What Happens To Portfolios When The World Rearms

May 4, 2026 | Season 8 | Episode 14

The market is trying to do two hard things at once: price a flood of earnings season signals while also digesting real geopolitical risk in the Middle East. We start by zooming out on what actually moves portfolios when tensions rise between the United States and Iran, especially with the Straits of Hormuz sitting at the center of global energy flows. My north star for making sense of it is simple: incentives drive outcomes, and history leaves clues if we’re willing to look at it honestly.

From nuclear deterrence to sanctions to uneasy alliances, we walk through why the Iran nuclear question is so hard to “solve” and why other countries are watching closely. That sets up a forward-looking investing conversation about the industries and technologies that may grow if proliferation pressures increase, and how investors can think about risk without getting trapped in the day’s headlines.

Then we pivot to the economic knock-on effects you can measure: oil prices, energy insecurity, and the global push for energy independence. We talk about electric vehicles gaining traction well beyond the US, why China’s dominance in EV and solar components matters, and we highlight renewable energy stocks discussed in Barron’s, including Iberdrola, Enel, and Brookfield Renewable. We also hit the tape: the S&P 500’s strong April, the “sell in May” debate, a low VIX and complacency risk, Rick Rieder’s bullish AI productivity thesis, Bill Ackman’s PSUS IPO drop, and Alphabet earnings with Google Cloud profitability improvements.

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Transcript

Welcome And What We Cover

Alan Eppers 0:00

And now introducing Mr. Keith Lanton.

Iran Standoff And Nuclear Incentives

Energy Insecurity Spurs EV Adoption

Renewable Stocks To Watch

April Rally And Sell In May

BlackRock Bull Case On AI

Morning Headlines Moving Markets

Bill Ackman PSUS IPO Breakdown

Alphabet Earnings And Google Cloud

Wrap And Where To Listen

Keith Lanton 0:03

Good morning. Today is Monday, May 4th. First Monday in the second month of the second quarter of 2026. We are in the midst of earnings season. Last week got a slew of reports from the uh big uh technology companies, and we have uh more earnings to come from uh more traditional companies uh that comprise the SP 500 uh this week to give us some further insights into the state of the U.S. economy and how the rest of the economy is doing outside of the uh big technology companies. This amidst the uh stalemate going on in the Middle East, uh, we have uh further developments this morning between the United States and Iran. That's going to continue to significantly influence financial markets and uh geopolitical events. And we will, of course, touch on uh some of the uh effects of what's taken place in the Middle East and uh try and uh learn, as we've uh talked about some of the historical parallels, learn from them, but more importantly, let's try and project going forward so that we can have some idea how the past uh has influenced the future and how the uh past could give us some insights into the current future and how we can make better investing decisions based on uh some of the information that we are taking in right now over the last uh few months and some more data that's of course going to come in and how we can make best use of that. We'll talk about financial markets, we'll talk about Barron's some uh optimistic commentary in Barron's, both in terms of uh guest commentary as well as the editorial commentary as well. We'll talk about the news flow this morning. We will talk about one of the uh big tech companies that reported earnings, uh specifically uh Google. And then we'll talk about last week there was a uh big, let's call it uh twin or paired IPO from Pershing Square. And we'll talk about uh which of uh Pershing Square's companies, uh, or Bill Ackman, who is the the head of Pershing Square, which of uh his investment vehicles may make the most sense. Last week was a big IPO raised uh north of about five billion dollars, coming in below what they were seeking to raise, but nevertheless, five billion dollars is a very substantial, significant capital raise, especially for closed-end fund. And we'll talk about if and where there may be opportunities there. So let's talk this morning about where things may be going long term, and hopefully this will give us some uh greater power to be confident in our decisions uh going forward. Over the weekend, Berkshire Hathaway had their uh annual get together and meeting, and Charlie Munger, who used to do those meetings with Warren Buffett, passed away a few years ago. But one of his well-known quips or quotes that we've mentioned before is show me the incentives and I will tell you the results. And uh I think that's uh very telling for uh perhaps some of the actions that have taken place in the Middle East, and as well as when you talk about the incentives and you talk about the results, you have to think about uh what past uh actions and decisions and what the results of those have been, and you can uh then calculate how what different uh parties may react uh going forward. And speaking of going forward, you have to think uh like uh Wayne Gretzky skate to where the puck is going, not where it has been, or Stanley Druckenmiller talking about how to invest, saying the biggest mistake investors make is they invest in the present, then forward looking and looking at where the puck is going instead of where the puck is. He said buy stocks and assets and investments in general that people are going to like, not necessarily the ones that people like right now. So over the weekend uh Daniel TenKate in uh Bloomberg talked about developments in the Middle East and specifically with uh Iran, and uh perhaps uh one of the outcomes, hopefully not the outcome that uh will take place, but perhaps one of the outcomes that we will see is that Iran will perhaps uh hold uh very uh strongly and tightly to ambitions to building a nuclear bomb. We've talked about this before, and we've talked about what Iran has uh witnessed with uh other countries that have developed nuclear weapons, and of course they have uh experienced the wrath of the United States uh and Israel and what the lessons or takeaways may be as a result of uh what's taken place there in the Middle East. So right now it is uh somewhat ironic that uh the discussions regarding Iran or Iran relinquishing its nuclear weapon are taking place in Pakistan. And Pakistan is a nation which uh flouted the uh the international community in the uh early 1970s when a handful of countries that had nuclear weapons were instilling very strong opinions that the rest of the world uh should not obtain nuclear weapons, and Pakistan was uh one of the uh early flouters of uh global arms control efforts, and they uh sought to and achieved building a nuclear weapon. It's also ironic that uh the Pakistanis were one of the nations that uh was the uh biggest uh aider to Iran, and they're seeking to develop a nuclear weapon, and here they are hosting these uh these uh conversations uh between Iran and the United States. And the father of the Pakistani nuclear program, Abdul Khan, had said in 2011 in a Newsweek article, don't overlook the fact that no nuclear-capable country has been subjected to aggression or occupied. He said, Had Iraq and Libya been nuclear powers, in his opinion, they wouldn't have been attacked in the way that uh we have seen at the time, he said recently. And Daniel 10 Kate uh suggesting that uh that assertion holds true uh today as well. Nuclear powers, those that have crossed the threshold, have avoided full-scale invasions or decapitation strikes like those that the US and Israel have carried out against uh Iran. And the lesson may be that uh other countries, and the uh estimate is that there's about a dozen countries that are closer, have the technology to be able to develop a nuclear weapon, may ramp up those efforts as well. Of course, at the moment, Washington and Tehran are locked in a standoff, each betting that uh the other will fold first as they uh block the Straits of Hormuz. This, of course, is uh enacting economic pain both in the Western world as well as perhaps even to a greater extent for the people of Iran. And the key sticking point remains the fate of that nuclear program. And again, going back in history, looking at lessons, thinking forward, if you look back of the countries that uh did flout or not it listened to countries that were telling them not to develop nuclear weapons, those countries being Pakistan, India, and North Korea, that these countries uh once they uh developed these nuclear weapons were at the time considered uh pariahs. They were considered uh countries to uh put sanctions on, and we had the result being that India and Pakistan were countries that uh both the United States and the U.S. allies uh had taken strong positions and put uh sanctions and uh economic uh conditions to make their situations uh more difficult as a result of uh their efforts to uh develop a nuclear weapon. But what the international community demonstrated is that uh once Western countries decide that they need things from countries like India and Pakistan, North Korea to a lesser extent, more than more than the desire to keep punishing them for their nuclear weapons, well then they have come around and welcomed them back into the international fold. This happened uh in uh 2001 after the uh terrorist attacks against the United States. Well, after those attacks, the U.S. decided uh that uh Pakistan was an important counterpoint against the uh Taliban, U.S. needing Pakistani uh military cooperation, and at that time the U.S. abandoning their campaign to to seek to uh restrict uh Pakistan's entry into a lot of uh global uh global markets and global uh events. Same with uh India, nation of uh 1.5 trillion people, critically important uh to the global economy relatively uh quickly. The rest of the world uh decided uh that it was more beneficial to do business with India than it was to impose those restrictions or sanctions. And then finally, of course, uh we can come to uh two other examples. North Korea, which uh was the first country to ever withdraw from the nuclear proliferation treaty, and the experiences there that uh the United States uh clearly uh unhappy with uh North Korea and their program to develop nuclear weapons as well as uh other ballistic missiles, but the uh contrast between what's taken place in in Iran and the contrast to how President Trump and the rest of the Western world has uh treated North Korea is not a lesson that the uh Iranians uh have not noticed and taken measure of. And finally, the Ukrainians uh could also uh attest that uh having a nuclear deterrent uh may have uh created a whole different uh narrative with respect to Russia and the invasion of Russia in uh mid-1990s, 1994. Both uh Ukraine, Kazakhstan, and Belarus uh all were encouraged to uh give up their uh nuclear stockpiles as uh the Soviet Union collapsed. But Ukraine was very wary of aggression. The other two uh countries, uh Kazakhstan and Belarus, gave up their nuclear weapons relatively quickly on fears that they may fall into the wrong hands. But Ukraine was uh very concerned and wanted uh assurances and guarantees. Uh what they got was a uh assurance from at the time the Clinton administration, and in fact in 2023, President Clinton did say, I feel a personal stake because I got them to agree to give up their nuclear weapons when he signed the uh Budapest memorandum. And he said at the time, none of them believe that Russia would have pulled this stunt if Ukraine still had uh their nuclear weapons. So the world has uh has spoken, and the Iranians uh have uh taken note, and it's not just the Iranians that have taken note, it's other countries that are seeking or may potentially seek to achieve uh gathering or obtaining nuclear weapons, and they would view it as as a deterrent, the rest of the world would view it as uh adding more danger, instability into the world, more places where a nuclear catastrophe could happen, more places where the wrong person could get their hands onto nuclear materials and create a situation where a terrorist or a bad actor gets a hold of those weapons as uh there is more proliferation, so it certainly adds to uh greater concerns. But when we think about this and when we think about investing the future of the world, we think about uh our children, grandchildren, great-grandchildren, we need to think of where to invest and which companies may put up measures to protect against this proliferation, which somewhat seems uh inevitable. So we have to think of the proliferation or the growth of nuclear weapons, nuclear technology, and which uh which of the future companies in the world will uh be developing these technologies, which of the companies will be developing deterrence to these technologies, ways to limit these technologies, way to protect against them falling into the wrong hands. And this is what we need to think of uh going forward. Sticking on that topic of what we need to think about going forward. Let's talk about the other significant effect of the actions in the Middle East, and this is the uh source of uh tremendous insecurity, and that is energy insecurity, as a big takeaway from almost every country in the uh entire uh entire uh you know planet here on Earth. And uh some key lessons that uh countries are drawing from the conflict between the US and Iran and some of the some of the actions of the United States towards towards their allies partners, uh specifically uh Europeans and NATO countries. Some of the lessons are be energy independent. Don't necessarily do as I say, do as I do. United States has been very, very uh aggressive and you know, very good policy, in my opinion, to become energy independent with uh respect to fossil fuels. The United States has a lot of fossil fuels, whether it be natural gas, whether it be oil, we're also blessed with geo uh geothermal power, water power, hydropower. President Trump, not a big fan of uh wind power, but there are capabilities there as well. But the rest of the world is relying on a lot of those alternative energies because Europeans are not as blessed with the fossil fuels, the Japanese, not as blessed with fossil fuels, the Indians, the Chinese. And what these countries are doing and the lesson that they are taking away is do not rely upon others. Do not assume because you have a treaty or an alliance that you are secure, that is not sufficient for energy independence. So the one of the key takeaways here from from what's taken place here in the Middle East is uh countries going to seek to be as independent as possible, and there are lots of investing opportunities as a result. And you can take a look at uh just a small uh country in Central America that's Costa Rica. And what's taking place in Costa Rica is something that I think is gonna start taking place in more and more uh countries throughout the world, and Costa Ricans are buying electric vehicles. In fact, they're buying more electrical vehicles per person than almost any country in the Western Hemisphere. So they're a leading example of how electric vehicles are gaining in popularity, and this is not just in uh rich countries like the United States. There are signs that the war in Iran, which has raised the cost of gasoline and diesel, is accelerating this trend. People are saying to themselves, I do not want this to happen to me again. I do not want to be subject to having to pay six, seven, eight dollars a gallon for gasoline. I do not want to be dependent upon the rest of the world. I want to be independent. So in the as a result of this seeking of independence on an individual level, electric vehicle sales in Latin America, Africa, and much of Asia soared 79% in March. Uh, for all of 2025, sale of electric cars in these countries has jumped 48%. If you're looking at Costa Rica, electric vehicles now make up 18% of all new car sales. That's three times the figures of the United States, where Tesla really was the uh founding founding father really of the electric car revolution 14 uh years ago here in the United States. And governments in the rest of the world are promoting electric vehicles as a way to become less dependent on imported oil, which they view as a drain on their economies and their precious foreign currency reserves. This is a uh measure that these countries are taking in order to give themselves energy sovereignty. So, this is uh an example of what happens when the incentives are aligned. Again, you show me the incentives, I will show you the outcome. These countries are big consumers of Chinese electric vehicles, many models, they are selling under $20,000. So the Chinese, while they are feeling short-term pain from high uh oil prices as a result of the situation in the Middle East. The Chinese are talking that they're playing the long game. They are the world leader in low-cost electric vehicles. They are also uh one of the world's leaders in solar panels and solar energy, uh, the products in order to produce solar energy. In fact, 70% of uh electric vehicle parts, components, autos, and uh 70% uh approximately of uh solar parts and components all come out of China. So thinking about uh how the geopolitical and uh investing future landscape can be changed, thinking forward, what's taking place here in the Middle East can have significant effects outside of outside of uh the Middle East, and we could see the ramifications and the repercussions of these actions economically over the next uh decade or two. Now, trying to pinpoint this and thinking about this more specifically to some individual uh individual uh companies. Barons uh talked about the investing in the coming boon in clean energy, and they talked about three stocks that may be worth purchasing. They talk about what we're talking about, Europe being more determined than ever to move away from fossil fuels. Ursula von Derleyen, president of the European Commission, said in late April that we must accelerate the shift to homegrown energies. Europe is facing a severe jet shortage, jet fuel shortage, and they are obviously experiencing a huge jump in fossil fuel costs. So they are doing what they can to move away, and it's very likely that this trend, uh, regardless of how quickly things are resolved in the Middle East, will continue because many folks are saying we do not want to be beholden to others again. So a couple of country companies to think about. One is Iberdrola, the ADR is trade here in the United States under the symbol IB India Bravo Dry, like the word dry DRY. They are a major player in store in installing renewable energy. It's a Spanish company. They are seeing a big tailwind for their global renewal business, while they're seeing steady growth in their in their more stable, a lower margin grid business, which has a more defensive uh characteristic. So Iberdola, which uh is a Spanish power company, but also Spanish power company that has diversified into uh building out uh renewable energy installations, trading around 20 times earnings, and pays a 2.7% dividend yield. Similar structure, company in Italy, E Nel, E-N-E-L, the symbol is E-N-L-A-Y, Echo November and Lay, like the uh like the word. It's an Italian power company. They have similar aspirations to Iberdola, trades at about 13 times uh expected earnings this year, 4.9% the dividend yield. They do have more debt and slimmer margins than Iberdrola, which may account for the lower valuation. And then finally, Baron's talking about Brookfield Renewable. The symbol is BEP, boy Eddie Paul, which is part of Canadian asset manager Brookfield. They own 46 gigawatts of renewable energy all over the world. That's enough to power 10 million homes. Motley Fool this weekend called Brookfield Renewable, a 4.5%. That's the dividend yield, energy stock. High-powered growth company, they say making it a no-brainer buy right now. Brookfield Renewable has a stake in Westinghouse, which designed the most prominent large next generation American nuclear reactor. Brookfield's earnings tend to be negative because of high depreciation costs which eat into earnings. But its funds from operations, a metric that takes out those costs, has grown steadily at around 10% a year. And uh, we mentioned given and yield in the neighborhood of about 4%. Alright, so this is where the puck may be going, thinking about nuclear, nuclear stocks, companies that uh can uh offer uh some defense against the others obtaining nuclear weapons, and of course the uh growth or the uh shift towards uh renewables and the countries that have the incentive to do so, often because they are not uh blessed with uh fossil fuels or the means and ability to extract them out of the earth. So, where does Leave us? Where does that bring uh financial markets? What are we to do not just in the long term but more immediately? Well, let's take a look at last week and let's take a look at at least what Barron's opinion is in the trader column. Barron's saying that the SP 500 just had its best month, that was April since 2020. Don't let sell and in May spook you, because one of the old Wall Street sayings is uh sell in May and uh go away until November. But stocks have been on a tear. Dow last week up uh just under 1%. The SP was up almost 1.5%, NASDAQ also up about 1.5%. The SP is up 10% in April, NASDAQ about 15%, posting their best months since 2020. That was the bounce uh during COVID. There is a lot that could have made the stock market fall. Investors shrugged off questions about when or even if the Federal Reserve would cut interest rates again this year after the central banks held rates steady, and they ignored the fact that Jerome Powell plans to stay on the Fed's Board of Governors even as Kevin Walsh Walsh prepares to become chair. Inflation came in hot as oil prices continued to rise and earnings from Microsoft and Meta revealed sizable capital spending increases and resulted in falling prices for those two stocks. Yet good news elsewhere on the earnings front seems to overshadow the geopolitical events, the news on the Fed, and those capital expenditure concerns. Last week, Eli Lilly offered evidence that weight loss drugs were only getting bigger. Coca-Cola surprised, showing that not all soft drink makers uh are suffering from an overhang from GLP1 drugs. Alphabet, the parent of Google, showed that capital spending can pay off, and they came out with uh profits that uh significantly surpassed to the upside. And then Caterpillar, Symbol CAT, uh demonstrated that there's more to its business than mining and machinery. More earnings on the way this week, as well as uh throughout uh the rest of this month, and they could be fuel for even more gains, uh, according to Barons. We get earnings this week from Palantir, Advanced Micro Devices and Arm Holdings. Also uh getting uh earnings from uh Pfizer, Anheuser Busch, Walt Dizzy, Uber, and uh McDonald's. And these earnings and these fundamentals are the key drivers to the markets. Even the fundamentals, even if fundamentals weren't as good as they are, Barron suggesting that selling in May would be a bad idea because if you go back and look recently, over the past 12 years, the SP has gained a median of 6.3% from May through October, that according to LPL. And the months of May and July have been particularly strong. The SP is up 12 times over the past 13 years in May, and actually up 11 times in a row in uh in July. Now this doesn't mean it will be easy. The stock market's April surge pushed the uh volatility index, also known as the VIX, down to 16.5. It had soared to over 30 in March. And you would think a low VIX is a good sign. Things are nice and calm, it's a volatility index. If it's low, things are calm. But when things are calm, that means people aren't worried, which means they're complacent, which means that they are more susceptible to have a uh a panic or a sell-off. So keep an eye out for the unexpected. Uh, we get jobs numbers at the end of this week. That could pack a punch. That's on Friday. But all in all, uh the fundamentals uh look encouraging, and uh financial markets uh have the uh power to move higher. Now in Barron's, they uh had an interview with this chief investment officer of BlackRock, one of the biggest asset managers in the world, Rick Reeder, who is also a finalist uh for the position of uh chair of the Fed. And he remains very bullish as well. He says that he thinks that the U.S. economy at this point is what he calls uh recession proof. He says the traditional recession playbook is dead. He's betting that a massive wave of artificial intelligence investment and a shakeup of the Fed are about to change the game entirely. The one concern or overhang that uh he suggests keeping an eye out on is uh debt levels and the the jobs market or the labor data. With respect to debt levels, he said uh if the government just comes out with a plan, they don't even have to actually start implementing it, but they need a plan to keep uh the uh deficit in check. And if if they uh outline that, he feels that that that would be a positive uh as well. But with uh respect to uh the economy and with respect to uh financial markets, he claims that the U.S. is growing faster than the government admits. Official forecasts uh say that the U.S. uh is growing at about 4% on nominal GDP, so that includes inflation. And he sees 6% nominal GDP growth. He argues that the massive capital being poured into AI infrastructure is creating a productivity shield that makes a recession nearly impossible, regardless of tariffs or geopolitical tension in the Middle East. He believes that the incoming Fed chair Walsh is the ultimate inflation killer. He says by making the economy more efficient, he believes that Walsh believes, like he does, that productivity will drive down prices and that will give the Fed the green light to lower rates and jumpstart small businesses and the housing markets. So, for investors, Reader is incredibly bullish. He says the technical setup of the stock market is the best he's seen in his entire career. One of the main reasons he uh cites it that for that thesis is that the number of available stocks is shrinking, while earnings growth driven by tech investment remains what he calls relentless. So he says, stop looking in the rearview mirror, the government that is a concern, the sheer force of the AI revolution, and a more aggressive Fed might be just enough to keep this economic engine running hotter and longer than anyone expected. All right, we got a few more minutes. Let's uh sum up and take a look at where we are, then we'll talk a little bit uh about what Barron's articles uh that were uh potentially of uh of interest. We are seeing uh futures uh this morning down about 140 on the Dow, about five on the SP, Nasdaq futures up slightly. And this as we are experiencing uh some escalating tensions between the U.S. and Iran, some conflicting commentary uh coming from uh those two uh countries this morning, and this uh geopolitical uh tension is what's weighing on uh the markets, at least at the open. President Trump threatening more strikes against Iran. US and Iran are still exchanging drafts of a framework agreement to end the war. But President Trump says he can't imagine that Iran's current offer will be acceptable. That's according to Axios, perhaps uh the uh headline giving the market's most uh pause and uncertainty was there are uh conflicting reports that Iran struck a U.S. ship with a missile near the Straits of Hormuz, but the U.S. has denied those claims. President Trump told reporters that new military strikes uh against Iran are possible if they quote unquote misbehave. Also uh reports that uh U.S. crude oil exports reached a record 5.2 million barrels uh per day in April. Financial Times reporting that the Trump administration wants to fast track $8.6 billion in arm sales to the Middle East. We talked about Berkshire Hathaway, their annual meeting. Warren Buffett largely not not speaking, but uh did say that he feels that this is not an ideal environment to invest uh the cash balance at at Berkshire uh Hathaway. We are seeing uh some weakness in commodities this morning. Gold is down about $77 an ounce, silver down about $3 an ounce, so uh some uh weakness in uh gold and silver, copper also down. We are studying treasury yields continue to tick higher. Ten-year yield back up to a 440. That's the high end of its recent range. The five-year north of 4% at a 405, and the three-year approaching four percent at 3.94%. Some other news uh this morning. President Trump said the U.S. will begin guiding some neutral ships through the Straits of Hormuz, testing the ability to restore traffic in the uh Persian Gulf. A few details about this plan. Uh shipping executives uh not sure uh how to uh react uh without some more details. Uh Iran out saying that they would view this move as a breach of the uh ceasefire. Oil prices were significantly higher this morning on these headlines, but have pulled back, and now we're looking at oil up about 50 cents a barrel. President Trump also over the weekend threatened to cut the U.S.'s military presence in Germany by about 5,000 troops over the next year, and uh that's getting some pushback from key Republican allies in NATO countries who are questioning the move. This week, Secretary of State Marco Rubio is traveling to Rome, meeting with uh Prime Minister Giorgio Maloney, and this uh after uh he and her, who uh had formerly had a warm relationship, uh, had uh clashed uh over the war in the Middle East, as well as some comments uh from uh Pope Leo the 14th. This morning, news uh GameStop symboled GME is proposing to buy eBay, EBAY, for $56 billion in cash and stock. This is a bold attempt to take over a storied e-commerce name that is several times larger than GameStock. Uh sticking with big money back to Berkshire Hathaway, their cash pile surged to a record $397 billion in the first quarter. And again, Greg Abel took the reins as CEO and uh led the annual meeting uh in Omaha this year for the first time. Mr. Abel sought to uh assure Berkshire's shareholders that he will invest wisely and manage the conglomerate's massive cash stake without the burdens of bureaucracy, as he seeks to win over those cautiously, hoping he is a worthy successor to Warren Buffett. Over the weekend, Spirit Airlines said that uh they uh would be shutting down. They say they have almost completed their refunding of uh funds to passengers, that they are returning their crew to their home bases following uh their decision to cease operations over the weekend. The other major U.S. airlines in the U.S. said that they would uh help those stranded passengers get to their destinations. Analysts generally viewing the shutdown of spirit as a positive for the remaining airlines as this uh takes some uh low-priced competition uh out of the system. Little indication of what's going on economically, uh U.S. restaurant sales uh reporting uh weakness, weaker than expected sales growth in the uh past quarter, suggesting that uh rising gasoline prices are having an effect uh and forcing customers to cut back on their spending. Brown University saying that they uh cut their stake in a publicly traded private credit fund run by Blue Owl, but uh they did keep their uh stake in the parent company of Blue Owl unchanged. So some pullback from private credit from uh large uh university. Friday mentioned the economic report. That is the uh day, that's May 8th, that we get the uh the employment report. We're expecting non-farm payrolls for April to come in at 178,000. That would be an addition of 50,000 from the previous month. Expectations of for the unemployment rate to have held steady at uh 4.3%. Article in Barron. I mentioned Bill Ackman, one of the most followed and outspoken billionaires on Wall Street. Last week he brought a massive new IPO, Pershing Square USA, symbol PSUS, it's like a closed-in fund that uh was brought uh public at $50 a share. It arrived with a thud, dropping 18% on its first day. So if you're looking to invest alongside Bill Ackman, is this uh decline a warning sign or a massive uh buy signal? So according to Barons, the rocky debut of the closed end fund symbol PSUS might be your best entry point at this point, down 18% from its IPO if you believe in Bill Ackman and if you want to invest uh alongside of him. So right now you can buy into uh PSUS with Ackman's top picks, which at the moment are Alphabet, Meta, and Uber, at about a 12% discount. But the catch is that it's gonna cost you this about a 2% uh annual fee. So you have to decide whether or not you think uh Bill Ackman uh will return to his winning form, and whether or not that 2% fee is uh worth the price of admission. And if you think that uh those two factors, along with a 12% discount, make sense, well then PSUS, Barron suggests, is probably the best way to invest with Bill Ackman. What they say to avoid is the management company, the symbol is PS, which did move up a lot at the end of last week. That's Pershing Square, that is the management company. Barron suggesting that at this price, which is around $40 a share, it's valued at a massive premium compared to its peers like Blackstone, and it carries uh huge key-man risk. Basically, if uh you are investing here at Pershing Square, it's likely because you believe in Bill Ackman, and uh Bill Ackman seems to uh be the uh predominant uh force at Pershing Square, and he's 59 years old, but nevertheless, if anything were to happen to him and you're paying a big premium, you uh you would have some risk there. So basically, uh if if you're interested in in Bill Ackman, Pershing Square, PSUS might be a more attractive way to invest alongside Bill Ackman than with his management company symbol PS. And finally, let's talk about uh results last week, big technology results, which of the companies reported the most impressive results, and which of the companies looks most set up for future success. Barron saying that this big tech company is spending an unprecedented amount on artificial intelligence, and they say it is the only company making it work, and that company is Alphabet, the parent of Google. Say last week uh Alphabet shares soared as soon as uh their earnings release hit the wires, and they remained up about 10% on the week last week. They are the smallest. Yeah, it's hard to believe Alphabet could be used uh alongside that word small, but they are the smallest of the hyperscaler clouds, which is uh Google Cloud. Google Cloud sales hit 20 billion last quarter. That's up 63% from last year, significantly better than the 18 billion that was expected. But the even bigger eye-opener was the segment's profitability is increasing even as it scales. Google's uh cloud units operating margins hit 33%. That's up 18% from a year ago, and it accounted for about a sixth of uh Google's operating income. So coming into the AI boom, Google Cloud was an also ran among the big clouds, but the last two quarters have proven that it is a real player, growing faster than Azure, which uh is Microsoft's product, and AWS, which is uh Amazon uh Web Services. So Barron suggesting uh that despite the uh the great news, the good quarter, the up stock price, that uh Alphabet stock uh still looks in. That's everything I've got.

Alan Eppers 39:19

Thank you for listening to Mr. Keith Memento. This podcast is available on most platforms, including Apple Podcasts and For more information, please visit our website at www.heroldlantern.com.

Sophie Cohen 39:37

Opinions expressed herein are subject to change and not necessarily the opinion of the firm. Penn's performance is no guarantee of future results. The information presented herein is for informational purposes only and is not intended to provide personal investment advice. It is important that you consider your tolerance for risk and investment goals when making investment decisions. Investing in securities does involve risk and the potential of losing money. The material does not constitute research, investment advice, or trade recommendations.