Postcards: Five Things I Think to Start the Week

What is the real unemployment rate? What stocks should we be watching? And what's going on with Berkshire Hathaway stock? ͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­ Forwarded this email? [Subscribe here]() for more You are a free subscriber to Postcards from the Florida Republic. To upgrade to paid and receive the daily Republic Risk Letter, [subscribe here](. --------------------------------------------------------------- [Postcards: Five Things I Think to Start the Week]( What is the real unemployment rate? What stocks should we be watching? And what's going on with Berkshire Hathaway stock? [Garrett {NAME}]( Jun 3   [READ IN APP](   Market Update: We’re in challenging terrain. Selling strength is very high on the Russell 2000 (but buying is higher), and the S&P 500 continues to yo-yo between Yellow and Red territory. Hedge. Be very cautious, as we now see real worries about the economy's health. --------------------------------------------------------------- Dear Fellow Expat: I have difficulty believing that the unemployment rate is under 4%. Especially when I drive by Baltimore Country Club on a Monday afternoon, 1,800 people on a golf course drive around in red shorts. What is their secret? What financial secret has the man in the teal shirt uncovered on Monday at 1:45 pm that allows him to not be in the office? Does he own GameStop (GME)? NVIDIA (NVDA)? Did his uncle found Under Armour? Something to ponder… what else do we think today? No. 1: Berkshire Crash 2024 Berkshire Hathaway (BRK.A) stock trades for $624,000 per share. I recall being a kid, opening the Baltimore Sun, and seeing the stock trading around $10,000. I thought… wow… that’s an expensive stock! They must be good at what they do… Well, today, something went wrong. There was a glitch in the old stock exchange. At least, that’s what the kids are calling it these days. Shares collapsed on the screen to… $185.10 per share. They’d undo all the trades and wash it if anyone bought it for those levels. But it sure is weird to look at this Google Stock screen… No. 2: Debt Free As I noted on Saturday, I sold my house in Florida. I took the proceeds and immediately paid off our car (which had a 6.49% interest rate). For the first time in my life, I have zero debt. Our school loans are gone, our home debt is gone, and both cars are owned outright. By definition, my personal Altman Z Score is infinity… As I’ve noted - I think something is VERY broken with the debt system in America - and you can’t pay me right now to buy another house. Yes, the price may go up… but I look at the interest I spent over four years on that house - at just a 2.6% interest rate. I couldn’t fathom facing 7% rates right now. And to think - they want to extend loans to 40 years. If I can’t pay cash for something moving forward, I won’t. I’m done with the U.S. debt system… and I’m thankful that after 43 years, I can get away from that rigged game. Will rent go up? Yes… but I can also walk out my door tomorrow with my family, leave all the depreciating televisions and furniture behind… and have no commitment to the real estate around me. There’s something VERY freeing about that feeling. No. 3: Stonks? I have a cash injection and must decide where to allocate capital now. I’m in a weird position because I give away my best ideas and don’t buy the stocks we recommend. I don’t want any conflict of interest and must be compliant. Full disclosure: I own a lot of Altria (MO). So, I might recommend Phillip Morris (PM) in the future because it’s a better stock than Altria. I LOVE Energy Transfer (ET) but own it through a different fund diversified across the entire midstream space. I have a portfolio of stocks up 19% this year in Republic Risk - and I own none of them. I don’t talk my book… I give my best ideas to my subscribers. I follow very specific rules when making recommendations. Today, we recommended a French company, which might be the perfect business. They sell lots of disposable consumer products… and we all know that inflation is the friend of those companies… Shares are trading at $38 right now. I see $50 by the end of next year… Check it out right here. [Upgrade to paid]( No. 4: Time to Trade Occidental Again People are trying to make sense of the big slide in oil prices. OPEC said that it’s going to provide support to crude prices… right? Nope… they’re going to phase out their production cuts, and oil is taking a bath. We’ll see about 1.5 million barrels of crude return to the daily markets come June 2025. This is a big political decision - and we could see oil back under $70 quickly if the bleeding doesn’t stop. The MicroSectors U S Big Oil Index 3X Leveraged ETN (NRGU) is off 10% today. This is one of my secret weapons for understanding the energy sector. When this thing hits oversold… it will be time to buy again. This fund represents a big stake in the Solactive U.S. Energy Index - which measures the top 10 U.S. energy companies. Also, pay very close attention to Valero (VLO). Shares are getting battered. If—for any reason—we see this stock back in the $120 to $130 range, it is a screaming long-term buy. You can sell puts, or credit spreads on VLO all day. Just be prepared to buy the stock. And finally, Occidental (OXY) is back near the $60 level. This may break under $60 very soon, and we might even retest the $58 level. If that’s the case, be ready to use the insider buying strategy with credit spreads. We’d look to sell puts around $55.00 and buy the $52.50 put for security. Buffett loves to buy this stock for under $60… Given the huge market miscalculation in the company’s carbon capture business, I expect they'll deploy more money soon. No. 5: Feeling Minnesota What? From the Associated Press: A juror was dismissed Monday after reporting that a woman dropped a bag of $120,000 in cash at her home and offered her more money if she would vote to acquit seven people [charged with stealing]( more than $40 million from a program meant to feed children during the pandemic. The 23-year-old juror is a hero. A note said she’d get another bag of cash if she voted to acquit the defendants. The actual case is crazy enough. Seventy people engaged in a conspiracy to defraud tax payers of $250 million. They were supposed to feed kids… but ended up laundering the money. Once again… this problem started because Congress just started tossing money into the sky. When you create crooked incentives, crooked people will pounce. Stay positive, Garrett {NAME} Disclaimer Nothing in this email should be considered personalized financial advice. While we may answer your general customer questions, we are not licensed under securities laws to guide your investment situation. Do not consider any communication between you and Florida Republic employees as financial advice. Under company rules, editors and writers cannot recommend their positions. The communication in this letter is for information and educational purposes unless otherwise strictly worded as a recommendation. Model portfolios are tracked to showcase a variety of academic, fundamental, and technical tools, and insight is provided to help readers gain knowledge and experience. Readers should not trade if they cannot handle a loss and should not trade more than they can afford to lose. There are large amounts of risk in the equity markets. Consider consulting with a professional before making decisions with your money.   [Like]( [Comment]( [Restack](   © 2024 Garrett {NAME} 548 Market Street PMB 72296, San Francisco, CA 94104 [Unsubscribe]() [Get the app]( writing]()