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America some money my job's not just to entertain but to educate teach today I went to a Sprint spanking new Norwegian Cruise Line holding ship first inaugural launch right here in New York City and all I can tell you is that once again we are struggling as investors because we simply cannot predict human behavior the cruise ship seemed filled with joyous people who are ecstatic about being on one of these things without mass they had that had been the protocol now it's gone they were itching to spend at the bars in the gambling tables of course that's not a reason why people should buy or sell stocks including this bummer of the day where the Dow shed 347 points that's been lost 1.02 NASDAQ declined 0.68 giving back some of those big gains but is something you have to think about because so much of picking stocks comes down to gauging the public psyche and that is inherently subjective it's why I'm always trying to relate what you see in the real world with what you get in the stock market so I see a full bird of people on a Norwegian cruise ship and I think you know what that is bullish boys for the company but then I realized it's great for the economy too and you know what that's bad for the stock market remember the federal service on a mission to slow the economy in any sign of strength will cause them to raise interest rates more aggressively oh let me put you another way if you own the stock of Norwegian Cruise you wanted to do well but you also want the rest of the travel industry especially the cruise lines the new poorly because that's the only way to avoid the Wrath of the fed and still make money on Norwegian and look that's the calculus in every industry last night we received the perfect September sales numbers from Costco they hadn't had to roll back prices yet they're just asking their suppliers to lower what they charge to reflect lower commodity costs Costco is an inflation fighter we want people to shop there because if you you how much they can save on food when they get the suppliers down they will take their prices down too will the FED include that in its thinking nah that's too as we say it in the business too granular we also own Costco for the travel trust because its sales are so much better than everyone else's and the weight at taking markets here because of their low prices but the Federal Reserve doesn't acknowledge the role of any single chain even if that chain happens to have 119 million card holders most of them for the US again we want Costco to do well and we want the FED to notice that they're helping in the fight against inflation we don't want them to look at the other guys who are doing well too if they are doing well but the FED doesn't think like that nor can the FED figure out the work from home movement they'd know if they listen to AMD tonight which reported a shortfall related to PC sales most likely for the home the Stock's not getting hit too hard because it already been cut in half but most companies in the community space figure the aggressive buying wouldn't last forever and it didn't it petered out but they had made too many PCS in room I point this out because we are on the eve of the labor departments all important non-farm payroll report when we find out last month's unemployment rate and wage inflation now we've had a good run this week going into the numbers so today there were traders who locked in some gains because the job reports too hot well it'll wreak havoc on your portfolio or maybe the dated let's say it doesn't matter when you listen to some fed officials this sounds like they feel compelled to keep bringing the pain no matter what the house of pain it's astonishing to me that each fed official is allowed to make their own statements feels like a linebacker coach or a special teams coach in the NFL who publicly diverges from the head coach that's not allowed these people have no idea how powerful their words are and they keep popping off as part maybe they think it's part of their job but I think it's part of their job should be to muzzle their views there's no reason they should be out there talking worse they base their statements solely on the aggregate data from the government along with some local reports from their specific regions they seem to have very little sense of the material nature of the post-covered consumer they didn't in 2007 and I fear they don't know now for example we know that Costco is as strong as ever but that may be a sign of a strap consumer we know the reservations for Norwegian at this point are better than they were in 2018 going into 2019 but is that a flush consumer who's spending like man or first staircase consumers finally feel safe taking a trip now that we're no longer worried about it's been the pandemic it's a psychology that's so hard to determine how about air travel we've been seeing right I mean come on every plane is is for wherever we go extremely full flights is that because the consumer spending beyond their means or are there just so many events that didn't happen during the worst days of the pandemic so people are simply catching up with their lives it's confounding at every turn the restaurants I want to go to are all packed people are spending fortunes on liquor I see it myself because my wife is in the high-end basketball business prices doesn't even seem to be an object right now it was always an object before these days people who don't have a lot of money don't blanch in a 15 cocktail but when you talk to them yes anecdotal they say they're just thrilled to go out thrilled to be alive do we want interest rates lower to Reign that in or can we just say look they're thrilled to be alive and they're spending because uh like and for war they realize they lived they survived we had some serious inflation after World War II and it wasn't the end of the world and it's more important it did end it could be the same thing with cars there are Myriad Auto Part makers who can't deliver all the components that car companies need but if you took advantage of remote work to move from the city to the suburbs of the country you need to buy a car to get around you can't use public transit that surge of demand for vehicles is unprecedented of course if you simply look at the macro data this looks like an overheated auto market that the FED needs to act aggressively to cool down I see these issues everywhere so many people people took big bias at the beginning of pandemics why should they come back to work we brought off a huge part of the workforce they're enjoying their freedom the fake kid enticed them back to the office by making it too expensive for them to buy a house or a car with borrow money but if they don't want to come back you can you can either train a machine to take the place or you have to pay up and educate new people of course at a certain point the people who were bought out will Source their savings and come back to work but who knows what that point is well they run out of money if rates go to five percent and I do want rates higher I just don't know how high they should be and I don't know when they'll come back and that is the problem the FED faces if I were Jay pal I put together a team of Behavioral psychologists to help them figure out how people behave after a war or a pandemic the Euphoria I saw today on the Norwegian cruise ship was almost Eerie the mass being off change people they're ready to do things that they wish they had they've been doing before the pandemic before the pandemic so they're changing their behavior they don't care about higher rates they have savings because they did nothing for two years my biggest worry right now is that the aggregate data can't capture the nature of this one it's a whole lot of one time only Euphoria Behavior people who survived the war are not the same as they were before the war they want to go out and spend like crazy because they lived they want new things they want a car they want a better house a year from now there probably will be no Euphoria it'll be over they'll have spent their excess savings that's exactly when interest rates will likely be at their Max because the two-year treasury simply can't measure the joy of people on a cruise without a mask the data is inflated but the two-year 4.2 percent is a heartless Beast unaware of the person who stopped me on the ship and told me how great it was to be alive again it measures some amorphous heartless level of price that just may be too high because we feel different here's the bottom line sure everything's everything's inflated now but so much of that's because we're coming out of the covet era all I can say to Jay pal and Company is that yes keep raising rates but nothing lasts forever Andrew in New York Andrew hi big fan um actually my 13 year old son is here and he has the question so I'm going to put him on thank you excellent hi Mr Kramer this is Moe thank you for taking the time to talk to a 13 year old Giants fan well 13-0 yes Giants fan no but that's okay go ahead go ahead I have a couple of thousand dollars to invest and I was hoping for your opinion of what I should do with it I was thinking of either inflation-adjusted Bonzer and index funds if you think an index fund is a good idea in which sector and should I wait until the market calms down no no you're 13 years old you should be in the most aggressive Index Fund possible that has a lot of high risk high growth because you got your whole life to make back if you make a mistake certainly not Bonds those are for much later and I can tell you you got horse sense because you put that uh that idea of an index fund in your mix but let's make it a high growth fund that would be the best and thank you for calling and uh good luck with the Giants they're three in one but to me it's ephemeral let's go to Ricky you can Google Ricky in Texas Ricky Amigo your fellow Mezcal connoisseur started a position with Google alphabet back in the stock split I want to know should I continue building on this position I think it's like phosphora my wife's uh Mezcal I think it's a buy I want to be there I want to buy some we have big for the travel trust I think we should be even bigger and by the way let me throw in Amazon give you two for one how's that all right inflation is everything now and we know that we want rain hunts we want to Tamp it but so much of what's happening in inflation is just because we're coming out of the covet era and you got to incorporate that in your thinking well I can say to Jay Palin company is nothing lasts forever oh man tonight consolation struggle in today's tape so is it time to take a sip of the beer and wines spit uh Kingpin at a lower price I'm thinking yes but let's check with the CEO then earlier we had a chance to go on board the brand new Norwegian primas I mentioned first hand look at the latest of the cruise company's numbers too and don't miss my exclusive for the CEO oh by the way and Mercedes is on a mission become maybe one of the most sustainable Park companies on Earth I'm learning more about the pursuit for a clean future with the company's top brass
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