#58 - Plan Hard & Pivot Harder

Author

Graham Schroeder
May 16, 2025

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Market Recap

  • Desert Deals: Saudi Arabia Eyes F-35 Jets in Talks with U.S.

    • Saudi Arabia is in discussions with the United States regarding a potential purchase of F-35 fighter jets, as part of a broader $142 billion arms deal. This agreement would be the largest defense cooperation deal in U.S. history, includes advanced military equipment and services from over a dozen U.S. defense companies, covering areas such as air and missile defense, maritime security, and communications.

    • The arms package involves major U.S. defense contractors, including Lockheed Martin, RTX Corp (formerly Raytheon), Boeing, Northrop Grumman, and General Atomics. Key components of the deal include Lockheed Martin’s C-130J Super Hercules transport aircraft, THAAD anti-ballistic missile systems, Patriot PAC-3 missile defense systems, and MQ-9B SeaGuardian drones.

    • The $142 billion arms deal is part of a larger $600 billion investment package between the U.S. and Saudi Arabia. However, the inclusion of F-35 jets remains uncertain due to U.S. commitments to Israel's military.

  • Dick’s Laces Up $2.4B Foot Locker Deal for Sneaker Heads

    • Foot Locker's $FL ( ▼ 0.08% ) surged 85% after Dick’s Sporting Goods $DKS ( ▼ 0.41% ) announced a $2.4 billion acquisition, offering $24 per share a nearly 90% premium over its previous closing price.

    • Despite projected synergies of $100–$125 million, Dick’s shares fell 14% as investors expressed concerns over acquiring a struggling retailer with declining earnings and heavy reliance on Nike.

    • The acquisition aims to expand Dick’s global footprint, adding Foot Locker’s 2,400 stores across 26 countries, potentially enhancing market share in the competitive sneaker retail landscape.

  • Paging Dr. DOJ: UnitedHealth Under the Microscope

    • The U.S. Department of Justice is conducting a criminal investigation into UnitedHealth Group's $UNH ( ▼ 1.69% ) Medicare Advantage billing practices, focusing on allegations of inflating patient risk scores to increase government reimbursements.

    • Following the news, UnitedHealth's stock plummeted 17%, reaching its lowest point in five years, and has declined over 50% in the past month.

    • The company is grappling with internal challenges, including the abrupt resignation of CEO Andrew Witty and the suspension of its 2025 financial outlook due to rising medical costs.

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Freedom Fund Portfolio

This week, the public account surpassed the $30K mark for the first time. An impressive recovery from the early April lows in the low $20Ks. That’s nearly a 30% value change in just six weeks. It’s a strong reminder of how quickly markets can turn. Historically, missing just the 10 best days in the market can cut your long-term returns by more than half. That’s why staying invested especially during the downturns is so critical. Weeks like this are why we stay in the game.

  • Portfolio News:

    • $DE ( ▼ 0.69% ) - Deere & Company reported Q2 2025 earnings with net income of $1.804 billion ($6.64 per share), surpassing expectations despite a 24% decline from the previous year. Revenue fell 16% YOY to $12.76 billion, with sales declines across all segments, including a 21% drop in Production & Precision Agriculture and a 23% decrease in Construction & Forestry. The company revised its full-year net income forecast to a range of $4.75 billion to $5.5 billion.

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

I recently started re-reading the book The Psychology of Money by Morgan Housel this month. While the book is primarily about how your decisions, emotions, and behaviors ultimately shape your financial success this quote about always having a plan for when the plans you have don’t go according to plan really stuck out. While I believe that you should go all in on your vision for your life, I believe one fundamental truth of life and finance: uncertainty is inevitable. No matter how detailed or intelligent your strategy is you will always encounter external variables, market shifts, economic downturns, job changes, and personal shifts.

  • Financial Planning: Build in a buffer for unplanned expenses like medical bills, car repairs, or inflation spikes. A budget isn’t rigid; it’s a living tool that must bend without breaking.

  • Home Ownership: Set aside 1–3% of your home's value annually for unexpected repairs. The roof, plumbing, or HVAC doesn’t care about your plans… it just breaks.

  • Education & Learning: Take courses or gain skills outside your “main” discipline in case your industry shifts. A degree is just a launchpad, careers morph in unexpected ways so make sure you are on the front end of it.

  • Business Strategy: Build lean operations and test assumptions quickly. Market conditions, consumer behavior, and competitors can shift overnight.

  • Mental Health: Recognize and prepare for emotional setbacks and have support systems and practices in place. Just because things go wrong doesn’t mean you did.

  • Global Events & Geo-Political Risk: Don’t rely on one country or currency in investing or business. Global stability is not a guarantee, resilience comes from diversification.

The old saying of being a willow and not an oak in life is more true today than ever before in our rapidly changing lives. An oak tree breaks when the storm comes because it stays rigid and never practices or plans for its flexibility like the willow does. Ask yourself this weekend: "Where in my life am I over-committed to a plan going perfectly? And how can I make space for adaptability without feeling like I’m giving up control?"

The purpose of this newsletter is to encourage you and our other 91 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.