Fedspeak vs. Geopolitics: Which Force Actually Drives Markets More?

**SPEAKER_1** (0:01)
This is Invest Talk from KPP Financial, helping investors make sense of the markets one day at a time. Here's your host, Justin Klein.

**Justin Klein** (0:17)
Good afternoon, fellow investors, and welcome back to Invest Talk. This is our Wednesday, June 24th, 2026 edition of Invest Talk. Appreciate you all tuning in for this hour. A lot to unpack in today's market with so much going on geopolitically, with central banks, with fiscal policy.
Then we have a massive IPO schedule that has already kicked off with the IPO of SpaceX and many more to come throughout the year.
So this year looks to be what, in hindsight, will probably be an inflection year in some way, shape or form. Is that more politically? Is that more monetarily? Is that more from a leadership perspective? We shall see. But bottom line is we are seeing a lot of volatility, a lot of increased volatility in markets, and that usually means the start of new leadership, new trends. And that's what we are here to help you with. Unpack what we are seeing and give you a sense of how to navigate times like these, unprecedented times like these. Now, I'm Justin Klein, and our objective, as always, to help you become a better investor, we do that by answering your finance and investment questions and bringing you data and perspective, develop with over 25 years of investment experience so that you can make better decisions with your money. Making decisions out of facts on the ground as opposed to fear and grief. So excited, as always, to connect with you for the next hour. So go on a state to give us a call, 8899 chart. Now, our next wealth webinar is coming up in less than a week Tuesday, June 30th, 12 to 1 PM, Pacific time, six days away. The title is Beyond the Yield, How to Invest for Your Income Needs. It's free, but you must register over at investtalk.com. Now, just to be able to talk about today's market performance and run down the show topics. But as usual, we'll tackle this first caller question now.

**SPEAKER_3** (2:22)
Hello, I'm just wondering what you think about Roblox, RBLX.
I was always impressed by the large number of users it has, young users, and thinking that might turn into, they turn older and they use it even more, and their kids use it or whatever. I was just wondering whether you think it's time to sell it. Thanks, bye.

**Justin Klein** (2:41)
Looking at Roblox, RBLX is the symbol. Before I get into the details of this company in general, I want to first talk broadly about that first comment the caller made, which is, hey, there's a lot of demand, a lot of kids use it, and that automatically makes it potentially a good investment. The reality couldn't be further from the truth. Demand for a product is not, I wouldn't even say it's the most important factor for long-term success. Now, short-term, yes, but over the long-term, it's about the economics of the overall business. Demand is going to ebb and flow.
Problem is that even when there's high demand, it could be losing money. Could be negatively accretive to the shareholder. If you look at Roblox, historically, it has never made money.
Can you believe that? Think about all the kids at the college state, all the kids that use Roblox and buy Robux, and they've never made money. Can you believe that? Well, I can. Very simple. They have negative economics.
Go look at Return of Invest capital, negative 51.3 percent. A lot of people look at Roblox, and there's one aspect that people will cling to, and they'll say, well, look at its cash flow. It has positive free cash flow. That continues to go up and up and up, and that's true.
That is the one little saving grace here. The problem is, is that it's not accounting, free cash flow does not account for stock-based compensation. That is clearly how they are financing their business, how they're paying employees. That stock-based compensation does not show up in free cash flow. If you go look at number of shares outstanding in 2020, there were 546 million shares. This was in September of 2020 Now there's 715 million shares outstanding. That is a very, that's about 30, 40% growth in the number of shares outstanding. So the net income remains negative. And then you go look at the chart. Relative strength is seven, not 70, not 17, seven. That means 93% of stocks in the last year have done better than Roblox. It peaked back in September of last year, about 160, 150 something, what is it? Yeah, it's down 68% from its 52 week high. So yeah, to me this is an easy sell. Demand does not mean it's a great investment. Now it can be a place to start. You see a certain product or service in demand, yeah, it's a good place to start your search or your research, but it should not be the end of your research.