Enlightenment - A Herold & Lantern Investments Podcast

Shutdown, Markets, And The Big Bill

• Keith Lanton • Season 7 • Episode 37

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October 6, 2025 | Season 7 | Episode 37

A government shutdown should spook investors, yet stocks are climbing, futures are green, and deal flow is perking up. We unpack why markets often rally through shutdowns, where this one could truly bite if furloughs turn into layoffs, and what a data blackout does to sentiment and positioning. From there, we zoom out to structural shifts: Thomas Peterffy’s argument that 9:30–4:00 is a relic in a global, algorithmic market, why 24/7 trading for liquid mega-caps feels inevitable, and how stablecoins grease real-world payments while broader crypto still fights for purpose.

Taxes take center stage as we translate the “big beautiful bill” into practical moves. Corporate rates anchored at 21% change capital allocation math, pass-through deductions remain powerful for qualifying owners, and estate and gift exemptions near $14M per individual materially alter lifetime and legacy planning. We dive into the enduring step-up in basis, refreshed SALT relief under income thresholds, and AMT tweaks—then outline concrete year-end ideas: maximizing qualified plan contributions, tax-loss harvesting to offset gains, and smart charitable giving with appreciated assets.

Momentum stories are back too. A regional-bank merger hints at a broader M&A thaw, AMD’s developing partnership with OpenAI adds new energy to the GPU race, and healthcare pops on a less-punitive-than-feared drug pricing path. Abroad, Japan’s dovish surprise sinks the yen while France’s political shock widens spreads—together reinforcing a “debasement trade” mindset where investors favor stores of value: quality equities with pricing power, hard assets, and, for some, gold or Bitcoin. We close with an under-the-radar income idea: cold storage REITs trading at discounts to replacement cost, investing in automation, and paying you to wait for catalysts.

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Keith Lanton:

Good morning. Today is Monday, October sixth. Uh first opportunity to get together and take a look at financial markets for the fourth quarter of two thousand twenty-five. We are beginning this quarter with the government here in the United States shutdown. Equity markets at the moment very sanguine, don't seem to be very focused or or concerned about government shutdown, perhaps as a result of previous government shutdowns that did not have significant significant effects on financial markets. If you go back and look historically, many times when the government is shut down, equity markets have moved higher. This time we've got a little bit of a wild card in there with President Trump and the administration suggesting that they may do layoffs as opposed to furloughs. This could impact employment, possibly have an impact on jobs. This is something that has not been done yet, so this is the one thing that could perhaps be different in this shutdown than in previous shutdowns. Hopefully, lawmakers will be able to resolve their differences and come to agreement or at least compromise. Mr. Munger, Charlie Munger, Warren Buffett's former partner, paraphrasing said, you know, there probably wouldn't be any government shutdowns of any magnitude if you told the folks in Congress that if they shut down the government, A, they wouldn't get paid. Quite shocking, yes, they do get paid during a government shutdown. And B, if you said, hey, we're gonna put you guys in a room and you're gonna have to work out your differences, and if you don't work out your differences, well then every day you're gonna be stuck here in Washington and you're gonna be stuck in a room negotiating amongst yourselves, just coming out , you know, for in the evening to eat, we'll bring food in. And if you don't work things out, you just come in and do it the next day. You said I'd be very surprised if a shutdown lasted longer than a day or two if if those conditions were put in place and suddenly there'd be an amazing amount of folks coming up with solutions. So perhaps that's something that one day will will happen so that the taxpayers don't have to not receive the services that ultimately they're gonna get paid for anyway. But here we are, October 6th. We're gonna start getting smattering of earnings reports this week and next week, but we're gonna start really seeing the big banks report earnings and then a big big amount of earnings to follow. Last week, Goldman Sachs came out positively up their price target on the SP 500 to 6,800. So optimism continues to persist. This morning, futures are higher. We have a couple of transactions that are giving the markets some impetus to to to also find reason to be excited and move higher. And we'll talk a little bit about that. We're gonna talk this morning about the big beautiful bill. I think it's important to go over that again and see what the implications are for the tax cuts that were put into place so that we can start thinking in our minds what we're going to do as we plan for the end of the year and for moving into 2026. Keep in mind, remember, make sure you max out your contributions if you're capable to to your 401ks or IRAs or Roth IRAs as your approaches. Think about your taxes this year. This has in general been a good year. You may start to see that you've accumulated gains over the year, thinking about what strategies you could implement now to take tax losses if you if you have them so that you can avoid or minimize capital gains as year end approaches. So we're gonna start out this morning. Barents had an interview with Thomas Petterfee. For those who are not familiar with who he is, he is the founder and chairman of Interactive Brokers, and he is a highly respected thinker. Once you hear a lot of the things that he's done, if you're not familiar, you'll say to yourself, , like I do, possibly, wow, this is someone who's accomplished a lot, has been able to see around corners, see where the puck is going. So what is he thinking? Becomes more relevant if you think he's someone that can continue to be innovative. He's 81 years old and he is still the 67% owner of Interactive Brokers. Interactive Brokers is a market capitalization of $114 billion, so we're talking about a significant net worth, 67% of $114 billion just on the stock alone. Now, Mr. Petterfee, he created the first fully automated logarithmic algorithmic trading system in 1987. These days of fully automated logarithmic algorithmic trading systems are what what what basically drives markets, but back then it was truly innovative. What he did was he plugged a computer into a NASDAQ terminal so that it could place orders faster than a human, and soon after the system started running, NASDAQ called him up and said, Shut it down. And why did they say shut it down? They said, Well, all orders have to be manually typed. We don't like this automation, this this could create problems, the computer could take over, and we don't know, unintended consequences, you've got to turn the computer down. Every order has to be typed in. So what did he do? Well, he and his team came up, again, this is 1987, with a robot with rubber fingers that typed so quickly they sounded like a machine gun. Uh he said NASDAQ didn't know what to do because he was now typing the orders in, and basically they let him keep that fully automated algorithmic trading system, and it was the first one, and obviously led to many others going forward. He also invented an options pricing model. This is before Black and Scholes, the model that is often used to figure out what the value of an option is today. He created the first handheld computers for floor traders on the exchanges. He also pioneered an infrastructure that made electronic trading possible and then launched Interactive Brokers in 1987. So, what does he think about trading today? What does he think about crypto? I'll tell you. He said that the New York Stock Exchange, currently trading hours are 9 30 to 4 o'clock. He said that that's basically a dinosaur, artificial construct, something that was created because humans had to get together and engage in an open outcry system in order to buy and sell stocks like an auction. And he said, well, everybody had to get together in one place in one time. He said, given that today's markets are made by continuously running computer algorithms, there's no need for that artificial construct. Basically, we're living with a vestige of the past that he thinks will go away. The world is becoming a lot more international. Lots of foreign investors, we've talked about this just last week, , own U.S. stocks, about 20% of them, you own U.S. bonds. Um, and these people want to be able to make investment decisions on their time zones when they want to execute orders. So he expects that the large cab stocks where the where there's lots of liquidity will be trading 24 hours a day with lots of liquidity sometime in the near future, whatever the near future is remains to be seen, but seems to make a lot of sense. It seems like we are left with this vestige of the past, which is 930 to 4, and if you think about it logically, you can see that it probably doesn't make sense in this day and age. Also, let's talk about crypto. Mr. Peddafi is a big fan of stable coins. He said they facilitate payments, making it easier to transact, in other words, adding like a lubricant to the system. You don't have to go to a bank, they make funds flow more smoothly and immediately, perhaps one day being integrated into things like a blockchain. But when it comes to cryptocurrencies, he said even though Interactive Brokers is one of the large platforms to buy and sell cryptocurrencies, he personally says that he has them on the platform and it's very successful on the platform because there's lots of demand for it, but he says that he does not really see what cryptocurrencies, the purpose that they serve, what they actually do for anybody. He said sooner or later there will be some disappointment with these coins. And then some advice for younger people who are entering not just the financial industry but the business world. When asked what advice he has for these people, he says, always, always have a plan. Do something every day to follow your plan, and you will get there eventually. Keep looking at your plan, revise it when you need to, but constantly work at it. That could apply to your personal life, that could apply to your professional life, but makes a whole lot of sense to to be able to constantly move just a little bit forward every day. Another another you know brilliant mind, Warren Buffett, , also has said similar similar things about the success that he's had in the business world and the investing world and life in general. All right, so let's take a look. I mentioned approaching year end, fourth quarter, here, now. Let's talk about the one big beautiful bill which was signed into law by President Trump on July 4th of this year. What did it do? Let's just r let's just go back over this again. Well, what it did was it it made permanent, whatever that exactly means. It means that there's not a mechanism at least built into this big beautiful bill that things will revert back to old tax rates, like happened when the 2017 tax act was passed. Well, in 2025, now Congress would actually actually have to pass new laws in order to change these new tax rates that were that were re-established. Uh so back in 2017 when the first tax package by then President Trump in his first term passed, was supposed to expire in 2025. President Biden and the Democrats did not change the taxes that and the tax cuts that were put in place in 2017, nonetheless, they said to expire in 2025 if something wasn't done, so something was done, and now the tax on corporations, which would have reverted back to the rates they were in 2017, these are corporate tax rates here in the United States, would have gone back to 35%. Well, now they're staying at 21%. Why is that important? Well, at 35% U.S. tax rates would have become and were previously amongst the highest in the world. That did lead to many corporations seeking to move their domicile outside the United States since rates have been reduced to 21%. That trend has has largely been ended. Also big big factor, big win for folks who run certain corporations, generally S corporations and limited liability companies that are taxable as a partnership. These folks were able to, if they met certain criteria, exclude 20% of their income that were passed out to equity holders, that remains in place. Very significantly, to many who are listening, is the estate tax and the tax planning that each of us may think about doing. The 2017 law double the lifetime estate and gift tax credit, which was based on previous indexing, would have been five million and ten million for individuals and ten million for married couples. Now those numbers are significantly higher. We are looking at , and I'm gonna round here, the numbers are slightly lower, about 14 million and 28 million for so that means individuals get a $14 million exemption instead of five million, and and and married couples instead of a ten million dollar exemption, well they're looking at a twenty-eight million dollar exemption, and that exemption is expected to go up to thirty million as it's indexed for inflation in the near term. So that means that if let's just you know stick with examples, if you're married, and this is federal estate tax, not not individual states. So if you're in a state with a estate tax, not every state has an estate tax, but if you live in a state that does tax estates, well you still may have state estate tax. So we're talking here only about federal, so and we're only talking about folks who are below the exemption amount of let's call it 30 million if you're married, those folks will not have a federal estate tax. If you're over thirty million, you still have a state tax and you should be engaging in estate tax planning. If you're under thirty million, you still may need to engage in estate tax planning, especially if you've got to worry about your estate income tax, and also if you believe that perhaps these provisions and these amounts could change in the future. But we're gonna talk right now with what is and not with what may be. So if you're looking at an estate with under 30 million in assets, well, you're in a lot better place than you were several years ago before 2017. And not only do you potentially if you have less than $30 million, but you know, if you have $20 million, it's still a good amount and you're married, you also have the provision that has been extended, which is the step up in basis for assets if you die. So if you have assets, maybe you're fortunate enough to purchase NVIDIA for $10,000 and now it's worth $500,000 and it's in an account that's taxable. Well, if you sell that NVIDIA, you would owe taxes on $490,000, capital gains taxes. If you pass away and die and it's in that taxable account, well then your heirs get a step up in basis, and that NVIDIA that you purchased at $10,000 is now $500,000. Well, your heirs will own that NVIDIA stock free and clear of taxes. Again, we're talking federal taxes. If your estate's under $30 million and you're married, and because of the step up in basis, you will not owe any gains on those capital gains. So no estate tax, no capital gains tax. So when you're doing your planning here, you've got a lot more flexibility because the step up in basis is still here, and these higher estate tax exemptions. So when you're thinking about doing your estate tax planning, thinking about these two critical elements will will certainly certainly factor into how you do your planning going forward. Another big provision of the big beautiful bill, this is one change. Prior to 2017, you were able to deduct your state and local taxes. That meant your real estate taxes on your home, and if you lived in a state that had an income tax, like I do, like in New York State, well, you had you were able to write off your real estate taxes, you were able to write off your your your state income taxes, and , and therefore you potentially could pay lower in federal taxes. Now it didn't work exactly as nicely as I just laid out there because there was this little secret tax that snuck up on you called the alternative minimum tax. We'll talk a little bit about that. But what did happen in 2017 is those exemptions for salt, state and local income taxes, were capped at $10,000. So if you had $50,000 in New York State income taxes and $50,000 in real estate taxes, before, assuming you were not subject to the alternative minimum tax, you could write off on your federal income taxes $100,000. After 2017, all you could write off was $10,000. Well, come 2025, there was some relief granted. That $10,000 max was raised to $40,000 as long as your income, and we're gonna again talk here, , was was was under $500,000. So if you make less than $500,000, there's a phase out up to $600,000 where you get a partial benefit. But if you make less than $500,000, you can now deduct up to $40,000 on your tax return instead of $10,000 for state and local income taxes. There is still an AMT, but in 2017, the alternative minimum tax was changed. The provisions where there was a phase out which made people less likely to be subject to AMT, that that that that minimum was raised, and , and therefore lots of folks who previously were subject to AMT are no longer subject to AMT. Not to get too far into the weeds in 2025, a lot of that was preserved, some of the limits were lowered, so while the AMT exemption is still unlikely to be felt by most taxpayers, a few more taxpayers starting in 2025 will now be subject to AMT than before, but still the vast majority of folks will escape the AMT. Talk to your tax planner if you think you might be impacted by these recent changes. All right, let's take a look at what's going on this morning. Well, once again, we are seeing futures higher, lots of enthusiasm in the markets. I see that John Paul Tudor Jones was on CNBC this morning, a well-respected billionaire hedge fund manager, saying that he believes the ingredients are in place for a massive stock price appreciation before the bull market tops out. He said that he thinks the ingredients are in place for some kind of a blow off. He says history rhymes a lot, so I think so I would think some version of it's gonna happen again. If anything, now is so much more potentially explosive than 1999. He said you have to get on and off the train pretty quick. If you just think about bull markets, the greatest price appreciation occurs 12 months preceding the top. It kind of doubles whatever the annual averages and before, and if you don't play it, you're missing out on the juice. If you do play it, you have to have really happy feet, he said, because he said there could be a really bad end to it. So we'll start out with that to tee off what's going on this morning, which is more enthusiasm in the financial markets this morning. We had a couple of deals announced that are kickstarting futures. Dow futures are up 80, Nasdaq futures up 200 points. Uh bond market seeing yields tick a little bit higher this morning on some of this perhaps enthusiasm in equity markets. We got a sizable reason regional bank merger that is spurring a bigger MA wave potentially being on its way, so with some excitement there. This bank, Comerica, is is up 14% after fifth third bank reached a deal to buy the fellow regional bank for $10.9 billion in an all-stock transaction. This will create the ninth largest U.S. bank by assets. And then perhaps the bigger driver for the enthusiasm is AMD stock, advanced micro devices. Symbol AMD is surging on a partnership with OpenAI. AMD shares are up more than 30% after reaching a deal with OpenAI. Sam Altman, AI's leader, said that OpenAI could ultimately end up with a 10% stake in advanced micro devices via a warrant with different tranches. AMD will use certain graphics processing units rolled out over multiple years. Initially, Nvidia, AMD's main competitor, sold off on this news. I think the stocks bounced back a little bit. Goldman Sachs this morning lifted their price target on NVIDIA from $200 to $210, giving the stock a little bit of some support. All this has taken place while the government is shut down as we started at the outset. So even though investors are flying blind at the moment, they don't seem to mind. Normally on Friday of last week, we would have gotten a jobs report, stocks would have moved on that data, but with the government shutdown starting October 1st, that was Wednesday. The Bureau of Labor Statistics was quiet when numbers normally would have been released. There was actually only one employee on duty at the BLS on Friday. But last week markets took it all in stride. SP was up over 1.5% for the week, Dow up about 1.6%, NASDAQ up about 1.4%, all at or near record highs. Now, I mentioned at the outset, markets tend to rise during government shutdowns, even though economic activity can temporarily decline because that activity typically comes back when markets reopen. Mentioned the one wild card is that if the Trump administration uses the government shutdown to order mass government layoffs, well then that could do some economic damage that didn't take place in previous shutdowns. Few companies, including Delta Airlines, will report earnings this week. Next week, big banks like JP Morgan will kick off a much bigger slate of earnings. Last week, without the Bureau of Labor Statistics jobs data, markets did digest an ADP report on private payrolls, which showed a decline of 32,000. There was an adjustment in that number. Nevertheless, markets taking that bad news as good news. If the the you know markets right now are of the mindset, if the jobs market's weak, well then the Fed can cut rates at the next meeting. So therefore, bad news, good news there. Also, the market's getting a big left last week because one of the biggest sectors that had lagged, which was health care, staged a strong reversal last week, gaining 7.1%, biggest weekly gain in healthcare sector since 2022. And this is after President Trump agreed to a deal with Pfizer to shield the company from tariffs as long as it cuts prices on drugs, it sells to Medicaid, sells some discounted treatments on a government website, invests in U.S. research, and charges the same for new drugs in the U.S. as it does in other wealthy countries. You may say to yourself, well, that sounds like things may squeeze Pfizer a little bit. Why is that so good? Well, because these these these requirements were less severe than investors had feared, and the optimism that other c drug companies are likely to get similar deals. Raymond James analyst Chris Meakin said if this is all the President Trump does on drug pricing, it's likely to be a win for the pharmaceutical industry. So for now, no news out of the government is considered good news. Also, this morning, busy day, we had political developments in Japan and France, which are sending shockwaves through financial markets because both of these news f news events were seen as a surprise, so markets didn't price them in. In Japan, stocks surged to a record high after party leadership vote made pro stimulus lawmaker Takaichi, a virtual lock to be the country's next prime minister, and she's also a woman, which is , I believe to be the first in Japan. So, along with more government spending that could fan inflation, investors are now preparing for a dovish tilt at the central bank. What that means is to keep interest rates lower for longer. This is not what the market was expecting out of Japan. So what happened is the yen sank because the expectation is we could have more inflation and lower interest rates. So yen sinking against the dollar, against also sinking against the euro to an all-time low. Long-term government bonds in Japan fell. Ten-year yield hit its highest level since 2008, again, because the expectation is that there will be more inflation with these more dovish policies. Markets had expected different a different Liberal Democratic Party politician to take control of the LDP Liberal Democratic Party and therefore to be the next person with with the gravitas to run Japan and the alternative candidate Koizumi, who was seen as fiscally cautious and was leaving the central bank to press ahead with what the market viewed as normalization. In other words, that means to lift interest rates. In contrast, the new Prime Minister Takaichi said lifting interest rates would be stupid during her leadership run last year. So the election of Takaichi, and this is important for us here in the United States because this is a global economy and we are competing for assets throughout the world, and this is viewed as a risk on trade, positive for risk assets, interest rates low, inflation higher, and when I say interest rates low, that means you know the overnight lending rates and therefore therefore more risk taking, positive for equities. And we weren't just getting surprises here in Japan, also in France. Uh Prime Minister Sebastian Lacorno resigned on Monday, 24 hours after President Macron named a new cabinet, plunging the country deeper into political crisis. France's equities benchmark plunged, and the ten-year notes in France rose nine basis points to three point six percent. Why did Mr. Lacorno resign? Well, same problem as his predecessors, having to pass a budget through a fractured parliament that included unpopular spending cuts and tax increases, needed to rein in the deficit, and wasn't able to get it done. So Mr. Lacorneau was in the job for less than a month, and the strength of the market reactions suggests that investors are caught off guard by this resignation as as as markets reacted strongly. France's borrowing premium over German debt, a key gauge of fiscal risk, widened to 89 basis points, the highest level since 2024. One effect of all of these changes taking place, not just here in the United States with the Trump administration, the changes they've made, not just in Japan, not just in Europe, specifically talking this morning about France, but changes that are taking place throughout the world all at the same time, and all seem to be doing one thing, and that is we seem to be running up debt, we seem to be trying to keep interest rates fairly low, and what this is causing is when what some are calling a debasement trade. What does a debasement trade mean? It means that we are debasing or hurting the value of paper currencies or fiat currencies if we let inflation move up at the same time that we keep interest rates low. What does that mean? That means that holding paper currencies yields negative real returns. We talked about this last week. If you have negative real returns from holding cash, you are encouraged not to hold cash. If you have negative real returns from holding short-term bonds, you're encouraged from not holding short-term government bonds. So what to do? Typically, you will invest your funds logically, whether you're cognitively thinking it or not, in more assets that are more likely to hold their value, to be a store of value. And what we are seeing is a tremendous increase in assets that people perceive will hold their value. So we're seeing trades out of the euro, we're seeing trades out of the yen, we're seeing trades out of the dollar, and we are seeing investors by cryptocurrencies, which I believe Bitcoin's hitting record highs this morning, gold, which is hitting record highs, silver, which is on a a tremendous tear recently, as folks lose confidence in paper currencies. And that's another reason that you may be seeing a big move up in equity markets that, in my opinion, is not getting the attention it should, is because equity markets and companies are an alternative to fiat currencies. If you own ownership in a company, take an example, Coca-Cola. If currencies are becoming less and less valuable, Coca-Cola is much more likely to raise their prices, therefore, they will have higher profits, therefore, Coca-Cola stock will appreciate, and therefore, in that scenario, Coca-Cola, again, this is just an example, not suggesting Coca-Cola good or bad, but in that scenario, Coca-Cola stock will be able to keep up with those rising earnings, and the price of the stock, if the multiple stays the same, will appreciate. Therefore, in that example, Coca-Cola may be a better store of value than the U.S. dollar. And therefore, stocks may continue to rise or rise in an environment where folks are not comfortable holding individual assets. All right, let's talk about a few other companies this morning. Boeing up a little bit this morning, preparing for a 737 production increase. Micron technology, symbol MU, upgraded to overweight from equal weight at Morgan Stanley, $220 price target. On CNBC, White House economic advisor Kevin Hassett saying that the federal layoffs will begin if President Trump decides that shutdown talks are going absolutely nowhere. New York Times reporting that Hamas has agreed to release all of the Israeli hostages held in Gaza, but they want to negotiate other elements of President Trump's peace proposal. Also, New York Times reporting that President Trump has told Israel to stop bombing Gaza. One final group of stocks that I'm going to talk about and then gonna just open it up to questions, thoughts, and comments. One group that I thought sounded real interesting, wanted to share with you. This was in Barron's, is a group of real estate investment trusts that operate warehouses that store items that require to be refrigerated. So this is called cold storage. And Barron's saying that cold storage stocks look like a hot buy right now. So Baron's talking about in particular two cold storage stocks that recently started trading. One is called Americold Realty Trust. The symbol is cold, C O L D. The stock is down about 42% this year, so we've been talking about stocks going straight up. Here's one that's gone down. It's trading around $12.50, maybe a little higher after this article. It is at its lowest price since its initial public offering in 2018. Barron's also talking about industry leader lineage. It's about $40 a share, 32% off this year, and about half of its IPO price of $78 in July of last year. So we're talking about super hot IPO just a year ago. Now the stock's 50% lower, nobody's talking about it anymore. So these REITs, a real real estate investment trust, operate warehouses where frozen and fresh food is stored on its way from farms, manufacturing plants, and meat packers to grocery stores. Lineage operates 500 warehouses globally and controls about a third of the North American market. Americold is about half of its size and is about 20% share of the North American market. This business is seasonal as food inventories rise in the fall ahead of Thanksgiving and Christmas and then decline early into the following year. The stocks pay healthy dividends. Lineage yields 5.3%, and Americold yields 7.4%. Barons believes the dividends look safe. An analyst at Baird was quoted in the article, Nicholas Thillman, saying the payout ratios are about 65% of adjusted funds from operations. Uh you may say which one is more attractive. Barron says that Americold could be the more attractive of the two. It has a lower valuation, higher dividend yield, more digestible market value, no controlling shareholder, and is undergoing a CEO transition. Americold has a $3.5 billion market capitalization. These stocks, cold storage stocks, were big beneficiaries during the COVID pandemic when Americans stayed home and prepared their own meals. Uh since then, these stocks have become under pressure as a result of a reversal of the pandemic era pantry stocking, as well as the impact of GLP1 diet drugs reducing food consumption. Some Wall Street analysts have recently cut earnings estimates, citing weaker trends that could persist into 2026 or 2027. The bold case is the valuations are low, long-term trends of higher meat and food consumption are positive, industry capacity additions are slowing, and the companies are valued at deep discounts to replacement cost in private market values. An analyst Steve Sakwa at Evercore says that patient investors could be rewarded. He's got a $19 price target on Americold, stocks around $12.50-13, and he has a $45 price target on lineage, which is currently around $41.5. These companies are investing heavily in automation, so think robotics to lower the cost structure of running and operating their warehouses. And if you're thinking about the cost of construction and the number of warehouses these companies have, both CEOs of these companies suggesting their stocks are trading at 55 to 60 percent of replacement costs. So if you think about what it costs to build a cold storage warehouse and what the valuation of the cold storage warehouses are now based on based on a market capitalization basis, you could argue that if you had to build these, you would have to pay more than the stocks are trading at, and you'd almost have to pay twice as much. Importantly, also each company has does have debt, but the debt loads by analyst estimates are manageable. Both companies have investment grade bond ratings. Knock on the stocks, fundamentals now aren't great, and there aren't a lot of catalysts, but often when there aren't a lot of catalysts and things look cheap, that's when you have smart market players, perhaps some other REITs like Brookfield or Blackstone may look at this as an opportunity to enter the sector, so you never know where the catalyst is going to come from. While you wait for the catalyst, you're collecting a yield of somewhere between five and seven percent, , depending on which of the two companies you think is more favorable, or perhaps six percent if you blend the two. So something to think about if you're looking for dividend income with the potential for price appreciation. Of course, there are risks involved, but the risk reward, at least in the minds of the authors here at Barons is favorable. 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.

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