Enlightenment - A Herold & Lantern Investments Podcast
Enlightenment - A Herold & Lantern Investments Podcast
Breaking Barriers: Navigating Bitcoin's Surge, Market Shifts, and Strategic Investment Insights
December 9, 2024
Season 6 | Episode 43
Unlock the secrets to navigating the rapidly shifting landscape of cryptocurrency and financial markets with us. As Bitcoin breaks the $100,000 barrier, we explore how this pivotal moment is reshaping perceptions among investors and influential voices. We'll consider President-elect Trump's ambitious plans to establish the U.S. as a frontrunner in the crypto world and delve into the broader implications of embracing change in both investments and life.
Stay informed with our comprehensive market updates and strategic insights. From the recent shifts in the S&P, Nasdaq 100, and Dow futures to the significant global events like the Assad regime's overthrow, we bring you the latest developments that could impact your financial decisions. Discover how China’s monetary policy shifts and Omnicom's acquisition of Interpublic are influencing global markets. With a keen eye on economic indicators and the potential for a Santa Rally, we examine the interplay of positive forces and potential risks impacting interest rates and the stock market.
Join our guest, Brad, as he shares his expertise on municipal bonds and the unique supply and demand dynamics they face compared to corporate and federal debts. With a focus on year-end portfolio rebalancing and insights into the municipal bond landscape, we provide strategies for thoughtful investment amidst economic policy shifts under the Trump administration. From Bitcoin trends to retirement planning advice, our episode encourages listeners to craft resilient investment strategies in a dynamic financial environment.
** 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 Lanton:All right, a lot to talk about this morning. Today is Monday, December 9th. A couple more weeks left in 2024. And then we're on to 2025, new presidential administration. Lots of changes happening in the world this morning. Middle East, of course, with the events unfolding in Syria. We got more news about Russia, Ukraine, President-elect Trump weighing in. So the geopolitical situation certainly remains in flux and we had a vote in.
Keith Lanton:Korea with respect to the prime minister there, and he is at the moment not being impeached. So all sorts of events all across the globe, including in France, where we had the government there getting a no confidence vote. So this morning we're going to talk about a few different things. One of those topics is something we really haven't spent a lot of time talking about and that is Bitcoin, which touched $100,000 last week. Barron's had a pretty much a issue that was very heavily focused on Bitcoin, and Barron's hasn't been overly positive or negative. I think that they've kind of vacillated back and forth on Bitcoin, but I think it's noteworthy that Barron has somewhat sort of changed their mind in terms of whether or not some small allocation to Bitcoin for investors makes sense. We'll talk about their view and some might suggest they're changing of their mind. They also, I think, changed their mind on what to do about Intel at this point.
Keith Lanton:So interesting when you see a change of direction, a change of mind, something we all need to keep in our heads that we can't get too stubborn and too fixed in what we think about different facets of investing and different facets of our life. Things change, we need to adapt, we might change back, but we can't stay intractable, and I think these are good examples of change and want to think about how we should possibly change as well. So here are some quotes about changing your mind and we'll talk about some quotes on Bitcoin. Get some inputs from some investors, both positive and negative, on things that they've said about Bitcoin, and then we'll talk a little bit about Bitcoin this morning. So, on change, george Bernard Shaw said Progress is impossible without change, and those who cannot change their minds cannot change anything. Confucius said Another quote. No one attributed to this quote Life is not a static thing. The only people who do not change their minds are incompetents in asylums and those in cemeteries and, finally, only fools and dead men don't change their minds. So let's talk about crypto and get a sense of some mind changing with respect to cryptocurrency, and this is not mind changing in the sense that we're going from super bearish to super bullish in terms of outlook, but change of mind in terms of acceptance of whether or not this is an asset class.
Keith Lanton:So President Trump when he was, I believe, president said he said I want one currency, I want the dollar. I don't want people leaving the dollar. He said I am not a fan of Bitcoin and other cryptocurrencies, which are not money, whose value is highly volatile and based on thin air. Unregulated crypto assets can facilitate unlawful behavior, including drug trade and other illegal activity, he said. Most recently, he said I'm laying out my plan to ensure that the United States will be the crypto capital of the planet and the Bitcoin superpower of the world, and we will get it done. Former President Obama said about crypto if the government can't get in, then everyone's walking around with a Swiss bank account in their pocket. Former Chair of the Federal Reserve, ben Bernanke, said cryptocurrencies may hold long-term promise, particularly if the innovations promote a faster, more secure and more efficient payment system.
Keith Lanton:Some well-known investors Bill Gates, former CEO of Microsoft, talking about crypto said Elon talking about Elon Musk has tons of money and he's very sophisticated, so I don't worry that his Bitcoin will randomly go up or down. If you have less money than Elon, you should probably watch out. Warren Buffett said of Bitcoin, it's probably rat poison squared. He said stay away from it. It's a mirage. Basically, in terms of cryptocurrencies Generally, I can say almost with certainty that they will come to a bad ending. Charlie Munger said sometimes I call it crypto crapto. Sometimes I call it crypto. I'll be nice poop. It's just ridiculous that anybody would buy this stuff, said Charlie Munger. Jamie Dimon, who's also walked back some of his comments regarding Bitcoin, has said Bitcoin is worse than tulip bulbs.
Keith Lanton:The Barons in the up and down Wall Street column this week said Trump is ready to unleash Bitcoin and other cryptos. Hang on to your wallet. What would happen if cryptocurrency, bitcoin and its lesser cousins were freed of onerous regulation and then let loose upon the land? Because we may be about to find out. Since Donald Trump was elected president last month, the price of Bitcoin has smashed through $100,000 barrier, hitting a record high of $103,000 on Wednesday and nearing a 50% gain since November 5th. That's notable enough on its own, but Barron says I think this is just the beginning of a more momentous trend Now. This doesn't mean that this is a good long term investment in their opinion. It's just that they think that the trend right now is higher because of the mania or euphoria. The bigger point is that we're about to be governed by the nation's first unabashedly pro-crypto administration. Instead of being stymied by the federal government, the crypto cosmos will soon be enabled, nay, driven by Trump and his team, whose connections to, and predilections for, crypto are strong and deep. Whose connections to, and predilections for, crypto are strong and deep. The CEO, michael Saylor, of cryptocurrency company MicroStrategy, which I'll also talk about, and Barron's does not have a positive view on that company, although they are more forgiving about crypto in general. But Mr Saylor said you've got a promise from the Trump administration to end the war on crypto, to make crypto great. It's a pretty big flip to go from digital assets having no path forward other than litigation to having a path. Barron's saying pay attention to what Trump has said. The rules will be written by people who love your industry, not hate your industry. He told the year's biggest crypto conference in July. He told the year's biggest crypto conference in July.
Keith Lanton:According to the Wall Street Journal, trump said he would create a national strategic Bitcoin stockpile. Since then he hasn't really talked much about that. We are getting lots of traditional companies setting up ability to invest in crypto assets. Jp Morgan recently reported record inflows to Bitcoin and Ether exchange traded funds. Bitcoin ETFs are now up to $150 billion Ether up to $11 billion. We've got the Bitcoin offerings from old school names like BlackRock, fidelity, franklin, invesco and VanEck, as well as newer ones like Grayscale and Bitwise. Crypto options are mushrooming. They just started trading a couple of weeks ago. That's really giving a boon to Robinhood, whose stock is up 213% year to date because of optimism over crypto trading. Robinhood reported in November that crypto notional trading volumes were over $30 billion. That's up four times from just the previous month.
Keith Lanton:Now Barron's despite the favorable reconsideration let's call it, I wouldn't call it the Barron's is out there pounding the table suggesting that you buy Bitcoin. Far from it. Nevertheless, they are reopening their mind to a small allocation with what they would call your mad money. So, barron's even going as far as to say in Bitcoin in your retirement account, a little wouldn't hurt. And when they're talking a little, depending on your risk file, they're generally talking 1% for people who can handle the risk and have larger accounts and can afford to lose all of their investments in crypto. So they say an allocation up to 5% would be possible, although they weren't necessarily recommending going that high. Barron's saying owning a little probably won't hurt. Just don't overdo it and bear in mind the many risks. Bitcoin should be no more than a side bet. Again, talking about that mad money category, don't count it making up for saving, short forals or reliable returns.
Keith Lanton:Aside from its recent spike in hopes for a friendlier climate in Washington, bitcoin's price is often fueled by macro conditions. Remember when interest rates surged in late 2021 and 2022, bitcoin tanked over 70% drop, so certainly extremely volatile asset. Keep that in mind. And that was just over a few months back, just a couple of years ago. Speaking specifically about MicroStrategy, barron says MicroStrategy is winning by breaking Wall Street's rules.
Keith Lanton:Avoid the stock. Investors effectively are paying $240,000 for each of the company's 402,000 Bitcoins, well above the market price. The premium, they say, looks too high and the stock is vulnerable to a pullback. The premium, they say, looks too high and the stock is vulnerable to a pullback. Another risk is that MicroStrategy fails to keep pace with any further gains in Bitcoin if the premium contracts. Microstrategy stock has already dropped 25% from its peak, even as Bitcoin stock has been moving higher. Another warning about MicroStrategy is that the institutional ownership of the stock is very low, aside from index funds. Therefore, many of the buyers are individual investors and they tend not to have such strong hands, meaning that they sell fairly quickly, so you can get very volatile moves in a situation like that. Also, this 240% premium is not something that typically occurred with the stock.
Keith Lanton:From 2022 to the end of 2023, microstrategy mostly traded at parity to the value of its Bitcoin and started this year at a premium of 30%. Now it's 240%. Microstrategy has raised its Bitcoin holdings by 60% since September and that's lifted its average price of Bitcoin in its holdings to $58,000 from $39,000. Average price of Bitcoin in its holdings to 58,000 from 39,000. And back in 2022, when prices were a lot lower and the market sold off dramatically, they were not buyers. They bought just 9,000 coins, and now they are buying at prices that are significantly higher. So again, buyer beware. An additional risk to MicroStrategy is that there are two levered exchange traded funds on MicroStrategy with $4 billion in assets. If the tide goes out and investors in those leveraged funds start experiencing significant losses which would not take all that much given the levered nature of the portfolio you could see big selling in MicroStrategy stock as these levered ETFs that are leveraged just to the stock of MicroStrategy begin to liquidate MicroStrategy stock. So Barron says, given these dangers, investors who are partial to Bitcoin should consider low-fee ETFs like the $50 billion iShares Bitcoin Trust, ibit, which has an annual fee of 25 basis points.
Keith Lanton:All right, let's move on to the second piece of information that I shared with you about Barron's changing their mind, and that's with respect to Intel. Barron's had previously felt that Intel was well-positioned to be able to capture a lot of the funding here in the US which they have captured some of that and therefore poised potentially for a turnaround. But Barron's reassessing Intel after the removal of their CEO, pat Gelsinger, and surmising that they now are rethinking things, changing their mind. Intel needs more than a new CEO. Why it's best to avoid the stock. Pat Gelsinger stepped down on Monday with no successor in place. Stock initially rose but then fell. Intel's number one problem is that it's lost its chip manufacturing technological leadership to Taiwan Semiconductor sometime around 2018. By the time Gelsinger became CEO in 2021, the problem had deepened and it has not been fixed. Until a new management team shows it can balance Intel's short and long-term priorities, investors should avoid the stock. So Barron's at least with respect to Intel going to the sidelines.
Keith Lanton:All right, let's move on to what we have going on this morning we are seeing S&P futures list. I looked down a little bit about three points, nasdaq 100 futures down about 36 points and Dow futures down about 20 points. So modestly lower open, at least based on the futures. At the moment, early tone is mixed as participants wait on key events this week that include earnings reports from Oracle, orcl and Costco, cost and the big economic event of the week, which is the November Consumer Price Index, the November Producer Price Index, and we also get a European Central Bank policy decision. In the interim, this morning's news flows focuses on the overthrow of the Assad regime in Syria, south Korean president surviving an impeachment vote, chinese leaders changing their stance on monetary policy to moderately lose from prudent and China is now opening an anti-monopoly investigation of NVIDIA and President-elect Trump stating in a meet-the-press interview over the weekend that he won't replace Fed Chair Powell and he will pursue his aim to extend the tax cuts, levy tariffs, deport illegal immigrants and try to end birthright citizenship.
Keith Lanton:Two-year note is up one basis point to $4.11. Ten-year note is up three basis points to $4.18. Dollar index this morning flat Oil up about $0.90 to $0.6810. Gold is up about $20 an ounce this morning. Reports that the Chinese central bank is resuming their gold purchases. Other companies in the ounce this morning reports that the Chinese central bank is resuming their gold purchases.
Keith Lanton:Other companies in the news this morning Macy's 3% higher after activist are merging or well, actually Omnicom is acquiring Interpublic. So Interpublic stock up 15%. Omnicom stock down about 3%. This is two very large companies in the advertising space. Advanced micro devices down 1%. Bank of America downgrading to neutral from buy NVIDIA.
Keith Lanton:We mentioned the launch of an investigation in China. The stock's down about 2%. Dow Chemicals shares are up 4%. They say that they're going to sell 40% stake in some US Gulf Coast infrastructure assets for $2.4 billion. Reddit, the social media platform, surged 5%. Upgrade at Morgan Stanley to overweight from equal weight. Paypal shares up 2%. Bank of America upgrading the stock to buy from neutral. Workday WDAY up about 9%. 24 points being added to the S&P 500 prior to the open on December 23rd.
Keith Lanton:Equity indices in the Asia-Pacific region began the week on a mixed note. One notable move to the upside was the Hang Seng up almost 3% on that change in tone on monetary policy. China also announcing that their November CPI came in minus six-tenths of percent. So inflation surprising to the downside in China and their 10 year Treasury yield is down to about one point nine three percent in China. Major European indices are mixed, notably the CAC 40 in France, where there's some turmoil in the government is up this morning about this point six percent.
Keith Lanton:President-elect Trump said he would. He would stay in NATO as long as they pay their bills. Ukraine should prepare for less aid. Ukrainian President Zelensky said he had a good and productive meeting with President-elect Trump. President-elect Trump called for an immediate ceasefire and told Russian President Putin it is time to act. According to Politico I mentioned, china resumed their gold purchases and President-elect Trump says he would consult governors about increasing the minimum wage. So I mentioned this week we've got on.
Keith Lanton:Wednesday, the big inflation report. Bureau of Labor Statistics releasing the Consumer Price Index for November, expecting a 2.7% year-over-year increase for the CPI. That would be up slightly from October. The core CPI strips out food and energy is expected to rise 3.3%. Thursday, european Central Bank announcing monetary policy widely expected to cut its short-term interest rate by a quarter of a percent to 3%.
Keith Lanton:Some interesting numbers with respect to the European Union the number of births in all 27 states of the European Union in 2023 was 3.7 million. That's a 5.5% decline from the previous year, the largest percentage decline on record here in the United States. Employment report showing that wages are increasing, although perhaps not as fast as some employees would like. Also showing that companies, while not laying off workers, aren't hiring workers. But the interesting statistic is that 51% of workers say they are watching for or seeking a new job. That's the highest since 2015. Also another interesting statistic is chinese market share of global car production is 38.4 percent. You go back to 1998, it was 1.4 percent. Former number one in terms of car production is japan. They're down to 11.4 percent.
Keith Lanton:All right, what else we got going on this week? Barron's saying that the jobs data that we got last week, which showed that the unemployment rate ticked up to 4.2% and showed that 227,000 new jobs were formed, was enough to keep the Fed on track to cut rates 25 basis points in December. But now the expectation is that, pending other data, especially this week's CPI, the Fed may go slower going forward and slower than the markets had previously anticipated in terms of reducing interest rates. Further Interesting note on the unemployment rate, which went to 4.2 from 1.1%. There was actually just a one-tenth of 1% move in the rate, so it's all rounding really. The unemployment rate was 4.146, 4.146 up from 4.145. So the previous month was rounded down. We went up one-tenth of 1%. It was rounded up so interesting that the unemployment rate sounds like it went up a lot more than it actually did.
Keith Lanton:Now, with respect to inflation, barron's saying the stock market's Santa Rally which we are currently experiencing is a result of lots of different positive forces coming together all at the same time Job market remaining fairly solid, earnings expected to be strong next year, federal Reserve still cutting interest rates Thanks to the Republican sweep in Washington. The market is betting on lower taxes, deregulation, merger boom and fiscal stimulus pushing growth rates even higher. But Barron says there is a risk that the Grinch may be out there over the next several weeks, especially if inflation ticks higher than expected, and this could put a dent in this impressive Santa Claus rally, especially because folks are so optimistic and so bullish that it doesn't take a lot of negative news in order to sway some of the market participants into selling when you've got so much buying and so many investors remaining optimistic. All sorts of confidence, consumer confidence in the market, in the stock market, not necessarily in the economy showing that individuals are super confident that the markets are going to go higher. They are bullish, and that is usually a sign of a contrarian statistic and something that we need to be knowledgeable of and think about as we move forward.
Keith Lanton:One thing that Barron did talk about that I think critically important to share with everyone is thinking about making sure that you have a will. What happens if you die without a will? About making sure that you have a will. What happens if you die without a will? Well, you could leave your heirs, and possibly your pets, with a lot of grief. You work hard your entire life to build up savings and with the intention of passing it on to the folks that you want to share it with, and if you unexpectedly pass away and you have not created that will, well, you may find that all that hard work is not going to be dispensed. As you were hoping. The state will make the calls on where your assets go, with potentially unhappy results. Prince Singer died in 2016 without a will. Now you may say I don't have a $156 million estate, but it might take just as long to divvy up your estate. It took six years for a probate court to divide his assets and they're still fighting over different aspects of it. So it's important to know Even if you do die and you do not have a will, all that has to happen in order to get the process of probate started is that someone has to send the death certificate to the county clerk's office.
Keith Lanton:If you die and no one sends the certificate to probate court, your property will probably lie in limbo. In a worst-case scenario, if assets such as real estate or bank or investment accounts have no beneficiaries, they will probably end up in your state's unclaimed property department. A judge will determine an administrator if you don't have a will, which can be a family member, friend, financial institution or creditor. Now, if you are an administrator, you must compile a list of assets, which is like the executor of a will search for potential heirs of a will. Search for potential heirs. Administrators also file the estate's last tax return and Internal Revenue Service Form 706, which determines if the estate owes any federal or state taxes. Because probate proceedings are public record, organizations that search for unclaimed property may reach out to heirs or administrators and offer their services for exorbitant fees. So keep that in mind.
Keith Lanton:If you want to avoid probate, you may want to look into trusts and things that keep your will private. Perhaps equally or even more important than making sure that your will is taken care of, make sure that you have beneficiaries listed on accounts that don't flow through your will like retirement accounts like 401ks and IRAs. If most of your money is in your 401ks, listing your beneficiaries on those accounts, which is simple to do with your custodian, may be the most important thing to do. Wills are certainly critical for parents of minor children who want to guarantee specific guardianship of their kids in the case of the parent's death. Children who want to guarantee specific guardianship of their kids in the case of the parents' death. Without a will, different folks can petition the court to suggest that they are the best source of parenting for your children, and you may not necessarily like what the court decides. The good news is that wills do not have to be complicated. If you have a small estate, you can avoid paying lawyers by using online tools and updating beneficiary forms. Wills can be as simple as jotting down the names of the people you want to receive your assets, signing and dating it, and that is an official document. A lawyer here in the article is quoted as saying I've probated a Post-it note before as a will because it met all of the requirements.
Keith Lanton:Barron's talking about inflation and one of the factors with inflation is, although it's coming down, it's still out there. One of the things you might have noticed is, for example, if you got into a car accident or you brought your car to a mechanic, the cost to fix your car still seems awfully expensive. Eggs still seem incredibly expensive. So although inflation is coming down, there's still lots of expenses that are very high, and if you are in a fixed income, you need to be mindful of making sure that your portfolio keeps up with inflation. Again, another one of those sort of myth busters that Barron is talking about is that if you are retiring at 65, you might live another 30 years.
Keith Lanton:Keeping your assets strictly in cash or bonds may find that you have challenges 20 or 30 years out, depending on the size of your assets, and for this reason a lot of the thinking has changed that investors may want to think about investing a portion of their retirement savings, perhaps as much as 50, 60, or 70%. Retirement savings perhaps as much as 50, 60, or 70%. Not necessarily all at once, but retirees may want to own more stocks than they previously have as they live longer and as real returns on things like cash and bonds dip down to low single digits, zero or negative, no guarantee that this will continue from 1926 through 2022. The average annual inflation adjusted return of the S&P 500 was 7%, so you're earning 7% over inflation. Again, that's not a straight line, that's not a guarantee, but nevertheless, if you got 30 years to go before retirement something you might want to think about you also might want to think about investing some of your funds in TIPS Treasury, inflation Protected Securities to keep up with inflation. And you might want to think about setting up buckets of money that you might want to need, that you might need, going forward, that you invest in TIPS and, for example, if you have money coming due every five years that are invested in TIPS, when those securities come due, you get the return of principal, whatever interest you've earned on those investments you've been getting deposited into your account and you get the inflation component delivered into your account so that you can spend that money and hopefully have kept up with inflation.
Keith Lanton:It's another strategy. You consider having some of your bond portfolio in tips. Again, it really depends on each investor's individual circumstances and what's most appropriate how much they should have in bonds and how much they should have in stocks, which is why it's critically important to, at the very least, stress test your portfolio. Perhaps you're capable of doing it yourself. Consider, at the very least running it by a financial professional to see their opinion, because you don't want to mess around with something as critically important as making sure you have enough money in retirement to do what it is that you want to do, what you worked your whole life to do. Being penny wise and pound foolish is something that could be something that really hurts down the road when you're older and not in a shape to really take care of it.
Keith Lanton:Before I turn things over to Brad, I got two more things. One, I'm going to talk about one of Brad's favorite topics, which is municipals. Barron's talked about municipal bonds. Trump's tax policy could reduce munis appeal, but Barron's remaining pretty optimistic on munis, despite the fact that the Trump tax cuts may be reinstated, making munis slightly less attractive. There's also some talk that the alternative minimum tax might change, which could potentially make AMT municipal bonds bonds that are subject to alternative minimum tax. In the municipal world, they could be subject to tax. There's also talk that the corporate tax rate could drop from 21 percent to 15 percent, which would make munis less attractive for insurance companies. Also talk about changing the SALT deduction, which could lower people's tax brackets, potentially limiting the appeal of munis. But nevertheless, despite all of these threats, barron's ultimately concluding that munis look attractive against treasuries as worries about the federal deficit grow. Some state budgets are adjusting to the loss of COVID funding, but most are in good shape.
Keith Lanton:Here's a fascinating statistic that was quoted in Barron's from a market participant saying that municipal debt has grown 2.3 percent since 2012. So the amount of more municipal bonds out there in the last 12 years is up 2.3%. There's obviously a lot more wealth out there, a lot more demand, but just 2.3% growth. So supply very low in terms of new issuance of munis relative to before. In that same time period, corporate debt has gone up 60%, federal debt about 130%. So again, if you're in the supply and demand world, muniz certainly looking interesting that there's not a lot of new ones being created.
Keith Lanton:Finally, before I turn it over to Brad, one other company that does pay a nice dividend that Barron's was positive on is Verizon symbol VZ. Barron's saying that Verizon's up about 13% year-to-date this year. S&p's up 28%. At&t, one of its primary competitors, is up 40%. T-mobile's up more than 50%. At&t is trading at about 11 times forward earnings, verizon's at about 9 times, t-mobile's at 23 times. Analysts are forecasting Verizon sales to go up 2% next year, earnings up 3%. Compare that to AT&T at a higher multiple and they're expected to grow at just 1%. So, while nobody's confusing Verizon with NVIDIA or any of the other high-flying tech stocks, barron's saying the company offers investors a gigantic dividend in addition to steady, if not spectacular, earnings growth. Verizon's dividend yield is 6.4% compared to 4.7% for AT&T and 4.2% roughly for the 10-year treasury, barron saying in their opinion, making it a solid bet for investors who still crave a total return on their equity investments. With that to Brad to give us some further insights this morning. Good morning Brad.
Brad Harris:Good morning Keith, good morning everyone. Happy winter Burr. Prior to coming to Harold and Lantern, I had worked as a municipal bond trader with my father in a family business for almost 30 years. As many of you know, I'm fortunate to be part of an organization, albeit bigger than what I came from, but still with that same family feel as I speak and continue to get to know everyone better. Not only do I see the care and interest everyone puts in their client accounts and relationships, but also the care and friendship that continues to grow within our own organization. So I really appreciate that.
Brad Harris:I know that Keith always highlights a lot of the Barron's articles every week and personally I usually just peruse the magazine, read the first column and see if anything else of interest. But this week's issue was absolutely excellent and I encourage that if you get a chance you should read the entire paper this week. It talks about and I know Keith Thorne talked about. It talks about everything from Bitcoin to municipal bonds. It additionally discusses at points how the Trump administration will affect everything and of course, no one knows what, until the administration and policies are actually and fully in place, what will actually happen. But I thought the magazine did a great job laying everything out while discussing potential opportunities as well as potential pitfalls down the road. Also, as Keith mentioned, there were articles on retirement investing, as well as wills and estates. I just thought the whole thing was an excellent read and I strongly recommend that you go and pick it up and read the paper this week.
Brad Harris:About a month ago, as the 10-year was heading up to 4.5% from a low of about 3.6%, I felt that we were heading into oversold territory. As the 10-year had been on about a 7% free-fall decline pretty quickly from its low yields, I understood the market was pricing potential Trump policies that would be inflationary, as well as the possibility that the Fed might be moving towards a more neutral stance on rates. But, as usual, markets tend to overreact and overshoot. With the 10-year back down to as low as 4.15% last week, it is possible that we've more than recovered from oversold conditions. I don't want to say we're overbought now, but with Treasury supply coming this week, we may retrace some of these gains that were made on the 10-year. On the other hand, with it being year-end, who knows, all rhyme and reason sometimes goes out the window at year-end.
Brad Harris:The powerful rally in bonds the last few weeks was certainly partly a short cover, because everyone had felt that we were running back up to 5% of the tenure. That's all I heard from everyone, but obviously that was not the case. But also there was a lot of real money rebalancing here, which brings me to my last point. It's always time to rebalance. If you're one of the fortunate ones that made a ton in the MAG7 stocks, bitcoin or anything else, if it's not part of your long life-term goals and you've become severely overweighted in these, take a look at rebalancing. Whether you go even into treasury bills or you decide to go for a little bit more with bonds, whether corporate or municipal, take a look, because at the turn of the year, who knows where we go? And I'll send it back to Keith, thanks.
Keith Lanton:Thank you, brad, that's everything I've got.
Alan Eppers:Thank you for listening to Mr Keith Lantern. This podcast is available on most platforms, including Apple Podcasts, Spotify and Pandora. For more information, please visit our website at www. heroldlantern. com.
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