#45 - Unspoken Expectations

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This week Charles Schwab copied Robinhood, Zillow is building its base, potential changes to the CHIP Act, and why you should think about how you communicate your expectations to others.

Market Recap

• Charles Schwab Expands 24-Hour Trading Access

  • Schwab ($SCHW) now offers trading to all retail clients to trade S&P 500 and Nasdaq 100 stocks, plus ETFs, five days a week. This expansion provides more flexibility for investors to react to market news outside regular hours.

  • They now join brokers like Robinhood and Interactive Brokers in expanding trading hours to meet demand from a new generation of investors seeking round-the-clock market access.

  • 24-hour trading gives investors more flexibility to react to market events. It can benefit those for when news breaks outside regular trading hours. However, extended hours come with challenges such as lower liquidity that can lead to wider bid-ask spreads and increased price volatility. While this provides opportunities it can also amplify risks for retail investors unfamiliar with off-hours market dynamics.

• Zillow Eyes Long-Term Expansion in Rentals and Mortgages

  • Zillow Group’s ($Z) Q4 2024 revenue increased 17% YoY to $554 million, with mortgage revenue jumping 86% and rentals revenue rising 25%. Net income came in at $60 million, while purchase loan origination volume grew by 90%.

  • The company’s shift toward integrating more digital solutions reflects its strategy to capture long-term demand despite near-term market challenges. The company continues to use tools like Zestimate, virtual tours, and online mortgage services to streamline the real estate experience and drive growth.

  • An company model like Masterkey an AI-powered platform that provides instant property analyses and guides buyers through the purchasing process without the need for a traditional agent could be an interesting acquisition target for Zillow if they want to continue to build a moat in the real estate industry.

• Reciprocal Tariffs Could Reshape Semiconductor and CHIPS Act Goals

  • The Trump administration plans to impose tariffs on imported semiconductors from countries that levy tariffs on U.S. goods. This move is aimed at encouraging domestic production and addressing trade imbalances.

  • The White House is considering renegotiating conditions under the U.S. CHIPS and Science Act, which was originally designed to enhance domestic semiconductor production with $39 billion in subsidies. This review may lead to amendments, especially concerning clauses added during President Biden's tenure.

  • Companies like TSMC and Intel, significant recipients of CHIPS Act funding are cautious about the potential changes. TSMC is addressing concerns regarding its new chip complex in Arizona in light of the proposed tariffs.

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Freedom Fund Portfolio

• Friday Freedom Fund Purchase:

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

  • 10 shares of $SOFI - SoFi Technologies

• Portfolio Earnings

  • $SHOP - Shopify - Q4 2024 Earnings

    • Revenue of $8.9 billion for 2024, up 26% (YoY)

    • Free cash flow of $1.6 billion for 2024, with a free cash flow margin of 18%.

    • Operating income reported at $465 million in Q4.

    • Shopify merchants attracted 875 million unique online shoppers from 175+ countries in 2024.

    • 70% of revenue came from North America leaving lots of room to grow internationally.

  • $DE - Deere & Co. - Q1 2025 Earnings

    • Net sales and revenue of $12.19 billion, a 35% increase (YoY).

    • Net income at $1.75 billion, up 50% from $869 million (YoY).

    • EPS reported at $6.23, a significant rise from $3.19 (YoY).

    • Precision ag tech drove double-digit growth in farm equipment.

    • Highest quarterly profit ever was powered by a strong market demand for construction equipment due to infrastructure projects. Saw that one coming as a result from Biden’s Infrastructure Bill.

• Portfolio News

  • $EVLV - Metro Nashville Public Schools Board of Education unanimously approves weapons detectors in all high schools

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

Recently in the state of our world I keep thinking about how I get so frustrated by my uncommunicated expectations of others. And have been thrown off guard by other peoples uncommunicated expectations of me. We’ve all been there before, expecting someone to know what we want without actually saying it. When those expectations aren’t met, it leads straight to frustration and resentment. The truth is, unspoken expectations are just traps we set for ourselves. Whether it’s with friends, family, or at work, clear communication is the only way to keep things real.

• Friendships - Friendships are built on trust, but even the closest friends can’t read your mind. When you expect your friends to automatically know how you feel whether you’re upset, stressed, or just need an ear to listen to you it creates an invisible burden. You might feel disappointed when they don’t respond how you imagined, even though they had no clue something was wrong. This is how resentment sneaks in. Unspoken feelings fester and grow. You start reading into little things such as texts that seem too short, canceled plans, or a friend seeming distracted or distant. You’re already carrying emotional weight they don’t even know exists. This can create distance over time, even in the strongest friendships.

• Family - In family dynamics, unspoken expectations are common and we assume they’ll just know what we need since we grew up with them. But everyone sees things through their own lens, shaped by history and personal experience. When those needs aren’t met, resentment can build. The key is open, honest communication. Most family members want to support you they just need to know how. Especially if you aren’t with them everyday to pick up on what exactly is going on in their life. The truth is over time family members can change as well and that is totally normal. Talk about why and how you are changing. And how things may be different than they were in the past.

• Romantic Relationships - Honest conversations keep resentment out and connection within a relationship. In romantic relationships, unspoken expectations can quickly erode connection. Assuming your partner should just know what you want often leads to frustration. Silence breeds resentment, while honest communication builds your bond. The key is to express needs clearly because your partner usually wants to meet them, but they’re not a mind reader. And they may not always know how to meet them. Don’t bottle it up, best to address expectations early and often in a relationship and check in on them. Now now is the time to create that diagram for your significant other on how to properly load a dishwasher to meet your expectations!

• Work - In the workplace, unspoken expectations lead to miscommunication and frustration. Whether it’s unclear job roles and responsibilities or unvoiced career goals, assuming others know what you want rarely works. Open communication about expectations, feedback, and boundaries helps avoid confusion and builds stronger, more productive teams at work. You definitely have to have strategy on how you present expectations you have for others. But for the most part if people care about you and enjoy working with you they will listen to what you have to say. Ultimately do not get mad at your co-workers if they are not living up to some standard you haven’t communicated to them yet. Maybe they just don’t know what you expect of their performance and maybe they just aren’t prioritizing it or seeing the bigger picture. Craft these messages in a way that comes off as a mentor or a team member… not a micromanager. Micromanaging creates resentment.

• Strangers - I struggle with this one the most… especially in public. I would write a book about “How to Have Social Awareness in Public” but in reality the people who need to read it most wouldn’t bother. Expecting perfect behavior from strangers (or fairness everywhere) is just asking to be annoyed. Stay chill and keep your expectations low and you’ll be much happier. Assume everyone is in their own little world and they probably don’t even recognize you there (no matter the size of your ego).

Bottom line: life is easier when you speak up. Clear communication might feel scary at first, but it saves a lot of drama down the road. Don’t leave things unsaid you’ll be surprised how much better things turn out when you’re open and honest. We ultimately decide to avoid communication with others due to the fear of confrontation. At the end of the day you can’t expect others to meet your standards or expectations if you never voice them (and the importance of why it matters to you).

The purpose of this newsletter is to encourage you and our other 85 Gazette subscribers to start and stay consistent with your personal, professional, and financial journey.

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.