Beyond the Headlines: Buffett, Munger, and the Fed's Final 2023 Meeting

What if the key to successful investing was learning to do nothing? Join us as we dissect this wisdom from investment gurus Warren Buffett and the late Charlie Munger. We navigate through their skepticism of exotic financial instruments and their emphasis on integrity. We also discuss the potential implications of the anticipated Federal Reserve meeting and the likelihood of higher interest rates. Plus, we swing by the concept of wide moat companies, debunk the belief that volatility equals risk, and touch on the recent uplift of gold and Barron's optimistic view of the stock market.

Ever thought about how the Federal Reserve's actions impact your investments? We shine a spotlight on the Fed's influence on interest rates - a topic that's particularly relevant for retirees in light of predicted hikes to the neutral rate due to structural shifts in the economy. And if you're part of the older generation planning for retirement, you'll find our analysis of how to adjust investment portfolios for desired income valuable. We question the viability of the 60/40 portfolio in the current market landscape, and wrap up the discussion by acknowledging the market's current "boring" state - no horrifying declines or spectacular gains. So, buckle up as we journey through the investment and economic landscape, where the only constant is change.

** For informational and educational purposes only, not intended as investment advice. Views and opinions are subject to change without notice.

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Transcript

Alan Eppers: 0:00

And now introducing Mr Keith Lanton.

Keith Lanton: 0:04

Alright, good morning again. Today is Monday, December 11th. In fact, after today, there are just two more Mondays in 2023. So we're rapidly approaching year end. We've talked in the past about some year end strategies and hopefully we are seeing a lot of those thoughts being executed on or having already been executed on as we approach year end. Today we're going to take some big picture thoughts. We had the passing of Charlie Munger, warren Buffett's partner, at Berkshire Hathaway a little over a week ago and this morning going to give some thoughts and insight, some lessons from Warren Buffett and Charlie Munger, some words of wisdom, and see how we can hopefully learn from standing on their very tall shoulders. And then we'll talk about the Federal Reserve.

Keith Lanton: 0:57

Today is the week when the Federal Reserve is going to be meeting for the final time of 2023. And we, as investors, are going to be waiting with bated breath on not what they say about interest rates, because it's extremely widely held notion, and one that I share, that interest rates won't be changing at this meeting. But at this meeting, there's going to be a lot more attention paid to what the board has to say about the future path of interest rates and the neutral rate, and we'll talk a lot about that and what it may mean for the economy, the stock market, the bond market and each of us as individuals and our own personal financial situation going forward, because one of the thesis is that we may see higher interest rates for longer. Many of us over the last 20 years have gotten very used to extremely low interest rates and it's very possible and we'll talk about it even being probable that rates won't settle back down to at or near zero and what the implications of that are and whether or not the Fed will be cutting as aggressively as Wall Street is currently pricing into current expectations. And we'll talk about the advantages of those higher rates for retirees, especially retirees that need income, and those higher rates may alter the portfolio of folks who are thinking about dialing back risk and being able to earn a return on their capital from bonds. Brad's talked about a lot and Brad will be joining us as usual to talk about the fixed income markets, and then we'll dive into Barron Barron's cautiously optimistic heading into your end. They are of the thesis that there is a reasonable chance that we will see new highs on the S&P 500, especially on the heels of last week's job report, which indicated that more folks are finding jobs and working than was expected, and it was expected to be fairly optimistic. And then, if we have time, we'll talk about a couple of individual stocks from Barron, as well as an asset that has been quietly appreciating over the past few years, but especially in the past few months, and that is gold.

Keith Lanton: 3:00

So let's talk Charlie Munger, warren Buffett and some of their musings, especially in the wake of the passing at 99 of Charlie Munger. One of the things that Charlie Munger in particular, but certainly both Warren Buffett said was to be skeptical of exotic financial instruments. They have been consistent critics of derivatives like cryptocurrency, as well as other types of financial innovation, and also critical of catastrophe bonds. One of Warren Buffett's famous quotes is if you've been playing poker for half an hour and you still don't know who the Patsy is, you're the Patsy. Unfortunately, the financial industry is full of players eager to induce you to play their game on their terms, and there's always a hefty fee attached. So perhaps things like triple inverse short ETFs would be one exotic financial instrument that Warren Buffett and Charlie Munger would be extraordinarily skeptical of. I'm sure you know, if you look at their portfolio, you won't see any things like that built into their investments.

Keith Lanton: 4:06

Also, something to think of as we talk about higher rate for longer is inflation is a reason to favor moats. What do we mean by moats? These are companies that have, if you think of, a castle wide, deep moat in front of them so that they can withstand all sorts of attacks. So Morningstar has adopted that philosophy and come up with a list that they call wide mode companies, and these wide mode companies are better able to withstand whatever macro environments send and throw their way. So, now that we're seeing inflation albeit mitigate, but potentially stay with us at a higher level for longer, thinking about wide mode companies, these are companies that have the ability to pass on increased costs to their customers and therefore not suffer as much when their expenses are rising. They can offset those rising expenses by passing on those higher costs because they have pricing power. This is an interesting one.

Keith Lanton: 5:01

Volatility is not risk. In fact, one of Buffett's musings is that beta is an all-power phrase nonsense. Now, beta is how much stocks move around relative to the S&P 500, and I think the thought process here is not that there is no import to what beta is, but I think the thought process is that beta or volatility does not necessarily indicate whether an investment is good or bad. Financial academics like using volatility as a proxy for risk because it's easy to measure, but that has the perverse effect of implying that an asset becomes riskier when it drops in price because it's still moving around a lot and therefore has a high beta, and Buffett among would argue that is the exact opposite of how a rational buyer thinks about a lower price. What Buffett says is, the risk that you really should be focusing on is not necessarily volatility, but it's the chance that you suffer a permanent loss of capital and therefore are unable to recover.

Keith Lanton: 6:03

Buffett and Munger were huge believers in integrity and that your actions speak louder than your words. And Warren Buffett famously said when he took over Solomon Brothers in 1991, amid crisis of confidence having to do with some rigging of pricing for treasury auctions, he said to the sales and trading force he said lose money for the firm and I'll be understanding. Lose a shred of reputation for the firm and I'll be ruthless. Another philosophy that Buffett and Munger espoused is in investing, it's okay to do nothing. Many of us sit around and look at our portfolios and think I need to do something. It can't possibly you know I can't possibly be a good investor if I'm standing pat and I haven't made a change in my portfolio in three months, six months, a year. I must make a change. I mean, I guess I got to feel like I'm doing something. I got to be proactive.

Keith Lanton: 6:58

And Buffett was comparing investing to a baseball hitter waiting for a fat pitch, a nice straight ball, down the heart of the plate. But he said, unlike in baseball, you're not called out after three strikes, so you can look at as many pitches as you want to whiz by before you see that really juicy, slow pitch coming straight down the middle and you can take your swing. And he said you know what you may miss a few juicy pitches coming right down the heart of the plate and you may have some regrets, but eventually you'll find the right one that appeals to you and eventually, does eventually happen. Markets go up and down and there are sustained periods of declines and in those periods is when you'll see even more juicy balls coming down the middle of the plate and be able to have your opportunity to take that big swing. Always be learning.

Keith Lanton: 7:45

Buffett and Munger were always reading. Munger once said you'd be amazed at how much Warren reads and how much I read, munger said my children laugh at me. They think I'm a book with a couple of legs sticking out. And then some philosophy on life. Buffett often talked about what it means to win the birth lottery. So here we're talking about not necessarily investing, but how we live our life. Buffett emphasized how lucky he was born, to be born where he was, in the United States and when he was in the 20th century. Had he been born in another time and place, his somewhat specialized talents of company assessment would have been worthless. He's called this the birth lottery. It's a good reminder to all of us the role luck has played in our lives. If you're hearing this, the chances are you've been pretty darn lucky.

Keith Lanton: 8:39

And then on the key to happiness. Buffett and Munger would say the key to happiness isn't a beautiful set of spouse, smart kids or a pleasant conversation. They would say the key to happiness is finding someone with low expectations, because you tend to be most happy when you're expecting not to be so happy and you're pleasantly surprised. That's what psychological studies show and point out is when your expectations are reasonable or low and they are met or exceeded. You tend to be happy when you expect something to be great. You go to a concert or a venue and you expect it to be the greatest show you've ever seen, even though it could be an excellent show If it fell short of your expectations. Going in, it's very possible that you're going to come away disappointed, even though it was great, because it's all relative to what that greatness is, relative to what you thought it would be. So something to think about. When you think about your happiness and your expectations, think about how often we sometimes fall into that trap.

Keith Lanton: 9:37

So financial market transition this week we have Bureau of Labor Statistics releasing the Consumer Price Index for November on Tuesday, tomorrow, the consensus estimate is for a 3.1% year-over-year increase, one tenth of a percentage point less than October. Core CPI, which excludes food and energy, is expected to rise 4%, matching the October figure. The annual percentage change in the core CPI is expected to be at its lowest level in more than two years. And then the following day, on Wednesday, the Federal Open Market Committee announces its monetary policy decision. As I mentioned, widely expected to believe the federal funds rate unchanged and the debate on Wall Street has now shifted to how many times the Fed will cut interest rates next year, as there is near unanimous agreement regarding this rate meeting that there will not be a hike coming up this Wednesday. There's a currently pricing at least one percentage point worth of rate cuts by the end of 2024. So, going back to Charlie Munger and Warren Buffett, if we don't see one percent of rate cuts, we might be disappointed, even though getting some rate cuts would be something that, you might argue, might be something that the market's like. But again, it's all relative to those expectations and what we expect. So what can we expect? Well, financial markets, a lot like an ongoing story, are Saga.

Keith Lanton: 11:00

The Saga has now shifted Many Fed rate meetings. The meeting is about what Jerome Powell's going to say in the conference. Afterwards. It's a lot about what the Fed's going to actually do. It's this time it's about what do those dot-plots look like? What do these independent Federal Reserve Board of Governors decision-makers have to say independently about? What do they think is going to happen to the path of interest rates going forward? Do they believe that we're going to see four rate decreases next year, and when do they think these rate decreases are going to happen? Each of those individually are going to be assessed as the data comes out on Wednesday. So things that were less important, let's say, a year ago, these dot-plots certainly had meeting, but they weren't the focus this meeting. I would argue they are going to be the primary focus, without something that let's say is a surprise. So, speaking about interest rates, barron's had their cover story and they talked about interest rates and what they said is that we can expect to see higher rates staying with us for longer and that can have broad implications for the economy. So we can expect that the next meeting, rates staying into five and a quarter to five and a half level.

Keith Lanton: 12:10

But the bigger question is what's going to happen over the next six months, 12 months, two years, three years, five years, even arguably 10 years, and expectations for the long-term trajectory of interest rates lie at the heart of the debate over the so-called neutral rate, and you're going to hear a lot about this neutral rate. And what is the neutral rate? That is the rate at which the economy is in equilibrium and arguably, the neutral rate five years ago was something at or near zero, and now the growing thought process is the neutral rate is higher than that zero to 1% that we saw for almost a decade. But what is. That about which there is not consensus is what is the new neutral rate? And this is something that we're going to learn from this dot plot in terms of what the expectations are from the folks that matter a lot, and those are the Fed governors.

Keith Lanton: 13:02

But there's a growing course of economists that are arguing that the structural shifts in the economy that have taken place, that took place either during or were exacerbated by the COVID era pandemic, are pushing the neutral rate higher than it has been in decades, meaning that the let's call it the Fed funds rate, or the rate at which the economy is not too hot, not too cold, is at a higher basic rate than it was in the past. And there are a handful of factors at play, and we've talked about this in the past. Governments are spending more freely, and governments have not been raising taxes to pay for that free spending, which has pushed up deficits. Their demand has remained remarkably persistent. A slow down in globalization has led to both a decline in trade volumes and a costly effort to bring supply chains closer to home, making consumer goods more expensive. So these changes, among others, have led to increase friction in the economy and we'll make it more prone to bouts of inflation moving forward, economists say forcing monetary policy to run tighter.

Keith Lanton: 14:05

As a result, since 2019, fed officials median forecast has put the longer run Fed funds rate effectively their estimate of neutral at two and a half percent. That equates to a half a percent real neutral rate after subtracting the Fed's two percent inflation target. Currently, many economists believe that the Fed funds rate could settle in the mid three percent range or even as high as four percent over the longer term. Adjusted for inflation. That implies an anticipated real neutral rate of one and a half to three to one and a half to two percent, which is three or four times the level that officials were predicting just a couple of years ago. Part of the reason why many of the projections, including those in the markets for cutting rates, perhaps overdue it a bit Is because they presume the policy is more contractionary than it already is. This former treasury secretary, larry Summers, and what he says is they assume too low of a neutral rate. To be sure, a higher neutral rate isn't a foregone conclusion. Opinions vary and unexpected events such as another financial crisis or pandemic could force the Fed or other central banks to push rates much lower, but for now, even Fed officials have begun to signal that they believe the neutral rate is rising.

Keith Lanton: 15:20

The long run implications of a higher neutral rate are substantial. Money would no longer be as cheap as it was for much of the two thousand and ten. That would be more costly, loans more difficult to secure, startup businesses would face heightened pressures to turn profits quickly and fewer would get off the ground. But there are benefits as well. Savers and retirees would profit from higher yielding fixed income investments. Higher rates would encourage more saving and more efficient capital allocation, and central banks would have room to adjust rates lower in the event of an economic slowdown, which would make for a less volatile economy.

Keith Lanton: 15:57

So, talking about these higher rates that we may see for the for the future, and the higher rates that we've currently seen in the last 12 to 18 months, wall Street Journal is talking about these higher rates ushering in a new era of income investing that is, turning older investors into bond buyers. Recent surge in interest rates that sent bond yields near a 15 year high is the single best economic and financial development in 20 years for a tire, he said Joe Davis, global chief economist at Vanguard. The shift is turning the stock loving wood stock generation into bond buyers. With current yields on 10 year treasury notes and around four and a quarter percent Older investors, have reason to move money into more conservative investments. And they have money to do that because, if you look at how investors have been managing that money, last year, 45% of Vanguard 401 K investors over 55 held more than 70% of their portfolio in stocks, and that is up from 2000 and 21 when that number was 47%. So what's happening now that rates are rising? What is Vanguard seeing? Well, this is a morning start statistic. This year, through October, 31 investors pulled 98 billion from stock funds and moved 170 billion into fixed income funds. So it bond yields now above 4%.

Keith Lanton: 17:23

That older generation that's getting ready for retirement can hold less in stocks and more in bonds in order to earn that bogey rate that they need on their portfolio. Whether it's 4%, 5%, 6%, whatever your individual bogey is, you're more likely to be able to achieve that by keeping your portfolio more conservative than you were just a few years ago. Now this doesn't mean that the older generation can shift all of their income to a fixed income, because even if you've got a million dollars and you move it into the 10 year treasury Well, you generate about $42,500 an income, then you'd have to pay a federal tax on that. At the end of the day, you might wind up keeping 30 to $32,000, and that's based on investment of $1 million, and that 30 to $32,000 wouldn't be growing. So you still need, given current interest rates, in all probability to have equities in your portfolio, especially as we are Living longer and therefore need our money to stretch longer and therefore the effects of that inflation become even more detrimental. But the likelihood is that the 60% equity, 40% fixed income portfolio given where interest rates are and we've heard a lot about the end of the 6040 portfolio is seeing a renaissance here, as investors can allocate that 40% to fixed income. And again, this is just an approximation. This is not something that every investor should do. Every investor should talk to their individual advisor, but the 6040 portfolio is making a lot more sense for more individuals than it was before. But for each individual situation is certainly unique and needs to be customized.

Keith Lanton: 18:59

So let's take a look at what's going on today here. As we wake up on Monday morning, we are seeing S&P futures down modestly. They're down about four points. Nasdaq futures down about 25. Dow futures about 26 points lower. Pre open action has been muted as market participants look to some market moving events this week, including tomorrow's CPI, which we talked about on Wednesday's Federal Reserve decision. Market participants are also in a consolidation mindset following big gains since late October.

Keith Lanton: 19:30

No economic data of note today. Treasury yields are inching up. This morning two year note is up three basis points, the 477 10 year up three basis point to 428. Today we do have a 50 billion dollar auction of three year treasury notes and 37 billion dollar auction of 10 year notes, with results at 1130 and one o'clock Eastern time respectively. These treasury auctions are beginning lots of attention because the government has to issue a lot of debt and if there isn't a lot of demand that's another concern that we have had enter the marketplace and investors. Focusing on the success of these auctions is another recent phenomena that we didn't experience just a couple of years ago. So there will be attention paid to how well these auctions go today and I could affect interest rates All right well.

Keith Lanton: 20:19

Corporate news signal symbol see I announced the significant increase to their share repurchase program of ten billion dollars. They said they'll also consider bolt on acquisitions and they ended that talks to acquire you, man after talk regarding price broke down, would have been one of the largest merger and acquisition Deal ever. You think I also did reaffirm the two thousand twenty three outlook iconic name. Host of the thanksgiving day parade, symbol m macy received a offer from an investor group to purchase the company for five point eight billion dollars. So are twenty one dollars a share. Macy stock up about sixteen percent or almost three points this morning on that news. Other companies in the news this morning at the symbol a bbb upgraded to buy from neutral goldman sax stock up about two points. Best buy up about a point and a half. Upgraded to buy from hold at jeffrey's occidental petroleum company warren buffett's been very active in enters into a purchase agreement to acquire midland texas based oil and gas producer crown rock For about twelve billion dollars.

Keith Lanton: 21:25

Looking overseas, equity indices in the asia pacific region began the week mostly on a higher note and major european indices are mixed in geopolitical news. Financial times reporting that israel warrants it can no longer accept his will of forces on its northern border. Us vetoes the united nations resolution calling for immediate ceasefire in the Gaza strip. Cnn, talking about the president biden, will host ukrainian president slinsky on Tuesday on talks on further. Ukraine aid remain stalled in congress. Wall Street Journal reporting the congress will vote this week on a nine hundred billion dollar defense bill. Wall Street Journal talking about recent polling numbers showing that donald trump leads president biden by four points. Nationally, sixty six percent of voters rate the economy is poor or not good. The trump lead expands to six points when third party candidates are included. Bloomberg talking about the bank of japan and saying that bank of japan sources say they do not see an end to negative rates this month. And the wall street journal reporting that new york state and ship makers will invest ten billion in the semiconductor research facility in state of new york. And the wall street journal finally reporting that tucker call some launches own streaming service. The cost will be nine dollars per month.

Keith Lanton: 22:46

So, baron, talking about the current equity market and talking about the direction for the rest of the year, suggesting that it, this, this stock market right now is like musak in an elevator. The stock market, the best stock market, they say, are those that you don't notice. And this is starting to look like a great stock market. And they say the best stock markets are often like that. They don't wow investors with eye popping games, are terrifying declines. They're not actively talked about in barbershops or taxi cabs more like watching paint dry until you realize how good the room looks and the chief investment officer at research affiliates arguing that the market is driven by three factors right now valuation, earnings and sentiment. And right now he says they are as boring as the market. Take valuation as of November 15th, the S&P 500 was trading at 19.7 times forward earnings, which is arguably high, except that it's right near the average for the past seven years. Other measures, he says, tell a similar story. S&p 500 earnings yield the inverse of it. The PE ratio is also right around average. Earnings look solid but not scintillating. Third quarter earnings reports are looking stable, while noting that earnings growth has returned and even sentiment isn't quite overdone.

Keith Lanton: 24:04

In November, investors at 19 percent of their portfolios in cash, above the 10 year average of around 17 percent. So arguably the indicators are looking somewhat average and volatility the market is looking somewhat muted. Last week the S&P was up about four tenths of a percent. The Dow is up two tenths of a percent actually three tenths and the Nasdaq was up about half a little over half, about seven tenths of a percent. This was on the heels of Friday's November's jobs report, which was expected to move the market but turned out to be an odd event. The reason strongly than expected numbers were offset by revisions to earlier months, the impact of strikes and other factors. Yet the data did suggest that the growing economy can side set recession and the Federal Reserve still may have the opportunity to cut rates.

Keith Lanton: 24:55

Now the stock market is waiting, with just a few weeks left in 2023. S&p has gained 19 percent for the year and is only about 5 percent from reaching its closing high of 4,796, which was hit in early January 2000. What the market needs is something that can force sellers who have consistently come in at just under 4,600 to keep the S&P 500 from moving higher, so that these sellers step away. And arguably, what can achieve that is solid fourth quarter earnings, and that seems to be what's being delivered. S&p 500 earnings are expected to grow by about 3.6 percent, while sales are expected to ultimately show a gain of 3.5 percent.

Keith Lanton: 25:40

A couple of stocks mentioned in Barron's and then I'll turn things over to Brad, just to mention these quickly Vertex Pharmaceuticals, symbol VRTX company talked about a few weeks ago. Barron in fact added again, saying that its painkiller could spark big gains. Barron's had talked about the opportunity for a non-opioid painkiller being developed by Vertex and Barron's addressing the fact that Vertex stock, after they wrote it up positively, has fallen about 9%, even though in that period the S&P 500 has appreciated. And that's because Vertex recently came out with the results of a study. But the study lacked a placebo which some say could delay the approval of this drug and some saying that perhaps it's not as effective if they didn't have a placebo in there and the stock fell 9%.

Keith Lanton: 26:30

Nevertheless, barron remaining cautiously optimistic on Vertex, suggesting that the cystic fibrosis business alone which Vertex has a drug for. They talked to a Goldman Sachs analyst, salvin Richter, who said that the cystic fibrosis franchise alone values the business at about $324. The stock's around $354. So only about $30 of the stock's current valuation has to do with the rest of Vertex's business and arguably the greatest portion of the rest of Vertex's business is the potential for this non-opioid painkiller. So if this drug is successful with Goldman analysts this article is cautiously optimistic on then you can see upside of about 25% to around 440 a share. Of course that is all dependent on the success of that drug, which is not a guarantee. But basically what the suggestion of the article is is the upside better than the downside if you're looking at expected values and probabilities?

Keith Lanton: 27:28

Barron's also talked about stock that has been out of favor for quite some time and seems to have some of its mojo back, and that is Intel, and Barron assessing whether Intel is more like General Motors, which has had perennial hopes of turning itself around and is yet to succeed, or it's a lot more like Microsoft, which for many years was on the verge of breakout success following Microsoft, windows and dominating the PC business and for many, many years struggling to re-identify itself. And now, with cloud and AI, microsoft has gone on to certainly great success. And the question is is Intel Microsoft or is Intel more like General Motors? The jury is out. Analysts still remain skeptical 42 analysts cover the stock, only nine have it as a buy, but the stock has been moving up very strongly recently. Pessimism peaked out just before the stock's latest run.

Keith Lanton: 28:23

Some things to like about Intel are that the new CEO, pat Gesslinger, has been making significant changes at the company, announcing massive investments in new chip factories, as well as making a determined effort to catch up with rivals on chip miniaturization and coming up with AI competitive chips. In December, intel will launch new PC chips and they'll come with AI coprocessors. Intel has also developed AI accelerated chips to compete with Nvidia in data centers. Some analysts are suggesting that these latest designs have competitive benchmark scores and come in at a much lower price point than Nvidia. Time will tell whether or not these efforts are successful. We do know is that Intel is not gushing cash. They are making significant investments and whether or not those investments pay off we will see in a few years, but you cannot expect any significant cash flow, in all probability until around 2026. I'm going to turn it over to Brad to give us some more thoughts and insights. Good morning, brad, good morning everyone.

Brad Harris: 29:28

I hope everyone had a nice weekend Over the past month. After a 9% rally on the 10-year treasury and a 12% rally on the 30-year, the bond rally finally took a breather on Friday and continues to be a little softer today. We have 10-year and 30-year auctions this week and I'm sure that the dealers and buyers will want to get those set up to levels that will create demand. So it's possible that the bond rally can be potentially on hold for this week until these auctions get out of the way. If the auctions don't go well, we could be setting up for a new direction, but my guess is that they're going to set up and that we should probably be stable into year end. That is.

Brad Harris: 30:10

The fact that we're a little bit soft right now is good for those of you who still have tax loss bond swaps they still want to do. You have until a month then to do them, but for municipals it's important to try to get these done by the middle of next week at latest, which I will say is Wednesday, december 20th, to put a date on it. I promise that if you procrastinate and wait until the last minute, that you will lose options, liquidity and be executing in a very sloppy market that may not be the most beneficial trade at that point. In municipals the 8 to 15 year part of the curve is cheap in one given structure Odd lot discount municipals with 2 and 3% coupons you can get much better than 4 or 4% yield maturity in this range and even taking into account the small to minimum tax that you need to pay on discount municipal bonds, you'll still be receiving about 4% or better true yield on many of these. The primary new issue market with 4 and 5% coupons have been pricing these maturities in that 8 to 15 year range at anywhere from 2 and 3 quarters to 3 and a quarter percent. So you're pickup for buying these discounted bonds that have been thrown away during tax loss season is tremendous. If governments stay in this range historically, these municipals should appreciate early into the new year.

Brad Harris: 31:33

The market has made some assumptions that the Fed is done, but I'd still proceed with some caution. Please remember don't fight the trend in either direction. The trend is always your friend, but at the moment, in my opinion, the Fed has not made it fully clear that they're our friend yet. I hope everyone has a great week. I'll turn it back to Keith. Thanks.

Alan Eppers: 31:54

Thank you, Brad. That's everything I've got. Thank you for listening to Mr Keith Lanton. This podcast is available on most platforms, including Apple Podcast, Spotify and Pandora. For more information, please visit our website at www. heroldlantern. com.

Sophie Cohen: 32:14

Opinions expressed herein are subject to change and not necessarily the opinion of the firm. Past performance is no guarantee of future results. The information presented herein is for informational purposes only and is not intended to provide personal investment advice. It is important that you consider your tolerance for risk and investment goals when making investment decisions. Investment insecurities does involve risk and the potential of losing money. The material does not constitute research, investment advice or trade recommendations.