#31 - New Position: $DE Deere & Co

Author

Graham Schroeder
November 08, 2024

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This week the Presidential election sent stocks soaring, why I purchased Deere & Co, and why you can’t let the little things in life impact the bigger picture.

Market Recap

  • Market Reacts to Trump's 2024 Election Win

    • Former President Donald Trump won a second term with key victories in battleground states, leading to a significant market rally. The Dow Jones surged over 1,300 points as investors priced in anticipated tax cuts and business-friendly policies.

    • Tesla ($TSLA) stock jumped by 14%, reflecting optimism around Trump's support for reduced EV subsidies and potential tariffs on Chinese EV competitors. This environment is seen as advantageous for $TSLA.

    • Bitcoin ($BTC) rose fast as Trump's pro-crypto stance to position the U.S. as a "digital currency superpower" lifted sentiment. Analysts expect a potential shift in SEC leadership that may favor a more crypto-friendly regulatory approach.

  • Jeff Bezos and OpenAI invest in Physical Intelligence

    • Bezos, OpenAI, and other investors have invested $400 million in robotics startup Physical Intelligence raising its valuation to $2.4 billion.

    • Physical Intelligence is developing general-purpose AI for real-world robotic applications to enable robots to perform versatile tasks.

    • Bezos getting invested in the robotics sector weeks after Elon Musk’s Optimus presence at Tesla’s Robotaxi event shows that there is a serious desire to advance the industry. This marks one step closer to never having to do our own laundry or dishes at home again.

  • Perplexity AI in Final Stages of Gaining More Private Investors

    • Perplexity AI is close to finalizing a significant funding round, expected to raise $500 million at a $9 billion valuation, marking a substantial increase from its $3 billion valuation in June.

    • The AI-powered search engine is a competitor to Google and OpenAI’s ChatGPT.

    • While Perplexity introduced a revenue sharing model for publishers in response to accusations of content scraping, the platform still faces ongoing challenges and scrutiny from major media outlets.

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Freedom Fund Portfolio

  • Friday Freedom Fund Purchase:

    • 8 shares of $EVLV - Evolv Technology

    • 3 shares of $SCHB - Schwab US Broad Market ETF

    • 8 shares of $PLTR - Palantir Technologies

    • 2 shares of $DE - Deere & Co - NEW POSITION

    • Exited and sold my entire $LAND - Gladstone Land Corp REIT. Back when I bought REITs heavily in 2023 I expected a REIT rebound (still holding $APLE, $O, and $MDV). Based on $LAND recent earnings (see below) I decided that their forecast continued to show declining rental income and reduced profitability.

    • I still want the portfolio to have exposure to the agriculture industry, which is why I added $DE as a new holding this week. I think $DE will be a champion of fully autonomous equipment in the future with GPS navigation and AI. The reality is less people are going into farming. Deere has a great potential to provide advanced technology solutions for labor shortages in the agriculture and construction industries.

  • Portfolio Earnings

    • $PLTR - Palantir Q3 Earnings

      • Revenue grew 30% YoY and 7% QoQ to $726m.

      • GAAP net income of $144 million (20% margin).

      • Adjusted EPS grew 43% year-over-year to $0.10.

      • Rule of 40 score of 68%.

      • Customer count grew 39% YoY.

    • $O - Realty Income Q3 Earnings

      • Revenue hit $1.33 billion for Q3 2024.

      • Reported an EPS of $0.30 per share.

      • Net Income hit $261.8 million for Q3 2024.

      • Realty Income celebrated its 30th anniversary on the New York Stock Exchange (NYSE) this quarter, with a record of 652 consecutive monthly dividend payments.

    • $APLE - Apple Hospitality Q3 Earnings

      • Revenue reported at $378.8 million, a 5.7% increase YoY.

      • EPS reported at $0.23, down from $0.26 YoY.

      • Net Income reported at $56.3 million, a decrease of 3.8% from $58.5 million YoY.

      • Despite modest revenue growth, Apple Hospitality emphasized maintaining profitability and managing expenses.

    • $MDV - Modiv Industrial Q3 Earnings

      • Revenue reported at $11.66 million, down from $12.57 million in Q3 2023, primarily from rental income.

      • EPS reported a net loss of $0.18 per share for Q3, an improvement from a loss of $0.86 in the same quarter last year.

      • Net Income reported a net loss of $1.51 million, compared to a loss of $6.46 million in Q3 2023.

      • Modiv executed lease extensions on key properties in California, indicating efforts to secure long-term tenants and stable revenue.

    • $LAND - Gladstone Land Q3 Earnings

      • Revenue reported at $22.6 million, down 4.1% from $23.5 million in Q3 2023 due to reduced cash rent on certain properties and the sale of a farm earlier in the year.

      • EPS reported a loss of $0.16 per share, nearly doubling from a $0.08 loss per share in Q3 2023.

      • Net income was $6,000 down from $3.1 million YoY.

    • Portfolio News

Freedom Fund Background: 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. 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. The biggest obstacle people have to investing is just getting started so I decided to start a new account at $0 to start from nothing with you.

Quote of the Week

With the increasing division in our country over the last 8 years between political parties, I felt this was a good time to reflect on the importance of not letting minor issues overshadow the larger good in our lives and nation. The more I think about it the more I think as a country and individually we all need to focus on shared values and overarching goals rather than being sidetracked by smaller disagreements. This idea can be deeply impactful across contexts like politics, relationships, and careers:

  • Politics - During presidential elections, citizens and politicians often become polarized over minor policy details or personal biases, overshadowing shared principles such as economic prosperity, freedom, and national security. This message is a reminder that while we all may have differing views on policy specifics, we all ultimately share foundational goals of a thriving economy, safety, and liberty. Although the media tries to control our emotions with their messaging to get clicks and maintain viewership, as citizens we all need to bridge our division on a day to day basis.

  • Relationships - Sometimes views between friends, family, and romantic partners who have small disagreements can sometimes create undue tension, even when there’s alignment on core values like trust, love, and respect. Couples or partners should remember their larger shared values like mutual support, respect, and growth. And not allow minor conflicts to cause division. Keeping a broader view can reinforce cohesion and perspective, helping partners work through minor issues without disrupting their core bond.

  • Career - In the workplace, it’s common for colleagues to disagree on approaches, deadlines, or strategies. When these minor disagreements come into play they can lead to division. This can impact productivity and harm team morale. By keeping the focus on project success, big picture intentions, and team cohesion it allows organizations to build stronger bonds that can endure beyond momentary conflicts.

Going into the end of the year try and focus on what big picture values and goals you have within your community, relationships, and workplace. It is always easy to get caught up in the details of conflict that may not support the larger vision for your life. Don’t let the small details crack your foundation. When you encounter the little things that can bring divide in your life, ask yourself: Do these things support or divide the global vision and values we share?

The purpose of this newsletter is to encourage you and our other 77 Gazette subscribers to start and stay consistent with your personal, professional, and financial journey.

Thanks for investing your time reading this.

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.