What recent changes in Venezuela means for consumers, new year, new investment advisor? Labor market ends the year on a soft note, Mortgage-Backed Security Purchase Lowers Mortgage Rates & More

What the recent changes in Venezuela means for consumers

Without getting into the benefits of less drugs coming into our country, there are economic benefits from the large amount of oil reserves that are in the ground of Venezuela. The current daily consumption worldwide of oil is about 100 million barrels per day. Venezuela has in their ground over 300 billion barrels of oil. That alone would keep the world supplied for over eight years. Venezuela has the highest proven reserves in the world even above Saudi Arabia. Venezuela accounts for about 20% of the world supply of oil. Venezuela has four times the reserves compared to the US, yet in 2024 the United States produced over 13 million barrels per day compared to Venezuela producing under 1 million barrels per day. There is talk that the big oil companies could be going into Venezuela and they could definitely increase that production by a large amount, which would benefit not just Venezuela but also the world markets and the United States consumer. The way the United States consumer would benefit is from lower gas prices at the pump and with oil currently trading in the high 50s, we could see that drop to the low 50s maybe even a little bit below that. This will not only put more money in US consumers' pockets, but it would also help the Venezuela population as the production of oil would create many good paying jobs and could lead to a ripple effect for other businesses with more money coming into their economy. The recent events occurred just a few days ago and a lot has yet to be played out, but make no mistake there are many benefits if Venezuela can produce a lot more oil for the world.

It’s a new year, is it time to hire or change to a new investment advisor?

With the new year, investors should take a look to see how their investments have done and how their investment advisor has been working with them. The beginning of the year is a fresh start, so it’s time to see what your percentage return was on your portfolio in 2025 and evaluate if your advisor kept you updated and gave you the customer service you need like returning your phone calls in a reasonable timeframe. You don’t want to jump from the pan into the fire, so when you’re looking for a new investment advisor, be sure that the company and the advisor are full fiduciaries, which means they must do what is best for you, not what is best for themselves. Ask yourself the question, is the advisor trying to sell me products that he or she makes a big commission off of? That could be a red flag that they don’t have your best interest in mind. It's also important to understand the investment strategy the firm and the advisor use. Do they use mutual funds or build your own portfolio with individual equities and investments that are liquid and don’t tie your money up for years to come in case the investment underperforms. I always believe it is worth asking the advisor how they manage their own personal portfolio. If it’s good enough for them, why is it not good enough for you? I know some advisors will say they have different objectives, but I think everyone has the same objective of making a reasonable return on their investments. And lastly, don’t be afraid to ask how they get paid when managing your investments. It may seem like an uncomfortable question, but if it’s an excessive amount, that can be a red flag. If the advisor is trying to dodge the question, that means to me, they’re trying to hide something from you at the very beginning, and you should runaway immediately. Take your time to find the right advisor, if you feel pressure from constant phone calls and high sales tactics, you probably want to look for someone else to work with on your investments.

The labor market ends the year on a soft note

This jobs report was special considering it was the first on time report in 3 months, but I'd say the data was lackluster. Nonfarm payrolls in December increased by 50,000, which was short of the estimate of 76,000. The two prior months also saw downward revisions that totaled 76,000. For the full year, payroll employment grew by 584,000, which equates to a monthly average of about 49,000 new jobs per month. This was less than 2024's gain of 2 million jobs or about 168,000 per month and actually registers as the worst payroll growth outside of a recession since 2003. While this all might sound troubling, it is important to remember that changes to government jobs had a large impact on the data. Since reaching a peak in January, government employment fell by 277,000 jobs. This obviously created a huge headwind for headline payroll growth. With that said, the labor market was still in a slower growth environment, and I continue to believe that will be the case as we move forward considering the unemployment rate still remains healthy at 4.4%. It's also important to remember that of those counted as unemployed, about 26% or 1.9 million people are considered long-term unemployed as they have been jobless for 27 weeks or more. I always do wonder how actively these people are looking for jobs. In terms of areas of strength in the report, both healthcare and foodservices and drinking places remained healthy. Health care employment was up 21,000 in the month and for the full year averaged monthly gains of 34,000. This was down from 2024's monthly average of 56,000, but still strong. Foodservices and drinking places saw employment grow by 27,000 jobs in the month and for the full year averaged monthly gains of 12,000 jobs, which was similar to 2024's average of 11,000 jobs added per month. Retail trade was the real headwind for the month as employment declined by 25,000 jobs. This could be due to seasonal changes, but it was interesting to see retail trade employment showed little net change in both 2024 and 2025. The other major industries in the report showed little to no changes in the month. Overall, I believe this continues to show that we remain in a slow hire/low fire labor environment and I don't see much evidence that will change this year.

Financial Planning: Mortgage-Backed Security Purchase Lowers Mortgage Rates

The U.S. government’s announcement of a $200 billion purchase of mortgage-backed securities (MBS) through Fannie Mae and Freddie Mac is already pushing 30-year mortgage rates below 6%, creating an opportunity for homeowners and prospective buyers. During the COVID-19 pandemic, the Federal Reserve lowered interest rates and also purchased MBS, which helped push mortgage rates down. Mortgage rates are not directly tied to the Federal Reserve interest rates, but the purchase of mortgage-backed securities is something that would directly lower mortgage rates. This is because investors purchase mortgages after origination for the interest income paid by homeowners, so Fannie Mae and Freddie Mac buying these securities increases demand which lowers the interest rates borrowers get on mortgages. For those with higher mortgage rates, this could be an opportunity to cut that down. I don’t think we are yet at a point where it makes sense to buy down the rates further, but there is no limit to the number of refinances someone can do. It may be best to refinance now and then again in another year or so.

Logical proof that silver could be in a bubble

At our firm we have said we do not buy precious metals because there’s no way to give it any type of value because it is simply a piece of metal. There are no earnings, no dividends, and no cash flow, so how can you give a value to a piece of metal? I discovered a good analysis that compares silver to the price of a barrel of oil. The comparison goes back 25 years to 1975, and the study showed with oil at $58 a barrel 1 ounce of silver costs more than a barrel of oil. There’s only been one time in the last 50 years when an ounce of silver was more than oil and that was 1980. That’s when the Hunt Brothers were cornering the market on silver and it hit $50 an ounce. Over the last 50 years, the average oil to silver ratio is about 3.8 times. Using that metric, with oil at $58 a barrel that would put an ounce of silver at only $15 an ounce. The other way to meet that ratio is oil would have to climb to almost $290 per barrel. I don’t see oil increasing much above $60 per barrel if anything at all. I think the more likely outcome would be for silver to decline somewhat. I don’t believe it will crash to $15 per ounce but I do believe it is possible many who hold silver will not be happy losing their big profits if silver declines. Researchers also point out that about every 10 to 20 years silver becomes the hot investment that ultimately falls back down to a normal value. Could that happen in 2026? The only thing in silver's favor is we could have lower short-term interest rates, but the question is, is that already baked into the price of silver?

Tesla is no longer the top seller of electric vehicles

Tesla held the crown as the top producer of electric vehicles for many years until 2025 when China's BYD passed Tesla. In the US, Tesla has had some difficulty with deliveries as they dropped by about 9% in 2025 to 1.64 million. Tesla also experienced a 23% drop in sales in November 2025. The Chinese car maker BYD, which has no sales here in the United States, saw deliveries of its cheap cars in other places around the world climb to 2.26 million electric vehicles in 2025. There’s competition from other Chinese car companies as well such as Geely and Leapmotors, which are producing a substantial number of electric vehicles that are sold worldwide but not in the US. Tesla and Elon Musk are not looking in the rearview mirror, but into the future with their Robo taxis, which is a steering wheel free cyber cab and their Optimus humanoid robot. For now the car sales will be the major source of income, but as years continue on Robo taxis and humanized robots could account for more revenue and income each year for the “new” Tesla.

That all-time favorite Kraft mac & cheese is losing market share

Kraft mac & cheese has been around since 1937 when you could get a box for $.19. It was created by James L Kraft who would sell cheese from a horsedrawn wagon. Kraft mac & cheese really took off during World War II when it was a fast and convenient dinner option and could feed a family of four.

For many years Kraft mac & cheese was selling about $1 billion a year as the company was selling more than 1 million boxes a day. But unfortunately, they have not kept up with consumer changes in taste and have seen their market share drop to 39% from 45% just three years ago. The company did replace artificial dyes and colors using natural resources in 2016, but a competitor called Goodles has come on strong by infusing protein and nutrients from spinach, pumpkin and kale and other ingredients to add flavors. Health conscience consumers are paying nearly twice as much per box versus Kraft mac and cheese. Goodles founders Paul Earle and Jen Zeszut were confident that many young adults were secretly eating Kraft mac & cheese and they felt they would love to have a healthier option. In just a few years, they have now taken 6% of the US mac & cheese market and could dig deeper if Kraft mac & cheese does not come up with something for those looking at healthier alternatives. Kraft Heinz, who owns Kraft mac & cheese, says they planned on spending $60 million to improve the product. I’ve never been a big fan of Kraft mac & cheese, but do you still find yourself eating it on a regular basis?

Would you own a humanoid robot?

The days are coming and probably within the next 3 to 4 years humanoid robots like Tesla's Optimus will be more prevalent in business and in homes as well. If you’re old enough to remember the Jetsons, they did have a robot for a maid, and if my memory serves me right, I believe she did have some robotic problems. Currently, there are robotic arms and other types of robotics in factories which can do heavy lifting and such things like moving hot metal, but those robots are generally stationary and can only do a specific task that it was programmed to do. Humans are still needed for jobs that are flexible, require different types of tasks, and also need movement such as installing items on a moving assembly line. While it looks like humanoid robots can be trained and programmed for multiple tasks, like sorting Legos by color, folding laundry and using a drill to screw in a fastener, there are still concerns about the movability. It will take years for them to learn how to move around indoors and avoid safety risks like tripping and falling on top of a human or a pet. They’re currently about 5'8" tall and weigh about 125 pounds, but if they were to run into you or fall on you or a pet, you would probably sustain major injuries. There are some predictions by the year 2050 humanoids will bring in about $7.5 trillion in annual revenue globally. This could be a substantial money maker for Tesla and other robotic companies, but I believe it's still quite a while before you or I will be able to have a robot in our home to clean the floors, dust the furniture, and do laundry.

Can’t afford the new car or truck you want? Maybe you should finance it with a 100-month loan

You may think I’m crazy and that there’s no such thing as 100-month car loans, which is 8.3 years, but with the average price of a new car now above the $50,000 barrier, 1.61% of car buyers have elected to get a loan for eight years or longer. The average price of new cars has increased substantially considering it's climbed $12,000 from just five years ago. The 72-month loan is also climbing to roughly 33% of buyers, which is up from 29% one year ago. American automobile debt is now $1.66 trillion, which is up $300 billion from 2020. The good news is vehicles are built better than before and should last longer, but if you are a consumer who does go for the 7 to 8 year loan you better take good care of the car and keep up on the maintenance so it will last longer and stay in better condition. Otherwise, you could have a worthless vehicle that still has a loan on it. If you’re in the market for a new car, be careful when you go into the finance department. They are very good at trying to sell you all the other options to increase the price of the car to increase their commissions, but you will pay interest over those seven or eight years on those extra commissionable items that they swear you need. There are so many things they can get you on, but here are a few to be careful of: the extended warranties, gap insurance, Vin etching, and prepaid maintenance. Think about all these extra items financed over eight years at 6% with an added cost of $5,000. That would increase your car payment by $65.75 and over eight years you would pay interest of $1312.16. Remember the old drug slogan “just say no”? The same applies here, just say no thank you!

Why do half of small businesses fail within five years?

There are many reasons small businesses fail during those first five years, and that 25% of small business don’t even make it past the first year. Reading about the many public companies we hold in our portfolio, having an MBA and running my own small business for over 30 years now, I can generally spot when a small business probably won’t make it. There are seven key points I’ve noticed when it looks like a small business will not make it. Number one is closing too early. I just went to a new business in Rancho Peñasquitos on a Saturday and we had to hurry up because the woman said they were closing at 2 o’clock. I asked the woman why, she said she did not know. I said that’s such a shame the parking lot is filled with cars and people. I’ve also seen employees in small restaurants telling the customer they will be closing in 30 minutes, isn’t that a welcoming feeling? The third thing on my list is no or very little training for the employees. When I was recently at that business in Rancho Peñasquitos, the woman that was there knew only the name of the equipment, but no idea how it worked and didn’t know how to use it because she doesn’t use it herself. Number four on the list is no advertising. This one drives me crazy as every business should have an advertising budget that should be at least around 10 to 20% of revenue. How are people going to know about your business if you don’t advertise? Number five is placing yourself on too tight of a budget. If you do silly things like keep your electricity low, and your business is dark or order cheap products, it hurts the consumer experience. Customers can also tell if you're trying to keep your labor costs down by not having enough workers, and that can really hurt when you have a rush. Consumers will remember the poor service that they received and likely won’t come back. Number six is starting a business without the proper capital and thinking you can run a business on a shoestring budget. Make sure when you start a business you have plenty of capital for things you can plan for but also things that you did not plan for. Last on the list is to be sure to pay up for good employees. Those employees represent your business and if they are not happy or you don’t pay them well, you’ll get low quality employees that are dissatisfied, which customers can sense from their bad service and attitude. As I said, there’s many other factors as well, but these are some big ones I’ve noticed recently. Remember if you start a business you will have to be at that business probably 60 to 70 hours a week for at least a year or two and don’t even think about going on vacation. If you can’t commit to that type of time to your new business, buy a good quality stock instead that pays good dividends and you’ll have no worries.