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Welcome to Catalyst. I'm Madison Mills. We are 30 minutes into the US trading day. Let's get you the 3 catalysts we're watching this hour. First up, we're going to size up Magnificent 7 earnings as big tech results dodge a worst case scenario for markets and investors. plus, as.Buffett announces his succession plans. We're going to break down where his successor might deploy that massive cash pile, and we'll go live to the Milken conference in Los Angeles for interviews with Apollo CEO Mark Rowan and Bill Ackman of Pushing Square. You won't want to miss it.Half an hour into the start of US trade and I'm going to get you a check on the markets, but first off, I want to break down the ISM data crossing the wire right now here. US ISM Services price index rising to the highest level since January of 2023. The ISM Services PMI rising at 51.6%. That is from 50.8% and is also above the estimate here of 50.2%. Also taking a look at new employment, the survey data coming in at 47.1%, actually a bit of a.There coming in at 49, so potentially a sign that unemployment is not under pressure, at least for that particular area here as we continue to take a look here at this data coming in again, that ISM Services price index rising to the highest level since January of 2020, 23 and new orders here, the survey coming in at 50.3%, the actual number coming in at 52.3%. Taking a look at the markets here, you've got them continuing to.Under pressure. This has been happening since the market opened this morning. Taking a look at the 10 year yield down just a clip here but still holding above that 43 level, continuing to see a touch of a steepener a little bit further out on the curve here in the bond market as we do digest that economic data coming in this morning. I want to bring in Adam Johnson. He is the founder and author of Bulls Eyebrief.com, a weekly investment letter that explores American ingenuity through actionable stock.He's going to join me for the hour and Adam, I'm really excited to speak with you because I've been asking my sources, investors over the course of the weekend, like what was that rally all about? What was

thebeginning of a big long rally.

So tell me, tell me where you're so convicted in this market. Tell me how you

I'm so convicted. Well, I'll tell you why. April marked the low, and there are a number of reasons that uh we can say that. Number one, just think about this investor sentiment was at a 2 year low.At the beginning of April, consumer sentiment was at a 50 year low. On top of that, you had the volatility index, the VIX spike to 60. Generally spikes above 40 are considered panic spikes, and it went to 60 in a similar vein, the put call ratio went to 1.6. Uh, that means that there were, uh, 1.6 times as many puts being bought as calls, so people were.Scared they want to insure their portfolio. Anytime you see put call above 13, that's climactic. At one point, 99% of stocks were below their 10 day moving average, which is a short term washout. But even more importantly, 94% of stocks were below their 50 day moving average. much, too much fear. Oh my gosh, everything was completely washed out because everyone was so certain that terrorists were going to destroy the world.And the recession was inevitable and that's always what happens at the bottom. People can only see the negativity right in front of them and sure enough, the small caps, the Russell small caps were down 32% at the low. The Nasdaq was down 28% at the low. I know because I'm long a lot of those stocks. My portfolio dropped from high to low. The drawdown over about 5 weeks was approaching 30%.

That much money was on the line.

That's a lot of money. I manage money for a lot of people around the world and um to see the drawdown that fast is very upsetting. Not a single one of my clients uh panicked at the bottom and to the contrary, a number of them actually put more money in, and that's what you do. That's the lesson of the past several years, Madison, that, um, that, um, very deep, nasty, uh, panicky sell-offs like that are moments to buy. It's hard to.Buying the whole, it's very hard to do and you buy and then the next day they're down another 5% you say wow, I'm an idiot. No, you're just, you're just trying to buy on the way down. You there are two ways to buy you can buy on the way down or you can buy on the way back up. Right now we're on the way back up. So for those who didn't buy the bottom they say, oh gosh, I missed it. No you didn't because we're going higher. And so that's why, uh, I, I have been buying over the past couple of weeks and I continue to buy. How do you choose what to buy?Well, that's part of the part of the process. Remember, yeah, I run the Bullseye American Ingenuity Fund, so my whole focus is on the people, companies, and technologies driving the world forward. So I'm looking at, uh, high quality companies that generate a lot of cash. They're already making money. I don't buy companies generally speaking that don't make money. OK, I have a couple in the portfolio, but I owe 41 names, and generally they're all companies that are making money. So when I run my cash flow models and I can get to.A point of higher cash flow into the future and then I put a multiple on that cash flow, discount it back to the present. I say, oh, it should be trading at 70, it's trading at 42. 0, and I'm going to buy some more,

right?

Right. All

right,really great overview and framework for our investor audience to keep in mind. Adam, thank you so much. You'll be with us for the whole hour to ask some questions. I'll ask you questions. It'll be great. We're going to move forward here though tech stocks pulling back along with broader markets after a fairly positive week with 6 of the mag 7 already reporting earnings with outlooks that.Relatively strong in the face of President Trump's changing tariff policies. So what does this mean for stocks and for tech going forward here with us we've got Lisa Schreiber, and NG investment analyst at Radiant Investments. Thank you so much, Lisa. You're with Gradient Investments as an investment analyst. Apologies for that. Talk to me about your note here. You talk about big tech earnings defying fears of the worst case scenario. Is that enough to give you confidence that these companies can maintain earnings growth moving forward?

Yes, absolutely. I mean, it was a, it was a big week last week with um most of the um Mac 7 names reporting, and I think overall uh the AI story remains intact, which is really important for the market, especially in case of uncertainty. Um, we hear, when we look at capE spending, um, it's high. Some companies even, uh, uh, even raised that uh that bar even higher, uh, which gives us um a lot of, of confidence here that the Mac seven, can, can.Uh, further drive the market here and what we also, uh, looked um at in especially with the Mac 7 names with some of them is, um, ad spending. How is ad spending, uh, developing here, right? Because that could be, uh, the first uh point where businesses are struggling that they're pulling.Ads which we didn't see at all when we look at me at spending come in above expectations, defying all odds, which is a good sign going forward and especially a good sign for the tech and for the next 7

earnings. So Lisa, what is your biggest concern for the big tech names going forward for the year?

Um, obviously it was, uh, decelerating in, uh, the AI spend, right? We heard a little bit earlier in the year, um, uh, we heard something from China, Deepsea, right, um, where the market, um, reacted very negatively to that. I think that is behind us, uh, because when, uh, the general, um, new development of AI and what drives us forward is.Happening here with the Mac 7 tech names, right? And if you build something, if you build uh the future of AI and innovation on the green space, you need a lot of money for that, and that is continuing to drive the markets here. So I would be not so concerned about that and we heard with the last earnings season, Cac spending remains intact, the overall demand remains intact, which is very positive here.

All right, and Lisa, my guest host Adam has a question for you. Oh

great, thanks, Madison. Uh, Lisa, I'm curious to talk to you about Google, and I'll tell you why I own it. I imagine you do too. It's trading down around 17 or 18 times earnings. That's cheap. It's cheaper than the S&P. I think part of that is this FTC lawsuit where they're trying to figure out whether there's uh an ad, uh, monopoly, uh, that Google enjoys and that, uh, how they might deal with that. What's your take on Google?

Uh, we like Google. Um, we still think it's a, it's a great opportunity ahead. Obviously there are struggles with their, um, monopoly, uh, lawsuits going on, uh, but overall I think it will still, uh, continue to do well, um, when we look at a little bit under the hood, um, at spending um from businesses, what I mentioned earlier, still remains very strong, but I think still, um, it, it can continue to do well, uh, for the year for sure.

I guess I, I hear you talking about ad revenue and the importance of it, and it makes me wonder to what extent you're talking to the economists on your team as well about any kind of fall off in the macroeconomic picture that could weigh on capex from all of the customers of these big tech companies. How are you framing your thinking on that and how are you modeling out that risk?

Uh, so overall I mean when we look at the general uncertainty in the market, which has a lot to do with policy uncertainty and with tariffs, right, um, then there is important, uh, to see, um, especially for some companies they suspended, uh, guidance, right? They, they put back uh down their outlook because they say, hey, we do not know, uh, much more than you do with all the policy uncertainty that's going on, right? And we do not.Really have the full impact of tariffs yet that we see in the hard numbers. That's probably um coming in Q2, Q3, depending on if their deals are are being made or not. So this is really um what we are focusing on, right? A guidance, um, outlook, and especially if they're, if we see signs that they're getting a little bit nervous and pulling back advertising, for example, which could be an early sign of struggle here.

And I also lastly want to end on your magnificent Seven top performer for this year. You had put down as Amazon. How are you feeling about Amazon today?

Um, still the same after earnings, um, than before the earnings. They beat on top and bottom line, right? When we look a little bit, um, deep under the hood, um, they came in a little bit light with the cloud business, which might be a concern. And when we look a little bit deeper under the hood, we see, hey, this is mostly to capacity constraints, right? The demand remains intact. And we saw the same.Thing with Microsoft in Q4, right? Uh, also came in light, um, but that was due to capacity constraints, demand, um, still high, and in Q1 that all reserve, uh, reversed back. So I think that is not really a concern here. Um, it's a strong company diversified in both retail and cloud. They are very efficient and they have a proven track record of cost efficiency and cost cutting.Um, high operating margins so they can withstand the storm here. It is the cheapest it has been in years, um, so I would say the sell off here with Amazon, um, especially due to the, uh, tariff constraints in the retail business is a little bit overdone here and it's still my top favorite pick for the year. All right,

Lisa, thank you so much for making the time and giving us those actionable insights. Really appreciate it. Thank you.And Adam, I want to turn to you to get your thoughts on this and specifically how you're kind of thinking about and differentiating the performance of these seven big tech superstars.

Well, I think Lisa just laid out the case that growth has kind of morphed into value. Some of these stocks are very cheap. She talks about Amazon. We're talking about Google. I mean, isn't it amazing? Nvidia at one point on the low was trading.Deeper than the S&P 500, Nvidia, the golden goose, VAI stock with 75% earnings growth was trading at 18 times earnings on the low. Yeah, that's crazy. So, uh, all these wonderful big growth companies have morphed into value companies, and I think that's a big theme, uh, for investors at the moment. I'm along all these names and they're.Just so much that is so cheap right now and here we have it in the mag

7. How do you not worry about some of the, you know, existential risks to these companies? Like what if the customers from Nvidia fall off a cliff because there's a recession or what if Huawei starts to really be out Nvidia? Like how do you ignore some of those or or are you ignoring them through your thinking?

You know, we have to live our lives based upon what we see in front of us, and there are always reasons not to do something. There's always a reason, you know, not to, not to leave your house or not to go take a vacation or not to buy a stock, whatever, but we do the best we can with what we know and we put 1 ft forward and we go for it. So rather than get upset about hypotheticals, I mean, you know, what if there's a nuclear bomb that somehow.Finds its way into what's happening in Ukraine. I don't think that's going to happen, but what if, right? Well, why would you wrestle with something like that? That that's the, that's the sort of thing that war games people do at the Pentagon. It's not what real investors do. It's not what, uh, uh, real people do. We just, we go with what we know. You

go with

what

you know and that's how you hopefully make some money. Adam, thank you so much, really appreciate your insights you'll stick with us for the hour here for our audience. We're gonna have all your markets action ahead, so keep it here. You're watching Catalysts.

Welcome back to Yahoo Finance here at the Milken conference in California. I'm Yahoo Finance executive editor Brian Sai here with a very special guest that is Mark Rowan, Apollo CEO, and of course I should mention Apollo, the parent company of Yahoo Finance. Mark, good to see you. Nice to see you. This is the first time we're going to talk to you after your earnings call on Friday, and I.You said something, many things which we're going to dive into. You said this quote, I gotta get to comment on this. We have lived through this period of hyper exceptionalism. I believe we are now back to exceptionalism. What's the difference between the two? Well,

think about what's happened. If you're anywhere in the world for the last 20 years, you have 3 large markets China, Europe, and US. For the last 20 years we've been the cleanest dirty shirt. All the money in the world has come into the US. Think about what's happened to our indices.10 companies became 40% of the S&P. One of our companies, Nvidia, was worth more than the market cap of every stock exchange other than Japan. Those 10 companies traded at a 60 PE. All this money came flowing into the US. We were the largest recipients of foreign direct investment 34 years in a row.We were atWhat we've done, and I'm not saying what the administration wants to do is wrong. I actually believe what they want to do in terms of resetting our trade relations with the world is the right thing to do, but the way it's being done in the short term, we introduced uncertainty and in the long term we actually damaged the US brand by just moving precipitously moving in a non-choreographed way. We've given people a reason to think about whether their money is in fact safe here now.I believe it is. I believe we are still 60% of all the capital in the world. We have lots of things going for us, but it would be hard to deny we have not moved down a notch.

Well, I know you do not say that the US brand has been damaged. You don't take that that lightly. Why is investing in America still safethen?

Let's start with what your alternatives are. We are the largest capital market in the world. We are 60% of all the capital. We have all the growth. We are at 4% unemployment and whether people like how we got here or not, we're building infrastructure, we're building semiconductor plants, we're building inflation reduction act, manufacturing. Oh, and now we're adding energy, we're ramping defense production, we're doing next generation data and power.Half the time I worry about capital flow, the other half of the time I worry about where are the workers to actually staff what we're building here. We are it every place else in the world.Has the same issues that we have without many of the advantages so people can at the one on the one hand say I'm concerned about abrupt changes in US policy and what that might mean.On the other hand, we can still step back and weigh our relative advantages and against our competing blocks, and they are manifold.

Last time I talked to you, Mark was at our invest conference in the fall, a week after the, uh, President Trump got, uh, got elected, and you were rumored to be a potential contender for Treasury Secretary. But now that we have seen the playbook that Secretary Besson has run, the president has run.What would you be doing differently if you were in that seat? Look,

unfair to the Treasury Secretary has a very difficult job and I think he is actually doing quite a good job under the circumstances. Let's start with the goal. We are looking to reset our trade relations with the world. We are the freest trading country in the world. Allies and strategic competitors have introduced blocks which keep us from accessing their market, removing those blocks, this is a fundamentally worthy goal. But imagine if we were going after this.With the US and Mexico together, the US, Mexico, and Canada together, the US and Mexico together should be the dominant economic force in the world for the next 50 years. US with advanced manufacturing, knowledge-based manufacturing, Mexico as a source of skilled labor. Northern Mexico should be the biggest boom town in the world. The issues that separate us from Mexico, notwithstanding two significant free trade agreements have not been resolved.If tariffs are a means to help resolve those issues, that's great. One Mexican industrialist said to me, and I quote, If it takes tariffs to make Mexico great again, so be it. Canada, exactly the same thing facing the world with our own markets established and bedded down probably just gives us much more leverage.

Do you agreewith Warren Buffett that tariffs are akin to a weapon?

Um, I don't. I think, and I, I've said this publicly, I think there are smart tariffs and there are stupid tariffs. Tariff is just a tool. A weapon gives it a political context or other things.

Are 145% tariffs on China, stupid.

They will certainly cause an abrupt adjustment, so think about what's happening.We have businesses in the US who have through no fault of their own, been induced to rely on a system of imports. You're now the 100 year old toy manufacturer. Your toys are coming into the port in the next couple of months

to come with no hair, Mark, you can't, we're dolls.

The way the tariffs work, the importer, that 100 year old store, has to pay the tariff when the goods hit the port. No one has that kind of money. We set this thing up in a way where the goal is worthy.But the method by which we're doing it is actually gonna cause significant pain in the US.That's not to say it's not going to cause even more significant pain in China, but if we have if we want to actually get a good outcome here, we have to have the ability, actual or perceived to withstand this for a really long period of time. I'm not sure tariffs are currently set up to do that, and you see exemptions for Apple, exemptions for some of the big companies. My guess, if we see significant Main Street retail bankruptcies, we will see exemptions on goods. So just a blanket tariff, probably a very.Blunt instrument

ofcourse, uh, Apollo owns many, many companies. You get a direct uh line assigned to the health of businesses in the US and around the world. Do you see significant pain financially in the businesses that youown because of the trade war?

We don't, um, think of our, our portfolio is a US centric and a to a lesser extent a Europe centric portfolio. Um, on balance, tariffs are kind of not an issue. There are winners and losers across the portfolio. What we do see though is uncertainty.When you don't know what the rules of the game are, you stop investing, you stop hiring, you stop making moves, and that's what in my opinion we're seeing across the economy. We're seeing uncertainty, we're we're seeing a slowdown. That does not mean that cannot pick up again if we have certainty, but until we have certainty we're gonna see a slowdown.

I think back toyour investor day October last year, it feels like yesterday in my mind, maybe not in your mind, but you mentioned that.You want to double your assets at Apollo by 2029 against the backdrop of a trade war. Can you still do that?

I, I think very little of what's happening now is actually impacting our industry. Our industry is being driven by everything we're building. Think about we're building infrastructure, we're building next generation manufacturing, we're adding to energy supply. We're doing a data and power. All of these things are long dated and complex.Long dated and complex does not get financed in the banking system. It does not get financed in the investment gra marketplace. It comes to private capital. Oh by the way, Europe wants to do everything the US is doing with a not as evolved capital market. I see nothing but demand for capital in the kinds of forms that our industry as a whole has done, and so I am very bullish. I also see expansions of demand for the asset.We started as a relatively small allocation from institutional clients. We then added to it individuals. We then added to it retirement services, insurance companies, a theme showed in the industry that this could be done and done safely. We then added to it the fixed income bucket of our institutional clients, larger than everything we've seen before and more recently we've seen traditional asset managers emerge as potentially very large purchasers of private assets.Among the most interesting things happening in our industry is actually that last statement.We are watching traditional managers redefine what it means to be an active manager from the buying and selling of stocks and bonds to the addition of private assets to heretofore public portfolios. Most consumers, most investors will not do business with Apollo directly or Blackstone or KKR or any of our any of our competitors. They will do business with their traditional asset manager who will access private markets most likely through one of the big firms.

Lastly,Mark, we were here one year ago.And I asked you about what was happening on college campuses across this country.Now things have gone another direction. You see the the Trump administration.Giving the business to Harvard, uh, giving the business to Colombia, what do you make of what the administration is doing with uh America's higher education institutions?

A couple of conflicting thoughts. First, US higher education system among our most important competitive advantages. Having said that, imagine how it sounds in government where we have our institutions bragging about the size of their endowment and how few students they admit.Where 95% of their faculty and administrators adhere to one political view where they have failed to adhere to basic norms, where 50 and 60% overhead charges are being leveled against grants to the institution, this is a system in need of reform. Universities do not reform without outside pressure because there is, for most of them, not all of them, very poor governance.What the administration have done right now and you can like or not like the tactics, they've gotten everyone's attention. There is a conversation coming about reform and higher education. I'm hoping all of these moves actually lead to a comprehensive reevaluation of overhead of free speech.Which I am firm firmly in favor of versus preferred and non-preferred speech, how these universities are funded, what their purpose in the world is. I want to see our university strong and as a source of competitive advantage. It's not clear to me that's where they work.We'll have to leave it there.

You've always been gracious with your time. Apollo Global Management CEO Mark Rowan, we'll talk to you soon. Thank you. Aci it. All right, Madison, back to you. Thank

you so much to Brian Sazi, our executive editor, for bringing us the conversation with Apollo CEO Mark Rowan. I should mention a disclosure here.Global Management is the parent company of Yahoo Finance. You can stay tuned for more coverage from Mil and we will be sitting down with Pershing Square's Bill Ackman later on today around 12:30 Eastern time. We're also going to have all of your markets action ahead right here, so stay here. You're watching Catalysts.Warren Buffett announcing his succession plans at the annual shareholder meeting, the question top of mind for Berkshire investors is what Greg Abel will do with its almost $350 billion in dry powder. Joining us now, investor Whitney Tilson, who currently serves as the lead analyst for Stansbury Research and is theAuthor of several books including The Art of Playing Defense, How to Get Ahead by Not Falling Behind. He's also currently a candidate in the New York City race for mayor. Whitney, great to speak with you. I want to talk about that cash pile. To what extent do you feel like you have any idea how Greg Abel is going to deploy all that cash?

Well, keep in mind, um, Greg Abel isn't the one deploying it at this point. Buffett is staying on as CEO through the end of this year. That's another 8 months, and then he's still chairman of the board, so I'm a little surprised the stock is down 6% today on this news because Buffett isn't going anywhere and uh probably will be around for another few years, and I think the answer under Buffett and Abel, um, they've been working together for many years is they're not going to do much with it at this.They are waiting for attractive opportunities and the markets rallied in the past few weeks and you know sort of looking like there might be some opportunity. Buffett mentioned a possible $10 billion investment that he was going to make recently.But somehow that fell through maybe because the markets rallied.

Yeah, and I just want to get your take on the market reaction here. The stock, as you mentioned, down nearly 6%. How should investors think about buying Berkshire stock without necessarily getting access to Warren Buffett long term? I understand what you're saying that the resignation comes at the end of the year and of course he'll still be involved, but what if the market action is signaling to us that investors really wanted to make sure they have that side of Buffett?

Well, I think the main reason for this reaction is the stock had gotten a bit ahead of itself this year. The stock was up as much as 19% when the market was down big. It's still, even with today's pullback, still up 11, 12%. Markets down 3 to 4% for the year. So Berkshire has been a fabulous performer, I think perceived as a, you know, a flight to safety with that big cash pile. So that big cash pile has actually, you know, been a tailwind for Berkshire stock this year.But you know, based on Q1 earnings, I think intrinsic value is roughly flat this year, but Berkshire is, you know, 15 to 20 points ahead of the market this year, and that means it's gone from maybe 5% undervalued to 10% overvalued with today's pullback. Maybe it's back to.You know, 3 to 5% overvalued. So I think it's a bit of a correction based on valuation, but that doesn't mean Berkshire's a sell. It means I think it performs in line with the S&P 500 at today's price. And so anyone who's holding it for the long term should keep holding it. But I don't think you know a 6% pullback today makes it a great buy because it started from a point of overvaluation. And

Whitney, my guest host Adam has a question for you.

Whitney, I remember back in2009, actually March 9th, the day of the low, I got a call from an old options trading client who said, you know, Adam, it could really get ugly. And usually, right, and usually when you get calls like that, that's the bottom. So you know we talk about this big stash of cash at Berkshire and small caps went down 32% at the low. That was the drawdown that we saw on the April low, and yet they're still sitting on it. Um, why sit on that kind of cash and not deploy it with markets down 25% or 30%?

Well, a couple of reasons. One, things rallied pretty quickly. Two, Berkshire is so big it's a 1 trillion1 market cap. It's not going to be out there picking around, you know, small to mid cap stocks. There are only a handful, you know, maybe 100 or so publicly traded stocks.That Berkshire could buy and Berkshire and Buffett and Abel have long made it clear they want to buy wholly owned businesses and that involves a negotiation with a very rational and knowledgeable seller and so I suspect that may have been what happened with the $10 billion deal that fell through that probably wasn't a stock as a wholly owned business.So you know it's it's not as easy as it is when Berkshire was smaller to take advantage, take advantage of quick market dislocations.

So Whitney, if they don't find value to deploy the cash, then why not return the cash to shareholders? Do you think that there's any increased likelihood in Greg Abel potentially starting up a dividend at Berkshire?

Um, yes, I think it is possible. I don't think it's likely at this point. Buffett and everyone at Berkshire is very, very patient and cash has built up in the past, and markets generally cooperate every so often and provide a lot of opportunities to put money to work like back in '89.When Buffett did put a lot of money to work, but there are only two ways they can return that capital. They were buying back stock fairly aggressively a few years ago, but again, as Berkshire's stock has risen to be, I calculated it it was maybe a 10 to 20% discount. They were buying it back, but today here at intrinsic value or even a 10% premium, Buffett hasn't bought back a single share in the last three quarters, I believe.So that leaves dividends and again Berkshire could pay a 25% 1 time dividend tomorrow and still have $100 billion of cash left over so um that, that wouldn't that's possible, but I don't think it's likely. I don't think you should buy the stock anticipating uh a big.One time dividend, but it wouldn't surprise me in the next 5 or 10 years, particularly when Buffett's passed if Berkshire does some combination like Costco does, where Munger was on the board many years where there's the occasional big special dividend and then an ongoing dividend aswell.

All right, really great overview there. I do want to end by just getting a sense because I know that you know Warren Buffett.Personally, you're also one of the contributors to uh the book about Charlie Munger, the poor Charlie's Almanac book and and I'm curious as someone who is obviously an investor yourself and an analyst, what are some of the and what is maybe the single biggest investing framework that Buffett talks about and prophesizes that you personally have utilized in your investments and have found the most success with?

Um, I think it's, um, I think it's the importance of being patient and being rational and not letting your emotions get involved. Most human beings are hardwired to be very irrational when it comes to financial decisions and being able to step back and not let market turmoil, not let a bunch of cash piling up, um, affect your long term investment decision making.

Yeah, and that's something he also talked about again over the weekend. Whitney, thank you so much for making the time for us this morning. Really appreciate it. My pleasure.Coming up we're gonna continue our Buffett conversation with a look at Berkshire's biggest holdings that's coming up next when Catalyst comes back.

Warren Buffett made billions over the years with his value-focused long-term approach to investing in stocks. So let's take a look now at how Berkshire Hathaway's top holdings have evolved over the years. I'm Jared Blickery, host of Stocks in Translation.Most of Warren Buffett's bets have had a rocky start to the year along with everything else. Berkshire's biggest position, Apple, has shed $13 billion with smaller losses in American Express, Bank of America, and Chevron as well. But consumer staples, Coca-Cola, it is up $4 billion. And let's now dig into some of the details. Berkshire first bit into Apple in 2016, with Buffett calling it the ultimate consumer brand powerhouse. At one point, Buffett owned nearly a billion dollars.In shares. He's since cashed in on some of those gains, trimming back recently, but at $75 billion Apple is still Berkshire's biggest bet. Not bad for a guy who actually avoids tech stocks. Buffett first swiped into American Express in 1964 during the legendary salad oil scandal. Look it up if you're interested and talk about buying the dip because he has held ever since, owning 1/5 of the company. Buffett calls Amex his gold card and a nearly $40 billion.holding he has no plans of giving up. In 2011, Buffett bet big on Bank of America $5 billion when bank stocks were decidedly not popular. He turned warrants, which are essentially long-term stock options, into big profits, eventually holding over a billion shares lately. He has cut back a bit amid bank sector worries, but at nearly $30 billion it remains a textbook MBA case in contrary invested coming out of the global financial crisis.Now Buffett first popped open Coca-Cola stock in 1988 and has not sold a single share since. He calls it his ultimate forever stock and at about $25 billion today, it has been a decades-long case study in dividends, brand power, and patience. His love for coke is almost as legendary as the drink itself, and you can see him sipping it over the weekend at his final Berkshire.Meeting as chief executive officer. Finally, Chevron is a newer edition first fueling up in 2020. Buffett quickly pumped up his stake to around $30 billion attracted by strong dividends and then solid profits. Recently he's trimmed back a bit, but with around $17 billion invested, Chevron is still a key holding, a classic Buffett bet on.Dividends and fundamentals in a sector that's easy to understand. Everyone needs oil and gas these days. Buffett surprised the world when he announced he's stepping down as the CEO at the end of the year, but he's still holding on to the chairman of the board title, and as a result, Berkshire is down about 5% today. But that's only the worst day since the big tariffs announcements about one month ago.Tune into stocks and translation for more jargon busting deep dives, new episodes on Tuesdays and Thursdays on Yahoo Finance's website or wherever you find your podcast.

All right, Jared, thank you so much as always.It's time for some of today's trending tickers. This morning we are watching Berkshire Hathaway previewing earnings for both Palantir and Hins and hers. First up, Berkshire trending after a big weekend of news out of the company's annual shareholder meeting here, including Warren Buffett tapping a new successor. We did know Energy executive Greg Abel was going to be taking over. That is set to occur at the end of this year. Shares are lower today on track for their worst day since April 4th. They're down just about 5%. Adam Johnson is still here with me to.Some commentary and Adam, I know this isn't a name that you own, but how do you think it's a

value name. I'm a growth investor. Yeah. Anyone who's surprised that Warren Buffett, God bless him, is retiring, um, uh, needs to just pick up a newspaper and I mean, come on, how old is Mr. Buffett? He's in his 90s. He's in his 90s, and we're going to be surprised that he's retiring. I'm only, I'm only surprised he didn't retire a decade ago. I mean, God bless him, uh, a legend, a gentleman, um, a thinker.A leader and inspiration for so many.

Does he frame your thinking on investing at all? Has he influenced how you think? You're very different thinkers.

We're very different. He is a value investor. He, for example, Bank of America, one of his big positions. You buy Bank of America when it trades at a discount to book value and you sell it when it gets to about 1.5 or 1.6 times book value, right? And a value investor says here it's a buy, here it's a sell, and you're playing that that differential and and value.sort of go in and out of the same name perhaps you know multiple times as the stock moves around with the business cycle. I don't do that. I'm trying to find a wonderful young company or in some cases a bigger mature company that is growing at double digits, and by double digits I want to find earnings growth of 20 to 30%, maybe more in the case of say an Nvidia or AI stocks, and then I try to figure out what the uh what the cash flow will be 3 to 5 years from now, discount all that future cash flow back to the present.And then put a multiple, a PE multiple on that, and that's if, if, if I say if I do that analysis and I find that the stock is trading at a price that I think is a fraction of where it ought to trade, I buy it and then when it gets to my target, I always sell a third and then I rerun the analysis and if I can get to a higher target, I hold on to it. So that's the way I invest very different from what Mr. Buffett does. Well,

we're

going

to talk about a potential name that fits somewhat into that framework here.We talk about Pallanttier shares wavering just a bit this morning. Earnings out after the close. Analysts are expecting a massive 36% year over year revenue jump. The stock down about 1% right now. Investors gearing up to get insight into AI demand and defense spending. I know this is the type of name that you could have added to. It's a growth stock, but it is not in your position.

Istared at that stock every day when it was at $8 and thought, Can I buy this thing? And the reason I didn't, and I was wrong not to buy it, but the reason I didn't.Is that at that point, um, their, their business model was lopsided by which I mean they would go into a company and they would get a huge upfront payment which was typically 90% of the revenue they would get from that client and then over time 8 months after they installed the AI uh platform into that company, they would get a small subscription which was just 10%. It should be the other way around, get 10% up front and then get the 90% on the back uh back end spread out, uh.Quarter after quarter after quarter, that's sustainable cash flow. They didn't do that. They have since switched, um, but the stock had already run and at this point it's trading at, I don't know, 200 times earnings. That's just, I know I'm a growth guy, but 200 times earnings is an awful lot. So no, I don't own Peltier, and that's specifically why it was about the cash flow of the business.

All right, well, let's also talk about another name here. Hims and hers announcing a C-suite shakeup ahead of its earnings out after the close. The health company tapping an.Amazon executive as its new chief of operations as it does plan to expand into areas like blood testing. Obviously him and hers has been a bit of a run over the course of the past couple of months. They are providing a compounded GOP 1 drug to consumers recently teaming up with Big Pharma as well in an attempt to reach consumers more broadly with these drugs. How are you thinking about a companylike this?

So I don't own this one because it's feast or famine. It's very hard to try to figure out whether this company's.Gonna make money a year from now, 2 years from now, and here's why as a compounding pharmacy, they are allowed to compound or fabricate or make drugs that are on allocation because we can't make enough. Great example uh Wagovi Ozempic, right? Uh, uh, drugs made by Novoordis that help, uh, diabetes and weight loss. Well, there was so much demand for these drugs that, uh, Novo couldn't make enough of them, so compounding pharmacies were allowed to basically just look at the.Recipe and say oh here's how we make it and then they make it and sell it um but when uh the drug comes off allocation and those drugs are no longer on allocation, Novo can make enough of them they're not allowed to make them anymore, right? So it's feast or famine, um, that's a, that's a hard business to, to own. I mean, more recently they've gotten into the uh sex drugs market, right, uh, you know, um, uh, Cialis, uh, etc. so if you're on your Instagram feed and you keep seeing, you know, all these.Ads, you know, better, better sex life. Go to him and hers,

you know supplements,

yes, but um, yeah, I'm, I'm, I'm not a buyerof this company.

Yeah, and to your point, we definitely see a lot of volatility around any announcement from the FDA on GLP ones. That's a great framework there for those investors. But coming up, we're going to take a closer look at President Trump's plan for 100% tariffs on foreign films, plus what you can expect to hear from Fed speakers this week as we head into the FOMC meeting. That's next.President Trump posting on True Social that he wants films produced internationally to face a 100% tariff and aim to encourage more production here in the United States that could impact some of Hollywood's biggest blockbusters. Joining us now to break down what this would mean for the industry, we have Yahoo Finance senior reporter Alexandra Knell. Ali, I knew you were going to be all over this story this morning. How are you thinking aboutthis?

Yeah, so if you take a look across the board for these media companies, Netflix and then your more traditional studios like Disney, Paramount.Brothers, they initially sold off on the news. We are off of those session lows. Netflix deleting those declines there, but I did speak earlier this morning with a veteran film producer, and she told me that the proposed tariffs were quote insane and devastating. That's how she described it. She said it doesn't make any logical sense. If you know how the film business works, that any type of tariff in this way would be beneficial because films are financed, produced, shot, distributed, edited all over the world, not just in the United States.and if films are forced to be made here, the pricing of labor, goods, services, that's all going to go up. Production budgets are going to increase and that's going to crush your smaller mid-tier films, so I think those independent films, and then you look at the ripple effects that extend beyond just the studio themselves. It impacts everyone from writers to crew to transportation to those catering businesses that support these film sets, and this is coming at a time where the industry is still grappling with the COVID pandemic, the aftershock.Of that the aftershocks of the writers and actors strikes, so there's a lot of volatility already in this industry and really what you need here in the US are those tax incentives and currently US tax incentives, they fall short for what's needed to offset the cost of some of these domestic only productions. So without significant federal support, this is not going to be realistic. And if you take a look at just some of the films that are currently or recently have been produced or filmed overseas, you have some big budget titles, Marvel's Avengers.Spider-Man Brand New Day. Both were shot in London. You have 20th Century studios, Avatar, Fire and Ash, that's produced in New Zealand. Paramount's Mission Impossible, that's a high profile film that's coming out. It was filmed all over the world. So this is something that we've been, uh, you know, wondering what the impact is going to be long term. There's a lot of question marks here. We did speak with a media analyst earlier this morning, and he talked a little bit about the retaliatory impact. Let's listen to what he had to say.

The the companies do go outside the US to do a lot of film production, and if there really were tariffs, it would be something for them to consider. They could always move back into the US. Uh, I, I think if Trump wants to go down that road, then you do risk of having other countries tax US films coming into their markets, which is something I think Hollywood really wouldn't want.

Right, so if these foreign countries end up, uh, doing their own tariffs on our imports, what is that going to ultimately look like and that could be devastating for the entire industry. So that's what my sources are telling me it seems like again though there's a lot of lack of clarity I would say on ultimately how this would be implemented, rolled out which companies.Would be most effective, but Netflix in particular makes roughly uh most of its films overseas. They have that localized content strategy. Film content for the company accounts for roughly 25 to 30% of total viewership on the platform as of 2024. So it's just something to keep an eye on when you think about all thesemedia stocks

certainly is. All right, Ali, thank you so much for the overview. I really appreciate it.Well, the Federal Reserve and Chair Jerome Powell facing a tug of war in the coming days as it attempts to straddle a slowing economy and sticky inflation. Joining us with details, Jennifer Schomberger. Hey Jennifer,

good morning, Mattie. That's right. When Fed officials gather for their policy meeting this Wednesday, the biggest question on investors' minds is which direction the central bank will lean in when it comes to setting policy, higher inflation or higher unemployment and lower growth.And the difference could mean vastly different courses for setting interest rates. New data out last week reinforced the Fed's conundrum. The US economy contracted for the first time in 3 years to start 2025 as a surge in imports dragged down GDP.But an April jobs report released Friday showed the job market remained resilient even in the weeks after Trump's Liberation Day announcements shook markets. At the same time, inflation growth slowed in March to 2.6%, but it was still hotter than expected at 3.5% in the first quarter overall, both still above the Fed's 2% target.Fed Chair Jay Powell said last month it's likely the economy will move away from both of the Fed's goals for full employment and price stability. President Donald Trump has made very clear on almost a daily basis that he wants the Fed to cut rates and has accused the Fed of being late. But in comments before the blackout period ahead of the Fed's policy meeting, officials seem to err on the side of holding rates steady as they await further clarity on the impact of the president's policies and toInflation and inflation expectations in check. The central bank is widely expected to hold interest rates steady this Wednesday. The big show, of course, will be Fed Chair Jay Powell's press conference, but many Fed watchers I speak to, including former Kansas City Fed President Esther George, tell me that if the economy remains weak in the second half of the year, that will almost certainly spell higher unemployment, which will be the trigger for the Fed to cut rates. Traders right now expecting.The first rate cut in July and that was pushed back from June, which traders were pricing in just last week. And Mattie, separately this morning in just a couple minutes' time, we will hear from Treasury Secretary Scott Besant, who will be addressing the Milken Institute in Beverly Hills.Back to you,

Jennifer, thank you so much. I want to get my final thoughts with my co-host for the hour, Adam Johnson. 32nd take on Treasury Secretary Scott Besson. How are you doing?

Love him. He is the adult in the room.He is seasoned. He has the confidence of Wall Street, and I think he also is a good counterbalance to the president. I think the president takes a very strong tack, and then he goes over to Mr. Bessett. Mr. Besson says, Well, but we might need to approach this or approach that, and then you see a little bit of a policy pivot again, adult in the room, seasoned, doing a wonderful job. I and many of us are thrilled he's there. All right,

well, we will continue to hear from Treasury Secretary Scott Besson in just a bit here. We'll be back.