Chokepoints And Markets

July 20, 2026 | Season 8 | Episode 22

We connect today’s market nerves to a timeless driver of power: whoever controls key waterways can reshape trade, politics, and prices. We use the Mississippi River and New Orleans blockade to frame the Strait of Hormuz risk, then pivot to what earnings season and AI disruption mean for software stocks and a surprising value idea in Subaru. 
• earnings season setup and why Big Tech AI spending matters for profits 
• Strait of Hormuz tension and how shipping chokepoints move oil and sentiment 
• the New Orleans port blockade as a catalyst for the US Constitution structure 
• the chain of events that helped lead to the Louisiana Purchase 
• Barron’s view on AI trade doubts and the rotation away from mega cap tech 
• why software stocks lag and how to think about winners vs permanently challenged names 
• Subaru FUJHY as a cash rich shareholder friendly value stock with strong US demand 
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Transcript

Earnings Season And Market Jitters

Alan Eppers 0:00

And now introducing Mr. Keith Lanton.

Keith Lanton 0:03

Good morning. Today is Monday, July 20th. A little bit past halfway through July. we're starting to really approach the belly of earnings. last week we got earnings from many of the major banks here in the United States, and this week we start to get a slew of earnings, and some of the earnings coming from some of the big technology companies, which Wall Street is paying particular attention to to see if the build-out of artificial intelligence and the investments being made are translating into additional earnings and falling to the bottom line. So we'll talk a little bit about that. Some of the concerns that the markets experienced last week. Of course, we have the ongoing concerns with respect to Iran and the geopolitical uncertainty there. This past weekend had a fun game yesterday, World Cup, Spain defeating Argentina in extra time, and President Trump attending the games, first U.S. President to be at the World Cup. And here we are Monday morning, situation in Iran. We're gonna talk about that. We're gonna talk about the Strait of Hormuz, of course, and the disagreement between the U.S. and Iran with respect to the memorandum of understanding and what that means with respect to the strait and who can control the strait. And we will talk about history and the imposition of blockades on waterways, and what we're gonna talk specifically about is a is a blockade that took place here in the United States and shaped the history of the United States and affected all of our lives as a result of something that took place a couple of hundred years ago in the expanding West of the United States and how that blockade changed U.S. history. So the Iranians acutely aware of the benefits financially as well as the benefits that they can accrue in terms of power and pain points as they have studied history like we have and have an understanding of the new power that they have with respect to waterways in the Straits of Hormuz. I don't think that they realized or thought that they had the ability to control that strait like they do now, and they are pressing their power and flexing their muscles in that region. And we'll talk a little bit about history and how how choke points can can can alter the course of events, and we'll see how these events get altered. But by studying history, we can learn, we can think about investing, we can make more intelligent decisions and choices in terms of structuring our investments and our portfolios, being positioned for uncertainty. We'll talk about the news flow this morning, what's taken place this week, and then we will move on to discuss a little bit about what Barons talked about this week. Their biggest article, headline story, talked about what else technology, but specifically technology, talking about one of the beaten-down sectors of technology, one of the sectors that has not at least initially been a beneficiary of artificial intelligence, but has been paying the price for the advances of artificial intelligence, and perhaps some of the stocks in this sector represent bargains, and that's the software stocks, and we'll talk about the stocks that Barons thinks could potentially be winners. And then we'll conclude talking about the company that makes cars. This is not an electric vehicle maker. This is a company that makes boring but arguably very solid cars, and this is a company that makes Subarus, and we'll talk about Fuji Heavy Industries, which is a company that Baron suggests something we might want to consider for our portfolios.

The Mississippi River Power Lesson

Keith Lanton 3:56

So let's start out talking about Vital Waterway. This is very far from the Middle East, and we're gonna take this all the way back to the 1780s, and we're gonna take us to the United States, and we're gonna talk about the Mississippi River, and we're gonna talk about the vital port at the at the mouth of the Mississippi, and that is the port at New Orleans. And you could arguably say that the blockage or blockade that took place in in New Orleans led to two significant implications or effects here in the United States, and we'll talk about how this was, but you could make a strong case that the blockage of the port of New Orleans was a spark that led to A, the creation of the Constitution of the United States in 1787, and B in 1804, the Louisiana Purchase. So throughout history, controlling key waterways has been one of the ultimate power moves, and we are talking about here following the American Revolutionary War, the young United States faced a significant crisis on its western frontier. Spain controlled Louisiana and the mouth of the Mississippi River at New Orleans. Now, in our minds, a lot of us think it was the French. We'll talk about how it was in the 1780s, how it was Spain. And for American settlers moving west of the Appalachian Mountains, the Mississippi River was the only viable highway to get their goods to global markets. So when Spain closed the Mississippi, or the mouth of the Mississippi, not the entire Mississippi, but the critical part, which is the port, basically, it nearly spiked the war, and it actually tempted some Western settlers to consider seceding from the United States. So how did it come to be that Spain was the country that controlled the city of New Orleans in the mouth of the Mississippi? Well, this goes back to the French Indian War, that war that George Washington fought in alongside of the British, and at the conclusion of the French Indian War, which many of us were taught in school, was a war largely between the British and the French, having to do with fighting to the west of what was the colonies of the United States, as the British were encroaching on what the French viewed as their territory, the French controlling the massive center of the continent of North America or what is currently our country, the United States. Great Britain controlled the thirteen colonies along the East Coast, and then you had the Spanish controlling Florida and most of Central and South America. So what happened is the French were seeing the writing on the wall, and they were aware that they were losing the fr the French in what what became known as the French and Indian War. And as a result, the king of France he hatched a plan. He realized that the British would demand French territory as a prize of war, and to prevent the British from seizing the strategic prize of New Orleans and the vast lands west of the Mississippi, the French King Louis XV decided to give it away first. And in November of 1762, France and Spain signed the secret treaty of Fountain Blue. And in that treaty, France ceded the Louisiana Territory, including New Orleans, to Spain. And Louis XV, he made this gift to his cousin, quote unquote, to compensate compensate Spain for its heavy losses and territorial losses, so its heavy financial losses and territorial losses during the French Indian War. During that war, Spain lost control of Florida to the British, and as a result, the French were saying that they were going to compensate the Spanish, who happened to also be the cousin, the ruler of Spain happened to be the cousin of the ruler of France, and as a result, he was giving the French territory of New Orleans to his Spanish cousin, and hence we have the territorial turnover of New Orleans and the city of New Orleans to the Spanish in the 1760s. And then at the end of the war, what happened is the major powers signed what became known as the Treaty of Paris. The British took control of Canada and all of the French territory east of the Mississippi except New Orleans because of that secret treaty, and now everything west of the Mississippi belonged to Spain, but the Spanish importantly controlled New Orleans and that vital port. So the Spanish in 1784 decided to close off that vital port. Why did they do that? Because they realized that the young Americans were moving westward, and they knew that they needed this Mississippi River in order to transport their farming product and their goods to export markets, just like we currently need oil to be exported. These settlers needed this, and the Spanish concluded, well, if they cut off this this way of selling goods, they close this port, well, perhaps these folks will stop moving westward and they won't move on to our land, and they saw that a confrontation was brewing and this was a way to head it off. So what did they do? Well, they halted this this river from allowing any exports, and this was important because when you look at the map back in the 1780s, you may think to yourself, well, states like Kentucky and Tennessee were newfound states, but at this point they weren't states yet. At this point, Kentucky and Tennessee were part of Virginia and North Carolina, and these are southern states. Keep that in mind, it's an important factor. So what happened is the Americans feeling the pressure from the Spanish cutting off the city of New Orleans and closing this port. We're seeking a solution to this crisis, and what the U.S. did at the time, the young country, the Confederation Congress at that time, keep in mind there's no Constitution yet, we're still operating under the Articles of Confederation, sent the Secretary of Foreign Affairs, John Jay, to negotiate with Spain. And what the Spanish told them is that they would never concede Mississippi, and they would never can the Mississippi River and they would never concede the port in New Orleans. So what they did offer to John Jay was a tantalizing alternative. They told him that Spain would open their wealthy European and Mediterranean ports to American merchant ships. But

John Jay Deal Sparks A Constitution

Keith Lanton 10:55

in exchange, the U.S. had to surrender its claim to navigate the Mississippi River for twenty five to thirty years. John Jay, a northerner from New York, well, he was focused on reviving the stagnant economies of New England and the Mid-Atlantic, and he thought, legitimately, that this was a reasonable compromise. Well, this reasonable compromise leaked and it triggered a furious political explosion that divided the country along sectional lines, and this was the first time that we were having North versus South. So remember, these territories, which today are Kentucky and Tennessee largely, were Virginia and North Carolina. Virginia and North Carolina were outraged that what they saw as a Northerner who was benefiting the interests of the northern colonies or northern states at this point, was willing to enter into an agreement that would benefit northern states at the expense of southern states. So what happened is you had revolutionaries such as Patrick Henry Henry, who said that he'd rather part with the Confederation than give up the Mississippi. So you already had the young country at a loggerheads amongst itself, bitterly fighting, and as a result, many of the more senior members who were trying to cobble together the states into a country still felt the urgent need to replace the Articles of Confederation, which was what became the U.S. Constitution. And one of the main factors driving the creation of the Constitution at this point was a provision within the Constitution that included a clause that required a two-thirds majority in the Senate to ratify any foreign treaty. And this provision was enough to get the Southern states on board to to approve what became the U.S. Constitution because they wanted that ability to be able to block things like what John Jay was negotiating in order to secure the comfort that that that that the burgeoning United States would not accept giving away New Orleans, the port in New Orleans, which they viewed as vital to their constituents, and thus were willing to sign on to the Constitution. So that was phase one, blockade, port, New Orleans led to creation of the U.S. being incentivized, being galvanized to sign the U.S. Constitution. Now this crisis continued where you still had the inability of these ships to head down to New Orleans. This continued to brew until 1795, when there was a treaty negotiated known as the Treaty of San Lorenzo, where Spain formally recognized that the U.S. had free navigation of the Mississippi and that they could store their goods in New Orleans. Let's move forward. Again, we didn't we didn't purchase the Louisiana territory. The Louisiana Purchase was not an agreement between Spain and the United States. It was an agreement between France and the United States. Here we are in 1795, and we're making agreements with Spain with respect to New Orleans. We bought the Louisiana Purchase, it was done in 1804, so what happened? Well, by the late 1790s, Spain was starting to feel that Louisiana was an expensive headache. They were having difficulty defending it, it was costly to govern, and American settlers continued to move westward. So enter Napoleon Bonaparte, the ambitious ruler of France. Napoleon dreamed of building a massive French Empire in North America to supply France's wealthy sugar colonies in the Caribbean. So Napoleon pressured Spain to sign a treaty in secret, where Spain agreed to give the entire Louisiana territory, including New Orleans, back to France. Now you say to yourself, well, why would the Spanish do that? One, they were having difficulty retaining it and defending it. And number two, Napoleon promised to give the Spanish king's son-in-law a kingdom in Italy. But Napoleon was taking his time organizing an army to occupy the territory, and during that time he asked Spain to continue to run the territory until the French troops arrived. Again, this is 1800, and the rest of the world still thought that this territory was Spanish. But in 1802, while Spain was still acting as the administrator, the Spanish governor in New Orleans revoked the American right to store goods in the city, violating the treaty that was signed in 1795. This sent shock waves through America. President Jefferson at the time, he was aware that a weak Spain owning New Orleans was manageable, but a powerful, aggressive Napoleon owning it was an existential threat to the United States. The Americans are moving west. Suddenly you have a strong and powerful France potentially occupying the territory that you're seeking to take over. You are concerned about the port in New Orleans. So, what does Jefferson do? Again, it's 1803, and he sends James Madison along with Robert Livingston with a goal, and the goal was to buy New Orleans and Florida, and these gentlemen went with the ability to pay up to $10 million. They didn't think that they could buy what ultimately became the entire Louisiana territory, they just wanted to secure the port, again, back to the port. They wanted to secure the port in New Orleans, but by the time that Monroe and Livingston arrived in in France to negotiate this treaty, again, got to take that boat across the Atlantic. Well, it turns out that Napoleon was not in the negotiating position he was in just a few months before that. Napoleon's army in Haiti had been decimated by yellow fever. And without Haiti, again, this was gonna be the primary reason to have these colonies was to be a big market in the U.S. for French goods. Without Haiti, Napoleon didn't have nearly as much use for Louisiana and all that territory. And at this time, Napoleon was gearing up to go to war against Great Britain again, and he needed money. He also knew that the British Navy would likely seize Louisiana from him anyway, as soon as war broke out, because they had a much greater presence in North America. So Napoleon decided to cut his losses, and he shocked the American diplomats who were there to secure the port. And what he said was you could buy the whole thing for fifteen million dollars. And that is in fact what happened. That was the triggering point, that is what became the what known as the Louisiana Purchase, cementing the expansion here of our country, the United States, and we can see how critically important the port, the waterway, the Mississippi River was, and how it led to two fundamental pillars of our country as a result of seeking to control and maintain control of a waterway, the signing of the Constitution and the Louisiana Purchase.

Strait Of Hormuz Signals And Oil Risk

Keith Lanton 18:13

So the Iranians, and not just the Iranians, it's others in the world, are eyeing what's taking place in the Middle East at the Strait of Hormuz. They're looking back at history where there are countless examples of controlling strategic ports and waterways and how they often lead to riches, they lead to wars, they lead to conflict, they lead to changes in dynamics within geopolitics, and this is something that we as investors need to learn the lessons of and apply them so that we can be more intelligent as investors and citizens moving forward. So this morning, we have a situation taking place in the Straits of Hormuz. We have the Iranians firing on more ships, but we also, this morning, at least at the moment, have Wall Street looking at the glass half full and eyeing the fact that Iran is signaling that they are interested in diplomacy at the moment. We've we've seen these ships and these winds go back and forth, but Iran is signaling and the U.S. is also signaling that they are willing to consider going back to the negotiating table, and financial markets are viewing that as a positive. Futures which were negative overnight now are positive. , Dow is up 94 points, Nasdaq up 260 points. And what we do also see just moments ago, we'll see how this moves financial markets, is that Iran's Houthi allies in Yemen are declaring a maritime embargo of Saudi Arabia. So this is another crucial choke point, the Red Sea, which is where the Houthis have been firing at ships in that area, another choke point, and here suggesting that that they are going to be targeting Saudi Arabian oil because what the Saudis have been do have been doing is they have been moving oil through a pipeline, transversing Saudi Arabia, avoiding the Strait of Hormuz, and using the Red Sea as a way to get their oil out. So the Iranians now are seeking assistance from their proxies in Yemen and seeking to to create a similar choke point that they've created in the Straits of Hormuz and the Red Sea. So we will see what implications this has for financial markets this morning.

AI Doubts And A Market Rotation

Keith Lanton 20:36

Going back to last week, Barron's talking about financial markets, trying to analyze what happened, saying the biggest problems, this is a quote from Mark Twain, aren't caused by what you don't know, but as Mark Twain put it, you know for sure that just ain't so. So it's not what you don't know, it's what you know for sure that's just not so. And Barron's saying perhaps that's a big problem for the stock market right now. The market at the moment is doubting what it knows. Major indices last week finished lower as these doubts grow. SP down 1.6%, NASDAQ down 2.9%, the Nasdaq 100 down 2.7%. Right now, the NASDAQ on track for its worst July in about 20 years. So everything we thought we knew is coming undone. Chip stocks were supposed to be unstoppable, driven by shortages and insational demand for artificial intelligence. Now the Philadelphia semiconductor index is down 20% from its June 22nd peak, slumping into bear market territory. Of course, the stocks index up 100% year to date before this 20% sell off. The pain has bled it into high flying indices in Asia, lopping more than 25% from South Korea's COSPE index, dragging the Nikkei into correction territory. Nikkei was down four percent on Friday. But the more worrying aspect of the sell off, however, Might be tied to the fact that it doesn't have a catalyst. Yes, we can point to a bunch of issues, including worries about the first half gains for the chip sector, renewed levels of big tech borrowing to fund their massive capital spending, and an economic backtrack that feels uncertain is adjust to a new regime at the Federal Reserve. That does help explain the rotation we're seeing in the broader financial markets with healthcare, financials, energy, and utilities pacing gains over the past month. That's helping the Dow hold up better than tech heavy indices. In fact, the equally weighted SP 500 hit a fresh all-time high on Friday. But the concerns are that the stock market can only take so much weakness in its biggest, hottest stocks before succumbing to selling pressure. That pressure got exacerbated on Friday with the launch of China-based startup Moonshots AI Kimmy 3K3 model, which the company says can rival those from OpenAI and Anthropic, which some are suggesting has parallels to the deep seek sell-off in the winter of 2025. Those models, however, remain largely untested and curiously timed with President Xi's first visit to an AI summit in Shanghai. This week, we are going to get earnings from Alphabet, and Alphabet's recent slump has been tied to a Bloomberg report on delays of its newest AI model that probably won't have an impact on the second quarter earnings which are coming out, but it does leave the stock market in a key period of reflection. Does the AI trade and all the tailwinds it creates carry further into the year and take stock prices higher, Barons wrote, or does it reprice lower due to a lack of real-world adoption of new technology? Barons concludes investors still haven't decided, but they will need to make up their minds real soon. So, markets this morning coming off that tough week last week, oil prices picking up last week, and the megacaps participating and pushing markets lower. Oil, which was down most of this morning, perhaps on the heels of this report regarding the Houthis in Yemen and Saudi Arabia, largely changed, largely oil is trading unchanged right now at around 82.40 a barrel. We are seeing a recovery in chip stocks, where for example, Micron MU is up about 5% after Bloomberg reported that that Kimi K3 model that was announced as rivaling some of the US models from Moonshot AI, that it requires a large amount of memory to operate. Therefore, the thought process being that these Chinese AI models, while they may be competitive, , will require lots of memory, and therefore that will only further increase demand for chips. Also, Axios is reporting that the Trump administration could ban Chinese AI models. Apple in the news this morning reports that they're raising their iPhone prices by 17% in Japan. SpaceX announcing that they are setting a July 23rd target for its next Starship launch, according to Reuters. This morning, Domino's Pizza came out with earnings. The stock is up about 7%. The headlines show that they missed earnings per share estimates by 10%, by 10 cents, not 10%, by 10 cents. They beat revenue estimates, they saw a same store sales growth of 0.1%, but at the moment, markets interpreting the news as better than expected. Wall Street Journal reporting that the Bureau of Economic Analysis will calculate how it will change how it calculates the personal consumption index, the PCE, and that could lead to lower inflation readings. Over the weekend in the Middle East, two U.S. service members were killed following an Iranian drone attack in Jordan. Iran's foreign minister said Iran has received proposals from mediators in Maine. The progressive candidate Troy Jackson is a heavy favorite to become the Democratic nominee for the Senate seat in Maine to run against Susan Collins as his campaign dominated the first two days of the delegate selection process. In the United States, the FDA has provided an update on the cyclospora outbreak, saying that the initial conclusion that it emanated from Taylor Farms was a false positive, and they are going to go back to the drawing board and see if they can isolate what is causing the cyclospora virus. So those who felt that it was contained and we understood what the source was, now it turns out that we need to revisit this issue and we all need to be extra vigilant with respect to what we are consuming. So Alphabet mentioned earnings coming out Wednesday. Investors looking for proof, it's surging expenditures translating into returns after recent setbacks fueled fresh doubts about its flagship AI models. Then Microsoft coming off its worth month since 2000 will be reporting earnings. Apple and Amazon coming out next week as well as Meta. The Magnificent 7 are lagging the SP 500 this year. AI concerns are now playing out in the Magnificent 7 and now starting to spread to the semiconductor stocks as we talked about. Also of concern, last week Amazon launched a $25 billion bond sale and it received a chilly reception, so some are questioning just how much these companies can go to the well. Moonshot AI, which we talked about, the Chinese company saying that they have a model that's competitive with some of the strongest U.S. models, the reports that they're preparing to IPO within six months. Another Chinese company in the news, Alibaba, the shares are up over 5% as they launched a preview version of their flagship AI model, which they describe as second only to Anthropics Fable 5 model. In Great Britain, Andy Burnham, the King of the North, becomes Britain's seventh prime minister in a decade, promising to rewire the nation to focus more clearly on issues people care about, like cost of living increases and poorly performing services. U.S. forces hit Iran for a ninth consecutive day as the concerns grow over the shipping through the Straits of Hormuz, as we've talked about. In Saudi Arabia, they placed an order for 35 wide-body aircraft with both Boeing and Airbus. And finally, for those living in the New York metropolitan area, you may take some comfort in the fact that New York is now the fourth most expensive place to live in the United States. What has surpassed New York recently and taken the number two place as the most expensive place to live in the country is the metropolitan Miami Fort Lauderdale West Palm Beach area, now more expensive than Greater New York for the first time on record. San Francisco retaining the title, San Francisco, Oakland, Fremont as the most expensive, followed by that Miami, Fort Lauderdale, West Palm Beach. And then in pulling up third is Los Angeles, Long Beach, and Anaheim, and finally fourth is the New York metropolitan area.

Why Software Stocks Are Struggling

Keith Lanton 29:43

All right, let's transition, talk about the cover story, headline story in Barrens. And if you've checked your portfolio lately, you've probably noticed that software stocks have taken a beating over the last year. The software ETF run by iShares is down about 15%, and this all while chipmakers and AI hardware stocks have recently pulled back but have soared over the last 12 months. Why is software so weak when the rest of the technology is so strong? Why is AI eating software's superpower? So if you think about it, companies used to pay per human user. But now AI agents write custom code internally, bots are replacing human workers, and clients are shifting their IT budgets towards buying hardware before prices jump. If you look at IBM, last week the price plunged of that stock 25% in a single day after clients diverted cash into servers and memory instead of software. So Barons asks, is software traditional software dead? Their conclusion is not quite, but we're entering a new, highly selective phase where investors have to separate the winners from the roadkill. Here's how the landscape breaks down. The infrastructure and security winners. AI needs mountains of clean data and heavy protection. Companies that help AI talk to enter talk to enterprise data are currently crushing it. Snowflake, symbol SNOW, is up 88% in the past three months. Palantir PLTR acts as a crucial operating layer linking humans, AI models, and data with 84% gross margins. Over in cybersecurity, where AI creates attacks at unprecedented speeds, giants like CrowdStrike, Palo Alto Networks, and Octo are skyrocketing. The catch though is that their prices are already sky high. So looking at the next tier, that's the tier that we're looking at right here, and this is the tier where we're trying to separate the wheat from the chafe, and this is the traditional software stocks. So if you want deep value, take a look at the full featured cloud encumbrance that are currently sitting in the bargain bin. Salesforce, simple CRM is trading at a forward PE of just 12, down from 20 earlier this year. Microsoft and SAP are trading at historic ticket discounts. To survive, these legacy giants have to embrace Andy Grove's classic rule, only the paranoids survive. They have to pivot to consumption-based pricing, sacrifice their 90% gross margins, and trim sales budgets. Microsoft and SAP are deeply embedded in core business processes, making them almost impossible to take out or extract. Meanwhile, Salesforce is hustling relentlessly, launching self-cannibalizing AI agents, flexible pricing, and even a headless software version designed entirely for AI bots to run without human interference. Then there's a third tier that Barron's is calling the permanently challenged. For this group, they're saying even hustle won't save them. Falling into this group, perhaps, but using them as examples are companies like DocuSign and Adobe. So for Adobe, for example, Barron's saying a single $20 chat GPT subscription can now do the work of four or five design seats from Adobe. So Adobe is facing a structural shift in its pricing. So at the moment, hardware and AI are taking all of the oxygen in the room, but history tells us that hardware and AI models will also eventually commoditize. When they do, the software application could reclaim its throne. So the key for investors today is not to treat software as a monolith, as every one size fits all. Avoid the point solution casualties and look for embedded legacy giants willing to disrupt themselves to survive.

Subaru As A Hidden Value Play

Keith Lanton 33:54

Finally, I mentioned we would talk about the company that makes Subarus. This is Fuji Heavy Industries here in the United States trading over-the-counter. Subarus have a cult following in the United States. Drivers treat buying an Outback or a Forester less as a shopping trip and more like a religion. But while car owners love the brand, investors have mostly ignored the stock. That might be a mistake, Baron suggests. Subaru's U.S. listed shares are trading at under $8 a share. This is currently stock is down 25% this year. The symbol for the Subaru shares here in the U.S. is F-U-J-H-Y, Frank Uniform Jack Hotel Yankee. Beneath the surface, Baron says the stocks look like a bargain. First of all, Subaru is sitting on a lot of cash. Subaru holds roughly $6 billion in net cash. That's more than half of its $11 billion market value. They don't carry the massive debt of a car financing arm. JP Morgan handles all their auto loans. And perhaps most importantly, management is rewarding shareholders. Japanese firms are getting more friendly, and Subaru is no different to shareholders. Subaru pays a 4% dividend and is buying back almost 10% of its stock this year, with a goal to double its return on equity by 2030. Also importantly, Subaru, unlike its Japanese rivals, has virtually zero exposure to China's brutal price wars. 70% of its sales come right here in the United States, where brand loyalty is super high. Experts think Subaru's stock could double or even triple or even end up being acquired by Toyota, which owns a 21% stake. So while hardware and tech are getting all the headlines, Baron says this cash-rich, low valuation legend might be the ultimate value hiding in plain sight. That's everything I've got.

Wrap Up And Disclosures

Keith Lanton 35:53 Alan Eppers 35:54

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

Sophie Cohen 36:20

Opinions expressed herein are subject to change and not necessarily the opinion of the firm. Pest 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.