Podcast Episode - Suze School: Follow The Percentages

On this episode of Suze School, Suze gives updates on PXD and oil stocks and then dives into why you need to focus on percentages when making your investing decisions. 

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Podcast Transcript:

00:00:29
October 15th, 2023. Welcome everybody to the Women and Money podcast as well as everybody smart enough to listen, Suze O here without KT. Now, I know, I know I told you today, we were going to do an Ask KT and Suze Anything but the little one still isn't quite up to snuff.

00:00:53
It's gonna be just me and we're gonna do another regular Suze School. But before I do that, there's just a few things that I want to tell you that are on my mind. Number one, once again, prayers, love support going out to everything that's happening in Israel.

00:01:14
Oh, could it be more horrific if it tried? I doubt it. So that's number one. Number two,

00:01:23
I did a podcast a long time ago. That was about the greatest words that you could ever say.

00:01:30
And the six greatest words that one can ever say happens to be. I admit that I was wrong.

00:01:40
Uh oh, what was I wrong about? So I just need to straighten something up because I was wrong. Do you remember when I first introduced the kids and teens savings account with Alliant Credit Union that you were all waiting for? And so excited about that, you have to have an Ultimate Opportunity Savings account yourself and then you can open one up for one of your kids. But I said to you,

00:02:10
it was only for parents.

00:02:13
Well, that is not true. So many of you wrote me and said, why can't I do it for my grandkids? Why can't I do it for my nieces and my nephews? And I called up Alliant, asked them the question and they said you can.

00:02:31
And I said, what do you mean? What do you mean? You can? I thought I was told that it could only be for parents. Well, anyway, there's a misunderstanding obviously on my part. So

00:02:41
if you are interested in opening up an ultimate opportunity, savings account for your kids, your grandkids, your nieces or your nephews, you absolutely can where they put in $100 a month or you put it in for them at the end of 12 months, they will get $100 plus at least 3.10% interest on the money.

00:03:09
And I don't care where you go, what T Bill, what anything that is the largest return that you are going to find anywhere caveat is you

00:03:20
either parents, grandparents or uncles and aunts, you need to also have an ultimate opportunity savings account if you already have one. No problem. If you don't, you should. And I don't care how much money you have. I don't care what kind of interest rate you can make anywhere else. It's not gonna kill you to put $100 a month into an account for yourself to get that $100 as well.

00:03:47
I would just want you to understand why this is so important for your children.

00:03:53
There's so many times when a bank or someplace will offer you,

00:03:58
oh, open up an account and we're gonna pay you $250 just to open up an account.

00:04:04
Or you deposit a lot of money all at once and we'll give you a lot of money that doesn't change behavior. Then what happens is you usually just put a lot of money in. You get the extra money, they're gonna give you, you wait three months and then you take all the money out or you spend it

00:04:23
when you have to do something month in and month out

00:04:28
to get to the point where you get your bonus.

00:04:33
Then what's happened in that period of time is that behaviors and habits have changed and when they change at a young age, it will stick with them forever. So do not pass up this opportunity because right now it's scheduled to shut down on December 31st of this year.

00:04:58
So go to my Alliant A-L-L-I-A-N-T dot com and right there when you go there, you'll see kids and teens checking accounts. Next thing, why is it different for a kid? And then a teen? Because legally a kid can't have a checking account,

00:05:19
a teen can. So therefore, not only can your teen have a savings account, but if they want, you can also open up for them a checking account. That maybe isn't a bad idea so that they can kind of learn about that as well. I personally don't care if you open up a checking account for them or not. The main thing is to do the savings account. So that is number one that I want to tell you.

00:05:49
Number two,

00:05:52
a lot of you are writing me and you're obviously listening to somebody out there. I don't know who else you're taking advice from, but you're getting confused because some people are telling you I absolutely would not buy a 20 or 30 year treasury bond right now. I would only stick to three and six month treasury bills and when the time comes, I'll let you know

00:06:19
the problem with that. I just want to say is that we live in an ever changing world

00:06:27
where anything can happen on the spot. And nobody, I don't care who they are, how brilliant they are. They cannot tell you when that catastrophe, look at Israel, look at 9/11, nobody can tell you when something is absolutely going to happen.

00:06:49
So when I give you advice that, hey, just dip your toe just a little tiny bit and whether it's a 20 year or 30 year, who cares?

00:07:02
You might want to think about that. I've been telling you that the majority of your money should go into three and six months short term.

00:07:11
But if you want a little bit longer term and so just something for you to think about for those of you who took advantage of it. There was a time just a few days ago when the 30 year bond was at 4.9%.

00:07:28
And now it's down a little bit, you probably already made money there. So just know that nobody can say it's always going to be like this or do this or do that also. I think it's really important because a lot of you are getting confused when you listen or you read all these other people and what everybody else says, and one person tells you to do this and another person tells you to do that.

00:07:56
The only person that you really need to listen to is yourself

00:08:03
and trusting your gut because maybe I tell you something, then somebody else tells you something else and then you write me and you go, well, what should I do? I can't tell you what to do. I don't know enough about your individual situation, your tax bracket, what your goal of money is your emotional tolerance to lose money, your time frame. I don't know those things. So I can't tell you exactly. This is what you should do.

00:08:33
But I want you to get to the point

00:08:36
of where you understand what you should do and you trust your gut more than you trust others.

00:08:45
So normally when one of you writes me, which many of you have been saying my adviser told me to do this. What do you think about that, Suze?

00:08:56
And one person who asked me that, I think it was maybe yesterday I wrote her back and I said most people already know the answer to the question that they are asking because if you're asking me what I think about something that means you don't understand it and it doesn't sit well with you because when something sits well with you, you know exactly what to do. You don't have to ask others opinions.

00:09:26
Does that make sense? I really got to the point when I was 45 years of age, when I stopped asking what other people thought

00:09:37
that that was when I truly started to own the power to control my destiny because it was at that point in time that I knew my own thoughts. And if you're constantly asking other people, what do you think, how do you feel about this? You don't know how you think, you don't know how you feel and you get confused and you think others know better than, you know,

00:10:03
it's better to do nothing than something you do not understand and don't ever talk yourself into trusting anyone. All right, Suze School to day now, it seems to me that the past two Suze Schools have been about Pioneer Natural Resources, PXD

00:10:26
As well as a stock, Devon DVN... two stocks. That a long time ago, I really, really said to everybody buy these stocks. I like these stocks. And during the time that I said that they went way up, then they went way down and now things are happening with them. But the one problem when I say to buy something,

00:10:54
usually I can't come back on and say, all right, just sell it, just sell it because again, I don't know your circumstances. I don't know when you bought it at, what price did you buy it? What tax bracket you're in?

00:11:06
So when you buy something, you have to have your own opinion as to when to sell it as well. Who cares if you leave money on the table? As long as you've made money, if something is going down dramatically and it is making you sick to your stomach and insecure you sell it because the goal of money is for you to be secure. And if a stock that you own is making you insecure, who cares about it.

00:11:35
So you have to make those decisions yourself. But I wanted to do a little quizzie with you today because I want you to understand that percentages, percentages of what you make in a stock is really what's really important to look at the percentage move of something versus just the numeric move.

00:12:04
Like is something up 10% versus, oh, something's up $80.10 dollars, $5. The percentage moves. But I'll get to that in a second.

00:12:16
So here is your quizzie for today.

00:12:21
All right, you have $10,000

00:12:25
and you go to see an advisor, an advisor says to you. All right, I'll make you a deal. I guarantee on the $10,000 you have two choices A or B

00:12:40
I guarantee that you are going to make 80% the first year,

00:12:46
but the second year, I guarantee that you are going to lose 50%.

00:12:53
But essentially that's still a 30% difference. Now, this is kind of what went on in 1999 with the internet stocks and everything up 80% 1 year down 50% the next. But did you make money? There's that 30% difference or

00:13:11
I guarantee you on your $10,000 that you'll make 5% this year, just leave it in a money market account

00:13:21
or a short term treasury or a one year treasury. And the second year, I guarantee you will have 5% on your money as well.

00:13:32
So which one would you choose? Which percentage?

00:13:39
And I'm sure many of you because this is a quizz. You're automatically going to, I'll, I'll do the 5%. Are you sure?

00:13:48
Are you positive?

00:13:50
You always have to do the numbers. The correct answer here really is B which KT was here because she so would have gotten this wrong anyway. Right. So 5% on $10,000 after year one is $10,500.

00:14:10
5% on $10,500 is another $525. Or at the end of two years, you would have $11,025.

00:14:27
But let's look at the other one,

00:14:30
$10,000 guaranteed to make you 80% the first year. You now have $18,000

00:14:40
and you're like, oh God, ok, you wish you could just get out, but you decide to stay in

00:14:47
and the deal was with the financial devil, so to speak, you would lose 50% the second year.

00:14:56
You still thinking, well, you made 30% still 80 minus 50 but 50% of $18,000 is $9000

00:15:09
which would have left you from your $10,000 only $9000. So in A, you lost $1000 in B you made $1,025. Do you see how percentages work?

00:15:31
And that brings me back to Pioneer Resources. PXD and Devon DVN. Ok.

00:15:43
Last Monday when all of this started,

00:15:47
many of you sold PXD at about $240 a share. Some of you sold it for less. Some of you sold it for more. But that's about what it closed at that day. Here we are five days later

00:16:04
and Friday, it also opened at 2 40. So it went up, it went down, it went up, but it was still trading at about $240 a share. Ok.

00:16:17
A lot of you who sold, you're like, well, what should I do with the money? And it was implied, well, if you still want a great dividend,

00:16:28
because Devon paid a great dividend and still does

00:16:33
that, you could take the money that you made from PXD the $240 and you could buy Devon at approximately $46.69 that same morning, October 9th

00:16:53
and here we are on Friday of this last week

00:17:00
and oil prices absolutely skyrocketed. Now, if you're part of the Women and Money community, I've been posting a lot about how things work and that these stocks were gonna open up. And all of that. And the reason that I knew that that was essentially going to happen is that oil stocks or energy stocks go up

00:17:27
when the price of oil per barrel goes up. Usually it's quoted as wt I crude

00:17:38
and the price of oil on Thursday night, early Friday morning started to skyrocket. It actually went up 5.5, almost 6%

00:17:53
over night

00:17:56
and it doesn't take a genius to know that if oil goes up 6% the stocks that have anything to do with oil or energy, they are going to skyrocket. Why is that? So whether you own PXD or DVN or not, this is a lesson that you have to learn, especially if you're investing in something like energy.

00:18:25
The reason that you knew the stocks were going to skyrocket today is that when the price of oil goes up,

00:18:34
then you have these energy companies that the cost to produce the oil to make it into energy that they sell stays the same, but they can sell it for more. So, their profits go up tremendously if their profits go up tremendously.

00:18:55
That means the company is making more money, they're earning more money and the stock will go up. So when a company makes more money, the stock price usually goes up. When a company loses money, the stock price normally goes down.

00:19:14
So when we first started talking about PXD and Devon, the price of oil was at about $30 a barrel. Then it went all the way up in 2022 to 100 and $27 a barrel. Then it went all the way back down this year to $66 a barrel.

00:19:36
And now here we are and wt I crude is back at $87.62 a barrel. It's back up there again. Now the other thing I just want to say, put a pin in that for a second is that a lot of people go on to the Women and Money app

00:19:57
and they say things like, oh, there's no way oil is gonna go back up to 100 and they give you all these reasons as what they think. Can you just please pay attention to either what I'm saying or other experts are saying, who knows who the people are on that community app that are giving their opinions? Are they experts? Are they not? I have no idea,

00:20:25
but I read this one that's like there's no way oil's gonna go up. And I'm like, are you kidding me? Are you kidding me? Now? Have I not been saying to you for a long time that I thought oil would go back up to about $100 a barrel? And one of the reasons that I kept thinking that is what is happening with Russia, with Ukraine and now definitely with Israel

00:20:54
because the Israel conflict has raised worries that fighting could affect regional oil production.

00:21:03
And the Middle East accounts for more than one third of the global sea borne trade, the, the oil that goes by sea and also last Thursday,

00:21:16
the US tighten the sanctions against Russia again.

00:21:20
So we have a situation where was Iran part of what happened over in Israel? Did they fund it? Did they not? Who knows? You know, they say they don't, but then they changed their minds and maybe they did and now you hear people saying, well, we'll go get Iran and we'll just bomb their oil fields, which is where they get all of their money and then watch what would happen to the price of oil. When I see

00:21:47
such incredible geopolitical unrest

00:21:53
that makes me worried

00:21:56
and it's conflict over oil because that is the currency over there. So I have no doubt that oil could very well easily go up to $100. I mean, really, it's only $13 away from that right now.

00:22:16
But that is why you saw most of the oil stocks go up dramatically.

00:22:23
Now,

00:22:26
the stock PXD Friday morning opened up at about $240.36 a share. It closed Friday at $248.29 a share. It went up $7.93

00:22:49
for those of you who sold PXD.

00:22:53
And let's say you bought Devon. Devon on Friday morning was right around $46 a share right there.

00:23:02
And then it closed at $48.39 a share up a dollar 70 a share.

00:23:13
So here's the question to you. Would you rather have made $7.93 a share? Having kept PXD

00:23:23
or

00:23:25
the dollar 70 a share in Devon? I want you to think about it because a lot of you wrote me and went, oh my God. If I just kept pxd, rather than buying Devon, I'd be up almost $8 a share, Suze. Instead I'm up only a dollar 70.

00:23:48
Think about it.

00:23:50
Percentages, forget the dollar amount.

00:23:55
$7.93

00:23:59
on a stock.

00:24:01
That was $240.36 when you essentially would have sold it is only a 3.30% return on the money.

00:24:13
That's how much pxd went up. 3.30%. And essentially these are the same prices that you would have been looking at maybe on Monday of last week

00:24:27
again at 240. All right. 3.30%. If you bought Devon at about $46.69 a share

00:24:39
on October 9th

00:24:42
and today it's at 48.39 39 you would be up 3.64% on your money. You would have made more money in Devon.

00:24:56
And if you had kept PXD, but when you first look at it, you're going, oh my God. I would have made $7.93. I only made a dollar 70 in Devon. But you're not looking at the percentages. The other thing you have to remember

00:25:16
is if you had 100 shares of pxd

00:25:24
and you were up $7.93 today, you'd be up $793.

00:25:34
If you had switched that money over to Devon,

00:25:38
you would have been able to buy 500 shares

00:25:43
for the 100 shares. Let's say you had of PXD because of the price.

00:25:49
So if you were up a dollar 70 on 500 shares, you'd be up $850 today.

00:26:00
So, do you see how you would have been up more money? So, when you're looking at anything,

00:26:08
rather than getting freaked out? Oh my God, it's down $40 it's down $80. It's up $8. It's only up a dollar 70. The market's down 700. Don't look at the number. It's down,

00:26:24
look at the percentage that it is down

00:26:29
because the percentage is everything and it means far more than the actual numerical value because that will tell you how horrible something's doing, how good something is doing more than the actual amount that it is now.

00:26:48
So that is the Suze School today of what you need to look at when you evaluate a position that you have a stock that you have whatever it is that you may have. So in recapping Suze School, which is the six greatest words I admit that I was wrong. Do you want to know what the other ones are?

00:27:14
I admit that I was wrong.

00:27:16
You did a good job. What do you think? Could you please?

00:27:24
Thank you. The one worst word is I, and the one greatest word is we

00:27:32
so those are the six greatest words, the five greatest words, the four greatest words, the three greatest words, the two greatest words and the one greatest word. So I did a podcast on there somewhere a while ago. But anyway,

00:27:48
I admit that I was wrong. Grandparents, aunts, uncles and parents go and open up a kid saving account, teen saving account for your kids, nieces, nephews and grandchildren. Also, second thing today, trust yourself more than you. Trust others. Don't go listening to people who say

00:28:15
it's this, it's gonna be that way. There's no other way it can be, anything can happen at any time.

00:28:23
And the third thing today is all about percentages and how you look at something. So you don't have to be depressed thinking you made the wrong move.

00:28:35
I guess. I'm also saying with this, yeah, I still like Devon, I still like Devon a lot and I think Devon really with what's happening with it could very well be another takeover target as well. You just never know. I don't know,

00:28:52
but it seems like a lot of the large companies are looking for it and for those of you, I just want to say this that are you're thinking about keeping PXD to transfer over to ExxonMobil,

00:29:08
the way everything's figuring out right now, the share price will probably be about 247 more than 2523. We'll see what happens. But ExxonMobil now is slated to be a good company as well. So if you wanna stay in oil, you wanna get the dividends of PXD until the deal happens or if it never happens.

00:29:31
All right, stay there and just switch. If you want to. You can't really make a mistake on this one, I guess is what I'm trying to say.

00:29:41
All right, maybe sooner than later here. I'll give you some alternatives of other energy stocks and stocks that I have my eyes on that. I think you might find interesting as well. But until Thursday, when Miss Travis better be healthy or we're, we're in trouble, everybody. There's only so many things I can cook. Not a great cook,

00:30:09
although I could be,

00:30:11
but I don't really want to be, but I have to be right now so that she's ok. But anyway, she's doing fine. She's much, much better. But Thursday, she will be here for KT and Suze Anything. But until then there's really only one thing that I want you to remember to say every single day and it goes like this today, wherever I go, I will create

00:30:38
a more peaceful, joyful, and loving world.

00:30:44
And if you do that, I promise you you will be unstoppable.