Money Rehab with Nicole Lapin - Why the Dollar is Slipping and Navigating What’s Actually Moving Markets with Karen Finerman

Episode Date: April 21, 2025

After a whirlwind of headline whiplash over the last month, last week in the economy felt... quieter. But quieter doesn’t mean unimportant. Instead of chasing breaking news, we’re settling into the “new normal”—whatever that ends up meaning in this cycle. So what do investors need to know now that the dust has (somewhat) settled? To help answer that, Nicole is joined by Karen Finerman (CEO of Metropolitan Capital Advisors, founding panelist of CNBC’s Fast Money, and host of How She Does It). They dive into the current state of the dollar, what tariffs could mean for your money, and Karen’s best-performing stock pick of 2025 so far.

When you're with Amex Business Platinum, going the extra mile for your business pays off. With five times membership rewards points on flights and prepaid hotels booked through amextravel.com, you can earn more points to help grow your business. And with access to more than 1,400 lounges globally through the American Express Global Lounge collection, including the Centurion Lounge, Can I get you a refill? you can stay fresh wherever your business travel takes you. That's the powerful backing of American Express.

Terms apply. Learn more at americanexpress.com slash amexbusiness. So I just went to the grocery store and I actually flinched at the cost of eggs and I don't even really eat eggs. That's how bad it is. Everything feels more expensive. And so I'm hearing from a lot of money rehabbers right now

that their credit cards are getting a lot of exercise right now. But the last thing I want for any of you is to go into credit card debt. Enter Chime Credit Builder Card. This is a secured credit card with no annual fees. You can build credit with money you set aside and avoid interest or expensive debt. Plus, you can get access to my pay and get up to $500 of your pay before payday with no mandatory fees.

Start building credit with your everyday purchases and regular on-time payments with no annual fees, interest, or credit check at chime.com slash mnn. And then when you go to chime.com slash mnn, as in Money News Network, you'll start thinking about all the doors that will open once you start building your credit, like lower rates on loans. Who doesn't want that? Turn your everyday purchases into steps toward your financial goals with Chime Secure Credit Card. Get started today at Chime.com slash MNN. That's Chime.com slash MNN. Chime feels like progress.

The Chime Credit Builder Visa Credit Card is issued by the BankCorp Bank NA or Stride Bank NA. Spot me eligibility requirements and overdraft limits apply. Out of network ATM withdrawal and OTC advance fees may apply. Late payment may negatively impact your credit score. Results may vary. My pay eligibility requirements apply. Credit limits range from $200 to $500. Go to chime.com slash disclosures for details.

I'm Nicole Lapin, the only financial expert you don't need a dictionary to understand. It's time for some money rehab. So I feel like the story this week is less about the moment to moment headlines like it was last week and instead looking ahead to settling down into this new normal. Nothing happened this week that was as crazy as what went down last week for sure. I mean mean we don't have any tweets moving trillions of dollars to discuss today. So we can kind of take a deep breath and talk about how to adapt to the economic conditions that seem to be staying here for a while, whether it's six weeks or six months. To help me do that I'm joined by Karen Feinerman, one of my favorites. She is the co-founder and CEO of a New York based hedge fund, Metropolitan

Capital Advisors, and has been a panelist on CNBC's Fast Money since day one, literally. She's also the host of the podcast, How She Does It, conversations with powerful women about how they're embracing challenges and managing success, both personally and professionally. So today we talk about the value of the dollar, the opportunities and challenges with all the tariff chaos and Karen's best performing stock pick of 2025. Here's our conversation. Karen Feinerman, welcome to Money Rehab. Nicole, thank you for having me.

So good to reconnect. Normally we kick off our interviews by getting straight into the headlines, but in this economy, it just feels important to ask how you're doing. How am I doing? I mean, it's exhausting, I have to say. It's exhausting. And you know, you just never know what you're going to find. And this idea of there could be monumental news at any moment is it's tiring. Are you monitoring Twitter for monumental potential tweet? Well, I'm on, you know, I'm on the computer all day long and just at any moment it could be something really market moving.

So you have to sort of be in this high level of, you know, high alert, high alert, exactly. Yeah. So has your investing strategy changed since liberation liberation day? No, it hasn't. It hasn't worked. I can tell you that, you know, I'm always long. I have various hedges on but always always net long very net long and

that's been the strategy for years and years. And, you know, it's painful when you are long going into the pandemic or going into the great financial crisis or whatever it might be. But the idea of sort of being able to market time, so know when to sell, know when to get back in, and then have that gap be wider than whatever taxes you might pay, to me is just a strategy that is too difficult.

So I don't try to do it. But what I do try to do, one of my favorite quotes, which I always come to is, buy when there's blood on the streets, even if it is your own. And I can tell you, recently, there's been a lot of my own. So I look at the VIX. I don't know how closely you follow the VIX, but it's sort of in no man's land now. It was up in the 50s. So I'd be a buyer when

it's terrifying. It's not low enough now. It's in limbo at, I don't know, 30 where it is right now. So I'm not really doing much, just being exhausted. So can you give us a sense of the VIX? We've been hearing a lot of the news lately. So when you say that the VIX is high, around 50, what is it normally? And then you say that you look to cover some hedges? What do you mean by that? So the VIX is really it is a measurement of how likely the volatility is in the market, more than 1% on any given day,

but it's really become known to be the sort of fear-greed index. So when the VIX is really low, and the kind of lowest I've ever seen it drag along for a long time is low double digits, so 11 or 12. And then in periods of high uncertainty, so the highest I've ever seen it is during the pandemic, during the really really dark

dark days of the pandemic, as high as about 80 intraday maybe. So now the VIX has gone from mid-teens to as high as 56. I guess it was Tuesday morning, was that when the bottom was sort of the, I can't even remember all the days. So it hit somewhere in the mid-50s. And I like when the VIX is super high. I like when things start trading down integers at a time, because that just tells me someone just wants to get out, regardless of price.

And if I own that, that's not fun, because that just tells me someone just wants to get out regardless of price and if I own that that's not fun but if I can buy more at a price where I'm buying from someone who says I don't care what price I'm selling it I just need to get out that's ultimately been a good thing to do. That's been on sale. Historically been a good thing to do. Exactly. You know the past. Historically been a good thing to do. Exactly. You know, we shop, we love to get things on sale.

We do not want our socks on sale. That feels bad. Well, unless you're a long investor, like betting on the future, holding onto your investments for a long period of time, not trying to bet against the market. So when you say you see blood on the streets, including yours, what kind of blood have you been shedding? I hate saying that.

I don't want you to shed blood. So well, you know, I have a lot of meta very big positions. So that's been a very difficult one. I have Netflix as well sort of hanging in the best. Amazon, which I have, I like a lot. Like how they're positioned, particularly in tough times like this. But the stock's down, I don't know where it is today, 172 or three, I don't know, the moment,

but it's down considerably. And I still believe in the AI story, I still believe in AWS, and then they have this remarkable retailing business, gigantic retailing business. So that hasn't been fun. The banks, JP Morgan, my biggest bank position has went to 280, probably shouldn't have been at 280 and then went down to about 210.

So that's a fair amount of pain. Citigroup, I could go, I don't know how long this podcast is, but I could go on and on for a while if things that haven't worked. Yes, you had right at the beginning of the year, you shared the stocks that you were looking at for 2025. Yep. The acronym was CARB, which is making me hungry, but it was, right?

Citi, Alibaba, United Rentals, Boeing, Energy, and Dell. Right. How do you feel about those picks moving into the second half of the year with everything we've seen in January? Well, Dell certainly is most in the crosshairs of all of them. The tariff wars, it was somewhat of a reprieve. I don't know that it's a permanent reprieve of China. We'll see. But the combination of the concern about AI and data center growth. That's obviously right in Dell's wheelhouse. And then aside from that business,

there's also the PC business, and that has sort of slowed, but also the PC business really is affected a lot by tariffs. So that's been the most painful one. But I still love it. But Alibaba having an amazing year. That's been having an amazing year, yeah. I feel like there was sort of not regime change because the regime is exactly the same,

but a change in policy and that doesn't have tariff issues, right? They do very little business in the United States and they have a huge business, they have a huge cloud business, they have, I mean, they're in so many different things, logistics and they really are conglomerate. They have an extraordinary amount of cash and it's not expensive. But it's subject to who knows what. Who knows? With the success of your Alibaba pick, are you looking to double down more on Chinese

G2C companies? I did buy some more Alibaba Friday, I think Thursday, Friday. I think that even in the situation that we're in, that China really feels that they need to support their economy. And that that will that will benefit Alibaba. So I have added. Have you looked at anything else or does anything else DTC? I own some FXI, I own KWeb, so some ETFs, but that's the only individual stock that

I own. Does it worry you what's going on with the de minimis exemption? I'm assuming you've been following this being a sunset for Chinese products next month? Right. So that doesn't affect Alibaba as much. So Timu and Xi'an, that's really affecting them. And I think we're also going to see meta is sort of a collateral damage there as well. Not this Super Bowl, but the one before that, it seemed like every other ad was

Ti Mu, Xi Nain. So we're going to see a meaningful contraction there. And those are big advertisers. So I think that's part of what's weighing down Metta. I mean, you've got a lot of things, but you've got the lawsuit. Because there's this big push, especially on TikTok right now. And we did an episode about how Chinese companies are now trying to market to individual Americans to buy directly and skirt around the tariff stuff. I mean, I'm my, I don't know if you know,

but my house burned down in the LA fires. And so now I did not know that. Where do you live in the Palisades? Where do you live? Yeah. Oh, I'm so sorry. Thank you. Thank you. You're the best. It's only recently that we found a new place to move into and I need to buy everything. And so I was looking at Alibaba and I was like, oh my gosh, is this something that I can do directly? You can and not pay the tariffs. You can. And not pay the tariffs? Well, the de minimis is $800. That's what a shipment, anything below $800.

So I actually don't know if you aggregate for more than $800. Maybe there's a way around it. I actually, I don't know. I don't know. I think it's really interesting to see what's happening with the Chinese companies that are trying to take the tariff news and spin it or sell their knockoffs or God knows what. Do you have any thought about what's going to happen? Well, it's interesting to the extent that any of that is about luxury high-end goods. If I were Louis Vuitton and that were one of my suppliers, I would be very, very unhappy,

so unhappy that I might look for another supplier. So if that is part of their game plan, I think that part is going to end up being very problematic. But for other things, I know these manufacturers are just carpet-popping TikTok every 40 seconds. Yeah. Are you seeing... Well, so I'm going to go back. I'm assuming you're not surprised by LVMH then tanking or the luxury sector. No, I actually was a little surprised that American Express was good because I would

have thought the correlation between the LVMH consumer and American Express was high, and that Louis Vuitton in the U.S. was a miss. In Asia, it was a disaster, but it was a miss, meaning, well, they were expecting for, it was about four percentage points low on same-store or comps rather. And so that's a, you know, that's a miss. And I would have thought AXP would, that customer would overlap directly. And that wasn't the case. That's interesting. I mean, what's tricky to understand is when a company is on sale or it's just not good. So if you're looking at some high quality investments, maybe on sale, we'll have a sale.

But what about the LVMHs of the world? That's not been a good one for me, but I look at LVMH versus Caring, for example. So you have two conglomerates, each has extraordinary brands. Caring has really struggled with Gucci and that is the main driver of their business. And it's just been a disaster for a couple of years. So, I mean, we're talking about like revenues down 20 revenues. That's enormous. And so to me, that would fall in the, oh, we might have a material change here.

And that a couple of things, something happened about two years ago that I really didn't like and made me sell my stock in Caring, which was the CEO who's married to Salma Hayek, the actress, bought CAA, took control of Creative Artists Agency. And I hate acquisitions like that that are a huge distraction. And it sort of really shows

sort of taking your eye off the ball. And coincidentally, that was when this sort of all the pent up demand and spend from the pandemic was starting to wane. And so for all of the luxury houses, that was sort of weighing on them, but carrying is pretty levered. And so that distraction I thought was really not a good sign.

So one thing about Bernard Arnault, he is all in. He is engaged all the time. Yeah, it seems like one of these things is not like the other because they're the parent company of, you know, YSL Gucci, Balenciaga, Bottega, Alexander McQueen, CAA? Yeah. Yeah. And so I don't know if, I don't know why you bought it. I don't know. I assume she's represented. Yeah, I guess. So I really didn't like that. And I if I thought, all right, if I'm going to have exposure in that area, I'd rather have LVMH. ["Money Rehab"] Hold onto your wallets. Money Rehab will be right back.

So I have written, count them, five books now, but each time I'm in the writing process, I stay at an Airbnb. I love to stay at an Airbnb. When I was actually first launching this show, I was at an Airbnb in Arizona. It was so peaceful. It was stunning. I could be productive and comfortable. The Airbnb was also surrounded by a ton of javelinas. If you know Arizona, you know they're like wild pig creatures. but honestly I love them too.

Being away for work, for fun, or both is a perfect opportunity to host your space on Airbnb. And if you think that hosting is overwhelming, I have a solve for you. With Airbnb's co-host network, it's easier than ever before to host. It's also a great way to earn some extra cash, which I know we all love. Now you can hire a quality local co-host to take care of your home and your guests. They can do everything from creating your listing to managing reservations to messaging guests and even providing on-site support. So if you've got a secondary property or an extended trip coming up and you need a little help hosting while you're away, you

can hire a co-host to do the work for you. Find a co-host at airbnb.com slash host. And now for some more money rehab. Are there other opportunities right now in this market that you're seeing of things that are legitimately on sale? So when we talk about on sale, we talk about high quality investments being down, not the things that are probably not going to come back up. I think Amazon is really attractive now. It hasn't traded here at this level. So I like to look at PE, assuming a balance sheet's fine, which their balance sheet is to look at PE, assuming a balance sheet's fine, which their balance sheet is, it's very good. It's not as good as Alphabet,

but it's very, very, very good. That's not an issue in any way at all. It's a positive. So I think we haven't had a chance to buy a business like this, AWS, which I don't know if you saw on CNBC, Andrew Sorkin's interview with Andrew Jassy last week. And he talked about AI as the most transformative thing.

They are not slowing down their AI business. And like what they saw as the opportunity in cloud maybe a decade ago, this is what they think the opportunity is now. The margins in that business are gigantic. and then they have this extraordinary retail business and so together you're trading, it's trading at about 28 times earnings. It hasn't been here probably ever in its entire history, so that's one that I've been adding to that I like. Yeah if you just look at our packages outside. Yeah, right.

Well, for your guy, for you guys, that must be all the time. Every day. Yeah. I'm trying to glean though, from your strategy, whether or not you think we're recession bound or not. I don't know. I think it's 50 50. The thing that's so unusual about this particular time is that it seems to be a self-inflicted wound, right? That I think we could get out of this

fairly quickly if we had some clarity. The market hates uncertainty. So even bad news with certainty is better than vague uncertainty with no news. So it's hard to know. Could the president just switch strategy and say, all right, we've got 15% across the board, that's it. That's the deal around the world. I think the market would rally tremendously. But I'm also not optimistic that that will happen in the short term.

Is it harder to hedge because of that? Because as you said, when the VIX gets cuckoo high crazy, you want to cover some of your hedges. What does covering look like? So if I'm short cues against a portfolio that has exposure to the Mag-7, I'll buy some back. So I bought some back. Often I own puts that are, I'm not looking to buy puts that start to make money right if the market goes down, right from the point that I buy them.

I'm looking at them as protection if the market goes down, 5% or more, that kind of move. So what I think of as sort of insurance with a high deductible, I'm gonna take some pain the first 5% down before that hedge really starts to kick in. It'll start to move, but it won't, it'll really kick in the lower it goes. So, and when you own those and the market's going down, you're like, oh, thank God I own these puts. That's the time to sell them. It's hard to do, That's the time to sell them. It's hard to do, but almost always it's the right thing.

Can you talk to a new options investor who might be exploring puts and calls and all the fun right now? I wouldn't be exploring them now for the first time. I can tell you it is a wild, wild market out there. And with zero-day options, I wouldn't touch those. And those are options that expire the same day. Although we did see that crazy trade of somebody with zero day SPY. Yeah, with probably very, very good information. Yeah. So there's that going on. That's not luck. No. Would you want to step into that? I mean,

would you follow it? Maybe that might not be so dumb, right? That could be like, look, I don't know what's going on, but I know that that guy does that. That's not an evening playing field right now. It is not. And so this isn't the time. If you don't, if you don't use options, this isn't the time to start trying them out. But I do, I think it's a good tool to have sort of in your toolbox to be able to express, you can a long bet, right? You want to know the name, but let's say there's a lot of risk, you feel like other business could be terribly damaged in a tariff, war that's protracted, could be terribly damaged in a tariff, war that's protracted, then you can buy calls instead of the stock and know,

all right, here's the most I could lose. You know, with certainty, you know what they would call. How much you can lose, you don't know how much you can make on the upside, and you know, really is a lot. That's great. But you know what you can lose. So certainty, again, is a good thing to have. Yeah, it's insurance. You know, buy insurance after the fire. Right. How much is fire insurance now? It's not even available probably.

Right. Exactly. So same thing with hedging. Lock in your protection before the chaos. Right. Chaos, it's very expensive and usually doesn't work out well when you buy protection in chaos. Let's talk about the value of the dollar. I think this is not getting as much attention. It's fallen by about 8% this year, recently trading near three-year lows. Can you help us understand why this is happening? I can sort of, but honestly, I'm not sure. I can tell you sort of what's happening. So we're seeing normally when there is a crisis such as this, there is this,

it's called a flight to quality. And as money around the world goes to the United States, because it is the safest, the biggest, the rule of law, all of the things that make the US market great. And so people buy US dollars and they buy treasuries. They might buy short-term, they might buy the 10-year, for example. And that's usually what happens in a crisis. That did not happen in this crisis. In fact, the reverse happened.

So there was selling in treasuries. We saw the 10-year yield. When people sell the bonds, yields go up. They need to, you know, if you want to entice more people to buy those bonds, you have to pay more interest. So that worked the opposite way that we would have seen. And so when you have people from around the world, let's just use the example of Chinese sellers.

I don't know how much of the selling was Chinese sellers, but they own hundreds of billions of dollars about 750 billion dollars of bonds So they sell their 10-year bond you get dollars back for the bond. They sell those dollars So you have this effect of the bonds going down and the dollar going down Which is the opposite of what you thought would happen. In addition, there was this giant levered basis trade on that had people buying the 10-year selling the 30, and they have to get out. That was sort of on top of it in a chaotic market. And then you had one more thing, the Japanese yen trade,

which has been on for years, which is people... Carried trade. Yes, the yen carry trade. So people short yen, they take that money, buy dollars, buy treasuries. Well that started to unwind when Japan started to raise interest rates and the yen appreciated. And then there's this question mark of is the US dollar going to remain the reserve currency of the world? I think so, but the idea that that's even a question right now is scary.

So a lot of things going on. Plus one other thing, which is in the last year or so, there's been a move out of some US equities into other countries, mostly Europe, because the valuation differential has gotten so huge. We talk about US exceptionalism and how great this country is to do business and rule of law and all of that, great capital markets, all of that. But the EU had underperformed for so many years, and the US markets had done well, the value proposition changed. So the money started to leave the US having nothing to do with tariffs. This predates Trump's election.

So let's recap, because I think this is really important. Typically in textbook world, stocks go down, bonds go down, bond yields go down, prices go up. Right. That's sometimes confusing if you're new to it. It's like a seesaw. Right. And then the dollar goes up. And then the dollar goes up. But now we saw stocks down, bond yields up, dollar down. All, I mean, the stocks down is sort of the constant, but the way that bonds reacted and the way the dollar reacted was really weird. Was really weird. And one more thing to think about was that weird. And one more thing to think about was that the Trump administration's plan was, okay, if we slow the economy, then bond yields, and the 10-year in particular, will trade down, meaning the interest rate will be lower. So we know we have this enormous deficit that we need to fund. And one of the ways to fund that, you sell 10 years. You can sell much nearer in, but then you've got to keep rolling and you don't know where

interest rates will be. So it wouldn't have been a terrible thing if the 10-year traded down because there were concerns about a recession and that we were able to issue 10 years, tens of billions of dollars or hundreds of billions of dollars of 10 years at a low rate. And so our interest rate costs would have gone down. But that's not what happened. And I think that correlation breaking down is what ultimately made Trump put on the 90-day pause to cool down the things that seem to be almost breaking. Yeah, I mean, it makes sense, right? If you're issuing that much debt. And when we talk about down the things that seem to be almost breaking.

Yeah. I mean, it makes sense, right? If you're issuing that much debt. And when we talk about the US being in debt, it comes from our treasuries selling the US debt in the form of treasuries and other countries buy that. And so when you're issuing that debt, every basis point, so fraction of a percent are billions of dollars. Right. And what we have to pay back for somebody to lend us money, essentially. Exactly. So the system was broken. The seesaw was broken. And then really just underlying why the falling dollar matters

right now, it's kind of a silent tax, right? Your money in the US by the last. So one of the things that originally the Trump administration had talked about was, well, other currencies are going to go down against the dollar because we're, you know, king of the world. And so that even if we were tariffed, that will lessen some of the blow. And that's not what happened, right? So the euro has appreciated a lot. The pound is appreciated.

The Mexican peso is about flat from when he was elected. The Canadian dollar's down a little bit, but these big moves are not happening. So that's interesting. I don't know what exactly to make of it. But yeah, the dollar isn't currency. It's this competence idea. Right. When it falls, the world starts looking for a new safe haven. Yes. Right. Or the pound or the euro. Right. Whatever it might be. The one thing it does help is that our goods are comparatively cheaper, right? So if you're European and wanted to buy an American made whatever, take away the tariffs

for a moment, it got a lot cheaper. It got 8% cheaper in the last, I don't know how long when you said it was around $1. eight or so. So things got cheaper. That makes us a little bit more attractive. Also, it does help multinational companies when they report earnings. So let's say you're Procter and Gamble. You sell 10 billion dollars in Europe, and you convert your euros back into dollars. You get more dollars, your earnings will go up. But I always dismiss that because it works the other way sometimes. I don't really count FX when I think about a company's earnings power. Others do.

I don't. Fx just being in foreign exchange. Foreign exchange, right. Currency stuff. I know. I just have to decode all this. No, it's good. I assume people know about it. No, it's bored knowing what FX.

No, it's a weird language. Great to learn world. Obviously been dominating all the financial news cycle. Of course, there's a lot of other stories happening and unfolding and evolving as well. What's something that you think has been overshadowed by all the tariff news that we should keep our eye on? Oh, that is a good question. Because I feel like it's like a shiny object thing, right?

Yeah, right. People can get away with some weird stuff because nobody's really paying attention. I think deregulation. I feel like that is something in their control. And that would be a benefit to many companies. So even Jamie Dimon said it on his call. Jamie Dimon, I think, is one of the greatest financial executives of the last century. Brian Moynihan also said it on, he's the CEO of Bank of America, he said on his call, the of paperwork and legal issues and rules that change and are so arcane in some ways and also just,

I don't know, whimsical, but that they have to comply with cost banks so much money. So if deregulation happens in many businesses, but let's choose banking because they are particularly regulated, then that will free up more money for making additional loans. It will make the banks more profitable, which makes them healthier. And Jamie Dimon gave the example of, if we could get rid of some of that regulation,

we could make mortgages cheaper, up to about 70 basis points cheaper, which matters a lot if you're a homeowner and you can get a mortgage 70 basis points, so lower than what you have now. That would be a very good thing. That's something that's in their control. We may see that. Not too much deregulation though. Right. We don't want to go through 2008.

Right. So things, you know, it's a pendulum, right? We always go from one excess past what probably is the right amount to the other that is the wrong amount is too much. So there's a lot of room to come back and still have guardrails that we need. Absolutely. Hold onto your wallets. Money rehab will be right back. And now for some more money rehab. We thought that this would be like the go-go days again of fundraising and IPOs, but we've

seen a big dry up there. Right. And we thought there would be a lot of mergers and investment banking activity not happening. One thing that is happening is the amount of trading revenue. So if you're the Goldman Sachs desk or JP Morgan's desk, the amount of volume you're doing trading is extraordinary, right? We've had several of the highest volume days ever just in the last two weeks. So they'll make money on that. They'll make sort of extra money. But I don't want to pay a big multiple of earnings on what I think is extra short-term money

that isn't going to be a long-term trend of giant trading day commissions. But in the very short term, it helps. In your picks, in your carved city, the C stood for city. That's been down 10% though. Yeah. That's been, I mean, how are the financials? The financials started off really well and then really got hurt in this, in this tariff, whatever you want to call it. I don't know.

Do you have a word for it? The fuck we can bleep it out. I don't know. Okay. That is the proper word for it I think yeah so a little blue. Hullabaloo they're kerfuffle. I love a kerfuffle. Okay who doesn't love a kerfuffle. Perfect. Just because Jamie Dimon used the word kerfuffle. He's kind of a folksy man. Yeah but he he's extraordinarily good at his business but normally when you see He's extraordinarily good at his business. But normally when you see Turmoil in the financial markets banks because they are levered

Don't generally trade well, so Citibank didn't trade. Well, I mean JP Morgan said it was a 280 went to 210 That's an enormous move Goldman said I mean all of them so they all kind of moved together There wasn't really a huge standout of one that you know did great. Morgan Stanley is a little bit of a different business model. They were down 30% too. So, you know, they all kind of got hit. Citi, I think Citi is a really interesting situation because it's super cheap and you're in the, hopefully near the last third or so of a multi-year effort by Jane Fraser and I love that a woman is the CEO there. I love that and she has really remade that bank, clarified the lines of business and really gone after expenses. So some of the city's earnings

and improvement is in her control and she's doing it. And that's been a really good thing to see. Just on this last earnings call, we started to really see it and she feels it'll be continue to happen in 2025 and 2026. So I loved that earnings call. And all of them also say though, we don't know what the economy is going to bring. We don't know how people's, you know, are we going to have more credit issues? Likely, right? Credit card non-performing,

you know, people who are unable to pay back their credit card, that ratio will go up and that's going to cost the bank's money. But they're not seeing it yet. I believe they will. They believe they will. Delinquencies, yeah. Yes, delinquencies. But Citigroup has this other thing, which is within their own control, which is what I like a lot about it. And JP Morgan has the most extraordinary leadership, but you know, Jamie, we will leave one day. Yes, but not any day soon. Let's hope not. A lot of life left in him. Yeah. So when we talk about things being on sale, would you say things being on sale that things being on sale, would you say things being on sale that are high quality investments? Would you say that the financials would be one?

And if you're sort of new to this space, there are a lot of ETFs that combine a bunch of these banks together. But I kind of feel like if Bank of America goes away, like just because it's called Bank of America, zombie apocalypse problems. because it's called Bank of America, zombie apocalypse problems. Yes, but I don't think that'll happen. So these big banks, and I forget who are, I think there's eight of them. There's a JP Morgan, the Citibank, Wells Fargo, names like that. The government will not let them fail. They are called SIFI banks, strategically important financial institutions, which basically means we cannot let them fail otherwise the apocalypse is the the financial apocalypse is here. So as a result of

getting that sort of protection that they also have a lot of this regulation that we talked about. But I really do believe the regulation has gone too far and they're way way way, way less levered than they were going into the financial crisis. The businesses, I said, the guardrails are there, and they're working. Yeah, we need a Goldilocks situation. Right, exactly.

We need a Goldilocks situation. But when I try to think about, OK, buy, if I'm sort of, what would I buy? I always think, OK, if I owned none of anything, what would I go out and start buying today? So I would buy Citigroup. I would buy some JP Morgan. I would buy some Metta. I think earnings power there is extraordinary. The stock now is about at a market multiple. And if you back out the cash, it's at a lower than market multiple so meaning the stock market trades at some multiple of the collective earnings of

all the companies in let's say the S&P 500. So you have X amount of earnings times 20 that's the multiple that's currently on the market and that moves with interest rates so that's where it is right now, 20 times earnings. So Meta to me is an extraordinary business that is not a run-of-the-mill S&P company. It is an extraordinary money machine. Has some headwinds for sure, but the underlying business is extraordinary. It's not really subject to tariffs. If I own none of that, I'd be buying that. I'd be buying Amazon if I own none of that.

So it's scary. It feels better sort of to buy it at Amazon at 220, but it isn't. It's better at 170 wherever, two, three, if I check up right now, 172.22. Okay. So those kind of names I would start with. Also, just in a time of turmoil, you wanna be in a company that doesn't have a debt problem. And none of these kind of companies have debt problems. So that's important. It is.

We end our episodes, Karen, by asking all of our guests for a tip that listeners can take straight to the bank today. You gave us so many already about how to navigate this market and just try to not get too scared. Right. Not get too tired either. You need a nap, sister. Yeah, I do. I do. I do need a nap. So here's really the tip that I would have is for almost everyone, your gut is not your friend. Your gut tells you to do the wrong thing

almost all the time. So if you're terrified and you don't wanna buy anything, it's probably not a bad time to buy. And if you feel great and you wanna own more and you wanna borrow money to buy more,, your guts telling you the wrong thing. Don't listen to her. Sometimes she's in a bad direction. It could be about personal relationships, could be about stuff. Just always check your gut. So true. Money Rehab is a production of Money News Network. I'm your host, Nicole Lapin. Money

Rehab's executive producer is Morgan Lavoie. Our researcher is Emily Holmes. Do you need some Money Rehab? And let's be honest, we all do. So email us your money questions, moneyrehab at moneynewsnetwork.com to potentially have your questions answered on the show or even have a one-on-one intervention with me. And follow us on Instagram at moneynewsnetwork.com to potentially have your questions answered on the show or even have a one-on-one intervention with me and follow us on Instagram at moneynews and TikTok at moneynewsnetwork for exclusive video content. And lastly, thank you. No, seriously, thank you. Thank you for listening and for investing in yourself, which is the most important investment you can make.