Announcer:
It’s time now on KROS for Financial Focus, brought to you by NelsonCorp Wealth Management. The opinions voiced in this show are for general information only and are not intended to provide specific advice or recommendations for any individual. Any indices mentioned are unmanaged and cannot be invested into directly. Registered representative securities offered through Cambridge Investment Research Incorporated, a broker dealer, member FINRA, SIPC, Investment Advisor Representative, Cambridge Investment Research Advisors Incorporated. A registered investment advisor, Cambridge and NelsonCorp Wealth Management are not affiliated. Cambridge does not offer tax advice. Now here’s today’s Financial Focus program.
Gary Determan:
First Wednesday of the month, so the pleasure of having Dave Nelson in studio with this. Dave, sorry to hear about the passing of your father, but my goodness, it must have been something to see all the family there.
David Nelson:
Yeah. I forget the total number as far as grandchildren and great-grandchildren, but it’s a big, big number. Yeah.
Gary Determan:
Yeah, I saw the number.
David Nelson:
Yeah, no. Yeah.
Gary Determan:
It was big.
David Nelson:
Yes. So it was a heck of a way to get together, as people probably have experienced in their lives that are listening now. But it was nice. Dad would have enjoyed it as far as the gathering. We did what he wanted, we just had more or less a pizza party. We went up to Rastrelli’s in the back room and pizza and beer. It was what he was hoping that everybody would have.
And anyway, so it was a nice gathering and again, just great people. We also were able to cobble together a group of individuals that basically Dad had 24-hour care for basically four years. And a whole bunch of people, a lot of the ladies that were the helpers as far as in that regard were at the party as well. So big gathering and played a lot of Roy Orbison music as a little tribute to Dad. That was one of his favorites. So we had a great time, ate a lot of pizza and had some time to get together with people I haven’t seen in quite some time. So yeah, it was a nice gathering.
Gary Determan:
Leaving quite a legacy and I’m sure he was very proud of all of his children, grandchildren, and great-grandchildren.
David Nelson:
I think so. I shared with one particular grandchild and I would … So she was the first great-grandchild to be real serious about sports. And Dad, I mean our family would kind of, I want to say nuts about sports, but that’d probably be pretty accurate. We really enjoy it.
So anyway, she’s really good in soccer and has had a nice … She’s eighth grade currently and I mean, she’s pretty dominant as far as out in the field. In basketball, she’s been pretty dominant as far as that is concerned. So those being probably the two sports.
But anyway, I would go past, and this is the last year or too and Dad would, middle of the week, end of the week, he was kind of losing feel as far as for what day of the week and what time of the day and et cetera, that type of stuff. So I’d walk in and, “Sophie play today?” “No, Dad, it’s noon. She’s in school.” Something like that. And I’d never say that to him, but, “No, no, no, she played yesterday,” and I’d kind of recap and whatever. And he always liked to hear as far as what did she do and what have you.
It was really nice and certainly brought her to tears as far as I shared it with her. I don’t think she had any grasp of how much joy he got listening to what she was accomplishing and whatever. So that was really, really nice. And yeah, sport’s a big, important part of our existence and it continues to be as far as for many of the family members.
Gary Determan:
Yeah. I see your nephew, Brian, was one of the pallbearers.
David Nelson:
He was. Came back, with his schedule as far as trying to recruit. He told my sons, he spent a lot of time chatting with them and I went through again the numbers as far as budgeting, as far as recruiting budget that he has versus any other places. It was kind of interesting. So those that don’t know, in college sports now they could be paid. So he coaches at South Dakota State and so relatively small school, I guess. It’s a D1, but a smaller D1.
And I said, “What’s your budget as far as this year?” And he said, “300 grand.” And last year was 65,000 so he got a huge increase, but he said, “Just put things in perspective. You and I, it’s 1.2 million. So I get 300 grand. They’ve got a million two that they can spend.” I said, “I know BYU is one of the biggest as far as last year as far as what they have as far as a budget. And what is it currently?” And he says, “It’s a little over 20 million.”
Gary Determan:
Yeah. I was listening to Dan Patrick last night and they were talking about this. The higher Division 1 football programs, their budget is around 50 million.
David Nelson:
Oh my goodness.
Gary Determan:
And the basketball programs like Duke and things like that, 30 million.
David Nelson:
30 million. Oh my goodness sakes.
Gary Determan:
And the bad thing about it is that he was saying that it’s going to take away from some of the other sports, like wrestling and softball and different things like that.
David Nelson:
Sure, sure. Absolutely. Somebody brought up last year to me and said, “Okay,” now Iowa men had a pretty good season this year, but we were talking Iowa sports. And they said, “Well, what about Jan as far as coaching the women? The gym is packed as far as it’s a sellout every game. The Iowa men, it’s not. Bottom line, what’s going to happen as far as there? Will she get more money than the men’s basketball? I mean, how’s that going to be handled?” So it’s just wild. I mean, it’s just crazy. And again, I’m a small school. Even you and I at 1.2 million, I mean, how can they compete as far as with some of these other programs?
So Brian, one of his best players, this is now two years ago as far as when it took place. Not one of his best, his best player departed as far as at South Dakota State and went out and played for Brian’s old coach out in Omaha, the Blue Jays.
Gary Determan:
Creighton.
David Nelson:
Creighton, thank you. So anyway, I forget what they paid, but it was something like a half a million bucks that he got as far as transferred over there. And he obviously didn’t have the budget. So it’s going to be stressful. He said, “I don’t look at the big programs anymore as far as comparisons.” He said, “Right now, my comparison is you and I. So we’ve got 300, they’ve got a million two. It’s going to be tough as far as to compete.”
But he thinks he’s going to have a pretty good program and he’s a pretty positive guy and we’ll see as far as his career, as far as where it brings him. Hopefully he can be competitive at that level, but who knows as far as going forward as far as with, again, the money that’s being tossed around.
Gary Determan:
I’m going to bounce this off you. This aspect, one of the things they brought up is the fact that players who do go to South Dakota State initially not recruited by the bigger programs, but they develop their skills and then all of a sudden the bigger schools want that talent.
David Nelson:
Yes.
Gary Determan:
Should like a South Dakota state get reimbursed by those schools?
David Nelson:
Right, exactly. I mean, you look at that and you look at, people are talking about contracts and they say, “Well, the pros get paid.” Well, the pros have to sign contracts for a year, two years, 20 years, whatever the case may be. In college there’s none of that at this point in time. So, as you say, he’s up there molding these guys, making them into a better player and then goodbye.
And again, from the kids’ perspective, you can’t really blame them. As far as you know, many of these guys aren’t going to be playing in the NBA as far as in making the big bucks there. So if they can pick up a half a million bucks in college sports, I mean, you can’t blame them. But yeah, I’m sure he would like to see some reimbursement, some of that type of stuff. Not just he, all these, what’s the term that they use as small D1s or whatever the mid-levels or whatever? There’s just different-
Gary Determan:
Mid-majors.
David Nelson:
Mid-majors. There’s what I’m looking for. Yeah, and it’s true. I mean, again, how do you compete? I don’t know what Iowa’s budget is as far as the men’s basketball, but I bet it’s a pretty nice number. And I’m not mad about that, don’t get me wrong. It’s just it’s a situation of it’s tough to compete as far as money talks.
Gary Determan:
Before we take a break for the weather, something we’ve talked about on this program, I know you have dealt with some players in the NFL.
David Nelson:
Yes.
Gary Determan:
And are you going to start develop, I mean, getting interest from collegiate athletes about what you can provide them?
David Nelson:
Yeah, we’ve had a couple inquiries as far as in that regard and the challenge for us, so we started in the NFL business as far as because we bought out a practice up in Dubuque, Iowa. This gentleman, unfortunately, at 44 years old, he had a liver transplant when he was young and as he got older, older meaning 42, 43, the doc says this, “Like you were told years ago, it’s not going to last forever. You’re going to need another transplant.” So he was prepping as far as for that, doing all that he needed to do. They got a liver. He’s heading out to Iowa City. They open him up and the bottom line is, I guess the easiest way that it was explained to me to understand it was almost like there was calcium buildup as far as where these things, his body parts and the new body parts were supposed to come together. So they said, “No, it won’t work. So we’re going to take that liver and give it to somebody else.” And he got sent home. Well, he got sent home and needless to say he didn’t make it.
So when we were chatting with him as far as it was in the latter stages, he had a niche. And that niche was NFL players, not the household name type players but other players. And as we took it over, we soon realized that this is a whole different ballgame here. One gentleman alone had 17 cell bills that he was paying, telephone cell bills for all of his buddies. The agreement was when they were younger that if somebody makes it to the big time, we take care of our friends. So these guys are ripping through money like crazy. I mean, you got a million coming in and you got a million five going out. It’s not a good scenario.
So anyway, so yeah, we’ll see. I would like to work with golfers. I would like to work with probably baseball players. They’re a little calmer, probably easier individuals to work with than a lot of the athletes that we’ve worked with as far as in the past.
Gary Determan:
All right. So many things. We could probably talk sports the entire time.
David Nelson:
Yes, we could. Yes.
Gary Determan:
But we’re going to talk business in the second part.
David Nelson:
All right.
Gary Determan:
Our weather update brought to you by the Clinton Midas.
Andrew Stutzke:
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Gary Determan:
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First Wednesday of the month, so we get to continue to the bottom of the hour with Dave Nelson of NelsonCorp Wealth Management. Well, it’s my understanding the market’s actually doing pretty well.
David Nelson:
We talked just a little bit ago about the craziness as far as money, trying to buy players, what have you. Our world has just been nuts as far as in that regard. You look at what’s taken place around the globe as far as the skirmish or if you want to call it a war, different terminologies. Bottom line, not good as far as what’s taken place abroad and yet the market has been going up, up, up.
So again, for those that don’t know, what markets typically do is they make an initial adjustment as far as to what’s taken place and what they anticipate is probably going to take place and then we start looking forward. So looking forward, what we see is that a lot of the US corporations in particular are crushing their numbers as far as from the standpoint of earnings. And the earnings are coming through much better than what people are anticipating, and subsequently the stock prices are taking off.
Semiconductors, just one area. There’s a product out there that buys, it’s what’s defined as an ETF. It’s kind of like a mutual fund concept. Excuse me. And it just owns semiconductor stocks. And if you look at that over the last three, four years, it’s just off the charts as far as the returns that have been made as far as there.
So it’s really interesting to see. I think this is probably going to continue for a period of time. There’s more positives right now than negatives pertaining to stocks and stock prices, but some point’s probably going to be a pretty nasty awakening as far as that’s going to take place. And we’ll do the best we can as far as to try to keep people in the loop of what we’re seeing and what we’re thinking in terms of obviously nobody can predict as far as what markets are going to do.
But yeah, it’s been a remarkable run over the last several years. And we had a pullback when the tariffs hit and then we had a pullback as far as when this war started up. But we’re kind of looking the other direction now and markets continue to go up this morning, big, big numbers this morning that we were up.
So again, it’s clients I’m sure are enjoying it as far as looking at their account balances and we’re hoping that it continues, but obviously trees don’t grow forever as far as in the sky. So at some point there’s going to be a payback and again, we’ll try to mute as much of that as we possibly can.
Gary Determan:
You’ve been doing this for some time now. Have you seen this much volatility in the past?
David Nelson:
Closest would be probably the … And most of the volatility has been on the upward side, which is kind of weird. And again, people don’t mind volatility when it’s going up. They just don’t like it as far as when it’s going down. But the late ’90s would be probably the closest parallel to what we’re seeing and that’s the internet, the early stages folks of the internet. So the ’95, ’96, ’97, things really start taking off. And you get to ’97, ’98, ’99, I mean, things were flying. They’re going up percents a day and we’re seeing a lot of that as far as in recent times with a lot of these AI stocks. So those that don’t know, that’s artificial intelligence, that type of investments over the last several years has just been off the charts going up.
And again, not all these companies are going to make it. And that’s the real challenge as far as trying to sort through who’s going to make it and who’s not going to make it. And oh, by the way, even the biggest names right now may not be in existence in five years. Shocking as far as to hear something like that. The Apples of the world, look at Apple’s stock over the last, say, two years, really hasn’t done a whole lot. I’m not saying, again, we can’t get into giving individual advice and I won’t, but at the end of the day, it’s just a good example of a company stock that’s, in comparison, struggled over the last several years in comparison to a lot of these other more tech driven and again, supposedly more exciting as far as going forward type stocks.
Gary Determan:
You know, for the everyday guy, I mean, right now he’s looking at what he’s paying for gas, groceries and different things like that.
David Nelson:
Yes.
Gary Determan:
Does that play into the markets at all?
David Nelson:
It does. And that’s the major disagreement that’s taken place now as far as when you talk to people pertaining to where’s the market going to go. You can’t ignore inflation is what many people say and you just referenced it as far as you look at gas prices, you look at grocery store prices. There’s clearly inflation that’s there.
What caused it is a whole bunch of disagreement as far as is the tariffs. No, it wasn’t the tariffs. Who knows exactly? But the reality is prices have gone up and gone up considerably as far as from back in the day.
The other side of the coin, as bizarre as this sounds, is that this is going to potentially basically, could, I should put it that way, a recession. So the recession is still a possibility. So you have inflation and you have a potential for recession and yet the markets continue to go up.
So it’s nerve wracking as far as to people like us. Warren Buffet has a great quote that be excited when other people are nervous and be nervous when other people are excited. And hate to say it, but again, most of the time that’s the world that we exist in and what we’re dealing with right now is certainly something that falls under that category.
The other reality is you look around the globe as far as where should I be investing. And US stock prices are considerably higher than they are abroad. But the justification has been and continues to be, and maybe justifiably, that the technology stocks are doing so well and there’s such a large percentage of the US stock market, so much more as far as technology is developed as far as in the United States versus abroad. So again, can you justify that? Maybe you can, maybe you can’t.
I’m just telling people as far as clients when we have meetings with them, said, “We’ve had three really good years. If we break even this year, I personally will be very happy as far as with that.” Now we’re above that now, but again, we got a long ways to go as far as the balance of the year. Throw elections in, throw in we’ve got a new governor as far as that’s overseen as far as the federal governorship. So a lot of these things don’t end well and so time will tell. And again, we’re ready to place some heavy defense if and when the time seems appropriate.
Gary Determan:
Yeah. I believe it’s May 15th when Powell is being replaced.
David Nelson:
True.
Gary Determan:
But I understand he’s staying on.
David Nelson:
He’s staying on as far as the board, which is really unusual as far as from that standpoint. They always have the right to stand for a certain finite period of time after they’re done. But generally speaking, the individuals in the past have walked away.
I think, again, you look at it and this isn’t a political statement, just my personal opinion that I think it’s to try to, in his opinion, buffer the White House and some of the statements that are being made and what have you. And I think wants to be somebody maybe on the other side to make arguments kind of the other direction most of the time.
So I don’t know. It’s going to be really interesting and clearly I don’t think these two gentlemen like each other. And maybe it’s touche. I don’t know. I don’t know what to think of it.
But overall, I mean, Trump put him in his position, but he doesn’t like him and hasn’t liked him now for a number of years. He wants lower rates. All presidents want lower rates, it helps stimulate the economy. It helps make their job easier. But then you have the fear of inflation and so that’s what he argues is that inflation’s probably a much bigger deal than what most people believe it to be.
And time will tell as far as you look over the next six months, the next year or so, are we going to have more inflation? Chances are we probably are, except in one area, that area being AI. AI is trying to … One of the benefits of AI is, hopefully at least, is to drive down prices. Again, what that translates into to get the prices lower usually is going to be employment. In other words, people are going to lose jobs. We’re already seeing it as far as with some major corporations that have kicked out thousands of people and the justification is that AI can do the job quicker, better, cheaper, whatever, whatever. And again, time will tell as far as whether that’s the case or not.
Go back to the ’90s, we had the internet bubble that’s going to change the world and we saw that it did some positives, but it had some negatives as well. And this clearly is starting to, some of the negatives if you look at it that way as far as from individuals’ livelihoods, it’s creating some negative pushback.
Gary Determan:
Again, visiting with Dave Nelson from NelsonCorp Wealth Management here into the final four minutes of the program. So what are we looking for over the summer months? We’re not going away, are we, in May?
David Nelson:
Yeah. See, for those that don’t know, Gary just brought up is sell in May and go away. And historically, that’s been a good move.
Gary Determan:
Yeah.
David Nelson:
And historically, that’s been a really good move as far as when you have elections coming up, midterm elections. So you put the two together, it’s pretty much arguing for that.
We haven’t taken that … We don’t believe that right now that that’s the appropriate move. But you look forward, that certainly could be an appropriate move. History says that that window there, the returns have actually been historically very low to negative depending on the period of time and the year that you want to identify.
But it’s worth considering. It’s worth looking at. We certainly are and our tools that we look at that look at past patterns say that we’re going to be in a soft period here, not catastrophically soft, but nevertheless soft. And yeah, we’ll run for the hills if and when it seems appropriate for our clients.
Gary Determan:
Well, we’re getting ready for baseball down at NelsonCorp Field.
David Nelson:
Oh, yeah.
Gary Determan:
And it’s great that you took care of those naming rights and I know you like to bring some of your clients down there every once in a while.
David Nelson:
Yeah, we have two events that are set up as far as for our clients that’ll be invited out, have a beer and a brat, have some fun as far as supporting the program. We’re excited about it as far as, again, I don’t know if you’ve been following the … Now I’m drawing a blank on that. The figures that are up around town, the trolls. That’s what I’m looking for.
Gary Determan:
Oh, okay. Okay. The trolls, yeah.
David Nelson:
The trolls. So we were down at the ballpark at NelsonCorp Field is listening to the gentleman from Denmark as far as talk about that as well. It’s nice to see that beautiful facility utilized in a significant way. And as you say, we write a check as far as we don’t own it. Occasionally we have people that imply like we own it. We don’t own it, folks. We just write a check to throw our name up on the side of the building there.
But it’s such a great facility and it’s a great program. We love baseball. We’ll bring clients down there, as you say. We’ll have 400 people on two different events that we do, at least that’s the numbers we’ve had in the past. And we want to support it. We want to support all the activities as far as in town here that we possibly can and get some clients out to have some fun. And again, we got a lot to offer in this community and we really encourage people to get out, spend a few dollars so that we can keep a lot of these programs as far as afloat, as far as in our area.
Gary Determan:
So when the team is struggling, so people don’t come up to you and say, “Hey, Dave, what’s going on with the ball club?”
David Nelson:
Yeah, that’s right. We heard that the hot dogs are cold a couple different times. We’ve had people tell us that. The flag is ripped up, you need to change that. We’re not in that business folks. We’re in the business of money management and we’re going to stay in our own backyard. But we’re also very conscious of the needs in our community. Subsequently, we write a check because we want to keep the program and the facility afloat. So happy to do it and we’ll plan and continue to do for many, many years.
Gary Determan:
Always a pleasure to have you. And thanks so much, Dave.
David Nelson:
Thanks, Gary.
Announcer:
Financial Focus is a production of NelsonCorp Wealth Management in Clinton and Davenport. The opinions voiced in the show are for general information only and are not intended to provide specific advice or recommendations for any individual. Any indices mentioned are unmanaged and cannot be invested into directly. Registered representative securities offered through Cambridge Investment Research Incorporated, a broker-dealer, member FINRA, SIPC, Investment Advisor Representative, Cambridge Investment Research Advisors Incorporated. A registered investment advisor, Cambridge and NelsonCorp Wealth Management are not affiliated. Cambridge does not offer tax advice. For more information, visit our website at www.nelsoncorp.com