Motley Fool Money - Buffett's Latest Buys (and Sells)

Episode Date: May 16, 2023

Late Monday Berkshire-Hathaway filed a 13-F with the SEC, so we're taking a closer look at what they've been buying and selling. (00:21) Jim Gillies discusses: - Home Depot's lackluster 1st-quarter results masking an otherwise strong business - Capital One getting a boost from the Oracle of Omaha - The surprising energy stock the Berkshire Hathaway team took a stake in (19:15) Alison Southwick and Robert Brokamp dip into the mailbag to answer your questions about investing, retirement, and more. Companies discussed: HD, BRK.A, BRK.B, COP, USB, BK, TSM, RH, BAC, OXY, AAPL, HPQ, ATVI, VTS Host: Chris Hill Guests: Jim Gillies, Alison Southwick, Robert Brokamp Producer: Ricky Mulvey Engineers: Dan Boyd, Rick Engdahl Learn more about your ad choices. Visit megaphone.fm/adchoices

This episode is brought to you by KolaGard. Do you know what's really scary? Not screening for colon cancer when you turn 45. The KoloGard test is non-invasive, requires no special prep or time off work, and ships right to your door. In just three simple steps, KolaGar takes the scare out of colon cancer screening. If you're 45 or older and at average risk, ask your health care provider about the KoloGard test. KoloGuard is available by prescription only. Learn more or request a prescription today at kolaGar.com slash screen. What stocks have the folks at Berkshire Hathaway been buying and selling? Glad you asked. Motley Fool Money starts now.

I'm Chris Hill joining me today. It's our man in Canada, Motley Fool Senior Analyst, Jim Gillies. Good to see you, my friend. Good to be seen, Chris. We're going to start with Home Depot, and simply put, first quarter results were not great. Home Depot's revenue was lower than expected. Their same store sales were down 4.5% and the company says it expect sales to fall somewhere between two and five percent for the year, and that is lower

than previous guidance. Shares of Home Depot are only down 1 percent, which as a shareholder, I have to say, that has me both pleasantly surprised and a little bit confused. Why isn't this worse? I'm not complaining. I'm just confused. Why isn't my stock down more? Come on. I think because it was largely expected. I I don't think it's news that after a year of inflationary pressure, which followed two years of being locked in your home, when the only thing you could do is basically buy stuff for your home. I'm not surprised that the number of grills and outdoor furniture sets that they're selling has gone down. I'm not surprised that home improvement projects are perhaps

smaller than on average than they were a year or two ago. People are choosing to spend their money to go out after being locked in their homes for almost two years, or essentially two years. I think it was largely expected, Chris. I also think that the headline I saw that made me kind of look at it and go, really? I mean, who cares? It's kind of like one of those things where it's a headline that doesn't, contextually doesn't make a lot of sense, is that the headline was the last miss of this magnitude was

in November of 2002. It's kind of like when your favorite sports teams, you know, you might see your favorite sports team and said, oh, you know, they against this other team, they've had a record of over the past 100 years. Well, okay, the guys playing today weren't playing 84 years ago, so it's kind of irrelevant, right? This might be a reference to the fate of the Boston Bruins and the Toronto Maple Leafs in the Stanley Cup playoffs. But anyway, we'll leave that one alone. Look, the last miss of this magnitude was November of 2002. Okay, well, I'm going to invert. I'm going to pull my inner Charlie Munger out. I'm going to invert. What has transpired for Home Depot since the last miss of this magnitude? Well, for starters, it's been a

10-bagger since, okay? That's about 12 percent annualized returns before dividends, if you like your returns, dividend adjusted, assuming reinvestment. It's a It's about 14.5%. That has crushed the S&P market returns of 7.7% over the same period. Or again, if you like, dividend and reinvestment adjusted, about 9.8% for the S&P. So, this has been a market crushing performance. And I will point out, Home Depot had to suffer under the CEO ship of Bob Nardelli until he was thankfully ousted in 2007. So look, this also, What has happened since the last myth of this magnitude has been, Home Depot has converted itself essentially from a growth story to a cash cow story. And brother, they had been milking that

cash cow. Okay. So the CAPX, CapEx peaked for Home Depot in fiscal 2004, but it kind of stayed about the three and a half to four billion level until fiscal 07. Then, concurrent with Nardelli getting ousted and going through the global financial crisis, fell to below a billion dollars by Fiscal 09. It's only been slowly ramping up. They really slowed new store spending. The business was run for cash. And they did the radical, strange thing of deciding to return all of that cash to shareholders. Strange. And so over the last 15 years, roughly coinciding with the company finding its footing post-Global Finlaying. financial crisis. We're not completely going back to the largest miss of this magnitude,

but 15 years is pretty decent. The dividend has gone from 90 cents a year to $8.36 a year. That's about 16 percent annualized. Chris, you say you're a shareholder. I hope you're a long-term shareholder. The company has produced about $125 billion in free cash flow cumulatively over the last 15 years. The dividend is taken, that dividend, which has gone straight up, it's taken about 53 billion. Buybacks have taken about 87 billion. This has reduced, since the last miss of this magnitude, this has reduced the share count by 57 percent from 2.35 billion shares to just over a billion shares today. Now, if you add those two numbers together, it's slightly more the free cash while they've produced. The rest has come from, you know, they've increased

their debt, you know, stock option exercise. But if you are a trader, if you're someone who tries to go quarter to quarter to quarter with Home Depot. I don't know why you would. I was just going to say, aren't you finding better targets if you're a trader like that? I hope so. This is the epitome of long-term buy and hold ad opportunistically and forget about its stock. This two shall pass. Before you asked me to be on the show today, I was actually thinking of buying some Home Depot this morning. So, you know, I guess you ruined it for me in terms of foolish trading rules, but I'm fine to take that hit because I imagine if I, much like my shares in Costco, which I've owned for years and added to for years, I imagine, you

know, buying some Home Depot and leaving it alone, I think would do just fine from here. So, you know, okay, fine, it's the worst miss of this magnitude in 20 years. And to that, I say, big deal, don't care. Just a reminder, because we don't talk about this often, but for any new listeners, yes, we actually do have internal trading restrictions. here at the Motley Fool. And one of them is, if you're going to talk about a stock on a podcast like this, that basically shuts the window on when the next opportunity for you to buy it is. So, sorry to screw that up for you, but we're going to sacrifice I'm willing to make, Chris.

I hope you're willing to continue to make it because we're going to talk about a bunch more stocks in the form of one company, which is Berkshire Hathaway, because Berkshire Hathaway filed documents with the SEC late on Monday, 13F revealing a variety of investments. The one that's getting the most attention is Capital One. Berkshire Hathaway has taken a new stake in Capital One, close to a billion dollars in terms of the stake. And at the start of the trading day, shares of Capital One were up somewhere in the neighborhood of 7%. This was the headline. A lot of people, particularly in the wake of the Berkshire Hathaway meeting, which I know you attended, And one of the narratives coming out of that was, boy, Buffett doesn't really seem to like the banks anymore.

So the headline of Capital One had some people saying, well, maybe he likes the banks now. No, I mean, you look a little further. Part of this filing, we learned that Berkshire Hathaway has sold their remaining shares of U.S. Bank Corp, Bank of New York Mellon, as well as Taiwan Semiconductor restoration hardware. I'm wondering what stood out to you because I know it's not capital. No, I mean, I've gone through, I've got a whole list of the notes of what's changed this quarter, but we'll start with Capital One in the banks if you want. First off, with Capital One, as you say, they've added about a billion dollar position. It's 9.9 million shares. Everyone needs to calm down about this, which I guess is probably why that 7% bump didn't last. I think

it's only up 1 or 2% as we speak. This is 0.3% of Berkshire's portfolio. So Capital One could go bankrupt tomorrow, and I'm not sure Berkshire would notice. So really just, you know, it's okay. And here's the thing. As you said, you know, the banks completely gassed Bank of New York Mellon, which was previously a $1.1 billion position at the end of 2022, completely gassed U.S. Bank Corp, which is only about $290 million. Those are kind of relevant. They're still into Bank of America. In fact, they added a little bit to Bank of America in the quarter. The first thing that stood out to me, though, is what it was conspicuous by what didn't happen in the quarter, because, of course, this filing, this 13F filing is essentially the portfolio

as a specific date, March 31st. And of course, they file these four times a year. So, you know, the previous one was December 31st, New Year's Eve, and then this was March 31st. So we got the quarter. Something happened in the March quarter of this year, about in the banking, industry. Silicon Valley Bank, ring any bells? It rings a couple of bells, yeah. Yeah. And there was a lot of, you know, and of course, you know, so they went, they went belly up and then there's been this slow moving banking crisis since. But there was a lot of speculation out there that, oh, Buffett's going to be, he's going to be greedy when others are fearful, if you heard that before, he's going to be buying regional banks. Well,

if he was, they neglected to put it in the 13F now. I mean, they were, they re, So, he obviously wasn't. In theory, there could be some positions that he's asked for to, he's not done building a position, so in theory, he could ask for a waiver. But they usually disclose that kind of, that there's a waiver. It's not telling you what we're buying. Didn't see that this time. It didn't look too hard, to be perfectly frank. I think that the takeaway is, you know, he's just not buying the regional banks yet. Or maybe ever. So that's fine. But things that leapt out to me, if we can move away from banking. Some moves in the oil sector got some attention.

He sold down about just try of a fifth of the Chevron steak he'd accumulated, probably sold about $5.1 billion worth of Chevron, depending on where he sold it in the quarter. And he added, again, to Occidental Petroleum, added about $1.25 billion. If you use the weighted average price, I suspect it was probably lower because, well, you can track his prices online with his Form 4 filings. He's generally not adding over 60 bucks. He likes the high 50s right now. In fact, he's actually been adding this week, or last week, rather. He's added 2.2 million shares in 2023, May 2023. Average price just over $58. Don't forget, Berkshire also owns about 9.3 billion of 8% preferred stock from Occidental. Was 10 billion, but

Occidental started to redeem those preferreds. And why that matters, so they have to redeem it at 10% premium. So they're getting rid of the 8% dividend. They have to pay Buffett, but they have to pay them 10% more to get out. They've got until 2029 to get out of those. Why that matters is as part of that financing deal where he gave them $10 billion for that preferred. He also got 84, now it's 84 million warrants for Occidental. Eighty-four million shares. He He could buy at an average price of $59.62, I think. Those warrants expire a year after the full redemption of his preferred. So Berkshire is hard into Occidental.

So people might look at the Chevron sale, like, oh, he's selling. He doesn't believe in oil or oil prices going up net higher over time. I'm like, eh, he's just changing horses. Something else that I think is probably going to raise a few eyebrows, and I am here for that is he added just over 20 million shares to Berkshire's largest position. That would be Apple. Now, it's about $3 billion, he added, ballpark. We chatted about this earlier. This is another thing I'm sort of scratching my head on. In the same way that you talked about Home Depot earlier and said, you know, this was largely

expected, how could anyone be surprised coming out of the Berkshire Hathaway meeting all of the flowers that Warren Buffett threw at Tim Cook and Apple. How can anyone be surprised that Berkshire Hathaway is adding to their steak in Apple? That's exactly where I was going to go. I don't know how you could be surprised, but the prevailing wisdom, the market wisdom, and you can't see the air quotes fools, but I hope you heard them, is that Apple is too expensive. It's trading today at about 29 times trailing earnings. Growth has stalled over the last year. Revenue is down. 0.2%. earnings per share is down about 4%. Now, I'm going to point you to the most recent quarter, Chris, where revenue was up 11% and earnings per share, helped by buybacks, were up by 25% versus the

same quarter last year. So you might actually, the flat numbers might be hiding, maybe a nascent reacceleration of some growth. But look, Apple with the, their, and Buffett, again, at the meeting, yeah, he called Apple a better business than anything Berkshire owns. He flat-out set up. it. Okay. That's kind of interesting. He praised, as you say, Tim Cook. He has praised many times that Tim Cook's management style and the buybacks that are ongoing at Apple. And look, Apple remains the predominant cash generation story of our lifetimes. Their margins and their returns on capital are still fantastic. They're still net cash positive. They're still net cash position on the balance sheet. They, of course, are free cash flow positive. Maybe a little respect

for the long-term record is warranted rather than just, you know, talking about how, oh, no, Apple's too expensive now. And I mean, I've seen people, you know, on Twitter, so who knows how accurate that is, talking about shorting Apple here. I'm like, good luck with that. That's a bold strategy. You have fun. So, yeah, so that's the Apple.

But again, that's probably going to get a few people, you know, oh, what's going on? Eliminated a couple of small positions, restoration hardware, which is about 630 million at the end of 2022. completely gassed. I'm sure there are going to be people saying, you know, is that recession or inflation concerns? Probably warranted. Eliminated completely their position in Taiwan's semiconductor. Another, about 650 million at the end of 2022. This was completely not a surprise. Buffett flat out said that they eliminated it at the meeting. And the reason why would seem to be geographical risk, which you can probably read as he's unhappy with the relationship

of China, Taiwan, and what it might mean for the future of Taiwan Semiconductor. Yeah, this is another move that if you were paying attention to the Q&A during the meeting, you really shouldn't be surprised by the sale of Taiwan Semiconductor. No, no, it was part everywhere. I got three more for you. They added about 16 percent more to their HP, Hewlett Packard, the older Hewlett-Packard, the old Hulah, HP position. Just shy of half a billion dollars.

It's about 360 billion. I think that's just a growth of the reasonable price investment. Certainly, there's a few folks out there in the financial media and world and Twitter sphere, whatever we call these things, who really like that position. That's okay. I'm going to point out it's still barely a 1%. position in the overall portfolio. They did reduce their stake in Activision Blizzard by about 6, 7%. And why I'm hitting this one is because, first off, a year ago, they flat out

said, this was a merger ARB play. They expect the deal to go through with Microsoft acquiring Activision, and I believe it's in the mid-90s, where the deal price is. The stock price currently in the mid-70s. They were looking for that deal to go through and for them to get a higher price. Of course, that deal is running some problems over in Europe. So there was speculation beforehand that, well, Buffett may have gassed this position entirely, but we'll find out in the 13F. And I'm like, well, since the restrictions or the blocking of the deal happened after March

31st, no, you won't find out in the 13F because that's a position ending March 31st. And Buffett famously won't tell you any more than he has to. So maybe we'll see in the next one he's continued to sell down the stock. He certainly sounded like he thought the deal should go through, but that sometimes what should happen and what do happen are different things. And then the last thing that I love from the Buffett 13F or the Berkshire 13F, because this is a company as the one of the resident small cap guys at the Motley Fool. This one's right in my wheelhouse, and I was actually looking at this stock about two weeks ago.

And I'm still looking at it. I'm still wondering about it. But it came out in the 13F that Berkshire Hathaway has initiated a position in Vitesse Energy. 51,000 shares. At the present price, this is worth roughly a million dollars. Now, this is kind of weird because it's a 555, 560. million dollar company. Even if Berkshire bought the whole thing here, it's irrelevant in the context of a $328 billion equity portfolio. If they bought the whole thing, it's 0.17% of the portfolio,

but they didn't buy the whole thing. They bought a million dollars worth, which is what, 0.003%. Like, why even bother? Are we sure that this wasn't, you know, Warren bought a billion dollars of this thing because he thought it looks cool and they have to be. a 10% dividend yield at this point. But it's just weird to me to see that, but I'm wondering how many people are going to try to coattail Berkshire Hathaway and go running in the direction of the test energy. Anyway, that was the last thing I thought was fun. We're going to find out. Jim Gillies, always great talking to you. Thanks for being here. Honor and a pleasure, Chris.

You've got questions. They've got answers. Allison Southwick and Robert Brokeamp dip into the mailbag to answer your questions about investing, retirement and dealing with stock from an employer. Our first question comes from Jared. My wife and I took a modest chunk of money and set it aside for individual stocks. She and I are taking it as an educational exercise in researching companies, looking at balance sheets, reading the news, and keeping track of progress. So far, I have bought a few shares each of AMD, Berkshire Hathaway and Dick's sporting goods,

and I mean literally a few shares. So my two questions are, one, do you think that there is a minimum share number to reach, to really make investments worthwhile. And two, I've heard the quote attributed to Peter Lynch that goes, the best time to buy a stock is now and the best time to sell is never. But when you talk about watering the flowers and pulling the weeds, does that mean selling stocks? Or does that mean rather just to stop purchasing a certain stock while continuing to purchase shares of flourishing stocks? Well, Jared, I think buying a few shares in a few companies is a great way to sort of tip your toes into buying individual stocks. We do generally recommend,

that an investor owns at least 25 companies, just so that you're sufficiently diversified. So it might be better to add some more companies to your portfolio rather than add to what you already own. And these days, it's pretty easy to do with commission-free trading, and some brokers offering fractional shares. So you can add more companies with relatively small amounts of money. As you get more comfortable investing in companies, you can increase the percentage of your portfolio you devote to individual stocks. And I would say that, roughly speaking, once it reaches about 5% of your portfolio, then it begins to have a material impact on your overall performance. But stick with the percentage that you're comfortable with as you learn and maybe track your skills at picking stocks.

I know many people who have 90% or more of their portfolios in mutual funds and index funds, but just pick stocks with a smallish portion of their portfolios. As for watering the flowers and pulling the weeds, it's a general, foolish guideline to let your winners run, though I would say that every multiple analyst has a somewhat different take on that. I would say that every time you have cash to invest, focus more on the stock's future potential than its past performance, though that's definitely a signal of what to pay attention to. As for whether you should sell stocks that are significantly underperforming, we had to full of plenty of stories of stocks that were down 70, 80, 90%, but then turned around and became great investments.

Of course, we've owned also many stocks that went down and stayed down. So I would focus on the reason you bought these companies. If they're still valid and the stock isn't doing well, or maybe it's down significantly because the market overreacted, then just keep holding on. Or is it underperforming and maybe gone down significantly because the future potential really has changed? It's not going to be the investment you thought it would be. And I would say if so, then you should sell the stock and invest the money elsewhere.

And I know that can be difficult because it's an acknowledgement that we maybe made a mistake. And we're essentially locking in our losses if you're selling it at a loss. There's actually evidence that investors hold on to their losers too long and sell winners too early, what behavioral finance experts call the disposition effect. But sometimes the right move is to lick our wounds, try to learn from the mistake and move on. Our next question comes from Gary. Allison, that's me. You are wonderful, smart, and funny, but I think this one is for bro.

I'm 61. My wife is 50. deciding about when I should retire, how do I account for the likelihood that she'll continue to work for several more years? I don't think we have enough say for both of us to retire now, but we could probably live on what she makes as a contract employee. I don't plan to retire right now, but I would like to take my foot off the gas pedal at some point in the near future and control my own time a little more. Complicating the matters a bit is that I'm the one who has health insurance benefits. Should I just see a fee-only financial advisor to go through the specific. So it's true, Gary, that Bro really is the scholar here. And I'm just the, I don't know,

Gracie to his George Burns. But I have been doing this show along his side for a very long time. So let's see if I can guess what Bro's response would be. I think he would say, yes, you should meet with a fee-only certified financial planner if you're approaching retirement. Bro is also going to say that he's glad to say that you're looking to semi-retire and not retire early because the science tells us that that's the healthier and wealthier path. You'll have more money because you're still earning a paycheck. And you'll probably stay more active and engaged in life. Here's the thing.

I'm not actually sure what he's going to say about the problem with the health care. So, bro, this is where I need you to step in. Was I right? Yes, I'm going to say care. is right about everything he said about you, because you are wonderful, smart, and funny. There we go. You perfectly anticipated what I was going to say. So, yes, I would say anyone really every five or so years should see a fee-only financial planner,

but particularly as you get closer to retirement. So how do you find a fee-only financial planner? Well, I'm just going to name the networks I always name, and that is the Garrett Planning Network, G-A-R-R-E-T, National Association of Personal Financial Advisors, that's NAFFA, and the X-Y Planning Network. I should say it's not going to be cheap, according to Justin Nichols, the director of operations for the Garrett Network. The average hourly rate across their network is $225, with most falling in range of 175 to 350. And to do a thorough analysis of your retirement prospects will require at least a few hours,

if not several. That may sound like a lot of money, but one thing to understand is actually most financial advisors don't charge by the hour, but they charge by assets under management, the average fee being 1% or so. When you think of paying 1% of your portfolio to have it managed and get the financial planning, it actually could be very expensive, particularly if you actually don't want your assets managed, you just want a one-time analysis of your retirement plan. Now, if you're looking for a tool that can do some of the number crunching for you for free, do an online search for CalcXML's tool called the Comprehensive Retirement Planning module.

And I think it's one of the best free retirement calculators out there. Just make sure that you have the right one because CalcXMEL makes lots of calculators. The one we're looking for here has the number 606 at the end of the website address. It's not necessarily a substitute for a professional planner, but you'll still learn a thing or two. As for the healthcare coverage, that's a tough one. You can visit health care.gov to see what might be available to you, through the Affordable Care Act, but you might also talk to your employer about how many hours you'd have to work and still be eligible for health care coverage. Nowadays, more

employers are embracing what's come to be known as a phased retirement, creating programs by which older employees can work part-time for a few years before retiring. It's good for the employer because many are still struggling to find enough qualified workers, and by keeping you around a while longer, it limits sort of the brain drain. And you could even spend time training your replacement. And it allows you to, you to, as you say, take the foot off the gas pedal and have more free time. As Allison said, the evidence about retiring is actually mixed and staying somewhat engaged in the workforce for longer might be good for you. Our next question comes from V. A big part of my portfolio

used to be the stocks I had received from my company. Recently, I've sold those stocks to invest in index funds recommended by the Molley Fool. My question is, should I make that investment in one transaction or is there a better strategy such as investing a portion every certain number of days to hedge against fluctuations in the market. There have been several studies that looked at whether it's better to invest a lump sum all at once or dollar cost average into the market over a period of, say, 6 to 12 months. And the consensus is that investing all at once wins something like 66 to 75% of the time, depending on this study and the period, looked at.

And this is because historically the U.S. stock market is up approximately three out of every four years. So usually it makes sense to get your money in the market as soon as possible. I'll just add that I like that V is highlighting that we at the full recommended index funds as well as individual stocks. If you don't have the time or inclination to file individual companies, there's nothing wrong with just sticking with index funds, or at least use them to complement your stock portfolio, which is what I do. Next question comes from Brian.

What interest rate is the tipping point where it makes more sense to pay off a loan versus placing money in a high interest savings account? Currently, my savings rate is 4.2 percent? Is it as simple as paying off loans with rates greater than my savings rate and putting money into the savings account if the loan rate is lower. Well, Brian, you're on the right track. I would just add that you might want to factor in taxes. So if you're, let's say, the 24% tax bracket and you pay 5% state income taxes,

then the 4.2% you're earning on your savings account is really closer to 3% when you factor in the taxes you're going to have to pay on the interest you receive. So that could possibly make paying off your debt sooner and more attractive depending on the rate on the debt. But that's just comparing the rate to what you would earn on cash. If you have a longer time horizon, the calculation may be comparing the rate on your debt to what you could earn in the stock market, which could say 6 to 8%, maybe. That's how I think of it.

I used to send in extra payments to pay off my mortgage early, but then refinanced during the pandemic at a rate below 3%. So now I invest those extra payments because I'm reasonably confident I can beat that rate on an after-tax basis between now and when I retire. But, of course, there's no guarantees. And just a couple other benefits about paying off debt. First, if you don't have debt when you retire, you've lowered your annual expenses, which means you've lowered the amount you need to withdraw from your accounts.

That in turn could lower your taxable income, which not only lowers your tax bill, but as we discussed earlier, could lower the amount of your Social Security that is taxed and the amount you pay for Medicare. And then finally, there's just a big psychological benefit to being debt-free, especially by the time you retire. So if having a mortgage or some other loan weighs on you, then paying it off might be the better choice. Next question comes from Patrick. We have most of our retirement in IRAs, but recently heard

something about 401k annuities. Google tells me BlackRock, along with others, might be buying annuities into their target date funds. This seems like a good idea, though, I can imagine lots of ways this can go very, very wrong. Is this a good idea for anyone or just the 401K providers? Yeah, some recent laws have made it easier for 401K providers to add annuities to their plans. And it's not just BlackRock, a recent Wall Street Journal article talked about how State Street and Fidelity are looking to do the same thing. And one reason they're getting embedded into Target-Aid funds is that's where the money is. The majority of new 401K contributions go into Target-Date funds.

And on the one hand, I actually like this idea as long as these are the types of annuities that pay a monthly or annual income for the rest of their retirees life, and especially if it's a better deal than what an individual could get on their own. And that's often the case with investments in 401Ks. I like these types of annuities as a replacement for a portion of a retiree's bond portfolio, because they mitigate market risk, because the checks keep coming in, regardless of what's going on in the stock and bond markets. They mitigate longevity risk because you can't outlive the payments. And they somewhat mitigate the risk of making mistakes later in life due to cognitive decline.

And one reason these are being added to these 401 case is that there's evidence that the average retiree actually doesn't know how to turn their portfolio into a paycheck, and they often spend too much too soon. But the other reason is that insurance companies have lobbied, Congress, very aggressively to get this to happen. I attended one of these lobbying events on Capitol Hill a few years ago, and you can just tell they were dying to have access to all that money. So I'm cautiously optimistic that this is a positive development, but I'm reserving judgment until I see more of the actual products. Our next question comes from Arian. I'm currently a 21-year-old senior in college, double majoring in environmental studies and legal studies, with the intention of attending law school in the future. However, I've also developed a key to key in interest in investing, personal finance, and keeping up with the market trends.

How would you go about finding an entry-level job in investing? Thank you for producing such informative and engaging content. I began listening to your podcast this year, and now I listen to it every day. You guys are great. Oh, I'm not going to take all the credit for that. That's nice. Thanks, Arian. Yes, thank you. And good for you for learning about investing at such a young age.

So I would say the first thing to do is figure out what you want to focus on. Are you interested exclusively in investing? Or are you also interested in personal finance topics like retirement, planning, college planning, taxes, insurance, and those types of things. If it's just investing, then the gold standard designation to begin investigating is the chartered financial analyst designation or the CFA. If you're more interested in personal finances, check out the certified financial planner designation, which I have. And you don't need to necessarily begin preparing for these exams. Just look at some of the course materials, watch some videos on YouTube,

and just see if you really enjoy the subject matter. Then look for internships with companies that do what you're interested in. It could be big-name firms or local smaller firms. You could contact them directly or check out the local associations. There are almost 70 CFA societies across the U.S. And for CFP practitioners, there's the Financial Planning Association. And they often allow students to attend events or join at a reduced rate. And by doing all that, I think you'll get a sense of what job you're looking for. Perhaps you'll make some contacts, which could then lead to an entry-level job. As always, people on the program may have interest in the stocks they talk about, and the Motley Fool

may have formal recommendations for or against. So, don't buy ourselves stocks based solely on what you hear. I'm Chris Hill. Thanks for listening. We'll see you tomorrow.