Enlightenment - A Herold & Lantern Investments Podcast
Enlightenment - A Herold & Lantern Investments Podcast
Unlocking Halloween’s Secret to Stock Market Success: Insights on Market Trends and Investment Opportunities
October 28, 2024
Season 6 | Episode 39
Unlock the secrets of an ancient tradition's surprising link to stock market success. Discover how the Halloween strategy could transform your investing game, along with an intriguing peek into the origins of Halloween itself. We'll dive into the heart of the market's pulse, from the S&P 500's "Magnificent 7" to undervalued gems waiting to be discovered as earnings season heats up. Join Brad and the team as we navigate the twists and turns of global events and their ripple effects on financial markets, from oil price shifts driven by geopolitical tensions to the political stage's influence on indices.
Explore the unpredictable dance of the bond market and how it might impact your wallet, especially if you're dealing with variable rate debt. We'll uncover the stories of companies like Ford, defying expectations, and examine the significance of bond market volatility and its historical echoes. As the political landscape looms large, we caution against making hasty investment choices based on election predictions and instead spotlight undervalued opportunities like Viatris. Whether you're a seasoned investor or just curious about the financial world, this episode promises a well-rounded snapshot of the economic landscape and potential pathways to profit.
** For informational and educational purposes only, not intended as investment advice. Views and opinions are subject to change without notice.
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And now introducing Mr Keith Lanton.
Keith L:anton:All right, welcome back Morning. Today is Monday, october 28th Eight days to go before Election Day, three days to go before Halloween and four days to go before the beginning of November, as this year winds down very rapidly. I'm going to start out this morning talking about Halloween and its some interesting facts and what it may mean for the stock market as October comes to an end, and then we will dive into the news. This morning talk about the markets, and one of the biggest factors to talk about this morning is the bond market. So we'll talk about what's been taking place the last few weeks in the bond markets since the Federal Reserve cut interest rates by 50 basis points and what effect that's had, as well as the news flow and what effect that's had and how that may influence not only the bond market but the stock market. Bond market is often called the most sophisticated institutional market because it's got a lot less retail investors invested in it and therefore it's considered more of a professional market. Whether that's accurate or not, who knows, but a lot of folks look at the bond market to give them some insights into overall health of the economy, and we'll talk about that. We'll talk about a couple of individual situations from Barron's stocks that they suffer as a result of a rise in interest rates or rates perhaps I guess I should phrase it differently not going down as rapidly as expected. We're also in earnings season and we will talk about the fact that the Magnificent 7, as we know, have had tremendous outperformance, and we'll take a look at the bottom of the S&P 500 and whether or not there's opportunity there, and then Brad will join and give us some real detail on what he sees going on in financial markets, bond markets, and what that may mean here as we approach Election Day.
Keith L:anton:So three days from today is Halloween and a lot of us celebrate Halloween and don't know exactly what the origins are, and it's largely attributed to the first Halloween celebrations being traced back to the Celts. They lived in an area now occupied by Ireland, the United Kingdom and northern France and celebrated a festival called Samhain on October 31st, and it marked the day before the new year, the start of winter and a time when the dead were believed to return to earth and trick-or-treating began as something called souling. So during the Celtic festival of Samhain, it was customary for poor children to go door-to-door begging for food and money and in exchange for their generosity, children would offer to pray for the souls of recently lost ones, and that's obviously where the name Soling came from. Here in the.
Keith L:anton:United States, we have a tradition that's now spread throughout the world where we no longer go door-to-door praying for the souls. We go door-to-door and folks expect to get a deposit of candy in return for saying trick or treat, and getting candy was something that really became the predominant gift, so to speak, when knocking on someone's door in the 1970s. In the 1930s, when trick-or-treating began here in the United States as more Irish immigrants emigrated to the United States and brought the holiday with them, it was acceptable to hand out everything from homemade cookies to nuts, toys and coins, and then, in the 1950s, picking up on the business theme here, candy companies started to really heavily market dispensing candy, and 20 years later, in the 1970s, it became the primary way to give out treats to the children coming door to door, and one of those treats was something that is currently called candy corn, which is one of the earliest Halloween treats, and candy corn was originally called chicken feet, so candy corn appeared on the market for the first time in the 1880s, when about half of the American workforce were made up of farmers, and because of that, candies were often made into agricultural shapes, such as chicken feet, which we now think of as corn-shaped, and this change occurred after World War I, when corn became viewed as people food. Before that, corn was viewed as food for animals. Now, of course, we are in the financial services business and we think about what effect Halloween may have on our investing strategy as the calendar turns, and, and it's based on the hypothesis that stocks perform better from October 31st to May 1st than they do the rest of the year.
Keith L:anton:And the Halloween strategy posits that it's prudent to buy stocks in November, hold them through the winter and sell them in April, while investing in other asset classes May through October. And this strategy is closely related, or pretty much synonymous, with different terminology and that you may have heard is sell in May and go away. And many believe that the notion of abandoning stocks every May and returning in November began in the United Kingdom, where the wealthy class would leave London and head to their country estates for summer, largely ignoring their investment portfolios Of course, there was no internet, barely any telephones and return in September. And the Halloween strategy does have evidence worthy of consideration. Historical stock returns suggest that the premise of the Halloween strategy has been mostly true Over the last about 50 years. If you sold in May and came back in November. Over rolling five-year periods, you would have outperformed the market about 80% of the time. Over rolling 10-year periods, you would have outperformed about 90% of the time. Now, before you get all excited, there is some evidence and some debate that the Halloween strategy, after some researchers have looked into it, was validated by two major outliers the 1987 market crash which fell in mid-October of that year, and the long-term capital hedge fund collapse which had a big effect on the financial markets back in 1998. So these two big down events, which occurred not between Halloween and May 1st, may have strongly influenced those positive return numbers. So, unless you're anticipating another cataclysmic event, perhaps it's just more of a coincidence than an actual actionable plan. Of course, time will tell and see if this expectation to sell in May and go away is borne out by future data.
Keith L:anton:But let's take a look at the data this morning here again, october 28th. S&p futures are up about 15 points, or about three-tenths of 1%, above fair value. Dow futures up just about 97 points now about 0.2% above fair value, and NASDAQ futures leading the way up about 105 points or 0.5% over fair value. Markets right now are pointing to a higher opening ahead of a big earnings week. Some of the headlines include Alphabet, which reports tomorrow, microsoft and Meta report on Wednesday, apple and Amazon on Thursday. So lots of the Magnificent Seven coming in this week.
Keith L:anton:Oil prices also helping the markets out. They are sharply lower after Israeli attacks over the weekend were limited to military bases in Iran, like the fear that Israel would attack nuclear or oil facilities, and therefore oil futures down about 6% or $4.41 to $67.34 per barrel. So markets viewing this, at least at the moment, as perhaps a de-escalation. A 10-year note is up just under two basis points to about a 4.25. Two-year yield north of 4% again, which is notable at a 4.11. Other commodities this morning natural gas down significantly 15 cents, down almost 6% as well. Gold taking a breather, down $10.50 after hitting multiple records. Silver, which has also been on a tear, is down 20 cents this morning and copper down about a penny and a half this morning.
Keith L:anton:In the election news, national polling averages have the presidential race roughly tied. Some suggest that former President Trump is leading marginally in the battleground states, some saying in all seven of them. All polling averages are within the margin of error. The Economic Times reporting that former President Trump supporter Elon Musk saying he can cut $2 trillion from the federal budget deficit if he is named the Department of Government Efficiency head. We mentioned that Israel attacked military bases in Iran. The Biden administration say they believe the attack should be the end of the direct military exchange between Israel and Iran. Overseas in Japan, the ruling Liberal Democratic Party had their worst electoral votes yesterday electoral reverse results in 15 years, that's according to the Financial Times and now the Liberal Democratic Party scrambling to put a coalition government together.
Keith L:anton:In corporate news, boeing was initially up. Now I believe it's down a couple of points. They are raising as much as $19 billion in a capital raise today, large portion of equity here in the United States, as well as some ADRs. Overseas, taiwan Semi TSMC symbol TSM down about 4.2%, the founder of that company saying that the company will face severe growth challenges amid free trade restrictions. According to Bloomberg, alphabet Up this morning about 2%. They are developing an artificial intelligence that will take over computers. According to the information, airlines higher in general because oil prices are down. Delta Airlines DAL in the news up about 145, largely, I think, on the lower oil prices. But they filed a lawsuit against CrowdStrike CRWD over the IT outage. According to CNBC and Apple up this morning about a point aiming to update their Mac lineup this week, according to Bloomberg.
Keith L:anton:This week I mentioned the tech earnings, which certainly will get lots of attention Alphabet, the first out of the gate tomorrow after the closing bell. Outside the tech sector Visa reports on Tuesday, abbvie and Eli Lilly on Wednesday, mastercard on Thursday, chevron and ExxonMobil closing the week out on Friday. Those are some of the big companies reporting. Lots of other companies reporting earnings as well, so we'll get lots of insights into the performance of corporate America. Also, we will get news significantly on inflation and employment, which are the key factors that the Federal Reserve uses to evaluate their interest rate policy. So this week, earnings and economic data that are market moving.
Keith L:anton:Thursday, bureau of Economic Analysis releases the Personal Consumption Expenditure Price Index for September. Economists expect a 2.1% year-over-year increase for the PCE price index. That would be one-tenth of a percent less than last month's reading in August. Core PCE strips out food and energy, expected to rise 2.6% after a 2.7% gain last month. And then Friday the employment report should mention that Hurricanes Helene and Milton which hit the Southeast in late September and early October, could distort the data and that's why economists are expecting a $110,000 increase in nonfarm payrolls, which would be a fairly muted number. That's after a $254,000 gain in September, unemployment rate expected to remain unchanged at 4.1%. This is the last peak at economic data of this magnitude before the Federal Reserve meets next week, right after Election Day, to decide what they are going to do with respect to interest rates.
Keith L:anton:All right, I mentioned we're going to talk about the bond market and we will talk about it also in the context of the stock market. So let's take a look at the financial markets. Last week, the S&P was down four-tenths of one percent. Last week, the Dow was down about six-tenths of one percent. Actually, it was down 2.3 percent last week, ending a six-week winning streak for both the S&P and the Dow. The NasdaQ, however, rose nine-tenths of 1%, extending its winning streak to seven weeks. Economically sensitive stocks took the worst hit. Last week. Retail banking and industrial stocks fell between 2% and 3% and it appeared that investors were taking profits after the S&P entered this past week, up 23% in 2024.
Keith L:anton:Keith Lerner, co-chief investment officer at Truist Wealth, said you don't need much of an excuse to move the market down. But excuses there were, starting with bond yields. Barron's 10-year yield rose to 4.22% from 4.8% the previous week and from a 2024 low of 3.62%, which was hit on September 16th. So September 16th 362. Today, october 28th, we're at about 425.
Keith L:anton:And this is as the Federal Reserve has cut rates 50 basis points. So you've got more than a 50 basis point increase in the 10 years since the Fed cut 50 basis points. Think about that. So why is this happening? Well, that's the million-dollar question. The rise is likely a reflection of the fact that the Federal Reserve will cut interest rates fewer times than investors had thought after the September meeting, a result of inflation being above its target and a job market that has grown faster than expected. Also, some are suggesting we'll talk about this theory that Donald Trump's chances of winning the presidential election have risen in the past few months, and suggesting that his policies could be more inflationary.
Keith L:anton:If there are fewer rate cuts going forward, which is what people are talking about now that could dent stocks. The last time the two-year yield, which reflects the expected path of monetary policy, sat above 4% was back in late August, and in late August, when the two-year was above 4%, the S&P 500 was at 5570. That's about 5% below where it is now at 5840. Yes, the market is anticipating growing economic activity and rising profits. But once it starts to see what the bond market sees potentially too much inflation and possibly a Trump victory and fewer rate cuts equities potentially could falter. Of course, a lot can change in a few weeks. October's payroll report we talked about coming out this Friday. That could change sentiment regarding the too hot or too cold thesis on the market. Two cold pieces on the market and of course next week we get election day and therefore by eight, nine or 10 days from now, depending on how fast we get election results.
Keith L:anton:If even that quickly, we could be looking at a whole different backdrop than what we're taking a look at this morning, the market's soft landing sentiment requires a balance of lower rates and solid economic activity, and if that balance is upset, that's something that could upset the equity market. Now Barron's took the opposite thesis on the reason for the rise in rates and suggested that it is not due to the possible victory of President Trump in the election and some of that being priced in suggesting that bond yields have risen sharply in the last few weeks because, as James Carville, who was the manager of Bill Clinton's 1992 presidential campaign family, famously said, it's the economy stupid. This time the economy is not only doing well, but getting even better. The market reaction is to send the benchmark 10-year Treasury yields soaring. We just mentioned it's up 0.6% to 4.25% from 3.62%, and underlying the move are fears of greater inflation, after Federal Reserve cut interest rates by a half point in September, with the economy strong and unemployment low. So perhaps the Fed is being overly aggressive and the markets are concerned that the Fed's got it wrong, in the sense that they're cutting rates when things are still very robust out there. Typically, rates are cut when the economy and the labor market are faltering. At the same time, the Bloomberg Economic Surprise Index, which had been going down, meaning that we were getting negative surprises, has now been going up, which means that we are getting positive surprises on how well the economy is doing and outperforming expectations, and that is spurring fears in the bond market about that wisdom of the Fed's last rate cut. To be sure, longer-term interest rates have moved up in tandem with the market's expectations that the Republican candidate will win the White House.
Keith L:anton:But correlation, they say, is not necessarily causation. The notion that the bond market suddenly awakened to the fact that we might have bigger budget deficits that kind of beggars disbelief is the suggestion here. Both President Trump and Vice President Harris are touting policies that will increase the deficit, and neither one of them has had any serious conversations on their concerns about a rising deficit. Now, that said, there are differences between tax and spending proposals from the candidates, but it is far from certain what fiscal measures either Trump or Harris would be able to get through what very likely may be a divided Congress right now, the polling suggesting that the Republicans may eke out the Senate and the Democrats might eke out the House. Of course that's an uncertainty as well, but nevertheless, with divided government, the possibility of either candidate getting all they want going forward will be somewhat diminished.
Keith L:anton:Perhaps one of the biggest factors driving markets higher is the wealth effect stemming from a and I'm talking about the bond market higher in terms of yields, stemming from a 41% rise in the S&P 500 index since its 52-week low almost a year ago, on October 27, 2023. Wealth effect also getting a nice boost from rising home prices, as well as the fiscal stimulus from Washington DC, where we're spending almost $2 trillion a year more than we are bringing in in terms of tax receipts, and perhaps that's why the US economy is defied persistent forecasts of a recession. So, even though 90% of equities are owned by the wealthiest 10%, this asset inflation meaning that 41% rise in markets over the past year is going to be a big one does seep into consumer inflation, as that wealthy 10% does feel even wealthier and as they are more comfortable spending some of their pent-up wealth. Perhaps that's one of the reasons that we're seeing some inflation that's greater than anticipated, and this also might account for some of the discontent on Main Street For those in the 90% that haven't enjoyed as much the growth of the markets. Well, they are seeing those higher consumer prices, and we're certainly hearing about that in the election.
Keith L:anton:As for the candidates' budget proposals, the main difference between the candidates is Trump's proposed tariff hikes, which could raise $330 billion from a 20% levy on imports plus an additional 50% tariff on imports from China. That's according to the Tax Foundation. That effectively would amount to shifting the funding of the government with an income tax to funding it with a national sales tax, something that potentially could be inflationary. Still, it would be a stretch, they say in variance, to blame the prospect of the Trump presidency alone for the jump in long-term interest rates. In Barron's to blame the prospect of the Trump presidency alone for the jump in long-term interest rates, the finger should be pointed at the Fed's willingness to cut rates while the economy is robust, thus risking greater inflation. So if we think that interest rates may stay higher for longer, one of the themes that Barron's talked about is stocks that may stand to get hit by bond market volatility. And who gets hurt by higher interest rates staying higher for longer, especially if short-term interest rates stay higher for longer? And that is that companies have.
Keith L:anton:The biggest problem are those with variable rate debt, something that we often don't think about, because the cost of borrowing these companies fluctuates with the vicissitudes of those short-term interest rates and therefore when rates stay higher for longer, well, these companies got to pay more in interest costs, which obviously affects their earnings. Now, only about one-tenth of all debt for large companies is variable, but the companies that do have variable debt that have chosen to finance their balance sheets in that manner have been particularly volatile in the past couple of years. Mercury Systems, which had about a market cap of $2 billion, dropped 7% since late September. They've got a significant amount of variable debt on their balance sheet. Also, top golf Callaway brands, iac Interactive Corp declined about 4% in the past couple of weeks. Lots of variable rate debt on their balance sheet. And one of the bigger companies with lots of variable rate debt is Ford symbol F About $150 billion of debt. The majority of it is variable rate. Ford stock has risen in the past couple of weeks, defying the thesis here, and that's perhaps because the expectations that their auto business, especially after General Motors, released earnings will turn out to be better than expected. So more of an earnings story than a variable debt story. So earnings overpowering variable debt, at least for the moment.
Keith L:anton:Now, speaking about all this movement in the bond market, there's something called the VIX that measures volatility in the stock market, but in the bond market there's something called the VIX that measures volatility in the stock market, but in the bond market there is an index that is known as the MOVE M-O-V-E index, which tracks fixed income volatility, and this year the MOVE index has jumped from 100.15 on October 4th to 124.23. That is the largest increase, going back to 1988, and the largest percentage move outside of 2020, when the Fed's bond buying kept volatility at ultra low levels. There's only been one of the time when the move index jumped so much, going into a fixed event. The fixed event here is Election Day, as opposed to being taken by surprise, and that was in 1991, when then President George HW Bush set a hard date of January 15th as the deadline for Saddam Hussein to pull his troops out of Kuwait. What the market is afraid of remains unclear. Obviously, they're concerned about the election, but we'll talk about why. That may not matter as much as perhaps the market is fearing at the moment, with polling showing that the election remains a toss-up between Harris and Trump. Investors may be afraid of a prolonged period of uncertainty before a victor is declared, but as far as the stock market is concerned we talked about this last week.
Keith L:anton:The outcome of presidential election has rarely been cause for concern. It goes up regardless of which party controls the White House. Since 1950, the S&P has gained 12% a year under Democrats, 7% under Republicans, while only two presidents, richard Nixon and George W Bush, had negative annual returns, and their performance may have had to do more with the economies they inherited than anything that they specifically did wrong. There has been much debate surrounding which party is better or not for US stocks. Generally, people's views are based on their views about the political system, so the hyperpolarization of US politics will often influence folks' expectations on which party will be better for investors' portfolios. In fact, investing with politics is one of the worst ways to lose your money. When Trump won the election in 2016, some investors sold all their stocks, convinced the market would fall. Instead, under the Trump presidency, the markets rallied 13.8% a year, and I'm sure there were some Republicans out there who did the same thing after Joe Biden won in 2020, only to miss out on 11.9 percent annual gains. Perhaps nobody knows. The same is true heading into 2024.
Keith L:anton:Peter Buchvar, who is a strategist at the Book Report newsletter, said this week I get asked every day ahead of each election by our financial advisors and clients whether we will alter our investment strategy depending on who wins the election, and he said the answer is always no, as I've learned over my 30 years in this business. Then investing based on your politics is never a good idea. So let's talk about the stocks that are not getting attention. These are not the Magnificent Seven. These are the absolute cheapest stocks in the S&P 500 right now.
Keith L:anton:Barron said if you're looking for cheap stocks, consider names with the lowest multiple in the S&P 500. These are stocks trading between four and eight times earnings at a time when the S&P 500, these are stocks trading between four and eight times earnings at a time when the S&P 500 has ballooned to 25 times earnings. These companies certainly have their problems, and the reason they're trading at very low multiples is a quick fix to their problems. It doesn't appear to be in the cards. Nevertheless, when you're trading at such depressed levels, you just need a positive surprise to be a catalyst for your stock. It doesn't mean that it's going to happen. So considering the list merely on an illustration of what's cheap may not be the best strategy, but it might be a reasonable starting point.
Keith L:anton:Cheap companies as a group don't grow as fast as the average company. Starting point Cheap companies as a group don't grow as fast as the average company. An investor, though, who did buy the cheapest S&P 500 stocks in equal amounts a year ago would have made 52%, including dividends since then, beating what's been a stunning 41% return for the S&P 500 index over the past year. But that doesn't mean anything for future returns. Taking a look at the list, a couple of names on that list the Viatris, which was spun out of Pfizer, trades at 4.4 times earnings, the cheapest stock in the S&P 500. It was created in 2020 when, as I mentioned, pfizer spun it off and merged it with EpiPen seller. Mylan Labs. This company makes Viagra, lipitor, celebrex and a few other blockbusters. There is lots of free cash flow about $2.3 billion a year. What's missing is growth and the company. You'd see a pickup in revenues after that.
Keith L:anton:General Motors, trading at 5.3 times earnings. Ford at 5.9 times earnings, trying to balance internal combustion engines and electric vehicles. Walgreens Boots Alliance trading at around 6 times earnings. Earnings, though there are in free fall. Reinsurance company Everest Group is solidly profitable and it is growing, but there's anxiety over global warming and them adding to recent reserves. So concerns global warming will cause flooding and the reinsurance company could suffer, but nevertheless stock at six and a half times earnings and this morning we could suffer, but nevertheless stock at 6.5 times earnings and this morning we're seeing oil down significantly and some energy stocks like Apache APA at 6.5 times earnings and Devon Energy at 8.2 times earnings. Finally, there's United Airlines at 7.3 times earnings. It's up 112% over the past year and still making the list at only 7.3 times earnings Now on that list.
Keith L:anton:I just mentioned Ford and General Motors and perhaps this is a good marketing study. I'm talking about one of their competitors probably not a direct competitor, but certainly in the same industry and that is Ferrari. Symbol for Ferrari is Race R-A-C-E. So if you're thinking about marketing strategies, perhaps you want to take a look at Ferrari or Race, thinking about your own business, perhaps. Ferrari has a market capitalization of $91 billion, trading for almost 60 times forward earnings, and Ferrari makes… made last year in 2023 13,663 cars. Now, if you look at some of the other auto companies, like we just mentioned, general Motors General Motors has a $58 billion market cap versus that $91 billion market cap and General Motors doesn't make cars in the thousands. Ferrari 13,600. General Motors made 2.6 million cars last year.
Keith L:anton:And you may say to yourself well, ferrari is a premium brand. General Motors makes more traditional vehicles. What about a premium brand? Well, take a look at BMW. They make 2.5 million vehicles a year. $48 billion market cap. 13,000 vehicles. Ferrari $91 billion market cap. Well, who makes the most cars? Well, you may not know, but it's Volkswagen. They make 9 million cars and they have a $50 billion market cap versus Ferrari's $91 billion market cap. Perhaps what's the secret here? Enzo Ferrari famously said Ferrari will always deliver one less car than the market demands. So, working out that marginal demand versus that marginal supply, and people each year are willing to pay up for those Ferraris 20%, 30% a year over the past few years in terms of the price increases at Ferrari, and the demand remains out there. So if you're thinking about your business, perhaps you may want to think about what Ferrari does and how you could perhaps emulate that. With that, I'm going to turn it over to Brad. Give us some more thoughts and insights this morning. Good morning, brad.
Brad Harris:Good morning Keith. Good morning everyone. I hope everyone had a nice and relaxing weekend. Last Monday I mentioned that, as intermediate and longer rates have been moving higher, technical analysts were pointing to two levels of resistance on the 10-year. 4.16% was the first stop and 4.25% was the second. We blew through 4.16% and as of this morning we were hovering around that 4.25% second resistance level. I personally feel this is psychologically a very important level to hold for the bond market, or at least within a couple base points of this level. Either way, we discussed on this call weeks ago.
Brad Harris:Fed lowering short rates has nothing to do with intermediate and longer term rates. And here we are now. Since the first rate cut, the 10-year has retreated from a low of 3.58% to a high overnight last night of 4.28%. That's a gigantic correction of over 5.5%. We certainly were overbought at 3.58% and at 4.28%. I think it's a more comfortable place to be and not a horrible place to put some money to work in the bond market.
Brad Harris:As I've said many times over the years, the dream scenario for many investors and those relying on the rates market is a steep ascending yield curve. With the current level of debt that our country has, my personal perfect scenario would be shorter rates in the low threes and the longer rates in the mid fours. I think that'd be a great curve to operate in for everyone, from savers to homebuyers to those who need or want to issue debt. As I said last Monday, with the election only a week away, I'm preferring not to guess. We're going short term, but the one thing that I think we've all learned over the years is buy the rumor, sell the news, meaning that if you think the election outlook will be positive for the market, it could be a buy now, but as results come in, watch out. Also, if you're using politics in any way as an investing guide this week, please remember that the House and Senate outcomes may carry as much, or maybe even more weight than the presidential outcome.
Brad Harris:Last, I know many of you have been buying more treasury bills over the past year than I can ever recall. The rates were, and still are, good for short-term treasuries and treasury bills. If you're buying these because you have other thoughts or needs for the money, this is the best alternative for you. However, if you're buying because you want a certain portion of your portfolio in short-term instruments and don't need instant liquidity, you may want to explore other options such as corporates agencies, cds or, for taxable accounts, municipals. You have to look at these on where they are trading versus treasuries and in municipals on the taxable equivalent yields.
Brad Harris:Last week we were buying 3% callable munis at par within two years, with the two-year hovering around 4.1%. If you're in the 35% bracket you only keep about 2.66%, so obviously you get a nice pickup buying the municipal and I think that we should be looking at those on case-by-case scenario For those making these investment decisions. Please take a look at some of these potential alternatives. With that being said, I do understand that short-term treasuries are the most liquid investment that you can have, so if you need or want that liquidity, you should stay that course. I hope everyone has a great week and I'll send it back to Keith.
Brad Harris:Thank you.
Keith L:anton:Thank you, brad. That's everything I've got.
Alan Eppers:Thank you for listening to Mr Keith Lanton. This podcast is available on most platforms, including Apple Podcasts, Spotify and Pandora. For more information, please visit our website at www. heraldlantern. com. Thank you.