their revenue and growing their expenses, if they have terrible margins. Right. So yes, I'm making 500 extra dollars, but it's costing me $490 to produce that. And that's not as valuable to me as someone like Nvidia with fat margins. So how do you take all that little, you know, dialogue right there, but, and turn it into some type of information for our viewers? But how do you dissect that.
[00:29:16] Speaker A: That, that.
[00:30:34] Speaker B: You'Ve been saying it, you've been calling.
Okay, all right. So, so there's your bold.
I mean you're going big time on the predictions. You're not just calling your shot, but you're calling exactly how far it's going to fly, exactly which seat or which row it's going to, going to land in.
[00:32:42] Speaker C: I mean, you're, you're going, you're going all out here.
Does the market.
[00:32:47] Speaker B: That's right. We may not be accurate, but we will be precise.
[00:32:56] Speaker C: Yeah, that's right. We're gonna, we're gonna have a lot to go back and, and chew on on this one. Does the market know.
[00:33:02] Speaker B: I'm gonna say this in a very arrogant way. Does the market know that the Fed's cutting in July? You know it. Does the market know it yet?
Okay.
Hey, you know what? If you can't stand out, I mean, be dare to be different. That's what I love about you.
Yeah.
[00:33:30] Speaker C: Well, as, as always, we're here just.
[00:33:33] Speaker B: For your entertainment and amusement. We're not telling you what to do with your money. Matt could be wrong.
I mean, it's, it's happened before. Right?
[00:33:42] Speaker C: There you go.
[00:33:46] Speaker B: Yeah, yeah, that's, that's right. One of the keys in, in investing. It's funny, you know, we started talking about golf. Golf is, there's a, one of the greatest golf books probably ever written is called Golf is Not a Game of Perfect. It's sports psychologist that's talking about the mental side of golf. And golf is a game that you good players just make better mistakes than bad players is maybe the way to say it. Same thing with investing. You know, it's, it's, it's not about being right all the time. It's about making your mistakes very small and not, I can't even say infrequent because even good investors are going to be wrong a fair amount of the time. But don't lose half your portfolio when you're wrong.
Yep, that's about what I've always heard.
Yeah, yeah, that's what I've always heard. That's the, that's the, the, the standard industry consensus, I guess, is that. And that's the best money managers. We're not talking about, you know, every advisor out there, every investor, the best money managers, about 600. That's, that's humbling you talk about. We talk about humility sometimes. That's, that's pretty humbling. You're going to be wrong almost as much as you're right. So how do you succeed despite that? That's a, that's a big lesson to learn.
[00:35:10] Speaker C: If you would like to speak with.
[00:35:12] Speaker B: Matt and his team, you can reach them at. Well, first we can go to the website intelligent investment.com or give them a call at 702-655-8300.
Joke around about it a lot, but Matt and his team are there. I got to hear you chat with one of your guys. Right before we hit record there, you were still getting data together when we. Right before we got on. On here.
[00:35:34] Speaker C: So sharp guys over there enjoy having.
[00:35:40] Speaker B: Yeah, awesome stuff, man. Well, enjoy your weekend and we'll see you next week. Good. Good to be back, man. Missed you last week. Good to see you.
See you, bud.
[00:35:51] Speaker A: Bye.
