Warren Buffett's 2025 Letter to Shareholders Arrives Soon: Watch This Number
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On radio, on YouTube, streaming live on investtalk.com, and for our podcast subscribers, this is InvestTalk. Independent thinking, shared success. InvestTalk is made possible by KPP Financial, a registered investment advisor firm serving clients throughout the United States. Here is KPP Financial Portfolio Manager, Luke Guerrero.

Good afternoon fellow investors and welcome back to InvestTalk. My name is Luke Guerrero and it's Friday, February 21st, 2025. And now as you know, if you've been listening on most Fridays when I host, you know that just like everybody else, I very much enjoy the weekend. And the reason that is, is because it offers you a time to relax, to recuperate, to deal with the stresses of the week, spend time with your family, your loved ones, your cats in my case.

But it doesn't mean that you can take your eye off the ball. Because time doesn't stop, the world doesn't stop spinning, things don't stop happening. And so just because we relax for two days doesn't mean we forget. And that's incredibly important because things are constantly changing. The market is constantly moving and not in a straight line. We've been saying for some time,

The past two years are not indicative of what generally happens in the market. You can expect, as policy changes, to have upticks in volatility and different investment experiences than we've become accustomed to in the past couple years. And so, here at InvestTalk, we strive to help you digest what happens in the world. And we do that through our educational and actual items, but most importantly, we do that by going directly to you, our listeners,

and hearing from you, your finance and investment questions. Now, we will run down what happened in the market today, and it was a very red day, to say the least. And we will go over those show topics that I'm bringing to the table. But because this show is about you, let's tackle this caller question now. Hi, guys. Great show. I was calling to see what you guys think of PayPal. I actually own at about $90 for average cost. I wanted to know if it's worth keeping or it's time to cut my losses. Thank you.

PayPal, ticker P-Y-P-L, I imagine is commonly known by most listeners. Even if you don't use PayPal directly, maybe use Venmo. Venmo is owned by PayPal. And it got its start as a secure way to transact on the internet. One of its big partnerships originally was with eBay. Now it has grown and has

Half a billion users, half a billion active accounts, that is. Not necessarily half a billion independent people, but active accounts. And it still is one of the most used payment processing companies. And their technology is everywhere. They moved over time into credit beyond just payment processing. Again, their Venmo segment has moved into crypto as well. And so they've been expanding. Over the past 52 weeks, they're up about 30%. 30%.

Now, they're nowhere near their all-time high of about $310 and change per share. But this is a story of a company that is rebuilding. They have a new CEO in the past 16 months or so who has, again, done enough to show stockholders, to show shareholders, that there is growth and improvements. Revenue has grown at 12% on an annualized basis over the past six years, though it has slowed down.

Improving from a low of 8.9% in 2022. Projected to be about 14.9% in fiscal year 25. Now, year to date, this company's struggling. And one of the reasons why is because...

the most recent quarterly performance missed, right? They had checkout growth at about 6% below the anticipated 7-8%. That caused a pretty decent drop because of those fourth quarter 2024 earnings. But we own PayPal for clients and we didn't buy it, fortunately for us, around a 90% acquisition cost as you did. But you have to understand that PayPal is rebuilding. And so if you are a long-term focused investor like we are,

Then you see PayPal trading at only 15 times forward-looking earnings. Its five-year average is 27 times. It's trading at 10 times cash flow, two and a half times sales. It has a solid balance sheet. It's only got about $11 billion in debt. And over the past three years, they've been buying back shares. Everything...

has shown me over the past 12 months, generally, to be improving. Maybe not as quickly as some people would hope, but still improving. This is a rebuilding process. And if you're willing to stomach it, I think PayPal can be a solid choice. That's PayPal, ticker P-Y-P-L.

Because it looks like we have our first live call. William in Phoenix, who has a question about, I don't know. You tell me. Hi. International Seaways. International Seaways. There we go. Okay. So do you own it? Are you looking to buy it? I have a small position in it. Yeah. I know it's very cyclical business. So.

Yeah, well, they tend to be, right? Because when you have international shipping and transportation, particularly within crude oil and energy, it's going to be entirely tied to demand, right? To petroleum demand, crude oil demand, etc.

And so it is going to move in a similar fashion with the way that the underlying commodity that it is shipping moves. It's down 1.69% today. We'll talk about what happened in the market today a little bit later. But oil didn't have a good day today. And it hasn't had a good day in quite some time. It's just about at $70 a barrel now. Now this company is about a $1.8 billion market cap company. So it's a small cap company.

It has a decent amount of debt for its size, around $665 million, but nothing too alarming, I would say. Now, over the past year, it's been down 28%. Again, we know that oil has been down as well. And in spite of that, you do see some pretty solid growth headed into 2023, at least. They haven't reported 2024 earnings, but headed into 2023, they had solid growth. Now, keeping that in mind, they're projected to decrease revenue from last year.

in 2024 and then again in 2025. So you have contracting revenue. In that time, you're also seeing margins slide pretty significantly. Now they were negative during the pandemic, again, not a lot to demand, but they had a net margin of 44.8% in 2022, 51.9 last year. That's supposed to slide to 47, sorry, 46 this year and 37 the following year. Now, because of all this, because growth is falling off, because margins are contracting,

you're seeing relative valuations fall as well. They're trading at a price of book one. They're trading at their asset value at this point. And so when I look at this, I see, okay, it's probably a relatively safe dividend payer. It only pays 1.2% dividend yield, but the payout ratio is about 55. But the market is telling you, well, we think the price is a little high still. It's got about 8% short interest out there.

Now, it recently reached a low, a local low over the past 12 months of about $32 a share. It bounced from there, trying to find some support in the 35 range. I don't know if it will. There's a clear downtrend here. And so for this company, International Seaways, yes, it's cyclical. Maybe given that over time demand will come back, oil prices may be floated again. It could improve. But nothing is telling me from what I'm seeing that now is the time to enter. That's International Seaways. It took a while to find it, but we did.

I-N-S-W. So we're going to do a short break and on the other side, we'll talk about today's plan topics as well as the market activity. Please remember you can call anytime and leave your questions on the InvestTalk Voice Bank. If you're listening on our live stream or on AM 1220 radio in the Silicon Valley, call now at 888-99-CHART.

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Looks like we got a phone call from Eric from California. Looks like we lost you for a sec, but I'm glad we have you back. You had a question about Walmart?

More about core holding. So I had Walmart for five, six years. I thought it was a core holding, but I sold it earlier in the week because I felt like it was a little overvalued. I had it for a long time. But I'm having a little bit of FOMO now. I was wondering, what do you guys do in situations with, you know, when you think you have a core holding and you sold out of it, do you kind of, you know, I don't really want to time it to get back in, but do you just keep it on your watch list or do you kind of just let it go? Yeah, well, that's a great question. You know, I think...

It's very case dependent. When you're talking about something like Walmart, obviously the largest, one of the largest retailers in the world, right? They have in the past couple years shifted beyond their brick and mortar stores, which have an extensive network globally and taken over, taken a really hold of online retail as well.

I know, at least through one of my credit cards, I get a Walmart Plus subscription. I've been using that more and more. I'm surprised that some of the same things that I used to buy on Amazon are also available there in similar price, similar quality. And so they've really grown to a massive behemoth. And so I think how you treat a company like that is...

probably fundamentally different from a small mid-cap company where you have an investment thesis that growth is going to come from this tiny segment and maybe it doesn't meet your expectations and you get rid of it. Because Walmart's asset price, their stock price, the value of that company is more tied to the overall prevailing macro conditions of consumers than a really small company that is predicated upon one product being very successful.

And so what I would say to you is think about the reason why you let it go. You thought it was maybe a little high in terms of its relative valuation. Now they reported earnings today. It was disappointing. The stock's down two and a half percent, not just because of that, but because we've seen some poor macro data, which we'll dig into in a little bit and what that could mean for consumers.

And so I would say, you know, it's good for these types of companies to always keep them on your mind. And if there comes a situation where the reason why you sold it has changed, right, your feelings on it, your thoughts about it, what your investment thesis is towards it changes, I don't see any reason to not get back into it. But what you're saying is you're feeling a little FOMO. And that sounds a little emotional to me. So don't get back in it because of emotions. Get back in it because the reasons why you no longer wanted to hold it

are no longer true. Thanks for the call. We've got a lot to talk about today, and we've already had two live calls. I guess three if you count Eric Collin twice. But we also have a lot to go over. And so our main focus point today is about the man himself, Warren Buffett, and his 2025, that is, letter to shareholders, which should be arriving soon.

Berkshire Hathaway shareholders will soon get insight into the company's performance, market outlook, and maybe get an answer to the question, "Why are you holding so much cash?" Also, we'll touch on shifts in the senior housing market. We know that the baby boomers are set to continue retiring. It will at some point be one of the largest wealth transfers in history.

But as they age, their needs change. And so what has been happening within the senior housing market? We'll also touch on European growth and how it doesn't look too good. What does that mean for European economies? And should we have time at the end of the show, we'll touch on Microsoft and their supposed breakthrough and what that means for their role in quantum computing.

We also have some voicemail questions ready to play, including one on Gilead Sciences, that's ticker G-I-L-D, and one on Franco Nevada Corp, which is FNV, as well as some questions that came in from the comment section of the InvestDoc YouTube channel. And of course, I welcome your finance and investment questions now or anytime throughout the show. Now we're moving into a quick break. And still to come, my main focus point, whenever Warren Buffett does anything...

Everyone needs to pay attention. So we'll dive into what he's been doing and what investors are hoping to hear this year. We'll answer more of your investment questions. We'll tackle those YouTube questions, more voicemails, hopefully more live calls, and yes, today's market wrap. So give me a call at 888-99-CHART.

Luke Guerrero is here and ready to tackle your questions. Is it a good idea to sell your losses in a Roth IRA and just use whatever you have left to reinvest into better stocks? Just wanted to ask you about one stock that I'm looking at, InterGETR. Call InvestTalk, 888-99-CHART.

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2025 rolls on and you've got finance and investment questions for Justin Klein and Luke Guerrero. Call InvestTalk 888-99-CHART. Well, we're doing it a little bit later than usual, but let's dive into the market today.

U.S. stocks were broadly, broadly, broadly down today. The Dow down 1.69%, S&P 500 down 171, NASDAQ down 2.2%, and Russell 2000 down 2.94%. And because of this, S&P logged its worst session of 2025s, and major indices all capped off a week of declines.

Now in terms of the big names, in terms of big tech, Nvidia and Tesla were pretty down today. Other underperformers included Managed Care, UnitedHealth had a really bad day today, hospitals, semi-names didn't do particularly well. Now there weren't a lot of positives in the market, but relative outperformers included Pharma, Biotech, Food and Beverage, and Tobacco names. Dollar index was up 20 basis points, gold finished down about 10 basis points, crude oil

Very bad day, down 2.9%, making it end just above the $70 a barrel mark. And so what really caused this big risk-off session? Well...

deteriorating macroeconomic data, right? You had February flash PMIs, which along with services actually fell into contraction, a contraction area. And that's following last week, 60 basis point downturn in the expected GDP for Q1, that tracker of projected GDP growth in Q1. And so you couple that with

Retail sales looking not as good. University of Michigan Consumer Sentiment Survey not looking that good, looking softer than expected. You have that uncertainty about tariffs and taxes and geopolitics and all of that

There's only one way the market was going to head today on the bad news, as well as the bad news from Walmart and some other companies is downward. And so you're having this contraction as the market is reassessing all this macro data we got today. Now, what's the second order effect? Who knows how the Fed is going to then react to this? They said just as recently as yesterday.

that they're now more concerned about inflation than they are about the labor market and growth. And so does this recalibrate? I don't think so, but certainly heading into next week, everybody will be paying attention to PC on Friday. Let's see if it matches up with what we saw earlier in the month with CPI and PPI. Now shifting gears, keeping things moving, let's talk about our main focus point today, which is about perhaps the most watched investor, I would say.

And that is Warren Buffett, the Oracle of Omaha. And we've covered stories about Warren, Mr. Buffett. We're not really on a first name basis. I don't know him. He doesn't know me. Pretty frequently on this show. And more recently, those stories have centered around the fact that Berkshire has been raising cash. And so the reasons why they've been raising cash are debatable. There's several schools of thought here.

One camp says that they believe the market to be overvalued, and that could be the case. Though historically, he has never been the best market timer, but some people think that he's been holding his nearly $300 billion cash stockpile to reinvest should things start to turn. There's also the school of thought that realizes that even he cannot beat Father Time, who comes for us all. And so by raising this cash, by having it prepared for his successor,

It allows Berkshire to be more reactive and active as well in seeking out good investment and acquisition opportunities. But here are the facts, right? For the past nine straight quarters, Berkshire has been a net seller, a net seller of equities. Their Apple stake has been reduced from 6% to 2% in that time. And there seems to be no rush to invest, right?

no brush at all whatsoever to inject that capital back into the market. And so I'm of the opinion that maybe it's a little bit of both. Maybe he sees that valuations are very high across the board. Maybe he knows that, you know, he's transitioning soon to Greg Abel and, and him and he and his team should have the ability to steer the company that will outlive Warren that already has outlived Charlie into deeper into this century. Now, you know, here is,

some credence to the valuation argument. And I have clients, multiple, who have asked, you know, who like Berkshire Hathaway and have asked, should I buy more Berkshire? And I always say the same thing, because Warren Buffett is better than I am at investing and do what he does. Is he buying Berkshire? And the answer is no. Berkshire's repurchasing stopped in Q3. And so this is reinforcing the idea that at least he thinks Berkshire's a little overvalued if he stops buying it back.

and the likelihood that the second order effect is, well, then his perception is that most of the market is overvalued. But I want to give caution, right? I want to also make sure that you aren't taking one man's actions too seriously. Though he is a very serious person. All it is telling you, all that it really should tell you is to be more cautious. Again, we know historically if you look back 30 years, he has never been the best at market timing. Market timing is very difficult.

But anytime somebody as important as he does something such as this, it should make all of us take a step back and think and reconsider, are we doing the best to position our portfolios defensively should things start to change rapidly? Now, the next InvestTalk, we'll look into this topic. One in five Americans are doom spending.

According to CreditCards.com, a new report indicates that one in five Americans are engaging in hoarding and doom spending, with this behavior driven by anxiety about the future. I don't know what doom spending is, but we will find out together on Monday. That's Monday, but for now, I'm Luke Guerrero, ready to take your calls at 888-99-CHART. Mark from San Diego, hang on, you will be next. We'll be talking about Oxy and CVX.

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Let's go to Mark from San Diego who has a question about Oxy and CVX. You looking to buy one of them? You hold both of them? What's going on here? Oh, I got some oil positions already, but I know oil has gone down and I'm sick of adding. And I know Oxy is a lot smaller than Chevron, but I'd like to get your opinion on either one. Good time to add.

Well, let me ask you, if you already have oil positions, how much of your overall portfolio is oil and energy? Probably about 10%. 10%. Okay, so nothing too crazy. And what are those names that you're holding? Oh, I got like the big ETF, the basic guard ones that do oil and energy. Okay. Okay, yeah, that sounds good.

What I was trying to get at is, do you hold any other individual oil companies that are similar to these? Because these are two pretty different names, right? Now, Oxy, Occidental Petroleum, which is beloved by Warren Buffett, I think Berkshire owns something around 28, 29% of the company. They've been buying it since 2019, is...

a little bit different right they're one of the leaders in carbon capture and transitionary technology their balance sheet is not as strong they're a 48 billion dollar company with 27 billion dollars in debt they do pay a dividend about 1.84 percent is their dividend yield now their cash flow is a little stagnant maybe towards the downside their profitability is falling but

But they're going to get exposure to oil prices, right? Oil commodity. It's anytime you're buying, selling, moving, refining a commodity, your profits are based upon the price of that and the demand for that. And so the experience here between these two is pretty similar in terms of, you know, how has the price moved in the past three months, right? Oxy is down 2%. CVEX is down about 2.9%. Just about the same.

Now, on the other hand, CVX Chevron is a pretty darn large company, right? $286 billion market cap company. Their long-term debt's only about $24 billion. So a lot stronger balance sheet. Their free cash flow, a lot stronger. $21 billion is what their free cash flow is projected to be this year. Their dividend is double, about 4.4% versus that 1.84%.

And they're a more established player. They're a rival with Exxon. They have an acquisition strategy. They don't really have as much exposure as Exxon to renewable technologies, and they don't have as much exposure to Occidental as renewable technologies. And so the question that you have to ask yourself is, well, do you want an established company, which you likely have a lot of exposure to within those ETFs?

Or do you want to tilt more towards the growth side in Occidental, which has more investments in renewable technologies, carbon capture, and more of a transitionary focus? Honestly, just because these are two oil companies, two energy companies, they're kind of different. And so it's entirely, you know, I'm trying to give you a little picture. Now, in terms of where the price of oil is, certainly bad day today. It's been down for a while. Demand just doesn't seem to be there. This administration really wants to pump up supply.

I don't necessarily see anything, you know, in the short to medium term that's going to make oil prices spike up. Certainly a conclusion to the Russia-Ukraine war would depress oil prices as well if people are allowed to start consuming Russian oil, you know, and sanctions start to disappear. So I think it just comes to which one do you want? More transition focused or a big established name? Thanks for the call.

Looks like we have another live call. Sherry from New York who's asking about Ulta and Zebra listening on the podcast because it was recommended by a friend of hers who I think you should trust. How can I help you? Yes, hi. Thank you for taking my call. I love your show and I have two questions about two stocks. First one is Zebra. It looks like after the earning, the stock has been tanking so it's there like a good point, entry point now.

Okay, so let's take a look at Zebra Technologies. We're actually talking about this. Justin and I were a couple days ago. And, you know, I think Zebra is a...

manufacturer of automatic identification data capture products. They help with mobile computers, barcodes, scanners, QR codes, all those sorts of things. And so most of their revenue comes from their enterprise visibility segment working business to business. Over the past three months, they're down about 20%. Year to date, they're down 19%.

You know, they recently reported earnings on the 13th of February. They're down 3% today. Now, they've started to do a shift more towards being focused on the software side, which could benefit them as a company. But all the trends I'm looking at here are negative, right? Cash flow is headed in the wrong direction.

profitability is headed in the wrong direction. Their valuation is still pretty high for a company whose growth is less than stellar and actually slipping, right? They had a peak revenue in 2022 of 5.6 billion, then 4.59 the next year, then a 4.9. It's projected to grow again, but I mean, over the past six years, they've only grown at about 2.3%. Now their margins, all positive, but pretty volatile.

14.9% pandemic was where they had a local high. It's fallen since then. It's supposed to climb back a little bit. Now, in terms of debt, they don't have much on their balance sheet, only about 2.3 billion on a $16 billion market cap company. But frankly, I just think they're struggling. And so you're asking the question, is now a good entry point?

Well, I mean, from a technical perspective, this thing's trying to find some support now, right? It dropped like a cliff from $420 per share in January down to about $311 now, $311 and change.

And so this to me is the situation of don't catch a falling knife. So I wouldn't take this as an opportunity to enter at all whatsoever. If you want to keep it on your watch list, I think that's perfectly fine. But there is nothing from the momentum of this name as it's continuing to digest this new information that suggests to me that now's the time to buy. Thanks for the call.

Now I want to briefly mention our newest edition of the KPP Premium Newsletter, which will be distributed tomorrow. This week in the KPP Insights section, we discussed ways to look at consumer credit and how to infer things about the market from that. I think it's a hot topic given what we've gotten from retail sales and all this macro data and how the market is digesting that. In the Stock Ideas section, we mentioned a tech company and a glass manufacturing company

In the portfolio management section, we touched on investing in international developed and developing markets. If you're interested in learning more, visit us at investdoc.com and subscribe. The newsletter will come to your inbox Saturday mornings. Another live call, Tom from Oregon. You're interested in learning my thoughts on stagflation. What is spurring this, Tom?

Oh, hey, Luke. Hey, first of all, love your show. I've been listening to it since the start of COVID and those were crazy times. And of course, they're crazy times now. So I just appreciate your show to keep a level head. Well, thank you for that. You know, you realize as time goes on that they're all crazy. It's just crazy for different reasons.

Yeah. Well, in any case, yeah, I heard Justin briefly kind of talk about the potential for stagflation on the last show. I was trying to look into maybe what sectors, you know, would be good to look at with the, you know, potential stagflation and potential.

It mentioned healthcare, financials, and maybe some sectors of REITs. But yeah, I was curious on your guys' thoughts, maybe what to look at if that does actually become more of a reality. Yeah, so giving a little context to what stagflation is, in case anybody wasn't listening to the discussion yesterday. Stagflation is this...

concept from the 70s because of the oil supply shocks in 1973, where you have high inflation, you have high unemployment, and you have slow economic growth. Typically, what you see is the labor market and prices are push-pull, right? The primary force that drives inflation is actually us being paid more money, right? Yes, it's the government printing money, the government spending money, but if wages stopped growing, right?

then a lot of the pressure on prices would stop as well. And so that's why the Fed looks at all these things and is a little worried when you see hotter wage growth than expected because they think down the road, well, that may drive prices upward. And so here is a different situation where wages are not growing. Wages are depressed. You can't get out of it by spending because economic growth is slow. Unemployment is high. And inflation just doesn't budge. And so the worry stems from the fact that we are now seeing

stickier inflation, we always thought it was stickier than a lot of people thought, but stickier inflation is now being shown by subsequent economic releases. And you have from the fiscal impulse side, which has floated the market for a couple years, less spending, public job cuts, which could in turn slow growth with tariffs and all these things that could cause some bad side effects. And so, you know, in times such as these,

Defensive sectors, consumer staples, healthcare, pharmaceuticals, utilities. One of the driving forces over the past year or so has been the AI secular growth theme. Tech companies have a lot of money to burn. They are burning it on data centers. There's a demand for energy. So energy can be a good place to have even in these types of situations. Gold.

If there's a lot of uncertainty in the market, people will flush and flood towards safe haven assets, not treasuries because you have an issue with the US economy, but they would flood to gold. So I think you're in the right spot when you're thinking about healthcare, when you're thinking about utilities, when you're thinking about staples, when you're thinking about gold. Those are some areas that maybe you want to increase your allocations towards because in these high inflationary, low growth environments, those areas can benefit. Thanks for the call. Now I mentioned it twice, but I'll mention it again. It is Friday.

And on Friday, we'd like to take a little bit of time to run down a bit of benchmark numbers. So let me hit you with that list right now. The two-year treasury yield was at 4.194% today for perspective. Last week, it was at 425%. 30 weeks back, it was 3.882%. And 68 weeks ago, it was 5.05%.

The 10-year treasury yield was at 4.418% today. For perspective, last week it was 4.472%. 26 weeks ago, it was 3.921%. And 68 weeks back, it was 4.63%. Gold was at $2,941 per ounce today. We are getting ever closer to 3,000. Last week, it was 2,883. And 67 weeks ago, when we all wish we had been buying gold, it was 1,935%.

Silver today was priced at $32.76 per ounce. Last week, that number was $32.27, and 54 weeks ago, it was at $22.80. Oil was selling for $70.57 per barrel today, an 18-cent decrease compared to last week. 22 weeks back, it was $67.79, and 64 weeks ago, it was $74.30. The national average for a gallon of regular gasoline is at $3.16, same as last week.

90 weeks ago that number was $3.56 and 138 weeks ago it was $4.25. In California it was averaging $4.84 per gallon, a 30 cent increase. 30 cents over last week. 68 weeks ago that number was $5.32 and 144 weeks back that was $5.87. For comparison...

This is the most depressing part for me to always read. For comparison, in North Carolina, gas was averaging $2.85 per gallon. That is $1.99 less per gallon than gas in California. Let's keep things moving and get to a fresh question from the comment section of our InvestTalk YouTube channel. I want to remind you, if you go over there and check out our videos, which present this show in a different format. And you know, it's good to shake things up every now and then.

But they present this show in a different format, so while you're over there, we have many videos, thousands of videos, I think, of lost count. But on any of the videos, if you have any questions at all whatsoever that you would like us to address on the show, just drop it in the comment section. We check every single comment section. And this one came in from Taylor Mickelson, and it's on VXUS. It says, "I'm looking to increase my foreign stock exposure. Is VXUS a good ETF to gain exposure, and is this a good time to get in?"

If you do get into an ETF like this, would you trim positions in single stocks like MTD and Gold? Or is VXUS diversified enough where this could not impact your weightings for those single stocks? Let's take a look.

VXUS is the Vanguard Total International Stock ETF. It offers a broad, inclusive portfolio of global stocks outside the US. Unlike some peer funds, it covers small caps in market-like proportions, which is to say a relatively small part of the portfolio. Essentially what they're doing is they're taking the FTSE, or as we in this industry call it, FTSE, the FTSE Global Equity Index Series, which covers 98% of the investable market cap.

And so taking a look at this, it is a passive fund, not just because it says it's passive, but five basis point expense ratio. It's got about 81 billion in assets under management. It is across sectors. It is across countries. You see here that there's a U.S. listed here, and that's not because there are U.S. companies in this portfolio, right? It's ex-U.S.,

But this is looking at revenue. So even if you don't own, here's a fun fact for you, even if you don't own a single US stock, if you own a global stock that has no US companies, global ETF, no US companies, still 20% of the revenue comes to the United States. You can't really escape that US exposure in total. Now you see this comparison to the MSCIAC World X US IMI, that Investable Market Index, right across the board, dialed in, again, passive index, exactly as you'd expect it, small, medium, large caps.

And so your main question is, is my weighting in MDT and gold going to go up astronomically because I hold this portfolio, this ETF? Well, if you're looking at home, if you're watching at home, I am highlighting how many holdings are in this portfolio. 8,469, 8,469. The largest stock is 2.5%.

And so it is not materially going to increase your exposure to any singular stock unless maybe you're holding some of the top names. But still, even if you are, even if you held Taiwan Semiconductor at 5%, well now it's only 7.5% exposure. So this is a great fund.

It's always a good time to get into the market as long as you're a long-term investor. So if you need that global exposure and you do not want to hold any US names, VXUS, cheap and solid. We're moving to a new break, but the theme of today's live calls, so we have another one from Dan from Walnut Creek. He wants to look at Palantir. That's coming up here on InvestTalk.

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You've got finance and investment questions, and Luke Guerrero is ready to provide his unbiased answers. Call now or anytime, 888-99-CHART. Let's go to Dan from Walnut Creek who has a question about Palantir. Do you own it? Are you looking to buy it? Hi, Luke. Thanks for taking my call. Yeah, I own a little bit, and, you know,

I guess it took kind of a little bit of a hit the last few days because there may be an issue with the government contract, it's all a cutback. And then I think it was a little bit overbought before that anyway. So I was wondering what your thoughts were on this. Yeah, so Palantir, for those of you who do not know, is a big data analytics and AI solutions firm. And they primarily operate through government contracts, right? 55% of their contracts are government contracts.

has returned a significant clip in the past three months in the wake of the election. Obviously, Peter Thiel, one of the largest supporters of the current president, going back to his first time running for office. So solid connections there, especially for a company that is

primarily majority of its revenue comes from government contracts, I think that's probably a good thing for them, right? I think it is unlikely given Peter Thiel's connections to Elon Musk and the people who are trying to rein in government spending in certain areas are going to cut back

on contracts with a company like Palantir. Now over the past couple days, they're down 4.63% today, even though they're up 345% in the past year.

Some of that could stem from the comments from the CEO of Palantir, or someone from the board who was talking about being able to sell some locked up shares and that may have driven the price down a little bit. But I tend to agree with you. It's incredibly expensive. It's trading at 232 times cash flow, 90 times sales, 190 times price to earnings.

Certainly below the highs of 385 times price to earnings. But this is a company that has a consensus target price of 95 that consistently issues new shares up from 1.8 billion to 2.4 billion in the past five years. It's a massive company. It's 249 million, or sorry, billion that is. And so I'm not too concerned about the government contract side of it because again, those connections run deep.

But I would be a little bit concerned about the valuation here. Now, doesn't mean it can't continue to run up. We have seen this over and over again. Things trail and run and run and run, even at ridiculous valuations. But the risk, the risk still seems to me to be more to the downside. So I think I agree with you. It's a pretty expensive name. It's Palantir Technologies, ticker PLTR.

Looks like we have yet another live call. Is this Will from San Diego again? Did we already talk to Will? Yes. Not today. Thanks for calling back. Oh, not today. We've had so many calls today because I asked and you guys answered. Do you have a question about RALAs? Yes. Registered index linked annuities. Is that a safe thing to invest in?

Okay, so there's never anything that's 100% safe to invest in that is first and foremost a RAL a aryla registered index linked annuity is a type of annuity that

gives you market linked growth, but generally has a cap, right, on the top side and protection on the downside. And so if you are pre-retiree or you are a retiree and you are looking for an instrument that can give you some of that market-like growth while also putting a hard cap on the amount you can grow, but also giving you some of that downside protection, again, it's not all perfect. There is some protection. It's not perfect.

then it could be something that you may prefer

be interested in investing in now there are downsides additional downsides again it caps your growth it's linked to the market but not completely it's it they're expensive annuities can be expensive um and it's not completely risk-free there are certainly risks involved and so from my perspective i generally stay away and and advise away from annuities because if you're looking like for market-like growth with some downside hedging protection

Any investment advisor or allocator could create a portfolio like that for you that is far cheaper than an annuity, that gives you a broader range of investment options. So it could be something that could work for you. I just think there are better options out there. Thanks for calling Will and enjoy your weekend. Well, we did it. We made it through the show without getting to a single talking point beyond our main focus point because I asked for a bunch of calls and you guys responded and I thank you for that.

I'm Luke Gray. This completes another InvestTalk program. We thank you for listening. We encourage you to tell your friends and family members about our free podcast downloads. Get yours anytime at iTunes, Google Play, and Spotify. And please be sure to leave a rate and review on iTunes. Remember, we can help you better understand your portfolio dynamics, calculate your investor risk number, build a full financial plan for you, and also help you optimize your 401k. It all starts at investtalk.com. Just click the free portfolio review button.

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