#05 - Earnings Week Opportunity

Busy week with Q1 earnings being reported reported, Scott Galloway’s media tour, and unexpected buying opportunities.

Big 3 Market/News Topics

• Home Price Expectations & Social Security 

  • The Federal Reverse Bank of New York released results from its 2024 SCE Housing Survey.

  • Social Security expects funds to run short in 2035 based on a press release by the Social Security Board of Trustees this week.

  • If home prices are going to continue to rise and government backed retirement funds continues to be depleted. Younger generations need to do even more now than past generations did when it comes to retirement investing. And in difficult housing markets buying what you can afford is crucial to building wealth long term.

• Palantir Reports Q1 2024 Earnings (See Slide Deck Here)

  • Palantir is a data analytics software developer that provides software named AIP, Foundry, Gotham, and Apollo. They were an instrumental partner in helping the CIA and Navy Special Ops find Osama Bin Laden in 2011.

  • Revenue grew 21% YOY.

  • Commercial sector revenue grew 27% YOY.

  • Signed 87 - $1M contracts.

  • Sixth consecutive quarter of GAAP profitability @ 17% margin.

  • The company is clearly growing commercially yet share prices were down 15% within 24 hours post earnings call.

• Robinhood Had a Huge Q1 Earnings

  • Revenue increased 40% YOY to $618m. And increased net deposit of $11.2b along with an increase of 1.1m new accounts YOY sure shows a migration of investors and currency to the young trading platform.

  • Net income increased YOY to $157m (compared to a net loss of $511m just a year ago in Q1 2023).

  • In Q1, Robinhood announced their Gold membership that costs $5 per month that gives access to customers a 5% APY on idle cash, 3% cash back Robinhood Gold credit card, and 3% IRA matching on ever dollar each year.

  • I signed up in Robinhood in Q1 as well (not for the Gold membership) to begin buying $25 worth of Bitcoin a week.

  • If you are interested in setting up a second brokerage, crypto account, or looking to move your Roth IRA over to it to get the 3% match you can sign up here and get a free stock when you open a new account: Join Robinhood Here

The Freedom Fund Update

I created the Freedom Fund as a public brokerage account back in October of 2022 to share that anyone with a social security # and a bank account can begin their investing journey by investing a couple hundred dollars a week.

• May 10th - Friday Freedom Fund Purchase

  • Added 3 shares of Palantir Technologies ($PLTR) and 2 additional shares of Shopify ($SHOP).

  • Both of these companies reported earnings this week and had 15-20% share price sell-offs. I think these are two great plays for the future growth in AI, defense, and ecommerce and this provided a solid opportunity to buy more.

  • Next week I will be adding a new ETF to the Freedom Fund.

• Exited Pepsi $PEP and added Palantir $PLTR

  • I sold out of my small Pepsi position this week to start a Palantir position in the Freedom Fund.

  • I have been buying Palantir stock since in my Roth IRA since 2021 and I have yet to change my mind about the company. Palantir is in their early stages of profitability that will remain consistent going forward.

  • Palantir holds no debt on their balance sheet and holds almost $4B in cash. With government contracts and a recent massive wave of commercial client growth, $PLTR has been trending upward again over the past 4 months. Customer count also is growing faster than revenue. As they scale these clients will translate into future revenue growth.

  • $PLTR share price dipped post earnings by almost 15%. It is important to continue to learn how to read earnings reports and understand corporate accounting if you are going to invest in single stocks. Share price will not always jive with the company value and potential.

  • There were about 5 other companies this week I noticed that had an earnings beat but due to having a more conservative forecast for future growth there has been a trending 10-20% share price drops across the board post earnings calls.

Every week and month I post on X (@GrahamInvesting) public updates about the purchases, exits, dividends, and growth of the fund if you want to follow in real time.

Creator Spotlight: Impressive April for Galloway

Scott Galloway is a professor at NYU’s school of business, runs the Prof G Pod, up and coming author, and entrepreneur. In the final weeks of April, Galloway released a Ted Talk presentation & published a new book called “The Algebra of Wealth”. For those of you who are yet to read, listen, or watch Scott you are in for a treat.

• The Algebra of Wealth: A Simple Formula for Financial Security

  • Galloway released the second of his “Algebra of” series he is working on with Volume #2 the Algebra of Wealth which is the second book following his Algebra of Happiness released in 2019.

  • In Algebra of Wealth = (Focus + Stoicism) * (Time * Diversification)

  • He is also planning on writing books in “The Algebra of _____” series around topics such as Masculinity, Work, and Mating.

• How the US is Destroying Young People’s Future / Scott Galloway / TED Talk 

  • This week I walked Scott discuss how America is not set up to help the younger generations succeed. And how we need to begin to measure our worth by the type of world we hand over to the younger generation.

  • Although the majority of America is focused on the present and future we are facing this talk gave me a good perspective that maybe we need to think more about the economic future we are leaving our younger generations after we are on this earth.

The message Scott portrays is very straightforward and he has many provocative insights into technology, business, and culture. The topics he speaks on are refreshing and thought-provoking. His ability to break down complex topics into digestible pieces makes his content accessible to a wide audience. And now he has become an ambassador for the younger generations for years to come.

The purpose of Graham’s Gazette and my social account @GrahamInvesting is to help others get started and stay consistent on their own personal, professional, and financial journey. I appreciate the time you take in reading & interacting with me and look forward to growing together.

Thanks for investing your time reading this.

-Graham (@GrahamInvesting)

Disclaimer: Graham’s Gazette provides information and resources related to investing, financial topics, and personal growth for educational and entertainment purposes only. The content presented is not intended to be construed as financial advice. Readers are encouraged to conduct their own research and consult with qualified professionals before making any financial decisions. Graham’s Gazette and its creators do not assume any responsibility for the accuracy or completeness of the information provided nor do they guarantee any specific results from such use of information.