Enlightenment - A Herold & Lantern Investments Podcast

Beyond the Markets: Finding Confidence Through Courage in Finance and Life

• Keith Lanton • Season 7 • Episode 35

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September 22, 2025 | Season 7 | Episode 35

What happens when a tech giant can borrow money at lower rates than the U.S. government? This fascinating development signals a potential paradigm shift in how markets view sovereign debt risk—and it's just one of many remarkable insights from the aftermath of the Federal Reserve's recent rate cut decision.

The Fed's quarter-point reduction marks the first cut since December, but market reactions have been surprisingly complex. While short-term variable rates tied to indices like the prime rate typically follow Fed movements—benefiting credit card holders and those with floating mortgages—we're seeing the 10-year Treasury yield unexpectedly rebound from 4% to 4.14%. This movement reflects underlying concerns about economic strength and inflation persistence that could temper the pace of future rate cuts.

Looking deeper at the Federal Open Market Committee vote patterns reveals greater consensus than anticipated for the moderate approach. Even officials expected to advocate for more aggressive cuts aligned with Chairman Powell's measured stance. Meanwhile, the Fed's "dot plot" projections indicate another potential quarter to half-point cut before year-end, though with notably less consensus than markets had hoped for—creating uncertainty that's now reflected in equity valuations.

Beyond interest rates, we're witnessing fascinating shifts across asset classes. Gold has surged to new highs while cryptocurrencies have declined significantly, challenging narratives about modern inflation hedges. Perhaps most remarkably, Microsoft recently issued 10-year bonds at 3.625%—significantly below comparable Treasury yields—suggesting investors may be growing more concerned about U.S. government debt levels than well-rated corporate debt.

For your portfolio strategy, these developments demand thoughtful reassessment as we approach the end of 2025's third quarter. With substantial cash still on sidelines and sentiment showing a mix of bullishness and caution, positioning correctly for what comes next requires both courage and confidence. As James Clear wisely notes, "The confidence that you can bounce back from failure is earned by working through previous failures."

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

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AlanEppers:

And now introducing Mr. Keith Lanton

KeithLanton:

Good morning. today is Monday, September 22nd. Hope everyone had a wonderful start to fall, uh, which uh which took place uh on Saturday as uh we wrap up the end of the uh third quarter of 2025. Also want to wish those who are celebrating the Jewish New Year a very happy and uh and sweet new year. So here we are. Year is uh quickly coming to a close. Last week we had uh the Federal Reserve meet, cut interest rates by a quarter of a point, had some uh interesting results coming from that from that meeting based on what some of the uh Fed governors have have voted and what their uh dot plots, which is which is what the Fed governors uh think about going forward. It's their current thinking. It's not a guarantee that it's gonna happen about what is gonna happen with with interest rates and the economy moving forward. And we'll talk about some of the takeaways from that Federal Reserve meeting and perhaps some of the market uh meaning equity market uh reaction that we saw at the end of last week is uh is playing out this morning, where we have some some weaker futures, at least at the outset, and we'll talk about perhaps some of the reasons why we're seeing what we're seeing, nothing you know overly concerning or dramatic, but nevertheless, the key here is to think about what the trends are going forward, how to build your portfolio, how to invest in this market. There's lots of cash on the sidelines, lots of folks that are feeling uh very bullish and greedy, and at the same time there are other folks who have lived through some uh pain in the past who are feeling uh really concerned, and we'll talk about those countervailing forces and what may be taking place in this market and how to best position your portfolio. Before we do that, I'm gonna start us out this morning, uh get us into the right uh frame of mind, hopefully, to think about what we want to do, perhaps thinking about uh our uh goals going into 2025, end of 2025, going into 2026, how we want to think about uh our future, our lives, not just our financial lives, but everything's interconnected and related, and our personal lives as well. So, James Clear, author of Atomic Habits, also has another new book out just recently, wrote some interesting words of what I view as wisdom on confidence and courage. He said the only way to develop true confidence is to earn it. The confidence that you can bounce back from failure is earned by working through previous failures. The confidence that you can deliver the speech is earned by the previous speeches you have given. As uh many athletes can attest, the confidence that you can perform on game day is earned by the previous performances in practice. In the beginning, you need enough courage to practice even though it may not go very well. And over time, as your skills improve, courage transforms into confidence. Courage first, confidence later, and that uh certainly applicable not only to uh athletics but to uh perhaps uh school if you're a student, or perhaps to uh your job, or perhaps to uh your relationships. On getting things done now, on getting started. Why do it now? Why get started? James Clear says, use the best idea you have right now. Claiming you need to learn more or get your ducks in a row is just a crutch that prevents you from starting. Education is a lifelong pursuit. You will always need to learn more. It's not a reason to wait. So if you're waiting to get something done, to get everything perfect, you might be disappointed that perfect doesn't ever uh line up uh perfectly. Just do it. Here's a study on artists. Think about actors, comedians who started at the bottom and worked their way to successful careers. Researchers identified one factor that was consistent across the group. Those who performed more shows than the average artist were the ones that went on to have a much greater success rate in their respective field. So that same principle holds true in many fields. If you want to rise, you need a lot of shots on goal. Keep making new material. Eventually, you will catch a lucky break. And finally, if there's something this Monday morning, a lot of us wake up on Monday morning and think of all of the things that we've got to do, the problems that we need to solve. Well, think of this working on a problem reduces the fear of it. It's hard to fear a problem when you're making progress. Even if progress is imperfect and slow, action relieves anxiety. So if there's something that's causing you anxiety, take some action, stop procrastinating, and uh hopefully uh you'll be making some progress. And finally, a thought on this wonderful life that each and every one of us lead. One factor that we have that uh 93% of the people that have been on Earth do not have is that we have something that they don't have, and it is not money, it is time. Over 180 billion people have lived throughout history. James Clear points out that 93% of them are dead. So you have what every king, queen, pharaoh, ruler, CEO, and celebrity of the past would give all their wealth and power for, and that is today. Several years ago, a uh young uh person in the audience was uh asking questions to uh CEO of uh Berkshire Hathaway, Warren Buffett, and uh Warren Buffett turned around and said to him, you know what? And I'm paraphrasing here, he said he said, I would give all that I have to be you. This is a ten-year-old, twelve-year-old asking a question to Warren Buffett. He said, You have what I can't get, which is the rest of your life in front of you, and that is truly priceless. So if you're uh here today, you have the opportunity and the pleasure of doing what uh so many who have come before who are super powerful, super wealthy, yet uh they are no longer here with us today. All right, let's take a look at the markets. I mentioned we're seeing a little bit of weakness this morning. We're gonna back up to last week. Last week uh the big event was on Wednesday, Federal Reserve reduced interest rates by a quarter of a percent. That brings the federal funds rate, which is the rate that uh which is the rate that the Federal Reserve sets for uh banks uh to borrow money from the Fed at a rate of somewhere set between four and four and a quarter percent. What does that mean to you if the Federal Reserve cuts rates by a quarter of a point? Well, what it typically means, it's not a guarantee, but it almost always means is that uh rates that are variable, that are tied to an index, uh typically the prime rate you might hear about, or the broker call rate. These rates are typically tied to the federal funds rate. So if you see a reduction in the federal funds rate, you'll see a reduction in those rates, and uh and therefore perhaps the uh cost of you borrowing money from your brokerage account has gone down by a quarter of a percent. Or more than likely the rate that uh you are paying your credit card company while still perhaps exorbitant is now about a quarter of a percent lower. Also, you're more likely to see uh if you have a uh mortgage that is not fixed but floating, that that rate will come down by a quarter of one percent. And also shorter-term loans like auto loans typically are uh more correlated with uh the federal funds rate, whereas typically mortgage rates, which which are uh the rates uh that folks who take out uh typically fixed income mortgages, those rates are typically tied to longer-term treasuries like the 10-year treasury, and and those rates aren't uh determined specifically by the Federal Reserve. Now, going into the meeting, we saw the 10-year treasury yield pull all the way back and touch 4%, and uh today we're seeing those treasury yields pick up and we're back up to about 4.14%. And then that begs the question of why? Why did we see the 10-year Treasury move down in anticipation of the Federal Reserve meeting and now move back up? Well, there's a lot of reasons for that, but perhaps one of those reasons had to do with some of the commentary uh from uh Chairman uh Powell. Also, of course, uh the ongoing concerns about the U.S. budget deficit, always the elephant uh in the back of the room. But I think, at least uh in the short term, I think uh some of the comments and uh some of the takeaway from the Federal Reserve meeting may have more to do with the backup and uh ten-year treasury yields, at least at the moment. So those 10-year treasury yields going from four to about 4.14%, and uh analyzing what uh took place is that we had probably greater consensus than we anticipated at the Federal Reserve meeting with respect to that quarter of a point cut, meaning that all the Fed officials who could vote at that meeting voted alongside Chairman Powell except one, Stephen Moran, who was uh recently uh put on the Federal Reserve Board by President Trump and was widely expected to uh advocate for uh aggressive rate cuts. What perhaps is most of note is that two former appointees, uh officials who were appointed by President Trump, uh these are uh Bowman and Waller, who are both vying for uh being the uh next chair of the Federal Reserve, that both of those members of the Federal Voting Committee voted alongside the rest of the members for a quarter of a point cut. I think that was uh something that was a little bit surprising. Some folks were expecting more advocates for a more aggressive cut, like 50 basis points. But the takeaway was uh perhaps most of these Fed officials viewed the concern that inflation may still be percolating and that the economy may still have some uh some some meaningful uh strength in it, and therefore a fifty basis point cut is not uh warranted, and therefore the market takeaway is well, the ten-year treasury picked up because, in a sense, the economy is a little bit stronger than expected, and uh, and therefore, even though even though the source of inflation may not be tariffs, they really might be a one transitory factor or a factor that uh is not persistent, uh time will tell. But the takeaway here is that these officials were not comfortable with uh 50 basis point cut. Also, important takeaway had to do with what is called the dot plots. Those of you who have uh suddenly started hearing these words, uh dot plot with respect to finances, uh, may say what what in the world is a dot plot. What a dot plot simply is is each Federal Reserve official who votes gets to uh put on a piece of paper a dot, which indicates what they think the future rate of the federal uh funds rate will be in the future, to give us some insight, not a guarantee of what interest rates may be in the future. And these dot plots uh indicated that we might see a quarter point cut before the end of this year. There's a reasonable chance we might see a half a point cut before the end of this year. But these dot plots were fairly inconsistent in the sense that uh some folks uh thought with uh a lot of uh probability we would see a 50 basis point cut, and other folks thought that perhaps we'd see no cut. So there was a little bit less consensus on a uh significant interest rate cut for the rest of this year, another factor on why perhaps the 10-year treasury is not uh dropping more, and another factor on why we're getting a little bit of uh consternation in the uh equity market, which had built up some expectations of more certainty for more rate cuts, and now uh we're starting to question that a little bit. So that I think is what we are uh facing here this this morning as uh as we wake up to this new day. All right, so let's put some numbers to uh to what we're seeing, and we're seeing Dow futures down about 180, SP futures down about 20, NASDAQ futures down about 90. Stock futures uh are sliding as investors wait to hear a bunch of speeches by Federal Reserve governors to give them some more clarity on what's uh they're thinking, and uh these speeches will be closely watched because, as I said, markets are focused on what the future interest rate cuts may be coming, and uh these speeches may give some clues and insights. Now, last week the three gauges, the Dow, the SP, and the NASDAQ, all soared to record closing highs after the Federal Reserve cut those interest rates for the first time since December, and did indicate more reductions could be on the way. It's just a matter of the extent of those reductions. Wall Street right now is trying to uh find reasons to sustain the rally that took place last week. And the main driver today could be comments from Fed officials with Fed Governor Stephen Moran, who I just mentioned, is uh the recently appointed governor by uh President Trump. Also going to get comments from uh New York Fed President John Williams. Chairman Powell expected to discuss his economic outlook tomorrow. And then economic data on Friday we get the personal consumption expenditures, which is known as the PCE, which is the Fed's preferred gauge of inflation, which certainly is something that uh we just talked about, is one of the concerns of some Fed officials. So uh this reading is important to give us some insights into what's taking place from an inflation standpoint, and that will drive Fed policy going forward into the future. Now I mentioned the 10-year Treasury was at 414 in the last few minutes. It's backed off to about a 412, so it's uh come down a little bit. What's also taken place is we see gold surging to a new high. It's up to about $3,743 an ounce, dollar relatively flat this morning. Also of note this morning, crypto is uh is moving lower, especially Ethereum, which is down about 9%, and uh Bitcoin down about 2%. Talks of uh some uh liquidations on some uh bets that some have had made in the uh crypto space, some forced liquidations causing uh extreme volatility in crypto. Also, uh when you're thinking of crypto, I think it's really interesting to uh recognize that gold has been uh steadily climbing for the past few months, and uh cryptocurrency has been off of its uh all-time highs and uh has uh has not participated like you may have expected with uh with gold uh increasing in value. What's perhaps of note further is that uh inflows into gold ETFs are extremely strong. So some investors perhaps who may have been crypto uh folks and looking at crypto when uh when concerned about the deficit and things like that are more seriously considering gold. Just a year or two ago, many had uh suggested that gold was no longer the hedge against uh things like paper currencies, and that call may have been uh premature. In geopolitical news, uh Democratic leaders have requested a meeting with President Trump ahead of the looming government funding deadline. President saying he would love to meet with them, but I don't think it's gonna have any impact. In other news reports that President Trump will address the United Nations Assembly tomorrow and meet with Ukrainian President Zelensky. There is uh no economic data of note today. I mentioned the Friday key reading on PCE. This week we will also get the final revision on gross domestic products in the second quarter. Some uh company specific news, uh Fox, symbol FOXA, the Class A shares are up about 5%. That came after President Trump said uh some uh executives and owners of Fox were going to be part of an investor group forming to own TikTok. Uh that group could also include tech billionaires, Larry Ellison and Michael Delt. Trump told uh Fox News Oracle stock rising on that report, as well as uh reports that uh they may uh be the company that uh helps uh create the American algorithm for uh for TikTok. Lots of talk on what would happen to the uh TikTok algorithm, which many credit to the huge success of TikTok if the ownership uh structure were to be modified for the uh US version. So Oracle moving higher and those reports, as well as reports that uh they are in discussions with uh Meta about uh about uh hosting Meta for uh artificial intelligence projects. Uh I mentioned crypto weaker this morning. We are seeing a weakness in uh Coinbase and MicroStrategy this morning. Also, weakness this morning in KenView. Kenview KVUE was spun off from Johnson Johnson to uh house their their over-the-counter medications and products, and uh one of those products is Tylenol, Washington Post reporting that the Trump administration is planning to link a setametaphine, the active agreement in the painkiller Tylenol, to autism that had been reported last week. Then some suggested that perhaps that wasn't going to happen now. Reports are that it uh is back on again. Big news in the pharmaceutical biotech space, MetSara, symbol MTSR, is up about 60% this morning to about $53 a share. After Pfizer agreed to buy the weight loss drug maker for $7.3 billion. As part of the agreement, Pfizer is going to pay MetSerra $47.50 a share in cash, and a further $22.50 if certain performance milestones are met. Pfizer also trading up this morning about uh 1.5%. Tesla rising this morning after CNBC's reporting that uh billionaire investor Warren Buffett has uh offloaded Berkshire Hathaway stake in Chinese electric vehicle maker BYD. This is the largest manufacturer in China of electric vehicles. Uh Charlie Munger had been a big advocate uh for purchasing Boyd back in 2008-2009. Berkshire had tremendous success with their investment in BYD, but now closing that investment out, and some speculating that that is a positive for Tesla. Intel stock down a little bit this morning after a big run last week. If we have some time, we'll talk a little bit about the news uh on Intel last week and the $5 billion stake taken by NVIDIA. Nvidia down mildly this morning about half of 1%. Lots of technology companies being affected by uh some of the uh reports uh about H-1B immigration visas. These are visas that are issued uh to foreigners who are bringing unique skill sets into this country and they're able to uh to work here. And the Trump administration, after some uh confusion, clarifying this morning that in order to get a new H-1B visa, there is going to be a charge of $100,000. Some reports over the weekend indicated that that would be $100,000 per year. This morning, Trump administration clarifying it'll be a one-time charge of $100,000 to get an H-1B visa. Trump administration saying this policy being put in place to encourage these companies to hire Americans first. Also, uh there was some confusion on whether or not existing holders of H-1B visas would be able to get back in the country if they were out of the country. The administration seeking to clarify that uh this does not affect current H 1B visas. Nevertheless, companies like Amazon, Apple, Google, especially some of the uh Chin in Indian consulting companies, employ lots of uh folks with H1B visas, and if they want to keep hiring these people, well, it looks like it's gonna be more expensive, so they're seeing some weakness in some of these uh companies and these technology shares. This morning we are seeing uh markets in the Asia Pacific region mixed. Standout was the Japanese market, which was up about 1%. Also this morning, some reports uh one from Reuters that uh President Trump will meet with Argentinian President Millet. Also uh reports uh that from Bloomberg that the U.S. is exploring a Trump branded site to help consumers find lower priced medications. So at the end of last week, we uh had uh reports uh regarding a conversation between President Trump and uh Chinese leader C with respect to uh TikTok and U.S. uh Chinese uh relations, and some commentary coming out of uh those discussions, somewhat in sync between the U.S. and China, but not entirely, and I think it's important to uh understand the uh the differences here because these events do have a significant effect on financial markets. The leaders said they would meet at a regional event in October and characterize Friday's discussion in a positive tone, but appeared not to come to a resolution on many of the outstanding issues, including a sign-off on the framework of a TikTok deal. Now, President Trump posted on Truth Social that we made progress on very important issues, including trade, fentanyl, and the need to bring the war between Russia and Ukraine to the end and the approval of a TikTok deal. Now, analysts did uh did note a willingness by both sides uh to uh de-escalate in a uh tone that was uh friendlier, but they did note some significant differences in each side's communication. Trump mentioned future meetings in his social media post. The readout from the Chinese government didn't mention future meetings, although they alluded to that get together in uh in October. Now, if uh there were agreement about a uh trip by President Trump to visit China specifically, not uh not to meet in uh in uh what they are where they are planning on meeting in South Korea, that would have raised uh significant expectations for deliverables. So it looks like uh at the moment that uh there will be a meeting, it will be in South Korea, but it will not be in China. If it were to be in China, the expectation would be that uh there would be uh more progress on some of these uh issues. China's view of a TikTok deal also sounded less final than Trump. China said the Chinese government respects the wishes of the company in question and would be happy to see productive commercial negotiations in keeping with market rules that lead to a solution that complies with China's laws and regulations and takes into account the interests of both sides. The U.S. side needs to provide an open, fair, and non-discriminatory environment for Chinese investors. So Chinese uh sounding uh a lot more bureaucratic and a lot less certain than the posts from President Trump. So certainly these two sides are uh negotiating in public, and we as investors uh need to interpret these signals and make uh investment decisions based on the commentary from both the U.S. and China. All right, let's talk about uh a few things from Barons, and we're gonna talk a little bit about the bond market as well. First off, I'm gonna get started. Many of you may have been participating or at the very least hearing about that. We are starting to see uh lots of IPOs. What are IPOs? They're initial public offerings when a company for the first time lists its stock on an exchange, and typically when markets are healthy and robust, we start seeing uh activity in the IPO market, initial public offering market. It's been pretty quiet here in the United States. Last few years, last time we saw a little surge was in 2022, when there were lots of companies going public by what were known as SPACs, special purpose acquisition companies. Uh right now we're seeing a lot more activity in traditional IPOs, although SPACs are making a comeback. So IPO market is experiencing a resurgence. 150 companies have gone public this year, raising $28.5 billion. First aid gains are averaging 26%, but some IPOs, like StubHub last week, have underperformed. We also have a uh backlog of uh companies coming public uh this year and next year, some uh companies like Wealth Fund Front, Grayscale Investments. You may recognize Grayscale from uh being an ETF now that uh holds uh cryptocurrencies like Bitcoin, Databricks, Stripe, which had previously uh considered going public through an IPO, and Fanatics, all big names that are uh on tap to issue shares. So public, individual investors. Uh Barron saying that uh the IPO frenzy is just getting started, but you got to be careful and not get burned. For every big winner, there is a list of flops and floundering stocks. I mentioned StubHub was a disappointment. Gemini Space Station, sponsored by the Winkelvoss twins, the crypto money manager, is now trading below its IPO price. Firefly Aerospace doubled on its first day, but uh recently traded at its offering price. So uh depending on uh where you invest and got into these stocks, you uh have seen lots of volatility and may or may not have a profit. Now, getting into an IPO before it starts trading can be ideal, but it is very difficult. Institutional clients typically get first dibs. Brokerages like Fidelity and Charles Schwab may get some shares as well as Robin Hood and Moo Moo, and the latter two, Robin Hood and Moomoo, are trying to make it easier for individuals to get IPO allocations. However, hot IPOs with the hot IPO, that's an IPO that's expected to uh open above its offering price. So, for example, if an IPO is priced at 30, it's expected to open at 50. Well, that's 20 points that uh, in effect you as an investor are are receiving if you got shares at 30 and it's expected to open at 50. Obviously, everyone wants that. So how are they allocated? Typically they're allocated to customers who have the biggest accounts, customers who do the most business and generate the most revenues or fees for the accounts. One exception is some of the online startups like uh Robinhood and Moo Moo, although the allocations are not significant at the moment. Nevertheless, they allocate, they say, based on a lottery system and not based on uh the size of your account. So typically when companies go public, there's a small float because they only issue a small percentage of the stock to the public. The rest of it's either locked up or owned by insiders. Therefore, the law of supply and demand takes effect. Not that many shares out there because the company didn't issue very many for trading. At the same time, there's lots of excitement, so there's lots of demand, and that can cause the share price uh to trade above perhaps what uh is the appropriate level for some time. But then investors need to be aware what happens next. Well, there's a lockup period for a lot of those shares, typically around 180 days. After 180 days, suddenly insiders, people who were restricted from selling shares, who got shares perhaps in private placements, can sell their stock. So you as an investor need to be very mindful that the law of supply and demand that was working for you can now work against you as that supply increases. Need to be very mindful and aware of the dynamics of the marketplace when investing in initial public offerings. Also keep in mind that it's not uh entirely clear if initial public offerings in the long term are a good bet. Since 2020, the average IPO has trailed its industry average by 4% over the following three years from its first day closing price. If you're looking at uh a proxy, perhaps, for the IPO market, the Renaissance IPO Exchange Traded Fund is having a good year this year. It's up 25%, but its 10.2% annualized return over the past decade, trails the SP 500 by almost five points. SP is up about 15, this IPO index over the past decade, so a long period here up about uh 15%. All right, I want to uh talk about new IRS rules that are going to go into effect in 2027. These new rules having to do with 401ks and 401 catch-up contributions. So, what is a catch-up contribution? What does it mean? Well, anyone who's over 50 or approaching 50, listen carefully because you can make a catch up contribution to your retirement account. What does a catch-up contribution mean? Well, it means that you can make a full contribution to your 401 this year. That amount, this is 2025, you can contribute $23,500. And if you are over age 50, you can contribute an additional $7,500 to your retirement account. Now, starting not next year, but in 2027, if you earn more than $145,000 per year, and that will be uh indexed for inflation, so that number will tick up a little bit each year, you will have to make that catch up contribution to a Roth 401k. So you want to make sure that your plan offers a Roth option. Because if your plan does not offer a Roth option and you make more than $145,000, you are not going to be able to make a catch up contribution, not starting next year, but starting the following year. So for those folks who are making more than $145,000 and are over $50 and want to make these catch up contributions, got to make sure that there's a Roth in your plan in 2027. And you want to be mindful that if you are currently making those contributions. Contributions and you're making them not to a Roth but to a typical 401k account. That right now those contributions are being deducted from your income. Going forward, you're going to have to pay tax in this year, but you will get the Roth benefit if you put them into the Roth option, and therefore you will be able to enjoy hopefully those gains tax-free, and you will have those funds in a Roth. So again, make sure that your plan starting in 2027 has a Roth option. Also starting in 2027 for folks who are turning 60 to 63. So if you're turning 60 in 2027, 61, 62, 63, you will also get the benefit of being able to make a catch up contribution that is 150% of the current limit. So if in 2027 the catch up contribution, I'm just using assumptions here, is $8,000, then in 2027, you would be able to make a catch up contribution of $12,000 or $150 of that $8,000, which is a new provision that uh went into effect based on uh the recently enacted rules. So a couple of things to be mindful of. If you're gonna be 50 or more starting in 2027, think about if you make more than 145,000, you are going to be looking at uh Roth contributions if you can make them. And if in 2027 you're gonna be between 60 and 63, you can not only make that catch-up contribution into your Roth, you can make a bigger catch-up contribution for those folks. Alright, couple of stocks uh quickly in uh Barron's. One mentioned favorably, it's been mentioned favorably before, hasn't worked out, but uh perhaps uh things are uh changing. Barron's doubling down on MSG Sports, symbol as MSGS. Those in the New York area know MSG Sports well because they own the New York Knicks and the New York Rangers. Stock has been a significant underperformer. Lots of folks attribute this underperformance to what some call the Dolan discount. The Dolan family controls MSG Sports. They own the Knicks and Rangers uh through super voting shares. So if you own MSGS, you are an owner, but you really have uh minimal to no say in what takes place. And uh Charles Dolan, the family uh patriarch at the Dolan family, which controls these stocks, has indicated that he has little to basically he said no interest in selling. So despite the fact that the stocks got a market capitalization of 5.2 billion, and that the LA Lakers just sold some shares to private equity evaluation of 10 billion, arguably the New York Knicks worth somewhere in the neighborhood of what the LA Lakers are worth. But here we're talking not only the New York Knicks, we're talking the New York Knicks and the New York Rangers. So we're talking a stock if you thought about what the New York Knicks and the New York Rangers would sell for, not that anyone's selling is the problem, well, it would be probably a lot more than the five billion given that the Knicks are probably worth 10 billion on their own. So Barron's suggesting that uh perhaps the Dolans uh won't be a seller but might take in some private equity like the uh Lakers have done. Sports teams are doing this more and more, and perhaps that would uh create some sort of reset in valuation. Another possibility, and I think this one's interesting, is that is that uh the Dolans may have some incentive to take the teams private. So a tax law change that kicks in in 2027, which affects public companies, could make going private more appealing. So what's going to happen in 2027 is that the five highest paid employees of a company, now when you're talking about sports companies, you're talking about athletes. So the five highest paid players on the Nixon Rangers, basically, their salary starting in 2027 will no longer be tax deductible. So right now, under current rule, if you're a public company, may or may not know this, executives who earn more than one million dollars, the compensation they receive over one million, not tax deductible to that corporation. Possibly a reason many companies still remain private. But what's going to happen in 2027, not only executives who earn over one million dollars will not be tax deductible, but your five highest paid employees will not be tax deductible. And when you're talking about a sports team, you're talking about those athletes, and when you're talking about the Knicks, you're talking about about $150 million in salaries currently, that currently are tax deductible, that uh you no longer will be able to uh deduct that uh on your taxes. So that's a a real impact there. Finally, going to uh conclude talking here about uh the bond market. And uh we started out talking about the bond market, we talked about the Federal Reserve and their interest rate decision last week, but very interesting development last week is that uh we saw a new issue here of bonds in the United States, which was a corporate bond issue issued by Microsoft. They came out with a uh bond that was due in 10 years in November of 2035, and the offering yield on the Microsoft bond was 3.625%. Now, what's most of note here is that the 10-year treasury is at the time was yielding about 4.11%. So Microsoft was able to issue debt here in the United States for significantly less, about half a point less, or almost 10% less, or more than 10% less, than the U.S. Treasury is paying on their debt. And this is despite the fact that U.S. Treasury debt, when purchased in a taxable account, is not subject to state income tax if you are in a high tax state. So typically treasuries yield less because A, they are viewed as safer, and B, there is a tax benefit for certain investors in treasuries. So we are seeing here investors suggesting that they view Microsoft's triple-A rating, even though Microsoft, different than government entities, cannot print money, being viewed as equal or more or superior to U.S. Treasury debt. So this is an interesting paradigm shift, and this is a a real-world example where we're seeing perhaps the argument that treasuries are not truly risk-free debt as we those of us who uh perhaps uh grew up in the eighties, nineties, and two thousands, uh what we learned in uh in school was that uh treasuries were the risk-free asset. Perhaps we are experiencing a new world here where there is a challenge to treasuries, concerns that governments are taking on too much debt, and we have a real-world example here where we see uh debt uh being uh issued at less than the uh the rate of the government, and perhaps this is one of the main reasons why you keep hearing about that uh corporate bond spreads are at record lows. And what does that mean? That means the interest rate that corporate issuers, and then we're talking about investment great or well-rated or financially sound institutions, what the rate that they need to pay in order to issue debt relative to the government. They are right now at historic lows. Some have suggested that that is because people are more comfortable with risk in the current environment. But perhaps it's because people are not comfortable with the risk of the treasuries relative to the corporate bonds. And that is why we are seeing a compression in spreads of corporate bonds to treasuries and may continue to see this trend going forward if uh something isn't done to uh to modify the significant amount of debt that the U.S. is taking on relative to the amount of uh production or GDP that we have here in this country. So something to think about when uh you are investing in uh in bonds and what is uh the most uh you know secure asset if you're looking for super safety in uh in your fixed income or bond investments. That's everything I've got.

AlanEppers:

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SophieCohen:

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