Forget the Headlines: How Smart Money is Investing in 2025

Forget Washington. Here's how the smart money is investing in 2025. I'm Brian Dress, Director of Research and an advisor here at Left Brain Wealth Management, joined as always by Chief Investment Officer and CEO Nolan Langford. Nolan, welcome to the program.

Fresh off of vacation. If my voice is a little bit hoarse, that's because all that yelling I was doing, not all the drinking I was doing.

No judgment either way, Nolan, but good to have you back. So a lot's happened in the first half of 2025 and with good reason. Headlines do have a number of investors rattled and wondering what to do in this market. And so in this week's video, we wanted to take stock of what's happening along with how we're responding to market conditions and discuss some of the compelling opportunities that we're seeing in the marketplace. And we're hopeful that this discussion is going to set some people at ease in an environment where there are a lot of scary-sounding headlines out there. So, and seemingly daily. So hopefully that headline flow will slow down. But even with that being said, plenty of stuff to do that we think is positive. So we've got a number of topics to discuss with you, our clients and our not-yet clients. So number one, concerns we've been hearing from clients and how we're responding to them. Number 2, the danger of mixing politics with investment strategy, one of our favorites. Um, number 3, areas where we see opportunities for strong returns in medium to long term in terms of growth opportunities. And then number 4, we're going to talk about an income opportunity, which is one of your favorite topics. So let's jump in. Let's talk about number 1, the real risk in 2025 and concerns we've been hearing from clients. So I want to share a little bit about what I've heard from clients. I've had a few conversations in the last few weeks and a number of people just kind of paralyzed by the headlines and what's going on out there. And it's causing hesitancy not only from prospective clients that we're trying to work with, but also from current clients that are kind of hesitant to get started with a little bit more investing. And it's mostly headline-driven, you know, the things you hear in the news. That's what I'm hearing from clients back. And sometimes that's all they hear. And it's not super surprising. But what have you been hearing on your end?

Well, I've been trying not to hear the news. That's what I always try to hear, but it's been more and more difficult, right, to avoid the headlines. And I would say you're talking about the client angst, you know, with everything that's happening. I think part of it, Brian, is the last 2 years have been easy or a lot more easy, right? And we need something to shake us up, you know, coming into this year, January, February, as you know, we're uber bulls. I was feeling really good about things. Market took off, a lot of growth holdings we like, right, took off right out of the gate. And then February 14th came and right in through April 2nd, Liberation Day, things got really, really squirrely. Things have settled down a little bit, quite a bit since then. And the sense that I get, Brian, is, you know, I think people are, you know, nerves are frayed a little bit, right? Obviously, I think people are kind of tired of hearing it. So I think people may start to get tone deaf pretty soon. Yeah, I think the playbook is out there, you know, scare 'em, tax 'em, tariff 'em, and then back down. And then they turn—

yeah, kind of a pattern emerging, right?

Yeah. So I get the sense that things are settling down. I think people are a little bit numb. And quite frankly, it's the summer. It's beautiful here in Chicago, in the Midwest, and people are out living life as they should be. So good. Hopefully this isn't a top-of-the-mind story anymore. I think this is sort of fading a little bit and people are starting to slowly but surely, the tortoise is starting to come out of its shell. That's the sense I get.

Yeah, market seems to be kind of settling in and responding less to sort of the headlines that are happening, which is good. I want to bring up a term that's kind of, it's a little bit newer in the market, FUD. That's fear, uncertainty, and doubt. That's kind of an old crypto term.

Yeah.

Which is interesting, but it's kind of starting to filter in to the overall market. But I want you to talk about kind of what are the opportunity costs of that FUD and specifically the cost of, you know, trying to hide out in cash.

You know, I am an optimist and I am hopeful that if anybody has cash that they're hanging on to, it isn't because of FUD. Mm-hmm. It's just because they haven't had time to getting around to doing something more useful with the cash.

Okay.

That's what I'm hoping. So all of you who are listening that do have cash where you've been too busy, life has been happening, you have family issues, the summer, work issues, we just haven't had an opportunity to sit down and think proactively about what's the best use of this cash, right? We're going to give you some ideas on this show and our income ideas. And to get right to the point, it is time to get busy. You know, if you look at your statement, even from cash, you know, I bank at Chase and, you know, they still show my interest with a decimal point in front of it.

Right. You know, there's a zero and then a decimal point.

Yes, exactly right. And so we know even with inflation being much lower, I think the last print we got was somewhere around 2.5%. Right. We need our money to at least be earning 2.5% just to keep up with the cost of things, right? And so if I have one year where my money's at Chase or any other bank— I'm not blaming Chase, I really like Chase— but if any bank's paying me 0.01% and inflation's 2.5%, if I go one year, I'm 2.5% behind. I go two years, I'm 5% behind, you know?

Absolutely.

Um, so it is time to do something. And for anybody that has cash, We're going to encourage you to get off the sidelines. There's a lot of investment opportunities. You don't have to go from 0 to 10, but there's some things that you can do in the middle.

Yeah, absolutely. We want to have compounding working in our favor, not, you know, against us.

Right.

Yeah. And so how are we handling things? It's just a general question. So I've talked to a couple of clients that they told me, I'm just tuning it out. I'm not looking at anything, not looking at my statement, which You know, I don't necessarily encourage that, but it can work out for you in situations like this. But how are we— I want to kind of turn that on its head. How are we tuning out kind of the noise out there in order to get the best possible outcome for our investors?

So it's pretty simple. That really doesn't change. It really doesn't matter the headline. Yeah, we always do the exact same thing and we're looking for opportunities in individual businesses. Sometimes at a good price, at a great business and a great investment opportunity, sometimes they're easier to find than others. And when you do have a lot of headline risk where people are freaked out or comatose, those opportunities are easier to find. Coming into this year, I was telling you, I am really bullish. You know, the 4 big themes that we've been talking have only been galvanized. And what we've heard through recent earnings have done nothing but bolster the point.

Absolutely.

And those are AI, which is artificial intelligence, Uh, digital transformation, digital, uh, advertising, and cybersecurity. Those themes continue to play. We're bullish coming into this year. Nothing has changed them. And interesting, you were asking about how are we positioning, what are we doing about the headlines, how are we reacting. We're not. You know, we just came off second quarter earnings releases, and we have our hands full following these interesting companies. Seeing who's been negatively impacted by tariffs, who's shaking them off, and who has not been impacted. To my surprise, and not amazement, but to my surprise, and I would say delight, Brian, at least for the businesses that we follow, tariffs has not been a really big issue at all. I think when we get— when I get to sit down and write Nolan's notes at the end of this year for 2026, looking back on 2025, I think the tariff scare at the end of the day is it may not end up being a nothing burger, but probably close to it.

Hopefully. That's definitely something we're keeping an eye on. We're not going to take our eye off of that. But at the same time, we've got to take a look at how it impacts individual businesses more so than, you know, looking at that macroeconomic type of viewpoint from that perspective.

You're right, Brian. I think our position is different because we tend not to own a lot of cyclical retail businesses, those are the ones that are really impacted by these consumer goods. Consumer goods. You know, if you're in apparel or something. Yeah. You know, heaven help you. And you're manufacturing in Vietnam or China and shipping the goods here to sell on somebody's shelf. I think if those are the businesses primarily we invested in, I think our attitude would be somewhat different. But we're talking cybersecurity. You're not slapping a tariff you know, on a firewall or somebody's internet activity. Yeah. So not as big of an issue. I think where it is more of an issue, not only companies that are impacted by tariffs like apparel companies directly, but if you're in a line of business and you're counting on other business makers to give you business and they're stalled because they're impacted by tariffs, then your customer base could be impacted and that could change your plans. Fortunately for us, you know, in the market we have thousands of companies that we can choose from. So we can, you know, decisively decide not to invest in a certain sector and invest in another. Fortunately for us, I mean, I think there was 2 or 3 names or 4 names. If you go back to Liberation Day or something that we said we'd like to take this opportunity to change. A lot of that had to do with the updating quarterly models.

Sure.

That we like where we take a look at businesses each quarter. Some go out and others come in. Yeah. Um, but from our perspective here at Left Brain, you know, other than that 8-week sort of downturn with nasty headlines, it's been status quo. Uh, and quite frankly, I like what we see. You know, some prices of businesses are still down versus where they were in Jan— or the February top. Some companies that are growth names that we like are down 20%, 30% or more still, even though the businesses have continued to do well. Generally, you're either going to get good news or cheap prices. And we like where we are. Generally, you do very well investing during chaos. This is not chaos. This was organized, right? I think a 10% tariff across the board, it is a tax. Some of it's going to be eaten by the consumer. The business will have to eat the other part of it. It'll be a one-time adjustment and life will go on.

Okay. We do want to talk more about those themes that you mentioned. We'll get into that in a minute. And not to belabor the point, but I do want to talk a little bit more about kind of how we view investing in the context of politics. Because, you know, Nolan, over the last 15 or 20 or however many years you want to say, it's become a more polarized environment from a political standpoint. And which is, it is what it is. But, you know, we really want to stress that we don't want that to filter into people's investment strategy is the point we're trying to make here. And so just generally, Nolan, just give us a few seconds on how do you view the mixing of politics with investing?

I don't. I view it just like I view the politics in the church. You know, they should be completely separate.

Church and state separation. I got you.

Yeah. So I have never been, since I've started in this business selecting investments for people, politics not once, right, have ever come into my investment decision, whether I should buy or not buy based off of who gets voted in, you know, into the White House. That just has never been. And if you go back and look over time, there have been good markets during Republican presidencies and there have also been terrible markets during Republican presidencies. And you could say the same thing about Democrats. And what we need to remember, whoever's in the White House, they will have their turn for 4 to 8 years, and then life will go on. But we have not seen any politician that comes in that breaks the, um, the catalyst that really drives the stock market. Really aren't— we haven't seen it be broken by any president. You know, we still have the deepest capital markets in the world here in the US. Innovation still lives here. If anybody needs to raise capital, any upcoming business with some new innovative product or service has to be done here in the US. We still have the rule of law, we still have the US dollar, and we still have the mightiest military on planet Earth, and we're the richest country. Yeah, those advantages really aren't disrupted by who's in the White House. Yeah, some things could change at the margin— the tax rate, uh, maybe some new regulation or deregulation— but the strengths that we have as a nation endure, and that's why the politics the market just kind of sails right through it.

Yeah, and I wanted to bring this up because we do have some data. Um, we're going to put a chart here up on the screen that you guys can take a look at. But back since 2008, um, there was an analysis done. And so obviously the stock market did what it did for that period of time. But if you were to have taken your money out during the Democratic administrations, or if you had taken your money out during the Republican administrations, as you see on the chart here, you would have severely underperformed the actual market. And so that's the premise that we're trying to stress for everyone, is that time in the market is really important. And we don't want you getting out of the market just because you may have a political view. Everyone's entitled to their political view, but we don't want that to impair, you know, kind of your family's future financially.

My guess, Brian, is there's a dichotomy between the way people feel about politics and investments from how long they've been with us as a firm.

True.

And I think there's probably a demarcation. Anybody that's been with us as a client, I'm going to just throw this out there, probably for 5 years or more, I doubt very much at all that this episode has bothered them or they have any questions on our stance on politics or anything of the sorts. Maybe people who have been here a lesser time, they don't— maybe they're not fully ingrained in the left brain way. I would encourage you all to go to our website and read Nolan's Notes. That's the letter that I write to clients. I've done that as long as I've been in the business. And we have 11 years of notes posted from every year we've been in the business. Some of those years we've talked about politics. I remember 2016 when Trump first came into office. I wrote a whole page on what we expected to be the Trump bump, and we were all surprised that he beat Hillary Clinton. And so we have some past letters. We've talked specifically about politics and specifically why politics don't come into our investment decision-making matrix. Exactly.

And then I guess I'm going to put a bow on the politics topic. We're going to move on to what we really like to talk about. But, you know, let's talk about, you know, everybody's kind of thinking about the negative, what could go wrong and everything else. And fair enough. But, you know, what are a couple of things that, that might go right, that might work in the investment— in investors' favor in Washington?

Yeah. So if you want to talk Washington specifically, I don't know if what the Trump Trump administration has done has been a big, big mistake or a masterstroke. And we won't know for a while. And I say that because, you know, his administration came in in January and the first thing that they did is ruffle the world with these tariffs. I mean, it's been all-consuming since he came in. And so if I'm a Trump apologist, I'm going to say this was brilliant because you want to get all the bad stuff out early in your administration, ruffle all the feathers. Mix it up. And then the second half, you want the cherry on top to come. You want them to eat the vegetables first and then you want to give them— sure, yeah, yeah, the dessert could come the second half of the year. You know, we got this tax cut legislation. Deregulation was a big Trump rallying cry when he won the election. Right now we haven't seen any deregulation. Okay, that was supposed to usher in M&A, mergers and acquisitions, big companies buying small companies, companies being allowed being given the space to merge. We haven't seen any of that yet. A less aggressive FTC, we haven't seen any of that. So that could pull up the market. Remember, second half of the year, they'll be positioning themselves— the Republicans will— for the midterms. They'll want to throw something out that the investing public can sink their teeth into that's overwhelmingly positive.

Right.

Those could all be catalysts And we haven't got them yet, but when they come, they could be really big catalysts that move us forward. I think the biggest catalysts are nonpolitical. We'll talk about those in a second.

Exactly.

From a Washington standpoint, those things definitely could be a wind in our sails.

Yeah, I just want to speak to those potential catalysts from the political perspective just because I know it's on people's mind. But let's move on to, you know, more, you know, more germane topics that make more sense from our investment perspective and move to the third topic, which is where the smart money's going. So, Nolan, we talked about, you mentioned briefly a handful of areas that we like in the market. So AI, cybersecurity, digital transformation, digital advertising. First thing, AI. So, you know, we're all kind of using AI more. There's already been a lot of money made in the AI trade, which is great. But it's interesting because as I was putting together our outline for today and putting together some graphics for today's video, I noticed that when I tried to use ChatGPT to build some graphics, that there was a huge delay because there are a lot of people putting together graphics on ChatGPT. And so what it made me think was, okay, maybe these railroad tracks aren't quite laid yet for AI. And so, and the reason I bring that up is because I've talked to a number of people who say, okay, maybe the money's already been made in the AI trade. Is it a bubble? Is it too late? Talk to me about what your thoughts are, how you would answer someone who would, who would ask that question.

You know, it would really surprise me if I heard somebody make that statement, and I would probably question them what data—

data, exactly—

they're looking at.

Sure.

That has them draw that conclusion. And the reason that I say that is I'm going to say there's probably not much money that's been made in AI yet. Even with the handful of stocks that you're talking about that have gone up, um, it's very incidental to how big the artificial intelligence realm will become.

Sure.

You mentioned about the railroad tracks, you know, you can't get the train till you get the tracks in. Exactly. So by definition, you're at the very start of whatever it is that you're trying to build. That is the case, and we know that's the case because, uh, the big hyperscalers They don't have enough power to put in all the data centers that they really need to roll it out on a mass level. AI we're talking about.

Exactly.

So we're nowhere at the very beginning. So there's no way you can be at the beginning of something and at the end of something at the same time. It doesn't work.

Yeah, I think, I think what, I think a lot of people have the memory of the '90s and how things went with the internet coming up and there were a lot of money, a lot of money was made. And then a lot of money was lost. But, you know, I think we see some similarities to the '90s. But talk about the differences. What is different between the companies that kind of made a boatload in 1998 compared to companies that are doing well now?

I would like to just— so for everybody, so we can level set, because we do have— for every client that we have that remembers the '90s and that made money because they had money, significant money to make money in the '90s, for every one of them, We have another client that just does not have a recollection, recollection of the '90s other than hearing about the bust. So let's talk about the boom for a second.

Yeah, for sure.

From 1995 to 2000, the stock market had an incredible run. The S&P, the Nasdaq, but the Nasdaq specifically, right? That's where all the technology stocks were. And that's technology boom 1.0. We had this boom from the mid-'90s to 2000. A lot of it was driven by Y2K. And it was thought that this computer equipment that had been manufactured years before, it was manufactured really with a two-digit year character. And once we got to the year 2000, you needed more characters. So it was thought that that old equipment would just malfunction or we would come in January 1st, 2000, it just would not work. Right. That, along with the internet, spurred a lot of technology spending and innovation. From 1995 to 2000, the Nasdaq averaged something like a 40% annual return. Yeah. So every $1 turned into $5. You know, over 5 or 6 years. It was an incredible run, and a lot of people made a lot of money. And another area that did very well during that time was the IPO market— initial public offerings. Companies that needed to raise money for some new innovative idea, in a lot of cases they were involved in the internet or technology space, hence the name.com.

Yep.

On the end of everything, very similar to today where you're hearing everything is.ai or AI enabled. Sure. Very similar. And you're right, we got a boom. And then starting in March of 2000, we started to get a bust. Now, the thing that's different about that one and this one, one of them is most of those companies in that internet age were hardware-based. Mm-hmm. Okay. Margins were a lot smaller. And anytime you're dealing with hardware, that business is cyclical by definition.

Right.

So that's one of the differences. What people really remember is like, the web.com, some of these ridiculous businesses. Those are the ones that they talk about because they had no revenue, no earnings. People were valuing them, evaluating them on silly metrics like the number of eyeballs or something. I mean, it was, it was really silly season. So it was unproven business models. I think they were allowed to flourish because money was easy. So people would fund all these ideas. Things are so different today than they were back then. Let's start with the companies themselves. Today's companies that are out, that are public, the ones that we look at and evaluate for opportunities in this tech and AI space are profitable.

Exactly.

So you have not only revenues, you actually have earnings and cash flow. So by definition, if you continue to have cash flow, you're not going bankrupt. So you're a sustainable business. Business models now are a lot more, a lot better. A lot more tested because investors aren't going to blindly just write you a check for your shares. They've been through this before, so it tends to be a tougher vetting process. Okay. I would say that is different. The business models are definitely, uh, different and much further along. Um, so I would say there's not a lot of strong corollaries between then and now.

Okay, that's good.

I will say the opportunity though is much bigger. You know, uh, we had just started email in the late '90s and the internet really had just gotten going. Servers really wasn't a big thing. There was no mobile, uh, at that time, right? So it was a different environment. Now here we are in the AI age, the opportunity is just so much bigger. Back then the internet was big and it wasn't really the internet from '95 to 2000 that made you money. It was the businesses that were able to flourish because we had an internet.

Sure.

So think Meta, Facebook, think Amazon, uh, even Apple to a large extent, these— Google, these companies did well on the back of the technology boom 1.0 because we had an internet, right? So now I'm saying if AI is going to be bigger and much larger, if the internet created companies from $1 to $3 trillion, what is possible in the AI age, right?

Absolutely. I love that you brought up Y2K. It seems so silly in retrospect. Okay, so let's— I want to just do kind of a little bit rapid fire. We got those other— a couple of other topics that we want to talk about, which is cybersecurity. So one of our favorite stocks is CrowdStrike, CRWD. Put a chart up here for you guys to take a look at. They recently had earnings. So, you know, we know cybersecurity is a big theme that we've been following. And obviously it's one of those things that it's a compulsory spend. You really can't— with the threat level that's out there, you can't just decide we're not going to spend money on cybersecurity if you're an enterprise, a large business, etc. So tell me a little bit about what we learned from CrowdStrike in the most recent earnings report.

That's a good point. So I think most of the viewers here who are clients, if you look at your statement, most of you, if not all of you, will have some shares of CrowdStrike. It's the largest cybersecurity publicly traded, uh, company, um, one of the largest that trades in the market. And you're right, their raison d'être, the reason for being, is stopping breaches. Yeah, that's in their tagline. You cannot be the CEO, owner, or manager of a business, have all of your data unlocked, that anybody can come shut your business down by locking up your data, right, and demanding ransomware. That doesn't work. If you're a CEO, you're getting ousted. And you're an owner of a business, you're gonna go bankrupt. You know, you gotta have a lock on the front door. So in general, that's why we like cybersecurity as an industry. And it's not just CrowdStrike. They certainly are the leader. They're much further along from a business model standpoint.

Okay.

The market cap's approaching $100 billion, lots of free cash flow. So they're a leader in the space. You can be comfortable that this business is gonna be around into the future. But we like the whole space. There's some other businesses we've been looking at. Zscaler's one of 'em. Cloudflare's another one. We've owned Okta in the past, Palo Alto Networks, Fortinet. We've owned a lot of names in the past. The industry itself is just a very fruitful, durable industry at this point. And we think for the foreseeable future there's profits to be made there. Our favorite name is CrowdStrike, but we think the entire industry is going to be very fruitful for investors.

Okay. And then we like digital transformation and digital advertising as well. So we won't go into too much detail, but just quickly, what are we seeing there?

We're seeing a big opportunity. In the past, advertising has made up a big part of our economy and it's made up a big part of the stock market. And we're changing our viewing habits. You know, it used to be TV was linear. We had cable. You went home Wednesday at 8:00 because your favorite show was showing the newest episode. Now everything's streaming and it's on demand. Advertisers has followed eyeballs. Eyeballs were cutting cord cable. 200,000 a year, 200,000 a month are cutting the, the cord and going to streaming. And advertisers are doing the exact same thing. They're taking their ad dollars to streaming platforms. So they're doing that for podcasts, which stream. And they're definitely doing it not just for Netflix, who added a new ad tier a couple summers ago. And all cable that streams now had some sort of advertising component to it. And I think with as long as Netflix has been around streaming and streaming's been around, you think to yourself, isn't advertising already on the digital map? And it's not. It's still the minority of advertising is done digitally, still mostly done in an analog linear type of way. So I think that creates a great opportunity. Advertising a few years ago was about a $700 billion industry. It's now about a trillion. So people have products and services and they need to tell us consumers about them and they need to reach us. And they do that by advertising. And more and more these days it's done digitally. We're not at the beginning of the transformation, but we're in the middle part. So there's still a lot of profits to be made. There's still a lot of growth in chasing the ads going from digital, going to digital.

It's just interesting that a number of the different topics that we're talking about all have a similar kind of thread running through, which is it seems like it's been around for a while, but there's still a lot more transformation to happen going forward. And so from an investment point of view, that means there's more opportunity, even though you may have seen, you know, Netflix has been around for over 20 years, but they're still making money, they're still growing. So that's just kind of a thread that's running through a lot of this. Let's move on to the fourth topic and close things out here with income securities. Nolan, we, We know you like income securities. We've been talking about them for a couple of years now. We've been putting them in accounts forever, but we know growth is one way to build wealth. There's another way to build wealth, which is income securities are generating more income. It plays a crucial role. And then in volatile environments, it also brings some buoyancy to your portfolio because you've got predictable streams of income coming through. And that's, you know, other market participants see it that way as well. So explain the importance of income in portfolios as we see it.

Yeah. So typically investments are only going to be one of two types. One is going to be growth, one is going to be an income. Let's take the case of CrowdStrike that you just mentioned. CrowdStrike is a traditional growth investment, meaning they don't pay me any income today. If I'm going to make money on CrowdStrike, it's because I bought the shares today at $400 and they went up to $1,000, and that's how I make my money. The business value grows because the business gets better.

Yeah.

And then I can sell my shares for capital gain. But there's another category of business that says, I'm not going to make you wait. I'm going to pay out all of my current income today in the form of cash. So not a lot of appreciation. I can buy the shares at $10. You know, if I wait 10 years, they're probably still going to be around $10. But what has happened in the meantime is it's paid me a dividend of $1.

Right.

Example.

Yeah.

Every single year. So I get my return today.

Dollars in the pocket.

Dollars in the pocket. And what drove us us to take a look at income securities and to really not only gravitate but embrace them is just client demand. You know, I had a client come to me years ago, like the first year I was in the business, like, hey, Nolan, you know, I just retired and I have this pot of money, but I also have this spending need. So I need you to invest in a way that you generate $5,000 a month because that's what I'm going to be spending.

Right?

Right. And then I jumped into the world of income securities 25 years ago, and we've been there ever since. So, the reason that attracts us to us, because clients need it. You know, clients retire, they're no longer earning a paycheck from XYZ company. Yes. They need income from somewhere in addition to Social Security. More and more it's coming from the portfolio. So, you could do it where you owned a bunch of stocks like CrowdStrike and every month you sold a few. Most people aren't as comfortable with that as they are with owning a basket of securities that generate income every month. And then the client can decide whether they want to leave the income in the account or whether they want to distribute it. And I think it's pretty natural for people that have money in cash at the bank, you know, by default, if it's money that they're not spending or they're not going to need to spend, then they're making an investment decision that I'd like my money to sit here to be liquid. But what's implied in that is, you know, hey, you also need to earn at least enough to offset inflation. Inflation right now, 2.5%. So anybody that has cash also has a need for income securities because while you're waiting, you need to at least earn some return to keep up the cost with everything else that's going up pretty dramatically the last 4 or 5 years.

Absolutely. I want to focus on a particular income security because we always like to kind of bring ideas to the table. I know, like you said, there are people with cash out there, so we want to kind of put some concrete details on something that might be attractive if you're sitting on cash. So we just had one of our analysts, Madhu Chowdhury, just wrote up Analy Capital Management. That's NLY. We'll throw a chart up. Like you said, the chart, it's not that compelling because it's, you know, these sort of things, they don't move that much from a price perspective, but they do move a fair bit in terms of giving you dividend in your pocket and money in your pocket. So Can you kind of give us the elevator pitch on why we like Annaly and why, why Matthew gave it a green light?

Yeah, Annaly is a— they're in the mortgage business, so they're a mortgage REIT primarily.

So that's real estate investment trust.

Real estate investment trust. And they lend money. So they lend money for people to buy homes. They also do buy what we call mortgage servicing rights. So, Brian, when you go out and you do your 30-year mortgage, you may be— you may have originated the loan at Chase, Right. And you may be making your payment to Chase, but it could have sold the collection part of that 30 years of when you pay the payment. They could have sold those rights to somebody like Anna Lee. They call them mortgage servicing rights. They collect your payments, pay your escrow, do all of that every month in exchange for getting a little bit every month. They have billions of these mortgage servicing rights.

It's just a volume business.

It's a volume business.

Yeah.

So they're a lender. It's internally managed on the real estate investment front. Primarily mortgage, different type of mortgage securities they're involved in. And so when you look at Annaly, it is a pretty steady income, uh, that comes in. The one big risk you have here is, uh, is interest rates. Uh, they're economically sensitive a little bit, but primarily interest rates. And, um, which is one of the reasons we like Annaly right now. If we do get, uh, interest rate cuts, it should drive book value up, right? It's a fixed investment and you could get some appreciation on the upside.

So that's not what we're playing it for. No, emphasize.

Yeah, yeah. We're playing it for the income, right? The yield right now is 13%. They pay a dividend of $0.70. A year ago they were paying a dividend of $0.65 per quarter. So the dividend has increased. Annaly has been around for well over a decade, so they're well established, about $11 billion market cap. And we really like the underlying business. You know, buying mortgage securities historically has been a very safe— people are generally going to pay their mortgage and pay you back. And so we really like that business. We followed it for a while. We think this is a pretty good time. And the yield at 13%, we think is durable. They're earning enough where they can cover that and then some. And right now, Annaly, which can leverage because generally mortgages aren't paying 13%.

Sure.

They use some, some sort of borrowing. But right now they're borrowing about half as much as they could, which means that they're underlevered and under-earning. So could things get stickier? There are more opportunities show up in the marketplace. Annaly has the dry powder to certainly take advantage of them. And we think that there's not a lot of downside in— and there's downside in all securities. Sure. But we feel really good about the income being there. Hopefully it'll continue to go up, but we like the dividend as it is. And we really like the kicker that if rates do go down, we could possibly get some upside in the share price. So it checks a lot of boxes, okay? The majority of which is most of clients that are coming to us that need income securities in their account need income for whatever reason. And Annaly delivers the income.

Absolutely. And again, we just want to emphasize, you know, if there's cash sitting on the sidelines and you don't know what to do with it and, you know, a lot of people think about maybe I should do a high yield savings or what have you. First of all, that's not a guaranteed rate. What you get today and that is not guaranteed, but this might be a little bit more of a compelling opportunity if you're sitting on cash. So certainly if you've got cash and you want to talk a little bit more about where are some opportunities to put that cash to work and not necessarily in the stock market, but in something that's a little bit more predictable than a growth stock, we'd love to talk to you about that and You know, just to kind of wrap this up and, you know, tie it back to what we talked about at the beginning of the video, you don't really need to chase headlines in this sort of a security. You're just looking for consistent, well-underwritten income. And that's what Annaly provides. And that's something that we, you know, we've spoken to a number of clients about and we are going to speak to a number of clients going forward here in the next few months. So get in touch with us if you're sitting on cash. And we've got a number of opportunities like Annaly here in the office. Let's close it out, Nolan. So at Left Brain, we're focused on a couple of things. Where can we get paid? Where can we get growth without being emotional about investing? And that's kind of just to tie things back to what we talked about earlier. A lot of emotions have gotten into the mix here in investing, in the investing world, just because of the headlines and noise that's going on around the world. So we want to be focused on the actual what's going on in businesses and how can we take advantage of that for investors. So a few things, you know, if you're not working with us, we'd love to talk to you and have a portfolio review with you. Maybe you're not taking advantage of some of the themes we talked about. If you're in retirement, you need income and an income replacement for what you used to bring in from a paycheck point of view. We'd love to do an income analysis for you and see if we can help out from that point of view. And then finally, we're going to put our booking link for a calendar, our calendar link here in the description. And if you want to get together with us and speak on some of the themes that we've talked about, you don't work with us as a client, well, we'd love to talk to you. If you do work with us as a client, we definitely encourage you to set up time for your annual review here in the summer. We've got some time to do those. So, Nolan, I'm going to close it out there. I'll ask you if you've got any final thoughts before we bid the viewers adieu today.

No, I feel really good about kind of the way we presented things. I really like you talking about Annaly because something came to mind as you were speaking about Annaly, just about income securities in general. Just so the viewers know, we do follow a portfolio of these, about 30 to 40 names that pay income anywhere generally between 7%. Annaly is maybe at the very top at 13%.

Right.

Most things are between 7% and 13%. But one of the things that came to mind is these sometimes are clients, but a lot of times are people we've been talking to about becoming clients that have money in old 401(k)s particularly if you're closer to retirement. Generally, what we find is when people are within like 10 years or so of retirement, they do want a little bit more predictability in their portfolio. Income securities allow you to get more predictability. I mean, you're never going to get guarantees, but at least you get a stream of income. As you move closer to retirement, you want things that move closer to what your goals are going to be once you retire, which is a reason that you don't want money sitting in an old old 401(k), you want to be active with it. So this is an opportunity to think about whether it makes sense to roll in that money over to get exposure to pure-play AI, digital ad space, income securities, that sort of thing. Okay. And the other thing that I thought about is a lot of these clients that we have that are executives and that work at publicly traded companies, it's mid-year, so it is a good time to take a look at your 401(k), to take a look at kind of how you've invested, Clearly, if you have any old 401(k)s, we'll talk to you about whether it makes sense to roll over. But also mid-year, think about the employee stock purchase plan. This is a good time to review that. Here in the next quarter, the company will probably be coming around talking about elections for 2026. The deferred comp plan, most people only pay attention to that in October when they come around asking you about how much you want to contribute for the new year. And then finally, income taxes. Most people just finished their taxes in April. It's a really good time for us to do an income tax review if you have an advisor sit down with them. If not, we're happy to sit down with you. But we do the income tax reports. Let's take a look at how you did on the 1040. Are there any capital gain, uh, capital loss carryforwards as we're managing the portfolio this year and we're looking to make changes? If there's capital loss carryforward, may get us an opportunity to make some changes with some securities that have embedded gains.

Okay.

Um, and if you've had gains last year, it's mid-year, so you may want to take a look at what realized gains or losses you have this year to get ready to position yourself for 2025 tax taxes.

Well, Nolan, it's the summer. We usually think this is a quiet time. There's plenty to do. Uh, we'd love to speak with any of you that are, uh, out there viewing this video for the first time, and, uh, we'll see you again next time. Thanks for being with us.