The Steve Pomeranz Show

For those of you who weren’t around for last week’s announcement, I just want to let you know that after 19 years of weekly shows I have decided to retire because, as the saying goes “I have the two essentials of retirement—much to live on and much to live for.” Today’s program will be the second of the final three, with our last airing on May 24th. In the meantime, I will be keeping you up to date on the investment world during this crazy time as well as re-playing some of our favorite shows from over the years. I will be keeping the website active with all the past episodes, so if you want to hear something again or get in touch, you can contact me there. Stevepomeranz.com Before I get to today’s commentary, there are some people I want to thank. First is Jerry Carr. Jerry was the station manager at WXEL until his retirement and absolutely the gatekeeper who enabled me to start airing way back in 2001. Without Jerry’s professionalism and foresight, I would not have had the great radio and investment career that I have had. Assisting him were Wendy and Ross Cooper. The two of them were always encouraging me and always there to help smooth out any rough patches. By the way, after Wendy left WXEL, she worked as my assistant and radio show producer for a number of years, and she did a great job. My wonderful program director at WXEL, Joanna-Marie Kaye, and my numerous engineers:  Steve Cody, Caroline Breder-Watts, John Zuletta, Rochelle Frederick, and of course, Tissy, one of the sweetest most gracious persons I have ever met. Unfortunately, she passed away at way too young an age. Needless to say, there were and are a lot of people to whom I owe a great debt. Now to my commentary…. What’s Eating Warren Buffett: Part 2 Last week I pointed out the unusual behavior of our Oracle from Omaha, in as much as his public statements have been totally out of character. Normally, as I said last week, Buffett’s announcements are full of optimism and dedicated to the proposition that one should always be buying when others are fearful. But this was not apparent during his hours spent delivering his talk at the Berkshire annual meeting last week nor was it on view during his interview with Andy Serwer from Yahoo Finance. First and foremost, Buffett’s war chest, which was $125 billion at the end of the year, has not decreased at all. As a matter of fact, it has increased to $137 Billion. Some of the increase we know about. He spoke at length about his sale of four major airlines and why he considered the purchases to be a mistake. He originally liked the idea that he could purchase about $7-8 billion dollars of airline stocks and earn $1 billion a year in return from earnings and dividends. All of that came to a screeching halt as travel disintegrated to zero, causing the companies to bleed billions of dollars and requiring them to borrow and issue new stock just to stay in the air. He spent a lot of time talking about the economic history of our country, even to the tune of estimating what America was worth in the 1770s. He then moved on to the America that endured the devastations of the Civil War, the Great Depression, World Wars I & II, and up to the present. He repeated the idea of the great American tailwind, in which American businesses benefit from our country’s work ethic, innovation, and expertise. This characteristically leads him to admonish us to Never Bet Against America. But in my opinion, it’s what he didn’t say that was most important. He did not say that even though he believed in this country’s economic future that he was buying that future at today’s prices. Let me repeat that another way.

Which States Are Being Hardest Hit By The Coronavirus? What's Eating Warren Buffett? And More

Which States Are Being Hardest Hit By The Coronavirus? What's Eating Warren Buffett? And More

With Jill Gonzalez, Personal Finance guru and Spokesperson for WalletHub.com Steve talked with Jill Gonzalez, personal finance guru and spokesperson for Wallethub.com, to learn how much greater the impact of the coronavirus is in some states than in others along with the specific ways in which the various states are affected. Jill is an expert in personal finance and investing and Wallethub did extensive research to find out which states are the most shut down and suffering the heaviest from the coronavirus pandemic. Which States Are Shut Down The Most? Jill explained that Wallethub’s study looked at six different metrics showing the decrease in visits to various types of places due to the coronavirus. Categories that were measured included retail stores, recreation areas, grocery stores, and workplaces. States were graded on a scale of 0 to 100. Steve informed listeners that the state experiencing the most severe coronavirus shutdown overall is Hawaii which has a score of 92. Jill attributes Hawaii’s high score primarily to the fact that the state is so heavily reliant on travel and tourism, two industries that have virtually ground to a standstill. She noted that one interesting finding of the study was that even trips to grocery stores have declined by approximately 60% in Hawaii. Number two on the list of hardest-hit states is—not surprisingly—New York. According to Jill, “In New York, people are still going to places like grocery stores, but everything else is pretty much a no-go. New York has seen the largest decline in the retail and recreation industries, along with usage of public transportation.” She remarked that the huge drop-off in people using public transportation is really hard to fathom for a city like New York, where so many people traditionally use the subway system. Jill believes that New York City is one area where some of the changes brought about by the coronavirus are likely to have lingering, permanent effects on how people work and live. For example, she expects that many people who have transitioned from working in an office to working at home will continue being telecommuters even when the “shelter in place” restrictions are lifted. How Is Florida Doing? When Steve specifically asked where Florida ranked, Jill replied that it came in as the 6th hardest-hit state. Like Hawaii, a lot of Florida’s economy is driven by the travel and tourism industries. She added that another reason for Florida’s high ranking is the large elderly population there. She said, “I think the elderly are trying to keep themselves safe, not really venturing out as much,” and she added, “Florida is an interesting case. We see reports on the news of very crowded beaches while at the same time a lot of elderly communities are really locking down.” Steve expressed some skepticism about how widespread the use of the beaches is, reporting that in the South Florida area where he resides, all of the parks and beaches are still closed. States Suffering The Least From The Coronavirus So, which states are on the other end of the scale, the ones that are the least shut down? As of the first of May, the state that’s the least shut down is Nebraska, followed by Kansas, Arkansas, Kentucky, Iowa, Alabama, and Ohio. Jill summed the situation up by saying, “There are a lot of Midwestern and Southern states that are showing the lowest level of shutdown or economic slowdown. And some of those states are already starting to reopen, at least partially.” Red States Versus Blue States Steve ran down some of the analysis done by industry rather than just by state. He told listeners, “The states seeing the biggest hits to the retail industry and the recreation industry are—in order,

With Jill Gonzalez, Personal Finance guru and Spokesperson for WalletHub.com Steve talked with Jill Gonzalez, personal finance guru and spokesperson for Wallethub.com, to learn how much greater the impact of the coronavirus is in some states than in others along with the specific ways in which the various states are affected. Jill is an expert in personal finance and investing and Wallethub did extensive research to find out which states are the most shut down and suffering the heaviest from the coronavirus pandemic. Which States Are Shut Down The Most? Jill explained that Wallethub’s study looked at six different metrics showing the decrease in visits to various types of places due to the coronavirus. Categories that were measured included retail stores, recreation areas, grocery stores, and workplaces. States were graded on a scale of 0 to 100. Steve informed listeners that the state experiencing the most severe coronavirus shutdown overall is Hawaii which has a score of 92. Jill attributes Hawaii’s high score primarily to the fact that the state is so heavily reliant on travel and tourism, two industries that have virtually ground to a standstill. She noted that one interesting finding of the study was that even trips to grocery stores have declined by approximately 60% in Hawaii. Number two on the list of hardest-hit states is—not surprisingly—New York. According to Jill, “In New York, people are still going to places like grocery stores, but everything else is pretty much a no-go. New York has seen the largest decline in the retail and recreation industries, along with usage of public transportation.” She remarked that the huge drop-off in people using public transportation is really hard to fathom for a city like New York, where so many people traditionally use the subway system. Jill believes that New York City is one area where some of the changes brought about by the coronavirus are likely to have lingering, permanent effects on how people work and live. For example, she expects that many people who have transitioned from working in an office to working at home will continue being telecommuters even when the “shelter in place” restrictions are lifted. How Is Florida Doing? When Steve specifically asked where Florida ranked, Jill replied that it came in as the 6th hardest-hit state. Like Hawaii, a lot of Florida’s economy is driven by the travel and tourism industries. She added that another reason for Florida’s high ranking is the large elderly population there. She said, “I think the elderly are trying to keep themselves safe, not really venturing out as much,” and she added, “Florida is an interesting case. We see reports on the news of very crowded beaches while at the same time a lot of elderly communities are really locking down.” Steve expressed some skepticism about how widespread the use of the beaches is, reporting that in the South Florida area where he resides, all of the parks and beaches are still closed. States Suffering The Least From The Coronavirus So, which states are on the other end of the scale, the ones that are the least shut down? As of the first of May, the state that’s the least shut down is Nebraska, followed by Kansas, Arkansas, Kentucky, Iowa, Alabama, and Ohio. Jill summed the situation up by saying, “There are a lot of Midwestern and Southern states that are showing the lowest level of shutdown or economic slowdown. And some of those states are already starting to reopen, at least partially.” Red States Versus Blue States Steve ran down some of the analysis done by industry rather than just by state. He told listeners, “The states seeing the biggest hits to the retail industry and the recreation industry are—in order,

With Terry Story, a 31-year veteran with Keller Williams located in Boca Raton, FL During this week’s Real Estate Roundup, Steve spoke with Terry Story, a 31-year veteran at Keller Williams in Boca Raton, about what the process of buying and closing on a home sale looks like in the coronavirus environment. How Home Buying All right, so we start with a listed property. Terry explains, “I would have already made videos of the home and taken my buyers on a virtual tour. Then, if they’re seriously interested, I arrange for them to do an actual real-world tour of the property, complete with mask, gloves, and even protective booties for their feet.” Neither the buyer’s agent nor the seller or their agent can be inside the property when the buyer is doing an in-person tour. Social distancing, right? This is far different from the way it’s traditionally done, and it requires some trust. Terry noted that “We’re letting strangers into someone’s home, unsupervised, and the buyer and seller are being exposed to each other—possibly being exposed to the virus.” Terry pointed out that the positive thing about all of this is that the seller can pretty well safely assume that the buyer is a very serious, motivated buyer. Otherwise, they wouldn’t be willing to go through all these obstacles—the mask, the gloves, etc. Terry continued explaining the procedure. “Let’s assume the seller’s agent knows the buyer by now and that the buyer has been qualified—really qualified, not just a pre-qualify. We’re talking about having proof of funds. That means that if the buyer is paying cash, then they’ve got the money in their bank account right now. If they’re financing buying the home, then they’ve been approved for the financing. It’s solid. They have a mortgage loan that’s been approved. The seller’s agent is going to, like, hold the buyer’s driver’s license while the buyer goes into the home, by themselves, for their do-it-yourself tour of the home.” Steve added that getting that mortgage loan approval is noticeably more difficult than it was before the coronavirus hit. For example, because people’s employment situations are more uncertain, the bank is going to check on their income and employment situation not just when they apply for the loan but all the way up to right before closing, right before everybody signs everything and the bank hands over that big check. Mortgage lenders are really just doing their due diligence. It’s just that things have changed, and the reality is that the buyer might have had a job when he first applied for financing, but he might have been laid off before we got to the closing. The lender is going to look at more than just the buyer’s assets or salary; they’re going to dig deeper and find out, for instance, if the buyer is considered to be an essential worker. Terry summed things up by saying that the bottom line is this: it’s an agent’s job to act as a transaction broker. She said, “It’s my job as a listing agent to make sure that I’m bringing people to meet with the seller who is qualified and highly motivated to buy, especially right now.” Getting To The Closing Steve asked Terry to continue describing the step-by-step process of closing the sale. Once a qualified and motivated buyer is brought together with an eager seller, the next step is to come to an agreement on price. At that point, the process pretty much continues like it always has. As Terry explained, “It’s time for an inspection period. But one change is that inspection periods aren’t taking as long as they used to. They’re now typically a week or less, instead of ten days because inspectors just aren’t as busy these days.” The lending process, from the agent’s point of view, is still basically the same, “Except,” Terry said, “that we’re checking on it every few days,

With Terry Story, a 31-year veteran with Keller Williams located in Boca Raton, FL During this week’s Real Estate Roundup, Steve spoke with Terry Story, a 31-year veteran at Keller Williams in Boca Raton, about what the process of buying and closing on a home sale looks like in the coronavirus environment. How Home Buying All right, so we start with a listed property. Terry explains, “I would have already made videos of the home and taken my buyers on a virtual tour. Then, if they’re seriously interested, I arrange for them to do an actual real-world tour of the property, complete with mask, gloves, and even protective booties for their feet.” Neither the buyer’s agent nor the seller or their agent can be inside the property when the buyer is doing an in-person tour. Social distancing, right? This is far different from the way it’s traditionally done, and it requires some trust. Terry noted that “We’re letting strangers into someone’s home, unsupervised, and the buyer and seller are being exposed to each other—possibly being exposed to the virus.” Terry pointed out that the positive thing about all of this is that the seller can pretty well safely assume that the buyer is a very serious, motivated buyer. Otherwise, they wouldn’t be willing to go through all these obstacles—the mask, the gloves, etc. Terry continued explaining the procedure. “Let’s assume the seller’s agent knows the buyer by now and that the buyer has been qualified—really qualified, not just a pre-qualify. We’re talking about having proof of funds. That means that if the buyer is paying cash, then they’ve got the money in their bank account right now. If they’re financing buying the home, then they’ve been approved for the financing. It’s solid. They have a mortgage loan that’s been approved. The seller’s agent is going to, like, hold the buyer’s driver’s license while the buyer goes into the home, by themselves, for their do-it-yourself tour of the home.” Steve added that getting that mortgage loan approval is noticeably more difficult than it was before the coronavirus hit. For example, because people’s employment situations are more uncertain, the bank is going to check on their income and employment situation not just when they apply for the loan but all the way up to right before closing, right before everybody signs everything and the bank hands over that big check. Mortgage lenders are really just doing their due diligence. It’s just that things have changed, and the reality is that the buyer might have had a job when he first applied for financing, but he might have been laid off before we got to the closing. The lender is going to look at more than just the buyer’s assets or salary; they’re going to dig deeper and find out, for instance, if the buyer is considered to be an essential worker. Terry summed things up by saying that the bottom line is this: it’s an agent’s job to act as a transaction broker. She said, “It’s my job as a listing agent to make sure that I’m bringing people to meet with the seller who is qualified and highly motivated to buy, especially right now.” Getting To The Closing Steve asked Terry to continue describing the step-by-step process of closing the sale. Once a qualified and motivated buyer is brought together with an eager seller, the next step is to come to an agreement on price. At that point, the process pretty much continues like it always has. As Terry explained, “It’s time for an inspection period. But one change is that inspection periods aren’t taking as long as they used to. They’re now typically a week or less, instead of ten days because inspectors just aren’t as busy these days.” The lending process, from the agent’s point of view, is still basically the same, “Except,” Terry said, “that we’re checking on it every few days,

Hi, Everyone, welcome to our 975th show…and guess what? I have an announcement for you. After 19 years of weekly shows, I have decided to hang up my spurs and ride off into the sunset of retirement. It has been an amazing part of my life as I have met so many interesting people, some of whom became clients and others who have written in or attended my talks throughout the years and those who have remained loyal listeners. I especially would like to thank all of you in the Sunday Morning Breakfast Club, as I call it—those who rise early and put my show on as the first or second part of their morning routine. It is an honor that you thought enough of the work we did to include me in the Sundays of your life. Today’s program will be the first of the final three, with our last airing on May 24th. In the meantime, I will be keeping you up to date on the investment world during this crazy time as well as re-playing some of our favorite shows from over the years. I will be keeping the website active with all the past episodes, so if you want to hear something again or get in touch, you can contact me at www.Stevepomeranz.com. Before I get to today’s commentary, I want to tell you a quick story of how we got started, and the one person who was most helpful at the very beginning. His name was Daryl Logullo. For those of you who have been with me from the beginning, you may remember that Daryl and I co-hosted the show in the first few years. Daryl was helping me market my fledgling investment practice, and he was the one with radio experience. As a matter of fact, when he approached me with the idea of doing a radio show, I told him the only network I would do it on was NPR. Incredibly, he suggested we contact the local station, WXEL, and ask them. Honestly, it was not something I thought was possible, and sure enough, they said no at first.  So, we told them we were going to be a different kind of show and could we make a demo to show them what we had in mind. You see the fact that I was a fee-only advisor, who did not sell products and wanted to educate and protect our listeners, was a pretty rare thing 19 years ago. Well, the rest is history. The station took a chance on me. So, thank you, Daryll Logullo, who sadly passed away a few years ago. I am forever indebted to him for guiding me onto this wonderful path. Okay, let’s talk about what’s going on out there right now. Where’s Warren? So here’s a question: Where’s Warren Buffett been? If you remember the 2008 crisis, he was all over the airwaves telling us to buy America and even doing a lot of buying himself.  His billion-dollar deals with Goldman Sachs and GE for 12% interest plus options to buy more stock at very reasonable prices became the stuff of Wall Street legend. Hey, $5 billion could get you a lot back then. Heck, he even bought Burlington Northern Santa Fe Railway for $26 billion! Now that was a bet on America! Today, however, he’s silent. So, I did some digging and this is what I found. First, it seems we can only see the selling part of his activity.  He sold his investment in a slew of airlines, from United to American to Southwest Air, stating that the industry had changed dramatically, and while he hoped the industry would come back, he can’t tell whether it will or won’t. So, he sold all the shares he owned. Other than that, we know that he sold a small amount of Bank of New York-Mellon shares too.  Some who follow Buffett have made some guesses though, so let’s see what they have to say.  A few of them have looked into his 4th quarter buying of 2019 and extrapolated from there. #1) It seems pretty clear that Buffett likes bank stocks. He likes JPMorgan (JPM)and US Bancorp (USB) for example, and both stocks got slaughtered during the selloff, so maybe he picked up some more of those two. It’s also a good bet that he purchased shares of Berkshire Hathaway (BRK.A).

Hi, Everyone, welcome to our 975th show…and guess what? I have an announcement for you. After 19 years of weekly shows, I have decided to hang up my spurs and ride off into the sunset of retirement. It has been an amazing part of my life as I have met so many interesting people, some of whom became clients and others who have written in or attended my talks throughout the years and those who have remained loyal listeners. I especially would like to thank all of you in the Sunday Morning Breakfast Club, as I call it—those who rise early and put my show on as the first or second part of their morning routine. It is an honor that you thought enough of the work we did to include me in the Sundays of your life. Today’s program will be the first of the final three, with our last airing on May 24th. In the meantime, I will be keeping you up to date on the investment world during this crazy time as well as re-playing some of our favorite shows from over the years. I will be keeping the website active with all the past episodes, so if you want to hear something again or get in touch, you can contact me at www.Stevepomeranz.com. Before I get to today’s commentary, I want to tell you a quick story of how we got started, and the one person who was most helpful at the very beginning. His name was Daryl Logullo. For those of you who have been with me from the beginning, you may remember that Daryl and I co-hosted the show in the first few years. Daryl was helping me market my fledgling investment practice, and he was the one with radio experience. As a matter of fact, when he approached me with the idea of doing a radio show, I told him the only network I would do it on was NPR. Incredibly, he suggested we contact the local station, WXEL, and ask them. Honestly, it was not something I thought was possible, and sure enough, they said no at first.  So, we told them we were going to be a different kind of show and could we make a demo to show them what we had in mind. You see the fact that I was a fee-only advisor, who did not sell products and wanted to educate and protect our listeners, was a pretty rare thing 19 years ago. Well, the rest is history. The station took a chance on me. So, thank you, Daryll Logullo, who sadly passed away a few years ago. I am forever indebted to him for guiding me onto this wonderful path. Okay, let’s talk about what’s going on out there right now. Where’s Warren? So here’s a question: Where’s Warren Buffett been? If you remember the 2008 crisis, he was all over the airwaves telling us to buy America and even doing a lot of buying himself.  His billion-dollar deals with Goldman Sachs and GE for 12% interest plus options to buy more stock at very reasonable prices became the stuff of Wall Street legend. Hey, $5 billion could get you a lot back then. Heck, he even bought Burlington Northern Santa Fe Railway for $26 billion! Now that was a bet on America! Today, however, he’s silent. So, I did some digging and this is what I found. First, it seems we can only see the selling part of his activity.  He sold his investment in a slew of airlines, from United to American to Southwest Air, stating that the industry had changed dramatically, and while he hoped the industry would come back, he can’t tell whether it will or won’t. So, he sold all the shares he owned. Other than that, we know that he sold a small amount of Bank of New York-Mellon shares too.  Some who follow Buffett have made some guesses though, so let’s see what they have to say.  A few of them have looked into his 4th quarter buying of 2019 and extrapolated from there. #1) It seems pretty clear that Buffett likes bank stocks. He likes JPMorgan (JPM)and US Bancorp (USB) for example, and both stocks got slaughtered during the selloff, so maybe he picked up some more of those two. It’s also a good bet that he purchased shares of Berkshire Hathaway (BRK.A).

With the passing of Wayne Huizenga, Steve replays and reflects on his memorable 2005 interview with the great American entrepreneur.

With the passing of Wayne Huizenga, Steve replays and reflects on his memorable 2005 interview with the great American entrepreneur.

With Dr. Bud Labitan, Physician, Investor, Author of Illustrated Valuations To get some insights for investors, Steve talked with Dr. Bud Labitan, who is both a physician and a value-investing devotee. Bud is the author of several books on value investing, including A Fistful of Valuations, that explain his investing strategies crafted on the principles put forward by Ben Graham, Warren Buffett, and Charlie Munger. Note: Steve made it clear to listeners that none of the stocks he and Bud discussed should be taken as recommendations. Listeners should do their own research in consultation with their financial advisor. The Current Market Situation To start things off, Steve asked Bud for his opinion on the current market situation, specifically, whether he believes stock prices accurately reflect the current economic situation or if stocks may be a bargain at the moment. In reply, Bud said that he sees stock prices as still slightly overvalued. His thinking on the future of the overall market is that it all depends on the rate of return to normalcy, which he sees as dependent on how quickly a coronavirus vaccine or effective treatments are developed. While he sees the overall market as overvalued, he noted that there are still individual stocks that may be a bargain. “I saw Boeing at $100 or below a hundred as a bargain at that point because, prior to the coronavirus, Boeing had been selling above $400.” Intelligent Speculation Steve next asked Bud to talk about the factors that go into his Intelligent Speculation Model. He noted to listeners, ”Remember, investing is investing in businesses, not just in numbers that move up and down in the market.” Bud explained that he developed the model based on the 1946 lectures Ben Graham gave to his students, combined with the four filters that Warren Buffett and Charlie Munger use: Products, Enduring Customers, Managers, and Margin-of-Safety, along with the fifth filter of Catalyst. He noted that Graham said, “There is a real difference between intelligent and unintelligent speculation and the methods of security analysis may often be of value in distinguishing between the two kinds of speculation.” The first factor in Bud’s Intelligent Speculation Model is understanding the basic economics of supply and demand for a company’s products. Another factor to consider is the individual investor’s time frame for investment—short-term, medium-term, or long-term. A third factor is a company’s advantages and disadvantages, which should be considered both in the long-term, as well as specifically within an investor’s investment time frame. As an example, he mentioned the fact that demand for Netflix is up right now because everyone’s home, but that investors have to consider if that demand level will drop significantly when everyone returns to work. Steve made the point that many investors make the mistake of extrapolating to infinity based on recent stock market action. When stock prices fall dramatically, as they have recently, investors think like they’re going to keep falling all the way to zero. Conversely, when the market is strong, investors act as if prices will just continue rising infinitely higher. A Wife, A Girlfriend, Or A One-Night Stand Steve next asked Bud to talk about his Stock Tracking Template, which uses a stock screener to identify potential investments. Bud screens potential stocks for investments into one of three categories that he refers to as a wife, a girlfriend, or a one-night stand. He explained, “A wife is someone you want to be with forever. Thus, you’re looking for a company that has characteristics of endurance and profitability and good superior qualities.

With Dr. Bud Labitan, Physician, Investor, Author of Illustrated Valuations To get some insights for investors, Steve talked with Dr. Bud Labitan, who is both a physician and a value-investing devotee. Bud is the author of several books on value investing, including A Fistful of Valuations, that explain his investing strategies crafted on the principles put forward by Ben Graham, Warren Buffett, and Charlie Munger. Note: Steve made it clear to listeners that none of the stocks he and Bud discussed should be taken as recommendations. Listeners should do their own research in consultation with their financial advisor. The Current Market Situation To start things off, Steve asked Bud for his opinion on the current market situation, specifically, whether he believes stock prices accurately reflect the current economic situation or if stocks may be a bargain at the moment. In reply, Bud said that he sees stock prices as still slightly overvalued. His thinking on the future of the overall market is that it all depends on the rate of return to normalcy, which he sees as dependent on how quickly a coronavirus vaccine or effective treatments are developed. While he sees the overall market as overvalued, he noted that there are still individual stocks that may be a bargain. “I saw Boeing at $100 or below a hundred as a bargain at that point because, prior to the coronavirus, Boeing had been selling above $400.” Intelligent Speculation Steve next asked Bud to talk about the factors that go into his Intelligent Speculation Model. He noted to listeners, ”Remember, investing is investing in businesses, not just in numbers that move up and down in the market.” Bud explained that he developed the model based on the 1946 lectures Ben Graham gave to his students, combined with the four filters that Warren Buffett and Charlie Munger use: Products, Enduring Customers, Managers, and Margin-of-Safety, along with the fifth filter of Catalyst. He noted that Graham said, “There is a real difference between intelligent and unintelligent speculation and the methods of security analysis may often be of value in distinguishing between the two kinds of speculation.” The first factor in Bud’s Intelligent Speculation Model is understanding the basic economics of supply and demand for a company’s products. Another factor to consider is the individual investor’s time frame for investment—short-term, medium-term, or long-term. A third factor is a company’s advantages and disadvantages, which should be considered both in the long-term, as well as specifically within an investor’s investment time frame. As an example, he mentioned the fact that demand for Netflix is up right now because everyone’s home, but that investors have to consider if that demand level will drop significantly when everyone returns to work. Steve made the point that many investors make the mistake of extrapolating to infinity based on recent stock market action. When stock prices fall dramatically, as they have recently, investors think like they’re going to keep falling all the way to zero. Conversely, when the market is strong, investors act as if prices will just continue rising infinitely higher. A Wife, A Girlfriend, Or A One-Night Stand Steve next asked Bud to talk about his Stock Tracking Template, which uses a stock screener to identify potential investments. Bud screens potential stocks for investments into one of three categories that he refers to as a wife, a girlfriend, or a one-night stand. He explained, “A wife is someone you want to be with forever. Thus, you’re looking for a company that has characteristics of endurance and profitability and good superior qualities.

With Terry Story, a 31-year veteran with Keller Williams located in Boca Raton, FL During this week’s Real Estate Roundup, Steve spoke further with Terry Story, a 31-year veteran at Keller Williams, about the state of the real estate industry amidst the coronavirus pandemic. Pending Homes Sales The coronavirus pandemic is definitely affecting pending home sales, at least it is in the Palm Beach County area where Terry operates. Since March 19th, properties under contract have fluctuated significantly. She noted, “When I first began monitoring properties under contract, we had 311. The next week, it was 297. The third week, the number dropped all the way down to 209. Then, in the fourth week, the numbers went back up to 217. And then up again the next week to 232. I’m starting to see a pattern. We have a tendency to freak out when numbers drop, but this seems to be our new norm. Things are starting to pick back up.” Steve observed that the pattern of pending sales looks like it may be parallel to recent stock market action. The Overall State Of The Market It’s not unexpected that numbers are generally down. Inventory is lower and sellers are concerned about finding buyers. Some are simply pulling their homes off the market. “What I really think we’re seeing is a pause. Buyers are pausing, sellers are pausing,” Terry said. There are, however, still sellers who want to sell their homes. And in order to sell in the current market, sellers have been willing to lower their prices a bit. “And buyers, especially motivated buyers, are seizing the opportunity to get the home they want at a lower price,” Terry added. The question then is “What will this look like on the backside?” Terry believes that buyer demand will be greater than seller demand for quite a while. “We’re going to stay in a seller’s market until we get to a point where there are more sellers than buyers. And that will happen. We can’t stay in a seller’s market forever.” Steve noted that a keyword Terry used is “motivated”, saying, “I think that’s the key driver here because these people who are motivated to sell, they’re going to be willing to drop their price, and buyers that are motivated are going to be willing to work through the greater difficulties involved in buying.” Steve closed their conversation out by having Terry reiterate the main points of previous discussions about how the coronavirus has actually changed the process of home buying and selling. Agents are using virtual tours, protective gear is required for actual home visits, and mortgage financing requirements have become significantly stricter. If you’d like to learn more about buying or selling a home, check out Keller Williams. Disclosure: The opinions expressed are those of the interviewee and not necessarily of the radio show. Interviewee is not a representative of the radio show. Investing involves risk and investors should carefully consider their own investment objectives and never rely on any single chart, graph or marketing piece to make decisions. Content provided is intended for informational purposes only, is not a recommendation to buy or sell any securities, and should not be considered tax, legal, investment advice. Please contact your tax, legal, financial professional with questions about your specific needs and circumstances. The information contained herein was obtained from sources believed to be reliable, however their accuracy and completeness cannot be guaranteed. All data are driven from publicly available information and has not been independently verified by the radio show.

With Terry Story, a 31-year veteran with Keller Williams located in Boca Raton, FL During this week’s Real Estate Roundup, Steve spoke further with Terry Story, a 31-year veteran at Keller Williams, about the state of the real estate industry amidst the coronavirus pandemic. Pending Homes Sales The coronavirus pandemic is definitely affecting pending home sales, at least it is in the Palm Beach County area where Terry operates. Since March 19th, properties under contract have fluctuated significantly. She noted, “When I first began monitoring properties under contract, we had 311. The next week, it was 297. The third week, the number dropped all the way down to 209. Then, in the fourth week, the numbers went back up to 217. And then up again the next week to 232. I’m starting to see a pattern. We have a tendency to freak out when numbers drop, but this seems to be our new norm. Things are starting to pick back up.” Steve observed that the pattern of pending sales looks like it may be parallel to recent stock market action. The Overall State Of The Market It’s not unexpected that numbers are generally down. Inventory is lower and sellers are concerned about finding buyers. Some are simply pulling their homes off the market. “What I really think we’re seeing is a pause. Buyers are pausing, sellers are pausing,” Terry said. There are, however, still sellers who want to sell their homes. And in order to sell in the current market, sellers have been willing to lower their prices a bit. “And buyers, especially motivated buyers, are seizing the opportunity to get the home they want at a lower price,” Terry added. The question then is “What will this look like on the backside?” Terry believes that buyer demand will be greater than seller demand for quite a while. “We’re going to stay in a seller’s market until we get to a point where there are more sellers than buyers. And that will happen. We can’t stay in a seller’s market forever.” Steve noted that a keyword Terry used is “motivated”, saying, “I think that’s the key driver here because these people who are motivated to sell, they’re going to be willing to drop their price, and buyers that are motivated are going to be willing to work through the greater difficulties involved in buying.” Steve closed their conversation out by having Terry reiterate the main points of previous discussions about how the coronavirus has actually changed the process of home buying and selling. Agents are using virtual tours, protective gear is required for actual home visits, and mortgage financing requirements have become significantly stricter. If you’d like to learn more about buying or selling a home, check out Keller Williams. Disclosure: The opinions expressed are those of the interviewee and not necessarily of the radio show. Interviewee is not a representative of the radio show. Investing involves risk and investors should carefully consider their own investment objectives and never rely on any single chart, graph or marketing piece to make decisions. Content provided is intended for informational purposes only, is not a recommendation to buy or sell any securities, and should not be considered tax, legal, investment advice. Please contact your tax, legal, financial professional with questions about your specific needs and circumstances. The information contained herein was obtained from sources believed to be reliable, however their accuracy and completeness cannot be guaranteed. All data are driven from publicly available information and has not been independently verified by the radio show.