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Good afternoon to everyone on the East Coast and further east, and for those of you in the Midwest and out west, again, good morning to you. This is Neil George, and I welcome you to the June webinar for Profitable Investing. The title that I'm using, it's Why the Markets May Have More Upside.Now, I've been looking at the idea of the bubblement discussion, because with the market effectively looking like it's a plane taking off from John Wayne Airport, down in Orange County where you know you have to rev up the engines to take off quickly, to gain altitude very quickly. That, kind of summarizes what the S&P appears to have been doing.I heard an interesting quotation the other morning, early, on one of the programs that I follow in which the fellow is basically saying that, "A market bubble isn't a bubble unless you're not invested and looking at it. Looking at the idea that you missed it." You have professional investors, you have pundits, you have hedge fund fellows and so forth that have arguably come out and saying, "We missed the turn. We were either sidelined or negative," and therefore there's potentially, a challenge.What I'd like to address in the webinar is the idea that, to go through what actually is occurring in the economy. What are some of the positive challenges that we have in the economy, in the markets. Of course, like I wrote in the June issue, the idea that we don't have an all-clear sign for the economy yet. There are still tremendous amount of challenges that we are facing in the economy, in markets. It's not all done yet. Again, I'm going to talk about some of those in a moment.Then of course, I'm going to bring up some of the specific segments, sectors in the economy. I'm going to talk about some of the themes and some of the individual stocks and securities that I've been recommending. Give you a little bit more of a preview of things that I'm working on. I'll be going through the portfolio. Then of course, I've been getting a series of your questions and comments which I'll be addressing at the end. With that in mind, let's move it along.The key thing of course is, we still have the coronavirus, the SARS-CoV-2. Now, many of you, including myself might be thinking that the whole thing is largely done. The media cycle has moved on, and it really is no longer front and center of most of the leading papers. It seems to have been sidelined from other news pegs, in broadcasts and other media, in discussions, in op-eds and so forth.However, the numbers are still very much there. In fact if we look at some of the data coming out of Johns Hopkins and other organizations that have been tracking and posting cases and so forth, from the end of May to date, we really started to see a big pickup in cases. Again, we're even getting it from a lot of first responders and so forth, and we're dealing with some of the challenges in various urban centers around the U.S., including in the Washington metropolitan area where a lot of those are starting to see a big, sharp increase in first responders that are being diagnosed with the COVID virus. Therefore, that is still something that I think is still very much front and center.There is still not a vaccine. There are still not unfoldment. Therefore, those are still some of the big challenges. Now, that being said, there are many different vaccines that are in development and in production. I was making a assumption that once they get a full green light from the FDA as well as other health authorities around the globe, the stockpile will already be in place. Therefore, that also includes the development coming from Merck, which of course is in the dividend machine. It basically, has some fairly successful initial testing for its vaccine. They are claiming that they will have it ready for full approval in October, perhaps into early November. The FDA is working very closely, hand in glove with them.We also have other outfits including, of course, coming from Oxford University and AstraZeneca with their project. I was looking at some of the statistics and data coming from Imperial College in London, with their laboratory project funded by some of the prominent families out of Hong Kong in which they're looking at some very low-cost vaccine products.Again, things are in the works, but we're not done. We are not finished. The treatments and so forth are not there. That is still very much disconcerting for me, my family, and friends and so forth, particularly given the fact that we've seen a lot of folks in masks that are heading out into the public without masks, not taking precautions. Of course, we are seeing further and further unlockings around the country, including in the metropolitan Washington area. Yeah, there's going to be a further significant unlocking that'll be occurring on Friday and through the weekend. Therefore, that is somewhat of a concern. So again, media cycle, maybe have moved on, but it has not really been solved.Of course, one of the big, huge overhangs that has me concerned of course is, are we going to get a second wave in which we're starting to see the numbers, not only popping recently, but we start to see a further surge. You're coming out of unlocking, and people forgetting about social distancing, forgetting about the mask that they might have in their pocket or in their glovebox of their car and so forth. Just going about their lives as if none of this happened. Therefore, that could lead to some significant challenges.That being said, the overall stock market and so forth seems to have really moved along. Of course, as I've noted, and I've had some discussions with some of my professional friends. If you are on a desert island and all you had was your feed of what was happening in the S&P 500 index, you basically would assume that everything was okey-dokey. Here we're looking at, this is the S&P 500 index and it is basically, plotted on open, high, low, close basis. I've done the overlay of the Fibonacci retracement levels. You've seen me talk about that. I made reference to it in the last week's journal, talking about the support and resistance levels for the S&P.Then on Tuesday in the journal, I referenced an idea that the 3110 area had gone through. Therefore, that now is a support level that I see for the marketplace. Of course, the 50, 100 and 200 moving day, moving average is, for the S&P, provide a lot of defense from some potential further significant shortfalls.Again, what we've also seen is, not only is the S&P very much positive for the trailing year, but on the year to date basis on the total return, it's very, very close, depending upon the day, and the moment, and the inclusion of dividends. Again, the general S&P appears to have passed the mess of the marketplace.One of the things, of course, that I've also been drawing your attention to is some of the changing characteristics of the S&P 500 index. Now, here what I'm showing you is the white line. Again, I did this on a logarithmic basis so you get a full perception of the percentage change. It's probably a little bit more meaning for the S&P index which is shown in white. That's the traditional weighted index that has really been seeing a dramatic increase in the amount of technology-related companies that are part of the S&P.The S&P information technology subindex that I oftentimes utilized, to show what's occurring in the tech sector in the U.S., that portion of what makes up the general S&P in white has been increasing dramatically over the past several months. As a result, the index is taking a much more of a tech-heavier index. With the technology space fairing quite well and drawing in a lot of buyers, that basically is not necessarily, fully representing the broader scheme of so many other companies and sectors that are inside the S&P.Therefore, if you compare that with the blue line which is the unweighted S&P 500 index. On the unweighted basis, again, it is not necessarily seeing ... It has seen a recovery, but it has not been the same level of recovery as we've seen in the more tech-laden S&P. Some of the reasons for that have been some of the sectors including banks and financials had been, sort of lagging. I think, lagging for good reason. Things are still very challenged in the U.S. economy. Yes, the Federal Reserve has been providing a lot of liquidity and aiding their requirements. They've eased on some of the regulatory concerns, but we still have some major significant challenges.One is that, with the Fed actions in both, bond buying as well as in the repurchase agreement market, as well as other liquidity tools, the very short-term interest rates in the U.S. are basically at or just above zero. That part of the yield curve is very, very flat. You see that the curve doesn't start to increase, where interest rates start to climb a little bit. Therefore, that means that the net interest margin, what banks effectively pay for money and what they earn on their loans is very, very tight and being squeezed further. That is a very bad metrics for the banks.The second part of the equation is on the efficiency ratio. That's a big problem. The efficiency ratio, it basically measures the percentage of each dollar that a bank earns in revenue as far as how much each dollar it costs them to make that dollar. The lower the efficiency ratio, the more efficient and effective the bank is. For perspective, one of my old banks I was with for a long time, Mark Twain Bank out of St. Louis, throughout Illinois, Missouri and Kansas. We were bought again, and effectively, now are part of U.S. Bank.During the prime part of our operations before the acquisitions, we were typically running an efficiency ratio in the 20% range, which was meaning, we were spending 20, 25 cents for each dollar of earning. We were a high-performing bank. Now in today's world, you look at most of the major well-known banks, you're seeing efficiency ratios which are running in the 60, 70 or worse, per cent range. Means that they're spending 60 to 70 or more cents for each dollar. That means that the profitability is just not there. With the interest margins being, I think, banks are something that we don't want to have. That's in addition to the other themes that I've been talking about, with the all panies like TPG Specialty Lending, Main Street Financial, which are in the dividend machines. These are companies that effectively are making corporate loans and are effectively eating the lunch of the core of traditional banks. Then we have other sort of consumer, all financials providing other sorts of payment assistance and so forth. Banks are just not something you want to be owning. That's what we don't have in the portfolios.Then you also look at some of the other areas which have been pegging. Utilities, which I'll talk about in a moment. Real estate and so forth, I'll be talking about that in a moment. Again, it's not necessarily fully reflecting, I think, some of the poor hearts to the marketplace. Now, one of the interesting things that I want to draw your attention to as well, and is something that we ... I say we in the royal sense as far as what I consider us as the family of subscribers of Profitable Investing is that, I have not been directing your attention to buying some of the boldface names in the travel sector.The idea of looking at American Airlines, you have Hertz, Delta Air Lines, Spirit Airlines, the casino company, MGM and so forth. These stocks were rightfully bombed out as the virus and the ensuing lockdown and shutdown throughout the U.S. was occurring. These stocks are gaining tremendous individual investor interest and demand. We're seeing that in what's being reported and analyzed for the major online brokerage firms that are seeing just a tremendous amount of interest in buying and adding to these positions.It's also confirmed data analytics that we get from InvestorPlace. The overall main website of the publishing company in which they basically, constantly keep an eye on what people are searching for. What they're looking for. What they have an interest in reading about. It's these names and this sector which is garnering a lot of attention.Now from my perspective, I understand that people see that things are bummed out and that there is going to be a potential recovery. However, and I do see that there is going to be a recovery for some of these, but I still would argue that they're ahead of the game a bit, for some time. Now American Airlines, I've been a longtime loyal customer of American since I was a small tyke in knee pads. I think it's an extremely well-run airline, extremely well-run company, tremendous amount of great people that I know personally, throughout the system, worldwide.Again, the airlines are going to have some major problems. Now that being said, if you look at the numbers, you can make an argument for why there might very well be some improvement. If you look at some of the TSA data, as far as the amount of passengers that are processed in U.S. airports, prior to the whole virus problem, TSA was processing about two million folks per day. During the trough, when everything was really, sort of all-stop, that dropped to a nadir of around 90,000. That was terrible.Now in the past week, it's been reported that TSA is processing about 460,000. That's a multiple, full pickup from the nadir in people going through the airports. It's showing up in more packed planes. From my perspective, unless there is a family emergency or a health emergency, I don't think anyone should be getting on a plane. I'm not getting on a plane. Again, I think this is something that is way ahead of surviving it.Now you also have some of the other challenges as far as systemic changes. Now, Hertz of course, saw Icahn, Carl Icahn, one of the famous fellows that has been hugely successful, he bailed on Hertz. Again, you have to look at the changing marketplace. Even before the virus, you had Uber, Lyft and so forth that were changing the necessity of having cars. In today's world of business travel and so forth, it's just not necessarily something that I think, a lot of folks are going to want or need to get into strange cars, or need to get into strange cars, let alone travel.The virtual meetings and so forth is working exceedingly well. Again, we really have seen a changed landscape. Then the other airline part of the business, which I think is really critical to airlines is business travel. There are two things that are a problem. One is, as I just reference, the remote meetings, remote work through RingCentral, Zoom and so forth, and Microsoft, Skype products. That's certainly, one of the things.The other part of the equation which I've done some work on, is the private aircraft business in which, business aircraft, I think is really going to be taking a further dent in commercial air traffic demand. Again, if you look back in time to the post-2007, 2008, businesses jettisoned their jets as quickly as they could, for necessity as well as for appearance. That is not occurring. A lot of business are saying, "Hey, we need these planes, because if we're going to have to go somewhere, we're not going to get on a commercial plane. We're going to get in our own place where we have control over the process."Even the NetJets of course, which is buried inside Berkshire, Wheels Up and others, again, I think are going to see the demand. I'm just not quite seeing this. Then there are resorts and hotels including MGM and so forth. I just don't see how that as a business model right now is going to work. That's why I've really looked at a different alternative to the travel leisure. Some of the companies that I've brought into the portfolio, and I'll be talking about those specifically in a moment.Again, I think individual investors, I think, have gone a little bit ahead of the game. Now let's look at the one part of the market which is also working quite well, are bonds, good bonds. Again, something where I've been recommending various strategic investments in the bond market for going on three years now. Now, here what you're looking at is, this is the total return calculations for three of the leading indexes in the bond market.The white line shows the total return for the overall Bloomberg, Barclay's U.S. aggregate market. This basically, takes the entire bond landscape in the U.S. and shows what you're making, from treasuries, corporates, inadmissibles, et cetera. We had a very shallow negative return in March, and it's come back and then some. We're seeing a very positive return.Then if you look at the red line, that is basically, the U.S. corporate. This looks at investment-grade corporate. Again, this is an area that is the safer part of the corporate spectrum. Again, it's one where we have a lot of direct representation through the mini bonds. We also have some of the closed-end funds like the BlackRock. You have Credit Allocation Income Trust. We also have some of the ETFs, including the Vanguard Index and so forth that's embedded in the model portfolios.Again, corporate borrowings are basically being snapped up. They're being snapped up for yield. They're being snapped up on the idea that people that have been doing heavy-duty credit analysis that I've been doing for you in the issue, are seeing that a lot of the companies that have issues out there, are very credible, will be credible even if we see further problems or challenges in the economy. Therefore, bonds are being bought.Even with some significant new issuance that's been coming at the corporate space, we've seen Apple come to the marketplace. We saw Amazon, which is in the niche investments. Caine has announced the massive new borrowings. Again, that is being snapped up or oversubscribed, and that is an excellent part of the equation.The other part of the corporate bond market is that if you look at ... The Fed, of course, has been in, is providing the backstop. It was very interesting to see in one of the recent reports from the Federal Reserve in which it reported how many corporate bonds it was actually bought. The answer was zero. No one selling the corporate bonds to the Fed. They're buying them and they're owning them. Therefore, that is, I think is a very strong indication that there is a lot of confidence in the corporate bonds space.The other part I want to mention is the higher yield. Below the BBB ratings from S&P Moody's, Fitch et cetera, these are comprised of companies that have dropped from the investment-grade, down. Otherwise, those are fallen angels, as well as companies that were borderline or iffy before the lockdowns and the virus thing. This area is actually fairing even better, and it's something where I could have drawn more attention to it, but I've been a little more skittish and really wanted to err on the side of caution. That's why I'm recommending and here to recommend the main corporate space in the investment grade.Then the gold line is the area which ... We're tracking another prominent part of the bond market that I'm very enthused about, continue to be so, which is the Municipal bond market. Now, the Municipal bond market is getting a lot of attention for both good and bad. On the positive side, the Fed's there. It's been providing a backstop, and purchases, and the ability to step in and purchase bonds and other related securities just like it's doing for corporates, including the ETF and funds space.Then it's also been providing credit access and has been expanding credit access, not only to larger municipal sections, areas, and counties, and so forth, but now it's further expanded that to smaller cities and counties throughout the U.S. That's the backstop. The other part of the equation is, a lot of communities are seeing some big challenges. With the shutdowns and the lockdowns, tax revenues were severely impacted. Yet at the same time, a lot of services had to be increased, including of recent, in some urban centers. Therefore, that's been providing some challenges.A lot of municipalities have been making some budgetary changes, and it is perceived as being positive. Of course, I will also continue to reiterate that the longtime history of Municipal bonds is that the credit perspective, next to treasuries, mutual bonds are the most dependable part of the marketplace. With even some of the handful of defaults, the recovery rate is typically at 99 plus cents on a dollar. Therefore, it's really one of those very good values.I think you're seeing that, that is starting to get further noticed. They were sold off along with corporates and the treasuries during March, but have been coming back quite strongly. Again, we have the closed-end Municipal funds in the total return, both the traditional ones and the taxable muni funds. We also have some of the ETF space with the mutual fund portfolio. Again, I think you're going to see some further progress in that.Now I'd like to draw your attention to a couple of interesting parts of the financial markets in which we're looking at the dollar and gold. Now, here of course, gold is gold and the white line is the Bloomberg Dollar Index which is weighted based upon the percentage of the world's financial and commercial transactions. It's a much more representative index than the traditional, regular U.S. dollar index.As you can see, the dollar spiked in February into March as there was just a demand to buy dollars and to have cash. Everyone was selling anything that they could get their hands on, to get dollars. That basically, the Fed stepped in, it caused a pullback, and the dollar has been retracing since. Therefore, as a result, we're down to around 1200 or so, today. We're getting back down towards longer-term averages. I think the dollar might very well continue to remain on the low-ish side for the time being. That provides a lot of benefit for the financial markets, particularly if we get some instability and keep stability in the dollar.Then you also note that gold not only has been generally trading higher, but it also has a strong inverse relationship with the dollar, and that's what I've been talking about. One of the key reasons why I stepped into the gold market, last year in June with the Franco-Nevada Corporation. If you look at why gold has been fairing exceedingly well over the past several weeks, dollar has been dropping. Therefore, that's been helping the price of gold.The other part of the equation of course, is interest rates. As noted earlier, with the Fed's action so forth, driving U.S. dollar interest rates to the floor, that is also the primary driver for gold. Again, I continue to see gold well-supported where it's 1717. I could see it continue to trade higher. Of course, Franco-Nevada as a stream company. In other words, it has interests in gold production and so forth, as well as some other minerals. Each month as it sees the revenue stream from the gold going to the marketplace, it collects the cash and cuts us a check in the form of dividends. Therefore, that .... and cuts us a check in the form of dividends. And therefore, that continues to be my preferred way of owning gold. And the other thing of course, which I'll just reiterate to you, is that you've shown me talk about some of the gold ETF space. And then, I've showed that Franco-Nevada is consistently not only outperformed gold, but outperformed the gold ETFs. And one of the things that I also would remind you that, for those that have been buying the gold ETFs on your own, note that they are not taxed the same as other types of ETFs. Because they are a singular asset, they do not comply with the Investment Company's Act of 1940. Because back in 1940, they had no idea these things were going to begin down the pike.And therefore, they are considered a singular asset, otherwise known as a grantor trust. And therefore, they're taxed as a collectible. And so, for capital gains taxes, they're taxed on a collectible basis. So at 28%, not at the lower rate of long-term capital gains. And therefore note that you will... Don't get a nasty tax surprise by owning some of the gold ETFs. I think you're much better off with the Franco-Nevada.Now, I've been referencing this throughout the presentation, of course, the Federal Reserve. And the key thing, is the Fed your friend? And one of my favorite financial movies, goes back to the early 1990s, was Danny DeVito in Other People's Money. The story of leveraged buyouts and so forth, LBOs. Danny DeVito plays Larry the Liquidator, and talks about the idea of trying to take out and liquidate effectively and unlock value from New England Wire and Cable. If you haven't seen that movie, you ought to check it out. It's very entertaining, Gregory Peck, a lot of other stars in it.But in his discussion at the shareholder meeting, in which he talked about why that they should go in. He basically stated, I'm not just your friend, I'm your only friend. And that's one of the things that we need to be aware of, is that the Fed really is more than throwing its weight around. It's buying activities in the bond market, in the ETF market, in the loan market, in the mortgage market, as well as its lending facilities for businesses and corporations, its lending facilities for municipalities. It is doing what effectively Congress is unwilling to deal with and make good. The Fed has a tremendous amount of flexibility, aided by the Administration and the US Treasury Department.And here, what we're looking at is a surge in the portfolio and balance sheet of the Fed. We're over seven trillion. This, I think, it look like it might very well be leading to eight, 9 trillion. And therefore, this is really one of the big key stories that there is. Not only massive buying that's occurring, but it is the backstop. The Fed knows it and the Fed will not be making changes. And we'll be wrapping up this month's two day meeting of the Open Market Committee. We're going to have the press conference this afternoon with Jay Powell, who has really redeemed himself in him from my perspective of his actions and so forth and given the conditions, so forth. His track record of not being a traditional economist and really understanding how systems and markets works, has really made him one of the best chairman that the Fed could have for this current situation.Now, some might basically be concerned that we might be seeing that this might very well be a problem, might be creating an inflationary issue and so forth. And the key thing is, if we can look back at history, the last time the Fed was doing something like this, in '09, in the reaction to the fiasco during the '07, '08 post-financial crisis. And we didn't see the inflationary issues. The Fed kept its balance sheet, and then gradually started making changes. Again, I think the Fed is very adept to doing it.And again, while they can't do it to infinity evenly, arguably have the capability of doing it. I think for the most part, having it in place for some time, I think has very limited downside for the financial markets, for the inflationary conditions and so forth. And I'll talk a little bit more about the government in just a moment, and how I see that playing out.Now, so let's look at some of the other things that are also potentially showing us some improvements. So we're looking at the US employment picture, and here we're basically looking at the idea of nonfarm payrolls that have been occurring. We, obviously, saw the initial dip into March and then the plunge in which we saw that. But subsequently, in the most recent data for the last month, we saw a big surprise. We saw effectively the 2509000 additional new jobs that were created. So that's that sharp white V that you see on your screen there. And again, I was not necessarily looking for this. And if you know from reading the June issue, which was to be written in May, I was looking for potentially, a further downturn in jobs. And I was looking for perhaps, a stronger level of unemployment rate.And so, I basically missed, I think, some of the initial big improvements from some of the unlocking that was occurring in the economy. So we've had unlocking on a larger scale basis in certain states, Texas, Florida, and so forth. We've seen more limited and some special situations throughout the rest of the country. We've seen assembly lines and production facilities for automobiles, other manufactured goods, food processing companies, and even with some of the flare-ups in the virus cases, again, we are seeing those jobs. And we're also seeing some of the jobs coming back as we're seeing some of the Main Street unlocking outdoor, and in some cases, indoor restaurants and other retail. And we also have to recognize that the data for May that we got last Friday, just like the data for the monthly jobs reports, they really are a snap shot that takes you through the first couple weeks of the prior month. And I think when we get the June number in early July, if this is something that's is going to be evidenced by that further unlocking benefits, we might see another rebound in jobs.And then, the orange line you see, that's the unemployment rate. The unemployment rate really should have been heading closer to that 19, 20% range, but with the surge in the jobs, it's ended up down at about 13%. Now, there's some wiggle room as far as how the Labor Department is categorizing folks that are furloughed that they see themselves as being employed, just not at work. And therefore, they have not necessarily being fully counted as unemployed. But nevertheless, seeing a drop-off in that most recent data, that basically is something that is very important and very helpful for the US economy. And we might very well have seen potentially a bottoming in how the consumers view their current personal financial situation, the economy, and how they look at how things are looking for them going forward.Here's the Bloomberg Consumer Comfort Index, the Comfy Index. And again, off the cliff, from the strong upward March from the end of '16 throughout '17, '18, '19, and into '20. And then of course, it just dropped off the cliff, when everything basically got locked down. But in the most recent of weekly data, we're seeing a little bit of an improvement. So potentially a bottoming, I think, with some of the jobs and some of the thought that with unlocking will come cashflow and so forth. And therefore, we're not done as I mentioned earlier. But yeah, for now, unless we see a second wave or major flare-up causing re-lockings and so forth, we might very well see some further help from the big driver of the US economy, which is the consumer.And the other part of the equation, which I drew your attention to in the June issue, is the savings rate that's tracked by the Bureau of Economic Analysis. Now, the savings rate, basically, just absolutely, has just taken off of recent. The idea that folks were adhering to social distancing, were basically staying at home, working remotely and so forth. And with work to control the spread of the virus and outside of groceries and some essentials, folks, even with a lot of employees, there are still many multiples more of folks that were fortunate enough to keep their jobs. They had less to no need to buy anything. And so, as a result, they've been socking away a lot of cash, and that's where you're seeing this massive buildup of savings in the US. And therefore, that's a lot of dry powder for buying more stuff and coming back.Now, it's not to say that consumer's tastes might not have been impacted. I still think you're going to see folks that are going to be saying, "Yeah, maybe I did okay without getting the additional whatever. I did fine, I didn't necessarily need a couple of new suits and ties. I didn't necessarily need it." And therefore, the idea that if we still see that new normal, that people are still, basically, staying more at home and if people work remotely, we still might see a little bit of a changed landscape.Now, we will see and just that we have seen some of the home projects are doing well. We've seen some improved sales at some of the DIY stores. We've seen some of the home furnishings from the online vendors, like Wayfair and so forth. Ikea, basically, with their stores shuttered, has seen just a surge more than doubling of their online sales and delivery. And therefore, we might see some further there. But the key thing is that there's a lot of money that's sitting in the bank right now, that is showing up in deposits around the country, that can be deployed to buy more services and stuff. And therefore, that means that there's something coming in the wings.Now, how does this look from the c-suite? And so, looking at effective of the CEO, the Chairman, the CFO and so forth and COO, chief operating officers, all those guys. Again, the Federal Reserve keeps tallies on what they're thinking, what they're planning on doing, what are looking at spending on stuff and capital investments, etc, etc. And here basically, what I'm presenting to you is the white line, is the current business conditions, how we see things right now. And of course, that basically fell off the cliff through the lockdowns and so forth and the uncertainty. But we arguably have seen, potentially, a flattening in or to a slight improvement in the most recent survey data, for showing that potentially, that we might be getting past the worst.Now, the blue line is how the c-suite folks view things six months from now, as that's an ongoing tally of a viewpoint outlook going forward. And of course it was, people were looking at it as being better, things will be better six months, even during the worst parts of the Bible that were hitting the economy and the markets in February, March. But again, we've seen a potentially a bottoming out in improvement from the nadir showing that the outlook very well might be a little bit better. And therefore, I think that along with the Comfy Index. And I think personal savings rate that I'm showing, it means that there is potentially some good stuff that might be coming the way of the US economy.So let's look at a few of the segments that I'm going to talk about, some of the things that I'm looking at and following. So as I mentioned earlier, the S&P Information Technology Index, which is embedded as part of the general S&P, it has seen an increase in its weighting. It has been strongly benefiting from the changes that are occurring, the remote working and the stay-at-home. Microsoft, of course, in the return portfolio is doing exceedingly well. It's a subscription software services, it's cloud computing services, Azure brand, as well as its gaming products and so forth. All of that means the company is firing on all cylinders. And then of course, it has its distance communications tool with Skype and LinkedIn, for folks that are reaching out remotely in the business communities and so forth. It's got everything working. It's a big component of this index. And I think we're going to see that to continue to drive further. I can either see some further upside for Microsoft, even though it's an expensive company.And of course, we also look at some of the other firms that are in that space. And we also are going to be seeing some further inroads in some of the communications part of the technology with the 5G deployment, is still very much underway. And I'll touch base on that with specifics in just a little moment. But again, I think that this is an area which has been garnering a lot of attention, and I think it's going to continue to garner further attention. And as you can see, it is very much positive on a year to day basis. It's extremely positive on the trailing one year basis. And I think that's going to continue to be the case. And we have a lot of participation, both in some of the individual stocks we have as well as some of the index funds and ETFs, including from the Vanguard Information Technology ETF.Now, the other area which has been garnering a lot of attention is the healthcare sector. Of course, we have drug treatments for COVID. We have the vaccine development part of the equation. And of course, we also have a lot of the spending on ancillary products that are basically treating other symptoms. And of course, the enthusiasm that we have for the segment. We have the index plays within the total return. The Vanguard, we continue that on the index sector from Fidelity and Vanguard in the model mutual fund portfolios. We also have some of the individual securities, including Merck, which I mentioned earlier with its initial successes in vaccine and treatment for the COVID-19. And again, the healthcare space, I think, continues to be one of those very favorable parts of the space.The one area, of course, which I also have been seeing some further progress, is we've seen that a lot of the hospitals and so forth and other parts of the healthcare space are having challenges. Because if you don't have or aren't basically part of the virus solution and dealing with the things, the rest of the healthcare space really has been put on hold. And that has put into jeopardy a lot of hospitals that are outside of the purview of COVID payments and so forth. So a lot of discretionary procedures and so forth that are very lucrative and put on hold, a lot of doctors and practices and so forth, outpatient centers and so forth have been put in somewhat official jeopardy. And therefore, I've been following that.But again, one of the areas, particularly in medical properties trust, the reach that's in the total return, again, they have a good mixture of the triple net leased properties as I've reported their rent payment and their credit evaluation of their tenants appears to be good. I had them on hold. We put it back on buy, and they continue to fare fairly reasonably well. And again, I think the healthcare space... and if in fact we're getting past the COVID problems, and we start to see more of other treatments, other diseases, other acute and chronic conditions being addressed by the US healthcare space, I think we'll see some further improvement here. And again, I'm looking at further opportunities in this.Now, I come to the utilities area. This has been one area where we've traditionally been able to have a lot of exposure to utilities, and it's been both defensive during the challenging times and providing us with some growth and improvement during the good times. One of the utilities, of course were sold off, like everyone was, and then they have, in fact, been coming back. But one of the challenges we have in the space is that while utilities are dependable and while the vast majority of utilities have good credit profiles, and they have good relationships with the public utility commissions, we also have seen a dramatic drop in electricity, power demand. With so many factories and businesses shuttered, or locked down and so forth, that really put the major brakes on business demand for electricity. And while residential has been seeing the pickup, it's not necessarily been the full offset.So the key thing to look at is that we have seen, I think, the worst part of that for what we're seeing going forward. And so utilities effectively, the ones that we have kept... I did sell off a few that I thought were challenged, including South Jersey Industries, SJI, from the dividend machine. But again, the other ones that we've kept are good in credit standpoints, are at status, and again, good markets and good relationships with our public utility commissions. And therefore, we're seeing some very good value to be buying in this space.Now, of course, one of the areas that I continue to be focusing more and more of your attention and my attention is the ESG space. And I'll talk about that more specifically in a few moments with one of the things that are coming your way. But the idea that renewable energy is from a company standpoint, particularly from an unregulated parts of their businesses, is going to continue to get further benefit. We've seen extensions of tax and other credits for utilities around the country as part of response to the COVID problem. And we've also seen a lot of states and municipalities continue to push forward with demands that certain percentages of power be done on a renewable basis.And therefore, the poster child for the success in this space is NextEra Energy, which is the total return portfolio, NEE, they're one of the world's largest wind and solar operators. And of course, we also have Xcel Energy, which is taking the playbook from NextEra, and they're running it. And we're seeing a ramp up in there as they move them up from the Niche into the Dividend Machine. And we're also seeing some of the utilities that are moving further in this space. And I think you're going to have rising business power demand. You're also are seeing the continuation of support for alternative and green energy. And you also have a further demand for ESG compliant companies by a lot of institutional funds, pension funds and endowments and university funds so forth. And therefore, I think the utility space, again, is something whereby, it is a very good value right now.And then, the last part of the equation, of course, real estate investment trusts. Again, it's typically been an area where we've had defense during some of the challenges, including the fourth quarter of '18 without much of '18s that are malaise. And during '19, we saw progress there. We saw the dumping in March, like everything else got dumped. And then we had to differentiate between what the different real estate assets were.Retail, of course, is really changed. We are going to be seeing a tremendous number of malls, around the country, are going to be not reopening or are going to be severely compromised. We're going to see retail stores are going to be going through some significant closings. We already have been seeing closings last year. And I was already projecting a large number of closings this year, which is part of my strategy for bringing in B. Riley, which has its great American division that specializes in liquidation of retail. But again, we've seen the recent data from the analyst group, Coresight Research, that is basically saying that their estimates for 2020 alone is close to double where they were projecting it before the lockdown. And therefore, a lot of the REITs that have the retail space... that's just not an area that you want to try to pick through or bargain hunt. It shouldn't be there.Then you come to leisure property. Now, I mentioned earlier, a lot of individual investors have been looking at and trying to see that the resorts, hotel stocks, MGM and others might not be seen as values. I just don't see that most real folks that basically don't care about themselves, their family or their friends are going to be wanting to step into hotels unless they have other intentions. And therefore again, it is a very tough space and I would not want to be picking through this. Now I did read some discussion. MGM actually has it's as a separately traded REIT, which they've embedded and sold off some of their property assets into this REIT. I'm looking at some of the financials and that was actually somewhat an interesting play. And I'm looking at some of the others that are part of this based upon some of the guarantees that are intrinsic and some covenants. So there might be some space there, but again, I'm doing some deep dives, and it's not something that we want to do. I would suggest that you look at buying on a broad basis.Meanwhile, the commercial space and office space and so forth. Again, a lot of it basically that we have, including W.P. Carey and so forth... the analysis we're getting, and the presentation, and the representation of rents and rent being paid is quite good. We're seeing similar conditions with some of the other real estate things in the corporate space. And therefore, I think that even though we're going to see less demand in certain urban areas, including New York and so forth, I think the diverse properties we have, still have some opportunity.And we get to some of the more specialized fields. I mentioned medical properties trust. We went through the deep dive there. And then, we also come to some of the data centers, Digital Realty, of course, that is doing exceedingly well, because of the demand for cloud and remote computing abilities. And therefore, DLR really presents one of the best in that space. And then of course, we also have the self storage. Life Storage, LSI, in the Total Return portfolio. I've been telling this now for a while as being sort of a heads you win, tails you win stock. During good times, it fares well. And during downtimes, when people have to move out or move things into storage, it picks up business.But then, I also have been drawing your attention to one of its newer product lines. Its local warehouse system, where because it's in areas throughout the country, it can offer small, mid-sized companies the ability to have localized warehouses in which it will organize the logistics and receive and move out products. And work with local delivery systems and provide tracking for goods that are inside their storage and moving through the storage to their customers. That basically makes them sort of a mini-Amazon, if you will, for some other small, mid-sized businesses. I think that sort of technology is working quite well for them. And that's why it continues to be one of the key reasons I particularly like LSI and the storage part of the marketplace.And of course, the other part... and I'll cycle back to some of the commercial property space. With the rollout of fifth generation 5G wireless, you're going to need... as I talked about a few issues ago, when I did the full rundown of the 5G space, you're going to need a great deal more antennas, both inside and outside buildings. And you're going to have to hang them elsewhere. So if you're thinking about Welltower and so forth, where they've got their traditional places where they're hanging there antennas up, that won't cut it. And therefore, you're going to have to have AT&T, Verizon, and other carriers will have to put these things a lot of the places. It means you're going to have to pace, pay for the space. W.P. Carey is one of those companies, I think, is going to be getting a big boost in revenue from attaching these smaller antenna throughout their building network. And again, I think a lot of other REITS with some of this space are going to see another notch up in their revenue sources from the 5G antenna rental business. Now, I want to basically circle back to what I was mentioning earlier with ESG. And of course, ESG basically means Environmental, Social, and Governance. So, the idea that companies that are basically green, or they say they're renewable in the energy space or how they do their operations or their levels of pollution, or how they deal with their assembly or fabrication, the idea that they care or at least demonstrate or provide some demonstrable evidence that they are not just focused on shareholders, but on the broader community. And of course governance, the idea that they are focused on being clear and clean as far as how they present their numbers and how they basically have a shareholder-focused board of directors potentially even separating, which I'm firmly in favor of, the position of chairman as opposed to the CEO-chairman combo position.So, ESG is not a new thing, but I think it's one which is really starting to take hold. Now this is the S&P ESG Index. And again, there's a lot of iffy and squishy ways of characterizing a company as being an ESG-compliant company. And so, there's a lot of argument that some companies maybe might not be as environmentally friendly as they might be reporting. But S&P and others have these sort of indices. There are a lot of other entities that put their seal of approval or their stars or their symbol on the companies that are ESG compliant. And what I see here, and I continue to see further buildup, is that institutional investors are being demanded by their beneficiaries to be more ESG compliant or focused. So, university endowments, which are massive, corporate trusts, pension funds and so forth, for teachers, public employees, and others are basically either mandated or compelled to do this.So, it's sending a wall of money into this sort of space. And therefore, I think this is going to be something that is not going away. And I think it's really going to get some further heavy traction. And therefore, we're already in that space with a lot of companies that are part of the ESG movement. I mentioned NextEra Energy, Xcel Energy being in the renewable space. Of course, we have Hannon Armstrong out of Annapolis. That's the company that finances renewable energy with government guarantees. That stock, I think is very unappreciated and not necessarily recognized for what it is and what it's doing and who's backing it. That's why I think it's one of those really good values. It's structured as a REIT, which benefits the company and shareholders from a tax standpoint. Again, if you don't own it, look at it. And I recommend buying it, as I have it in the portfolio. I'm looking at more companies in this space.The other part of the equation is we've got November third coming up. It's a toss of the ball at this point, as far as what's going to be happening in the administration, what's going be happening in the Senate and the House. And the idea that ESG movement, it's doing well now, it's really been picking up speed of recent. And if there's change in leadership in Washington, it only would get more prominence. So, this is one of those, I think, election-proof segments that you can buy and own, and where I'm going to be spending more time talking about what's actually working. So, I'm putting aside the fluff part of this and I'm going to continue to focus on some of the companies that are working for us, paying us the dividends, but also are going to be capitalizing on the demand for the ESG space. You'll be seeing more of that, including some discussions, in the July issue.So, we were talking earlier about a lot of interest in the traditional travel stocks, the airlines, hotels, gaming companies, and so forth. But in the June issue, I basically made my case for what I see as being much more plausible and much safer forms of travel and leisure. I presented Thor Industries. Thor Industries is one of the leading US manufacturers and purveyors of RVs, big brand names, Starcraft, Airstream and so forth. These companies have been meeting surge in demand. Now, I figured this out and I apologize. I dragged my heels a little bit on this because some of the financials, from a sales standpoint, were looking a little bit premature. Then we have a little bit of a production delay in the newsletter. But we have it out. The stock is getting noticed.It's also getting media. I've been seeing some articles in some of the major financial media talking about demand for RVs, talking about RV local sales from dealers, and even talking about Thor and some of its peers. And therefore that's getting attention. The key thing to look at is, if you care about yourself, your friends, your family, but you still want to get the hell out of your house, getting into an RV, where it's your space, you keep it as clean as you would keep your home, and you have the ability to effectively travel and have somewhere to stay, where you basically are secure, that I think is a very compelling argument for some time. And we're seeing that in more people that are becoming first time RV people is surging.Many people might argue that since I've been raising the buy prices, I did it last week, I did it again this week, that are we chasing the stock? Well, you can see the white line. We are nowhere near recent highs. We're really around the average for the past five years. The other part of the equation is, when I first recommended it, it was trading at a 50% or more discount to its trailing sales. Those sales are obviously going up, but if you look at the last quarter sales, and looking at where the stock is priced, it's still priced at a 20% discount to the sales it had for the prior year. And that doesn't reflect where the sales, I think, are going to come in, in the current quarter and the subsequent quarter. I think you're looking at a stock which is very much a discounted value. And if you don't own it and you think, well, I missed it. You did not miss it. There's a lot of value in this stock. Don't just look at the near term for the last couple weeks.Now, the other part of the equation is boating. Now, I spend a lot of time on the mid-Atlantic. There are publishing companies in Baltimore, of course. I spend time in Alexandria, Virginia. I belong to a century old boat club in Alexandria. I've been around boats. I've even piloted boats and so forth. Other parts of the country that are maybe landlocked, you still have lakes, rivers, and so forth. But I think boats are another version of an RV, whether you're looking at cabin cruisers or a houseboat, where you can go out on large lakes, like back in Lake of the Ozark or Chippewa Lake, not far from St. Louis, in Missouri, or whether you're looking at the Great Lakes around Michigan and so forth.There's a lot of opportunity for folks to get out, get away, and be secure. And Marine Products, MPX, which is the blue line, they're the equivalent of what Thor does for RVs. And so either you're looking at things where you can travel and stay on them, or you can get out and get away and still be very socially distant, and be safe for recreation, even for a day out. I think that is also getting recognized. The stocks now are starting to move. I raised my buy under price yesterday in the journal. I think that still there's value here. It trades at a small premium to its trailing sales, and those sales, I think, are going to be showing some upward movement.The other part of the equation, which I also brought into the equation is looking at the virtual leisure. This is where we're looking at the gaming market. We already had Microsoft as one of the leading game companies for both content, as well as for hardware. We've been on this movement for some time. I added Activision Blizzard, which has a variety of games. I'm looking at some other parts of this interesting and high growth marketplace. With sports and so forth, continue to be under, let's say, semi-unlocked condition, and even before that. Now, there has been a growing interest in online gaming and viewership of online gaming. That is not going way. I think it's really picked up steam during the recent lockdown period. I think that this is an area where we're going to see some much further growth.Now, I went with Activision for a couple reasons. One, I liked the financial conditions. I also liked that it pays a dividend, but the key crucial reason why is that the company effectively has game offerings that span various interest groups and demographic groups. It also is less reliant on Asia, as opposed to other companies, which are more China localized. The thing that I wanted to have more of a differentiation, different opportunities, including having a big focus in the US market. I also wanted to have a company which had both console games, online games, through PCs and mobile. A lot of companies have a mobile focus and might not benefit from the lockdown. It might revert back to getting unlocked.And the idea if you were just fully tied to the console or just fully on the online again, you have different dynamics as what your customer base is going to be. Activision really spans that and it gives a diversification in the game space. So that along with a similar approach from Microsoft, I think gives some space. If you don't, I'm assuming you should have Microsoft by now, but if you don't have Activision, please look at it and please look to buy with my recommendations.Now, as I mentioned earlier, the heads you win, tails you win continues to be a theme that I explore looking at companies that fare well during the good times, and are well positioned during the challenging times. A couple of examples, I'll draw your attention, we have, I mentioned earlier B. Riley, RILY. That's the orange line that you're seeing in price movement. Riley was founded by Bryant Riley, who is of significant ownership in the stock of Riley. He added those holdings heavily back in March. He's put together this collection of very talented folks with interesting business models. So he had his FBR, which does a fabulous amount of work in the capital markets, including dealing with some government entities. It also has, as I mentioned earlier, Great American, which focuses on bankruptcies and retail store shutdowns and liquidations. It has other entities which deal with liquidations and bankruptcy proceedings and asset recovery.And it also has some other asset valuation entities and trading as well as interesting asset management businesses. Again, good times it's doing well. Bad times, bankruptcies, it's cashing in. As I mentioned earlier, with a lot of companies that are no longer going to be with us or not going to have properties, Riley's and its subsidiaries are going to get a lot of business. If you don't own it, look at it. It's in the Niche Investments. Buy it. Another company, Ritchie Brothers out of Canada. Ritchie Brothers is in the auction business. They auction industrial consumer products, as well as cars, machinery, and so forth. So in the good times, a lot of companies might need equipment. They need it quick, they can't wait around for something new to show up and therefore they can go to Riley and get what they need immediately.During the bad times, creditors want their money. And therefore they liquidate stuff. They liquidate equipment from the oil patch, agricultural space, other machinery and cars and so forth. The bad times, it cashes in. In addition, it has also been moving further into the online space in which you traditionally would do onsite with other things being done, but it has become very highly successful in the online auction space. It is a company that I think is a good heads you win, tails you win whether the economy is good or bad. And then the other part which has been very much something whereby I hold my nose and go along with it is go with government. Focus on the companies that have the government contracts and the idea that the US government is not getting smaller, not going to happen.Now, many of you might like to see a return to balanced budgets. They might like to see some spending reforms, see a cut back and borrowing and so forth. It's just not going to happen for some time, if ever. The idea that the US government is not crowding out the credit markets, it's not causing a crowding out causing problems for the dollar. I could do an entire webinar or a series of webinars on the economic theory behind this, and I've given lectures on this at my universities in China and in the US. The key thing is, is that government is, as a percentage of GDP, huge. And this year it's getting huger and it's one of the most dependable parts of the equation.So we look at companies like Easterly Government Properties in The Dividend Machine and its tenants are US government. Uncle Sam is going to write the rent check whether he's using the building or his employees are at home. He's going to keep writing that check. And therefore it's highly dependable. There are other companies as well. BlackRock we brought up from the Niche into The Dividend Machine. It's an asset management company, but it also is a leading asset management company for the federal government. It is the largest single manager of the retirement funding accounts, the thrift accounts for millions of federal employees. It also runs government funds and gets government fees for other parts of government throughout the US and elsewhere, including the government of China. It is a very dependable company.Back in '09 it was contracted by the Fed to help it with its bond buying. Guess who they contracted this time to oversee all those trillions that are being added to the balance sheet? BlackRock. It's got plenty of government contracts, plenty of government checks. And there are other companies that are part of that space that I will continue to draw your attention to as being, not just the dependable part of the economy during the lockdown and the COVID. And if we see another flare up in the COVID problem and resulting in relocking. During the better times, government is only getting bigger. It is an important part of the economy and companies that capitalize on this by getting the government contracts I think you're going to see some further traction.So in looking at what's been occurring in the Total Return Portfolio, I'm still staying with somewhat more of the defensive part of the equation as being the 56% stocks, 44% fixed income with that cash. Now, the cash rate equation is becoming really challenged. Synchrony Bank, which is basically what we use as the surrogate for a high yield parking place for cash, yields are now dropping closer to the sub 1% range. And therefore I'm looking for alternatives for that. It's a loss leader for them. They're losing money in every deposit that you're putting into it. Also, I've had the two year treasury bonds, which I recommended back in '18 when I thought that was the safe part of the yield curve to park cash, when yields were in the mid to upper 2% range, those are now down to near zero, and I've put it on hold.If you own those two year treasuries, which now are a year out or some months out, hold onto them, own them, because that's a great place to put cash. You can't replace that. If you don't own them, that's why I don't have you buying the things. That being said, I'm looking at reducing the cash allocation and bringing in some other fixed income investments that you can park the cash in. Because I recognize that parking cash at zero or just above zero isn't working for anybody. And even though I like the security of it, I can do better for you. I'm working on some ideas and proving out how I'm going to form if we have another downdraft. I'm going to have that for you as soon as I can, so know that that's coming.Now, I was drawing your attention to some of the companies In the Total Return of interest. One of the things that I've been watching is the increase in prices for groceries and other foodstuffs and home goods. I'm looking at some of the companies we have, they've been addressing costs and some of their product offerings, and they're making some successes. So in the Total Return, Hormel, Nestle, Procter Gamble have been making some changes that are very quickly adapting to the marketplace and I think are showing some good promise. Same with Modelez, which also are making some improvements on some of their pricing and packaging. I think we're going to see some further progress there. Also, I draw your attention to Zoetis. This is the vaccine maker for animals. One of the things that we really learned from the COVID is that we need to focus on, analyze and Zoetis I think is very well placed. I've been looking at another company which is in the animal health space, doing some work on a little bit early, but you'll be reading about that soon, I think.I've talked about Franco Nevada and our gold position. I think that's all quite good. We also all have the two pipeline companies, Enterprise and Kinder Morgan. Both have been seeing some very strong improvements in their share and underlying performance of the companies. I'm still recommending owning those for the time being. I'm also looking at some further additions in the fixed income section, including cash alternatives. That's coming.Now, The Dividend Machine, I've made some changes in the June issue. I sold off Realty Income, even though they had what was traditionally dependable retail like FedEx and gymnasiums and so forth. The model really is put in jeopardy. South Jersey, too much leverage or exposure rather to Atlantic City, therefore reduced that. I'm looking at increasing the number of offerings in Cycle B of the portfolio. You'll hopefully see something on that in the July issue. I think there's still some further developments.A few companies to pay attention to, Corporate Office Properties, OFC, in Cycle A. It's a terrible name, environment for company that has a lot of very good assets, including data centers that are exclusive to Amazon. If they could change their name, I think the stock price would be much more reflective of this. I think it's a very good buy right now. TPG Specialty Lending, that's one of the alt financials I referenced earlier. People are paying more attention to it. The loan market is quite good, particularly for the type of loans it does, which are on the upper credit spectrum. Offers a lot of yield and there's a lot of value there right now.Then both Verizon and AT&T, not only in the 5G space, but also just in the rest of communication that's going. The other company which I will also draw your attention to, in Cycle C, I talked about BlackRock and I've referenced Easterly Government Properties, but the other part of the equation, which I still think you ought to be looking at, are some of the utilities, the Dominion, the Duke Energy, Eversource Energy, Public Service Enterprise Group. I think the utility spaces I mentioned earlier, you're going to see more business demand coming up further online. These have great status during the worst parts of what we've experienced. I think you're going to see some better numbers in the current and subsequent quarters as the economy gets unlocked. More stuff coming in the Dividend Machine.In the Niche Investments, this is the farm team. This is where we try out different companies. If you noticed I've been adding a lot more of some of the interesting companies in several segments that are important. Activision Blizzard, I talked about that earlier. RILY, Ritchie Brothers, as well as Kar Auction Services, those are both defensive and offensive companies for good and bad economies. We have Thor, Marine Products, I addressed and Gray Television, you'll note that that company, even if you don't have a dividend and I really wish they would share some of the cash. They're retaining that cash because they're looking to make some further acquisitions. It's not just hanging onto cash. They have a track record of doing something with the cash and I'm looking for them to do that.We are now five months out from the November third election. You're going to be seeing a tremendous amount of spending. That's going to be occurring from both sides of the aisle. Gray Television has a lot of presence throughout the local communities around the country. I think that's going to be a big success. The other company that I'll make reference to is Samsung Electronics. You've got so much intrinsic going on in this company from the processors, the component goods that everybody's equipment needs Samsung. That also extends to the 5G equipment. They're one of the very few that have a lot of the needed stuff that's not Chinese, that has the blessing of the US government as well as other European governments, which is valued at a fraction of what its peers are and barely above its trailing sales and barely above its book value.I know it's a pain in the tuchus to buy the stock from a lot of brokers. You oftentimes have to get on the phone and pay the fee to do it. If you don't own Samsung, you should own Samsung. They also had a good court victory from some of the opposition leadership in the government in Seoul. I think it's well positioned. Another company which is 5G focused is Ericsson, which has been sitting there. It's been sitting there because the company effectively has been cleaning up its costs. It's been focusing its attention to what it's got going for it. And one of the key things that you're seeing me present is that for the 5G space, one of the key things that the company has is that it has effectively a technology with most importantly, the patents on what actually has to happen to make 5G actually work. In traditional antenna that are used for things, they're basically a broader antenna which allows for the overall movement of data and voice.With 5G, it's very short. It's very focused and the antennas have to effectively be very tuned in much greater numbers. And Erickson has one of the few mechanisms that has the full patent on this particular type of antenna. Outside of them is Huawei. Huawei is not going to be happening in a lot of parts of the US 5G and a lot of the European 5G marketplace and Ericsson is. I think as more people start to recognize what's going to be occurring as this evolution occurs, Ericsson, I think, is going to get further notice.Now you've noted that I've increased the buy price stock has been reflecting some of the improvement. I think more folks are doing the research and seeing what's occurring in the company. I think you're going to see more attention. I could see the stock starting to move. So you're going to see some further writeup and discussion about its technology, its patents, and what's been occurring behind the scenes in one of the coming issues. It's a good stock that if you don't own, look at it. I would strongly suggest you take a look at it and buying it.On the mutual funds, again, we continue to have the general sector allocations on the stocks and fixed income. Like for the Total Return, I'm going to be thinking of looking to reduce the cash portion and increasing more of a defensible cash alternative so that you're not parking money and making the sacrifice to park that money. Meanwhile, on the fixed income side, the corporates, the preferreds and the muni bonds are working very well for us. Stock side, I mentioned the technology sector, the healthcare sector, and followed up by the utilities and real estate are doing well. Now, the one argument for the High Dividend Yield ETF from Vanguard or the Fidelity High Dividend ETF, which is sort of the overall ETF for the general stock market, again, slighter performance, because it's more of the unweighted and dividend focused stocks with less tech.Now I have that in as being part of the defensive way to get the general market. Then I basically recommend you have the tech space specifically. And I think that's the approach I think a more balanced versus my changing to a more S&P weighted index ETF, which I think you're just doubling up on what you already have in the tech space. So that's why I have it there.So again, I don't, other than the cash, I don't see much change going forward. Now I want to address some of the questions and comments that you've been sending in. And again, so start off with John writes, "When a subscriber wants to use the Total Return Portfolio and the Incredible Dividend Machine and the Niche, how should we adjust the model allocations?" Well, John, again, I think you generally want to stay with the general allocation of having the 56% in the stock side and the 44% on the fixed income side. Now, the Total Return Portfolio and the Dividend Machine both have a collection of very good dependable stocks. The Dividend Machine stocks are generally put in, because I think they are defended companies that I think can sustain their dividends and have a track record and be able to pay consistently increasing dividends.That being said, one of the things that I've been talking with my team about is the idea that we could very well make the Total Return Portfolio have all of the stocks of the Dividend Machine and the Total Return. And therefore in the column put the cycle of where the dividends are paid. And therefore you effectively could make your allocations knowing that you'd be able to assemble your collection of the A, B and C cycle dividend payments. So you could basically create utilizing all of the stocks and the Total Return and the Dividend Machine. And then for the Niche, the Niche is my farm team of stocks. So these stocks are ones in which I want you to buy in smaller sums, because again, these are stocks that need to prove themselves a bit further before they can be brought up into the main portfolios.Now you see triumph stocks like BlackRock, and therefore they proved out you've watched me try out Xcel, Alliant Energy until they proved out, then moved up into the Dividend Machine and so forth. And so, that's what I use. I also, in the past, we had Walgreens in the Total Return. I liked the ownership by management. I liked what they were promising to do. I liked some initial results, but they kind of started to slack off on their reforms. Therefore, I moved it down to Dividend Machine, it moved it from Total Return down to the Niche. Watched for some proof didn't get the proof and then we had to sell it. So again, just like baseball teams, they have the main team, and then they had the farm teams where they try people out. If they workout, they bring them up to the main team.So the Niche is just simply smaller sums. So if you normally would be allocating X portion to each position with the Niche, just buy a little bit. So you get in on the deal, you start to get a feeling for the company as I'm following and discussing it. And then you'll watch if it proves that it's going to move up. And of course, one of the newer ones that doesn't necessarily mean to be ends up being a small stock, Amazon, was brought into the Niche because I like Amazon as a perspective of an index on what I see the economy doing now, and going forward with the technology, cloud, services, logistics, as well as the retail platform, it is basically everywhere where we want to be. Even if it hasn't necessarily been all focused on the shareholder, as opposed to focused on the marketplace.Now, the other thing I've referenced with Amazon, I'll just draw your further attention to is that I mentioned the bond issuance. The last time I did a bond issuance was back in '17 when it acquired Whole Foods. And therefore I think there is going to be an acquisition. I would not be surprised if we had Amazon make a bid to acquire a major logistics or delivery company. UPS, it might be a little big. FedEx is cheaper in overall market cap and evaluation. Again, I wouldn't be surprised and I'm watching for some developments there. And I think it would be a big pickup for Amazon, if they could address the other big problem, which is the cost of delivery. Lawrence asks, "Why do you recommend holding Hercules Capital and Main Street Capital in taxable accounts? Their dividends are mostly ordinary income." Lawrence you're right. And again, I've gone back and forth, but these two, as well as some others like Compass Diversified in which, because of their structure, they have the ability to have some of their dividends effectively not as ordinary income, but effectively as some shield, as a return of capital. And therefore I have some concern about running into some of the restrictions within IRA accounts and so forth. All that being said, when I make the recommendation for it to be in a taxable account, as opposed to a nontaxable, I'm drawing your attention to that there is either an advantage to having a taxable account, like a real estate investment trust, where it has the 20% discount of a deduction on your dividends, or there's the potential red flag that might cause an issue at perhaps, or at some point in an IRA.So I'm dealing with it with the most conservative viewpoint, and that's why I do it. But as you've basically stated, you see what you're getting from your own position, you're going to make your own call. I'm giving you the most conservative viewpoint when it comes to the newsletter. Then another Lawrence asks, "How safe is the BlackRock Municipal Income Trust II?" Lawrence, I think it's quite good in the municipal bond market. As I mentioned earlier in the webinar is quite strong. Again, we have not a lot of issuance, a lot of demand, more demand coming into the space and against support by the Fed, both direct and indirectly. And therefore, I think this is quite good along with the two Nuveen offerings. I see that the municipal closed end funds are, are very good buys right now particularly with their discounts that they have.And then Robert asks, "How safe is WP Carey's dividend?" Well, Robert, again, I've been reticent to raise the buy under price. I've kept it more neutral. I've been keeping an eye on what's been occurring on how the company is presenting its rent receipts and its analysis of its tenants. It's an extremely large and extremely diversified real estate portfolio for government properties with government contracts. Technology space, the data center space and also has got educational as the life science space and so forth. And therefore there's a lot of moving parts in there. For now it looks good. Also management has maintained the game plan in its presentation that it continues to raise the dividend distribution quarter after quarter for all the past many years. And therefore that would be a dramatic reversal that I think would be quite damaging.Therefore, I am keeping an eye on it. I would be extremely disappointed. I think there is risk, and that's why I'm keeping an eye on the buy price for now. I'm recommending it as a buy. And then Al asks, "Is there an argument made for gold allocation in your portfolio?" Al, yes, I recommend gold. I have got Franco Nevada. I brought it in June of last year. And again, I don't see gold as an asset class. I see gold as an opportunity and the opportunity is that the US interest rates are down and will remain low and that's extremely positive for gold. The dollar is down to more reasonable levels. That's a positive for gold, and there've been other trading things that have been occurring in the futures market and in the market for physical gold, which are showing some improvements for gold pricing, which I presented in the free Income Investor’s Digest, which if you aren't subscribed to it's free. Go to the main Profitable Investing website, go in the upper left hand corner, you'll see the orange and subscribe that goes out on Thursdays.So the last two weeks I did a whole discussion on what was going on with the gold market. So again, I like gold for very specific reasons. And Franco Nevada is my way to participate in that with a dividend. Kevin asks, " Is this a good time right now to buy utility stocks?” Kevin, that's what I was talking earlier about the utilities that we have, have proven out from a status standpoint. And they've proven out with it with the decline in business and industrial demand for electricity. And therefore again, I think with the unlocking that's occurring in the US demand for business and industry power is going to be much better. And I also like the space of ESG, which I mentioned earlier. So Next Era, Xcel, others. So yes, I think utilities are a value right now that should be bought into.Then Vince asks, "Synchrony Bank has dropped its rates on savings. We need to find some good, safe cash funds."Vince I'm ahead of you on that. As I was just mentioning right around the time we had the sound problem. I recognize that's a problem. And I'm looking for an alternative, including I might reduce the cash allocation and give you a cash alternative. And so I'm working on that and I will be presenting my ideas very soon to shortage. And Mukund asked, "With the terrible economic situation on the ground, can we really expect to see markets moving even higher?" Mukund, I'm hoping I made my case throughout the webinar that there are a lot of people that are unemployed, a lot of communities have had a major problem, but there are more people that have jobs than don't have jobs. We've seen some return of jobs. We're seeing some unlocking, we've seen a little bit of an improvement in the consumer part of the equation.We also have seen a huge buildup in savings, which means a lot of people have a lot of cash they can do with. And therefore, and also the S&P is not just the tech weighted one. There are a lot of other stocks and sectors, including the REITs and utilities that haven't necessarily fully participated in, basically represents the values and that are still some of the individual stocks out there with their own stories like Thor, Marine products, etc. We're not in a bubble. I think we still have some growth opportunities. Then Jack asked, "What's your opinion on B Riley? Now they also have preferred and mini bonds." Jack, I know. I've been looking at the mini bonds and again, the idea of doubling up on a single company by having the common stock, as well as the mini bond, the preferred, that's what's been holding me back.I like the credit status of Riley, because if I didn't like the credit, I wouldn't recommend the stock. And therefore I liked the preferreds. I like the mini bonds. I don't know if I can put them into the issue, but I like them. I think the company is good. It's good to go from a credit standpoint. And Jerry asks, "Please comment on Hercules Capital’s vote to allow the board to approve issuance of shares below net asset value or book value." Jerry, I did have some people write in or reach out to my team and customer service asking about that. I viewed the proxy vote and so forth. And I also looked at the money, the ATM program, which they can issue stock in the public market. That's really what they're doing. In other words, this is just allowing them to use the already authorized stock sales that they've been doing for 2019 into 2020 in which it says basically what the board wanted, if they needed liquidity and if the market had their stock below book value they wanted to have the ability to do this, if they need you to do. And therefore, I think giving them the flexibility is not a bad idea. I think there's a rapid decreasing necessity for that. And therefore, I think it was put together many weeks ago, two months ago, when there was uncertainty, they just want to have the flexibility. I don't see it as a problem. And then Qindi basically asks, "Viper energy has taken off recently. Do you expect the price coming back to a range of $9 or below?”The key thing with Viper Energy is as I was pointing out, I kept the stock, even though got rid of a lot of the petroleum sector with this sudden hissy fit between the Saudis and the Russians. And the idea that, Viper has gotten down to pretty much at book value, which means all of that valuable land it's got and everything else. It's got a ton of cash equivalents. It's got very little debt. It's got a lot of capability as far as status. And therefore, I think people recognizing that it isn't going down the chute. And again, I'm looking at there's cash to be made from its properties, even with oil in the $30 to $40 range. And therefore, I think that's why that the stock has been reflecting that it's a value. I just don't think that's going to fall off down below that unless we see a big drop off in the headline rate of West Texas Intermediate and Brent. Again, it's very difficult to call.We had the special meeting of OPEC+. We had the Saudis and the Russians said, well, we're going to cooperate a little bit, but meanwhile, you have a lot of members and an extended countries that are not going along with the cuts. And therefore, I think the idea that oil is just something where it's got some challenges. I have the two pipeline companies that are proven as being cash generators. I like Viper because of what it has and its underlying land assets and what it can generate with cash. And therefore I think it's a good recommendation. I will probably be raising the buy under price and you'll be reading about that soon enough. And then Nicholas asks, "Can you give me an update on MFA Financial and CVA?"So Nicholas, MFA, to reiterate, when the financial markets started to lock up before the Fed basically stepped in to provide liquidity, MFA was doing fine. Its portfolio of whole loans that had including non-qualified, these would be loans they're made to wealthy retirees, independent contractors that might have credit scores in the 800 plus range but don't necessarily have regular W-2 income or loans that are don't fit conforming numbers that are mandated Ginny, Freddie and Fannie, and therefore, have to be done on a separate basis. So the performance of the underlying loans was not the problem. It's just all of a sudden, bond traders and dealing desks that deal with and put prices on the mortgages themselves effectively stopped. And therefore, a lot of trading desks that would normally take on and build and put a value on and say, "Yeah, I'll bid at this price," said, "We can't put any bid."And so if there's no bid, that means the value of the bonds might very well be seen as zero, even though nothing changed as far as what was going on with the actual loans. That's what set off instantaneously that their portfolio, which is still performing, went from being worth less to worthless at least as far as the market was concerned. That set off the margin calls, because all of a sudden they have bonds that had to be put with a zero value, officially with no bids that set off a wave of mess. And have basically been working with forbearance on some of its counterparties. And it's been continuing to deal at the book value, in other words, the value of the portfolio is multiples of what the stock price is and therefore they're working out what they can do as far as putting prices on their portfolio and working through that.I basically see the potential for MFA to effectively resolve its condition and get liquidity flowing back again as being possible to maybe probable. And, but again, I couldn't stand around while this was basically just all of a sudden had the thing just yanked out from the marketplace. That's why I sold it and the portfolio and wrote exactly what I just went through as reason why. I think there is still a good possibility, probability that they will work out. Now Covanta. Covanta basically again, energy from waste, which is a phenomenal part of the ESG space. A company that has a lot of necessity in a lot of municipal markets. It's a good business model. Municipalities pay Covanta to take their trash and recyclables. They burn it up in a clean way and they generate power, which they sell back to the municipalities.It's a great business model and it's great for the environment. And it pays a dividend. With Macquarie, which is the massive Australian-based infrastructure financial company, it has a great partner in doing some contractor deals in UK and in Ireland and so forth. It generates good income and some more growth. It got a little bit tight as far as the cashflow. Now, utility rates, power rates have dropped. I mentioned this earlier with utilities because of the lack of business demand. So wholesale power is lower and therefore that put a little bit of a squeeze on Covanta and the idea that some of the business waste and business recyclables, because a lot of businesses were shuttered or locked down, they weren't dropping off a lot of stuff to Covanta's facilities, including in Alexandria, down to Florida, etc., and for that there are two little squeezes they got put on them.And the company was already just a little bit levered, from a financial standpoint. And I think a little too generous when it came to its dividends, I would have preferred to see more of retained retention of earnings for its operations. And therefore, that's why I basically took a step back and recommended that we sell it. I brought Waste Management up from the, from the Niche Investments to replace it. It's a pretty expansive and growing energy from waste program. I am following Covanta. I think there's a lot of, I like management team, although I think they should be a little more financially conservative. I also, I think I like Macquarie. I followed Macquarie for a long time. I like a lot of their funds, I like some of their projects that they do. And I would think if I were Macquarie I would be eyeballing Covanta at its current market cap and valuation saying, "Why don't we just bring this thing in house?"So again, I'm watching that. If I see an opportunity for us to reenter that maybe in the Niche Investments, I will make the explanation and the rationale for it. Again, like the company. I think it has promise and there is a potential for some good progress. I'm keeping an eye on it. If something happens that that can make it defendable as a buy, I'll bring it back to your attention. So I think that's all that I have that was forwarded by my team. So again, looks like I'm going to be ending a little bit early again, I greatly appreciate all of you attending, sending in your comments, questions. Note that we will have the PowerPoint presentation and the recording will be posted soon. We'll have the transcript available not long from now.Again, I greatly appreciate you subscribing and renewing. If you have questions that weren't addressed, send them to my customer service team, they will get them to me post haste. If you have suggestions for articles of certain areas to look at, or for further discussions in the webinars or in the journal, let me know. I've also been looking at doing a podcast and if you had an interest in that reach out, let me know, and that would be free as part of your subscription. So again, thank you very much. Sorry for that sound snafu a little while ago, we'll work on trying to avoid that next time. So again, thank you again. This is Neil George for Profitable Investing. So long. ................
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