Tariffs Are Here to Stay: How Permanent Trade Barriers Are Reshaping Long-Term Investing

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

**Luke Guerrero** (0:16)
Good afternoon, fellow investors, and welcome to the Friday, July 31st, 2026 edition of InvestTalk. I'm your host, Luke Guerrero, and I'll be with you over the next 50 minutes or so as we round out the month of July and get ready to head in to the rest of 2026
As always, our show will be a mixture of educational and actionable material, and we'll answer your finance and investment questions as well. That being said, before we talk about today's market performance and run down those show topics, let's tackle this caller question now.

**SPEAKER_3** (0:58)
My name is Dave from Fresno. I'm calling about CRS. It's been an ATM machine for a long time, but it's at the 100 day moving average.
I was calling to see if I should sell more or hang in there. Thanks a lot.

**Luke Guerrero** (1:16)
Let's take a look at CRS, which has some earnings pretty hot off the presses because they did report yesterday. And in that report, looks like they had a record quarter in every single margin metric, but had about a $21 million revenue miss, which set the stock down after hours. It has since recovered. It was up 3.17% today. Then in fiscal year 2027 guidance, well, they raised that to 850 million to 880, it looks like. So a bit of a revenue guidance, rather a guidance raise, which was beneficial for the stock today, now trading at about 5.19, though down from an all time high of 6.03, which we saw pre-earnings on July 24th. Now there's a lot good that is happening in this company. There's a reason why over the past 100, sorry, over the past 52 weeks, it's up 108%.
I mean, their operating margins are solid. The return on equity has grown from negative 3.6 in 2022 to 25.8 in 2026
It is kind of the picks and shovels play. I guess I should mention what it does for you guys. They, what they do is they manufacture these high performance specialty alloys. So they take nickel and titanium and stainless steel and their products are used for a bunch of things, for defense systems, for medical implants, for power generation. And so when you're talking about the need for next generation weapons, the need for next generation power, this is the picks and shovels play that every single jet engine, defense missile, power turbine that is being built through the decade may end up using. It is probably one of the most disciplined of its peers from a capital perspective. I mean, they only have $691 million in debt on a $25 billion market cap company. They have a five times operating income growth in three years. And their margins are industry leading. I like this name. There's a reason why it's run up. It's become very expensive. So its price of cash flows about 41.8, but it's thus far been able to justify that growth. Will it into the future? I'm not sure. And it sounds like it's been, as you said, an ATM for you. I don't know if I'd fully exit the position here, but I certainly would trim back, given maybe you're starting to see a bit of a momentum fade over the past month and valuations seem to be not necessarily stretched from historical standards over the past five years, but a bit high compared to what you'd expect across the industry. That is Carpenter Technologies, ticker CRS. Thanks for the call.
All right. I read a great show yesterday, looking into the story about how AI is kind of a spending problem, and more importantly, when are we going to see this massive cash burn really start to pay off? And so Justin talked about that critical question. He also answered a listener question on ticker CRWD, which is CrowdStrike Holdings Inc. If you happen to miss that episode, I encourage you to go check it out, and remember, the best way to never miss an episode of InvestTalk is to subscribe wherever you get your podcasts. Now, on to today, where we're shifting gears and going to talk about something we've never talked about before. Tariffs, I'm kidding, being sarcastic, and how they are here to stay, because there are some permanent trade barriers that may in effect reshape long-term investing. I mean, you're seeing it out of reporting from Bloomberg, saying that Trump's tariffs are likely to stick around despite their own popularity, and it's signaling that businesses and investors need to treat elevated trade barriers as more of a structural feature of the economy and not really a temporary headwind anymore. So we'll talk about the long-term investment implications of a world where tariffs are the new normal. We'll also talk about the US. Treasury and how it warned banks that they may start to dip their toes in the yen market and what that might mean for everybody.