Enlightenment - A Herold & Lantern Investments Podcast

Jobs, Immigration, and Portfolio Allocation: Where the Puck is Going

• Keith Lanton • Season 7 • Episode 33

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September 8, 2025 | Season 7 | Episode 33

The financial landscape is shifting beneath our feet, and savvy investors are taking notice. Recent employment data has revealed troubling signs of economic weakness—just 22,000 jobs added in August (far below expectations), unemployment rising to a four-year high of 4.3%, and downward revisions showing actual job losses in June for the first time since 2020.

But within this uncertainty lies opportunity. BlackRock, the world's largest asset manager, has made a striking proclamation: we're entering a prolonged dollar weakening cycle. History shows these cycles typically last eight years, potentially unlocking significant outperformance for international equities. With international stocks already outpacing the S&P 500 (21% vs 10% YTD) and U.S. markets trading at a premium (25x vs 17x forward earnings globally), the case for diversification beyond American borders grows compelling.

The interplay between immigration and employment represents another crucial dynamic shaping our economic future. As immigration numbers decline from recent peaks, we're seeing complex ripple effects throughout the labor market. Immigrants typically contribute to approximately half of U.S. job growth, bringing both labor supply and consumer demand. This relationship adds another layer to consider when interpreting employment data and making investment decisions.

Markets remain resilient despite these challenges, buoyed by expectations of Federal Reserve intervention. Investors are now pricing in a 67% chance of three rate cuts this year—a dramatic shift that's already impacting bond yields and creating opportunities in interest-rate sensitive sectors. Meanwhile, specific growth opportunities like InnoData (INOD) in the AI space show how targeted investments can thrive even in uncertain times.

Ready to position your portfolio for what's coming rather than what's already happened? Consider how these shifting dynamics might impact your investment strategy, and whether your current allocations reflect where the financial puck is heading.

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

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Alan Eppers:

And now introducing Mr Keith Lanton.

Keith Lanton:

Good morning. Hope everyone had a wonderful weekend as we are steaming quickly towards fall as the year progresses just a couple more weeks left in the third quarter and news flow financial markets not disappointing Last week. We're going to talk a lot about the employment report which came out on Friday led to a little bit of weakness in the equity market, led to a lot of strength in the bond market, and we're going to talk about some of those themes that are the result of some of the effects that we're seeing, which is those weaker employment numbers, and we are also going to focus on some broad trends that perhaps are influencing those employment numbers. And we're going to talk about a report that came out last week from BlackRock on where they think perhaps the puck is going in terms of portfolio allocation and what investors might want to be thinking about how they can reposition their portfolios going forward, perhaps to take advantage of some of the broad trends that they see. And then we'll talk about what's going on. This morning we are seeing futures up a little bit here in the United States. We'll talk about the news flow that's going to take place this week and then we will transition into Barron's talk about a few different stock ideas, talk about some of the activity last week.

Keith Lanton:

So I think we can take a look back at the last several weeks in the market activity and we can draw a couple of conclusions, and I think what we need to do is focus on some trends that we are seeing. We can get lost in the noise, get lost in the news flow, both what's coming out of Washington DC and what's coming out of perhaps your news feed on, whether it's Facebook, instagram, snapchat, cnbc, fox, business News, bloomberg, wherever it is that you're consuming financial information. There's a lot of sensationalism, a lot of hype, a lot of day-to-day machinations that can help us but can also create information overload and cause us to lose our focus, which is why, if you're looking at the great athletes and the amount of concentration required, as Wayne Gretzky said, where is the puck going, not where is it at the moment it, as Wayne Gretzky said, where is the puck going, not where is it at the moment. So, a couple of trends to keep in mind. So, employment report last week, an employment report. We're going to talk about this, potentially influenced by another big theme is immigration and how those two are intertwined, and then we will talk about BlackRock and where to think about investing a portion of your portfolio. This is not like get out of everything that you've currently got and get into something new, but what potentially rebalance portfolio. And what they're talking about is diversification away from the dollar. They're talking about diversification into predominantly international equities, and we'll talk about that. All right.

Keith Lanton:

So let's talk about the jobs report that came out on Friday caused the bond market the 10-year yield to sink from about a 4.17 before the bond market, all the way down to a 4.07. And if you're looking at just a few weeks ago, you're looking at about a quarter of a point reduction in the 10-year treasury, which is the yield that probably has the greatest influence over mortgage rates. We're seeing mortgage rates declining as a result of that 30-year Treasury, which touched 5% this morning. It's all the way down to 4.75%, so finally getting a break in the 10 and 30-year Treasury yields. We have been seeing declines in the shorter-term Treasury yields and that's on the back of talk that the Federal Reserve is more likely than ever to cut interest rates soon. But we weren't seeing a sell-off in the longer Treasuries because there were some concerns about the deficit, there were concerns about inflation, and now we're seeing a shift where the focus is more concern about the job market than those other factors.

Keith Lanton:

So, job market Friday 22,000 US nonfarm payrolls added in August, significantly weaker than expected. We were looking for a number, depending on who you're looking at between about 75,000 and 90,000. We got in at 22,000. Unemployment rate picked up to 4.3%, highest level in four years. Also, very significant, job revisions show the economy actually lost 13,000 jobs in June. That would be the first loss of jobs going all the way back to the COVID era in December of 2020. And revisions for May, june and July collectively showed that the number of jobs created was 279,000, less than was initially reported. Where are jobs coming in? Well, jobs are coming in still to healthcare and social assistance.

Keith Lanton:

Job losses big trend of job losses federal government. Perhaps the effects of Doge weren't immediate is what some analysts are suggesting and we're starting to see the impact of cuts in federal employment 15,000 decline. The number of jobs lost in the federal government since January 97,000. Interestingly, another sector we're seeing continued weakness in is manufacturing Jobs. There fell by 12,000, and manufacturing jobs down 78,000 over the last year. Perhaps counterintuitive based on the rhetoric out of Washington DC and certainly out of the desire of the Trump administration to be creating manufacturing jobs. Perhaps, as those policies get implemented, hopefully we'll see potentially a transition there, but perhaps some of the uncertainty with respect to trade policy impacting employers who are holding off until they can get some more clarity and that's something else Barron's talked about. We'll touch on that. Wages were up about 10 cents in August. That's about a three-tenths of 1%. Wages are up about 3.7% year over year.

Keith Lanton:

So clearly seeing weakness in the jobs report, certainly in the number of new jobs being created, and perhaps an effect of this, if you think about it, is immigration. If you have less immigrants coming into the country, these immigrants tend to be younger. We don't have very many immigrants coming in at 70, 80, 90 years old. These tend to be working age people. When they come into the country, they are coming here hopefully in pursuit of a better life for themselves and their family, so they are typically immigrants, are looking to work. So when we bring those immigrants into the country hopefully obviously legal immigrants they are looking to work and we are seeing a slowdown in the number of immigrants coming into the country. And jobs report is economically driven, or whether or not it is being driven by the fact that we just have fewer immigrants coming into the country and most likely it's some sort of combination of the two.

Keith Lanton:

Put some statistics around this If you go back to 2022, the height of the Biden administration lots of folks coming into this country. Biden administration lots of folks coming into this country. The foreign-born population in the US was about 46 million and we had net international migration and of course, these are approximates of about 1.7 million people. 2023, we had about 2.8 million new arrivals and therefore, with this drop in immigrant population, it's very possible that you have people not in the workforce and therefore not looking for jobs, and therefore this creates some effect on the employment, as less immigration can certainly affect the employment reports. The effects are complicated and they do vary depending on many different factors. So there's no, there's no clear answer. It's not like if you see this A, then you get this result B, which is what makes this muddy and complicated.

Keith Lanton:

But a decline in immigration does reduce the number of available workers. That's pretty obvious and therefore that slows the growth of the overall labor force. Immigrants, particularly those of working age prime working age especially historically, contribute to about half of the job growth in the United States. Now, fewer workers might suggest a tighter labor market leading to a lower unemployment rate. You'll note the unemployment rate picked up from 4.2 to 4.3. So you'd think, well, if there's less immigrants coming into the country, therefore it'll even be harder for employers to find jobs. But that's not always the case, because these immigrants are also consumers. So the dynamic becomes complex. If you've got less consumers, well, you have less demand. So broad trend one to keep on the radar employment tied to immigration.

Keith Lanton:

Take a look at those two factors to hopefully get some snapshot on where the puck may be going and what the Federal Reserve has to contend with, so that when you get new data, you can have an informed opinion of what that data means. So you can more accurately assess how your portfolio should be invested and allocated to different sectors whether it's fixed income, bonds, stocks, commodities, cash and make the appropriate decisions, especially if you're at or near retirement age. If you're a young individual, these are less relevant because you're not as concerned with the economic cycles. Let's talk about portfolio allocation. Let's talk about portfolio allocation. Probably the greatest impact in terms of the performance of your portfolio is not whether or not you own X stock or Y stock it's are you allocated to this sector versus that sector?

Keith Lanton:

Asset managers see significant opportunity in unhedged international equities, arguing that the dollars decline could unlock meaningful outperformance abroad for years to come. Now this is a pretty big macro call from the largest asset manager in the United States, not something that I would think that they would do lightly. Global equity markets are starting to reflect the shift. International stocks have been the strongest performers this year, being given a tailwind by things like trade tensions, declining investor confidence in US policy direction, the growing deficit here in the United States and expectations of an interest rate cut here in the US. So each of these has weighed on the dollar strength, reversing a long period in which US economic momentum and relatively high interest rates were tailwinds for the dollar's reserve currency status.

Keith Lanton:

According to BlackRock, the implications of this shift are profound. They say they believe we are toward the beginning. Toward the beginning, not toward the end, but toward the beginning of a weaker dollar cycle which has tended to boost international returns, they say. History suggests this thesis. Since the 1970s, dollar weakening cycles have typically lasted eight years.

Keith Lanton:

The question now becomes how to best position portfolios for this shift. Blackrock's answer is clear Focus on unhedged international equities. So that unhedged is an important word there, because there are many mutual funds, etfs that are hedged and may not give you the exposure that BlackRock is suggesting. So if you're unhedged, you own foreign equities and local currency and you can benefit not only from stock performance but also from the appreciation of those currencies relative to the dollar. So if you're investing in a European stock index and the index is up 5% but the euro is up 10, reassessing their US exposure because the dollar is down about 8% year-to-date, us market's up about 10're up 2%, which means that that dollar weakness is having a real impact and may affect your investing decision and that may cause a spiral. Dollar weakness could lead to further dollar weakness as investors reassess their allocation to US dollars. Of course, by upping your allocation of international equities and doing it in an unhinged fashion, you are introducing an additional risk to your portfolio because if foreign currencies fall relative to the dollar, well, it works in reverse and that would reduce your total return. So falling currency in terms of the currencies you're investing in, that would be a headwind for you. But BlackRock's condition is that the dollar is entering a prolonged downturn and the firm sees the risk reward trade-off as compelling.

Keith Lanton:

Blackrock notes that the average advisor allocates nearly 70% of equity exposure to US stocks. That's up from 70% seven years ago. Blackrock said they are starting to see a change in sentiment. The portion of exchange-traded fund inflows directed to international funds has risen 29% this year, up from 12% one year ago. Broader sentiment surveys support the case for reallocation as well. Bank of America poll of global fund managers earlier this year found that 54% expect international stocks to be the best performing asset class over the next five years.

Keith Lanton:

Elaborating on this theme, barron's over the weekend in one of their columns, their retirement column specifically ran a article entitled how to Diversify Outside the United States. They say American exceptionalism may be dying. How to make the best of it? Us stocks are defying worries that America's best days as the global leader are over. It isn't clear if American exceptionalism is really dead, but they say it's waning and there are ways to make the best of it, and that is to own more foreign stocks in your portfolio.

Keith Lanton:

Year-to-date, the iShares ex-US exchange-traded fund is up about 21%, versus about 10% for the S&P 500. And they also cite the weaker dollar as one of the big tailwinds for international stocks. Big tailwinds for international stocks. Now, again, if you think about it, the dollar and the weakness in the dollar is not necessarily the result of recent policy. It certainly may have had an influence, but the dollar has been very strong for many years and has gotten to a level that, historically, is a point where it could be due for a breather. So there's lots of factors here affecting the value of the dollar, not necessarily just political factors.

Keith Lanton:

Nevertheless, put it all together, it makes a strong case for at least getting some diversification in your portfolio outside of the United States. If you're thinking about what the rest of the world looks like in terms of asset values, the US comprises about 65% right now of global stock market value as a result of many years of outperformance, but that means about 35% of equity valuations, even at current levels, are outside the United States. So if you're invested 90% or 100% in the US, well, you don't really reflect what's necessarily the composition of the world. So you might want to think about that Now. You can certainly make the argument well, I invest in a lot of S&P 500 companies and those companies have sales overseas, so you could take that into account in your thought process and do some personal math and come up with an allocation that may make sense for you to direct to foreign stocks as an asset class that takes into account the fact that you own S&P 500 companies which are doing business overseas. You could also make the argument and this argument has worked well in the past that US markets are much more reflective of growth companies, technology stocks, that the rest of the world just doesn't have as good of a technology sector as the United States, and that has been true for the last decade or so at the very least, and therefore that perhaps justifies more investment in the United States. But you do need to keep in mind that the US is trading in around 25 times forward earnings, trailing earnings, versus about 17 for the rest of the world. So how much that's factored in or not is open debate, but certainly there's some pricing into the fact that the US companies and technology stocks have been growing faster than the rest of the world.

Keith Lanton:

So let's talk about financial markets and we'll talk about this morning. We'll set the table again. Going back to last week, where we got the disappointing employment report on Friday. It was the fourth mediocre jobs report in a row. Markets hit a record high, s&p hit a record high on Thursday but then fell about three-tenths of a percent on Friday. But the S&P did end the week up three-tenths of a percent, despite the sell-off on Friday. The Dow was down about half a percent on Friday and it was down about three-tenths of a percent for the week.

Keith Lanton:

So what is the markets optimistic about? Why are we still staying very resilient at the moment? Well, the markets right now are focused on the Federal Reserve and that it's looking increasingly likely that the Federal Reserve will cut interest rates at their upcoming meeting on September 17th. But the markets are looking past the next meeting and the markets are thinking that it is almost certain that interest rates will be cut multiple times this year to prop up the economy. So the irony is the economy is going to get weaker, but don't worry, the Fed's going to raise rates, so therefore stocks will continue to climb. Investors right now are pricing in a 67% chance of three rate cuts this year. Now, that's between September 17th and December 31st. So that's asking a pretty good amount, and the markets even are pricing in a 9% chance of a full point of rate cuts, something that seemed almost impossible just a few days ago.

Keith Lanton:

The bad news is the economy is potentially weakening. On top of the latest job numbers, other statistics last week showed that there are more unemployed Americans than jobs opening for the first time. That's the JOLTS report that came out last week job openings in the economy, showing that for the first time since 2021, there are more people looking for work than there are job openings. Based on that Joltz report, now worries about the broader economic slowdown are outweighing the market's other boogeyman, which is inflation. We talked about that just a few days ago 30-year Treasury 5%, now 475. Days ago, 30-year Treasury 5%, now 475. Now not. Every part of the economy is in a sullen mood.

Keith Lanton:

On Friday, interest rate-sensitive stocks were the standout performers. Lower interest rates should lead to lower mortgage rates, which could bring some home buyers off the sidelines, therefore giving a lift to stocks that have a relationship to home building and home formation companies like the Home Builders, as well as the companies like Home Depot and Whirlpool, because you're going to fix those homes up and purchase appliances. Small cap stocks also showing strength because they have a meaningful exposure to variable rate or interest rates that are tied to the Fed funds rate in terms of their borrowing. So more so than large companies. More floating rate debt, so that floating rate debt would float lower if rates are cut.

Keith Lanton:

Last week we also saw a great deal of strength in Alphabet, the parent company of Google, up 9% on Wednesday after a judge said the company would not have to break up its business despite losing a major antitrust case. Barron's wrote an article on Google saying that markets may have gotten a little ahead of themselves, that Google is not completely out of the woods and perhaps the market reaction, while certainly deservatively of positive news and the stock moving higher, but sharing remedies could move forward for Google, meaning or Alphabet meaning that they would have to share some of their search results with competitors, potentially like Perplexity or Anthropic some of the AI startups that are developing their own search engines. This is something we don't have clarity on, but this is a risk for Google. It's also the potential the government could appeal their case and this ruling does not close the door on the fact that other countries around the world may pursue antitrust cases and other companies that feel that they've been wronged may view this ruling as an opportunity to still continue or perhaps initiate litigation against Google to suggest that they've been harmed by Google's policies. So certainly good news for Google, but Barron's suggesting perhaps markets, maybe short sellers, being forced to cover led to a little bit of extra strength there. Macro economic news will possibly dictate trading activity until the Federal Reserve meets on September 16th a decision on September 17th, barron's saying as investors await more data, strategists don't expect the bearish wind blowing through the market to become a full-blown storm, so they're not suggesting things are going to get real ugly, at least based on what is taking place so far at the moment.

Keith Lanton:

All right, let's shift gears. Take a look at the financial markets this morning and see what's going on. Equity futures are pointing to a modestly higher open this morning. Dow futures are up about 70. S&p futures up about 13. Nasdaq futures up about 75 points. Bond yields are lower pretty much across the board by 0.01, one basis point to two basis points. 10-year treasury was about 408. It's about 407 this morning. For some context.

Keith Lanton:

Last week's action driven by expectations surrounding monetary policy, as we talked about Price stability, will be at the forefront of focus this week. Markets are going to focus on the August PPI report, that's, the producer price index, on Wednesday and the CPI report, which is one of the Fed's key inflation gauges, on Thursday. So lots of attention focused on inflation because that'll dictate how much room the Fed has to maneuver with respect to interest rates. So a September cut looks like it's almost a certainty, but higher than expected inflation readings could certainly influence those future cuts, which are being priced in at a rapid rate. Fed Governor Christopher Waller, who is an FOMC voting member and has been a proponent of lower rates and is in contention to be potentially the next Fed chair, noted last Wednesday he expects to see a near-term uptick in inflation, but expects it to fall back to 2% within six to seven months. St Louis Fed President Alberto Musalem, who is also a voting member, has a different view. He said that tariff-driven inflation could be more persistent than current forecasts suggest. So, seeing different views from different Fed members, the market will be without any color from the Fed this week, as they are in a blackout period ahead of next week's meeting, so won't be getting any more comments from Fed members.

Keith Lanton:

Corporate headlines quiet this morning. Only a small number of companies expected to report earnings this week. On the trade front, reuters is reporting that the US is considering annual approvals of chip equipment sales to Samsung Electronics and SK Hynix factories in China. Companies in the news three companies being added to the S&P 500, all moving higher this morning. Emcor symbol E-M-E. Applovin A-P-P is up almost 9%. Robinhood H-O-O-D is up almost 8%. Those three companies join in the S&P 500. Google Alphabet the corporate name is up slightly this morning. On Friday, they announced they plan to appeal a ruling by the EU that imposes a $2.95 billion fine on Google and directs them to cease and desist alleged self-preferencing practices.

Keith Lanton:

Unitedhealthcare UNH perhaps turning a corner up about 1% this morning. They affirmed 2025 guidance ahead of an investor and analyst meeting. 2025 guidance ahead of an investor and analyst meeting. That's significant because when they cut guidance and cut their estimates, they said they really didn't have a lot of clarity on the future. So perhaps a sign of stabilization. We'll get more information out of UnitedHealthcare symbol UNH.

Keith Lanton:

Overseas Asia markets generally to the upside. Japan the biggest gainer up 1.5%. In Japan, prime Minister Ishiba resigned and will serve as a caretaker prime minister until a new leader is named. Markets viewing that as a positive. Major European markets starting the week on a higher note. Markets there up anywhere in the neighborhood of 1.tenth to just under one percent. French Prime Minister Beirut is expected to lose today's confidence vote after just nine months in office. Wall Street Journal reporting there was an ICE raid on a Hyundai plant in Georgia and the Journal reporting that the detainees of that raid will be returned to South Korea. The White House on Friday released a fact sheet where President Trump modified the scope of reciprocal tariffs and established procedures for implementing trade deals. This didn't get a lot of attention but significant in that it'll create the potential clearer framework of trade policy here in the United States.

Keith Lanton:

Biggest earnings report we get potentially is tomorrow Oracle reporting their quarterly results. On Thursday, adobe and Kroger are reporting earnings. Also tomorrow we get the Bureau of Labor Statistics releasing its preliminary revision to employment data for the last 12 months. This goes back from April 1 of 25 to March of 25. So this is a significant time period and economists think that a loss of jobs due to this revision could be in the range of 475,000 to 790,000 jobs. So if in fact the revision is of that magnitude, we could see half a million to three quarters of a million jobs that we thought were created now being told that perhaps the statistics were not quite correct and therefore the job creation, even going back the past year, was not as robust as initially announced. So that will get meaningful attention, although it is backwards looking. So, depending on the severity of it, the markets tend to give it a less focus because it's the past.

Keith Lanton:

On Thursday I mentioned CPI coming out Wednesday. Ppi Friday University of Michigan comes out with consumer sentiment for September. We're looking for that to be at 59.3, up about the one point. Importantly also, when they release that consumer sentiment, they come out with consumer expectations for inflation, and this is important the metric when people expect more inflation, they tolerate higher prices and the expectation is that consumers are expecting 4.8% inflation, which is a big number and potentially worrisome, because if you expect it, you swallow it more easily and therefore inflation has a greater chance of occurring. Interesting statistic the number of robots Chinese factories are installing annually is 280,000 robots In 2023, China installed half of the world's robots.

Keith Lanton:

If you're looking for another trend to keep an eye on, it's older Americans, who are certainly making up a greater percentage of the population, demographics critically important to investing and the number of Americans who are 65 or older who are living alone is 28% and that is a very high number and that is a number that could influence all sorts of things, especially caring for those folks. They're living alone and not with someone to take care of one another. It makes it more likely that they will need some sort of care going forward. All right, just a couple more stories and then we'll conclude. Barron's talking about interest rates and how markets are hyper-focused on what's going to happen with rates and how to adjust the portfolios accordingly, based on changes in rates. But what Barron's is arguing is that employers need certainty, not necessarily about interest rates, but more importantly, I mean they certainly would like clarity on interest rates, but clarity around tariffs. So what they are suggesting is that businesses need this clarity around tariffs to determine their trade policy.

Keith Lanton:

Back in limbo after a federal appeals court recently struck down President Trump's use of emergency powers, it could be a while before companies get any clarity on what is exactly taking place, not only with respect to different tariff rates for different countries, but just overall US policy, and whether tariffs are legal, which ones are legal, how the administration might try and work around some restrictions that potentially could be put in place. And this makes it very difficult for businesses, especially small businesses, to make the critical decisions about importing and exporting products, and at what prices and into what parts of the economy, if you don't have clarity with respect to trade policy. So things freeze up. When there's uncertainty, corporations don't make decisions, investors get uncertain and consumers start changing their behavior. Makes it more challenging for the economy going forward and certainly employers become potentially hesitant to add new workers. Think about it If you're running a company and you're not sure what the trade policy is, you're not sure how, if you're going to go left or right based on those decisions, you'd probably be pretty hesitant to bring on new workers when you don't know if your business is going to be where it is in a few months from now. So getting some clarity on trade policy is something that the markets clearly would potentially benefit from.

Keith Lanton:

According to Barron's, a company, an AI company mentioned in Barron's favorably is a company called InnoData. The symbol is I-N-O-D. Innodata offers data engineering services for the development and deploying of AI models. They see a significant opportunity in the high-quality data training needed by the next generation of AI. This is you know how do you input data into these models so that the models most efficiently learn based on the data that's input into them, so that the models therefore give you better answers? This is what InnoData helps a lot of these large language models do. These are companies like Meta, microsoft, grok, anthropic, etc.

Keith Lanton:

Barron saying after a sharp correction in INOD, the stock appears undervalued, supported by strong fundamentals and a positive long-term outlook. Innodata is a critical partner to numerous technology giants. They offer software that transforms raw data text, video, sensor information into higher quality AI-ready data sets. Market capitalization of this company still very modest at $1.2 billion. Over the past three years, revenue has tripled, profitability has surged and, despite these gains, barron says the stock could be just getting started.

Keith Lanton:

We'll talk about some of the risks. This isn't just a reward story, barron saying, after a sharp correction from highs earlier this year, where the stock was north of 60 and is now trading, at least before today's story, a little under 40, that the stock may rebound. Now five of the seven MAG7 tech leaders are using its services. Its biggest customer has increased from an $8 million contract in 2023 to $135 million. From $8 million to $135 million run rate. In the second quarter, innodata's revenue was up about 79% year over year, management suggesting that the pipeline is strong. Company went from a loss to earnings of about $7 million. Management hiked 2025 guidance and forecast revenue growth of 45% or more. Now there are risks Two of the company's largest customers, which we don't know exactly who they are, but we can maybe make some guesses contribute to more than half of the total revenue. So if you were to lose one or both of those customers, that would be quite devastating.

Keith Lanton:

Other risks here are that bigger tech companies are aggressively moving into this space. Some would argue the market is expanding and that's a justification of the business practices of InnoData. But it also creates a competitive threat from more well-capitalized competitors. Nevertheless, barron says the stock at around 30 times forward earnings, looks attractive, especially relative to the revenue growth trajectory. But there certainly are some concerns about the concentration of clients here. But nevertheless they view the factoring it all in the risk-reward is attractive. But this is you know. Inod is for investors seeking aggressive growth and understanding that sometimes when you reach for something that's very aggressive, that if it doesn't work out that the downside is more negative than less aggressive stocks on occasion.

Keith Lanton:

Finally, I'll conclude with a story on bonds, municipal bonds. Barron's talking about bonds issued by universities or schools and suggesting that there continues to be an opportunity in bonds issued by high-quality, higher-ed institutions here in the United States. Article quotes manager of the Nuveen Fund that he favors elite universities that get lots of state funding, are in high demand from students and earn top marks from credit agencies. Article gives an example of a company that certainly had its share of news, which is Harvard. They have a 10-year bond that currently has a yield of around 3.5%. That's about a 6.9% taxable yield for someone in the highest bracket in Massachusetts. If you don't live in Massachusetts, that might be more like 5.9% for you on something taxable.

Keith Lanton:

Why are these bonds offering attractive rates?

Keith Lanton:

Well, certainly the headline flow has for big universities here in the United States that have a lot of notoriety has not been good as the Trump administration has taken issue with some of their policies. But perhaps even a bigger factor is that there has been a lot of new issuance. These schools, looking to get ahead of potential funding cuts from the Trump administration, issued a lot of bonds. So supply up, demand down modestly. But that new issuance, which has already taken place, is starting to get digested in the market and we're starting to see some price appreciation of these bonds. Now there certainly could be more headline risk. There could be potentially more funding cuts for some of these universities, but Nathan Will, who's the head of Vanguard's municipal research, said more negative headlines would likely be a buying opportunity, saying that strong schools stay strong, and he feels that elite institutions, although they may come under some pressure, are likely not going to suffer any significant ratings cuts. They have a big pool of alumni who are very supportive and therefore, over the longer term, these institutions should continue to do well.

Keith Lanton:

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. heroldlantern. com.

Sophie Cohen:

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