Palantir Technologies, Big Money Managers, Apple’s Stock, Retirement Income Taxation, Early Social Security, High-End Companies, Hospital Stocks, America’s Top CEOs, College Graduates & Investing

Why I won’t be buying Palantir technologies anytime soon

When I’m out in public many times people ask me what my opinions are when it comes to investing, the markets or individual stocks. I have to say the one stock that people seem to be asking the most about recently is Palantir Technologies, their ticker symbol is PLTR. I believe I’m asked about this company because investors look at the hype of the past performance and the fact that this stock is up over 1,000% since going public in 2020. That creates excitement for investors, but is it worth buying now? The company currently trades around 60 times next year’s estimated sales, and again that is sales not earnings! That makes it the most expensive stock in the S&P 500.

There are signs that growth outside of the US is slowing and I don’t like that they have three unnamed companies that accounted for 17% of the total revenue last year. Usually hype like this goes the same path, which ultimately results in large losses for buyers at this point in the cycle. A more recent example comes from the company Snowflake. In 2021, Snowflake hit an all-time high over $400 per share. Today that stock is down nearly 60% and trades around $167 per share.

You don’t hear much about it now, but I remember back in 2021 many people were asking about this company as well. I’m also not thrilled with Palantir’s CEO, Alex Karp, who during an interview just a few months ago had some pretty nasty comments about analysts who don’t agree with him on the stock price. He said “I love the idea of getting a drone and having light fentanyl laced urine spraying on analysts who’ve tried to screw us.” Maybe I’m old school, but I don’t think that is anyway for the CEO of a company of any size to talk about anyone that does not agree with the CEO’s position. Especially considering many times they aren’t knocking the business, just the fact that this company’s valuation is extremely crazy!

I will also try my best to refrain from making any comments on Mr. Karp’s hairstyle, but it just seems a little bit outlandish for a CEO to have that type of hairstyle. As far as the stock goes, maybe the craziness will continue and perhaps it does go higher, but if people ask me if they should buy, sell, or hold the stock, I would definitely say sell! I guess I now have to be careful of drones flying above my head that could be spraying fentanyl laced urine on me.

Good news, only 26% of big money managers are bullish

A recent poll from Barron‘s magazine, which they conduct twice a year, found that only 26% of big money managers were bullish and thought stocks would go up while 74% were either neutral or bearish on stocks. They said 32% of respondents were bearish and that was the highest percent since 1997 while the 26% that were bullish marked the lowest reading since 1997. I think Barron’s Magazine is a good source of information, but I was disappointed that they did not list the years of experience of the managers that were being polled. The reason for my concern is that the last big negative in the economy and the market was in 2008, which was 17 years ago. A current manager that graduated school at age 23 would now be 40 years old and they did not experience managing money through 2008. Living through and managing money through a challenge like that provided me with extremely valuable lessons that younger managers would not understand. But why is this negative report a good sign in my opinion? Their current asset allocation is only 64% in equities with 36% in other investments like fixed income and cash. They will not stay bearish forever and if they change direction in the next 6 to 12 months, they will start buying equities again, which will push up prices. If you’re looking for value, the least attractive sectors were energy, real estate, and utilities. I have talked about my concerns around the Magnificent Seven and now only 10% of these managers think the Mag Seven will lead the market over the next six months. Even looking out 12 months only climbed 32% thought the group would lead the market. When asked about the strength of the US dollar going forward 12 months, 68% of the money managers said it will be weaker, which I agree with. Only 15% of the managers think it will be stronger a year from now. These surveys also provide an interesting insight into what other money managers are thinking. 

Apple’s stock continues to amaze me

There seems to be so much negative news that continues to come out against Apple, but the stock continues to remain relatively steady given the amount of negativity. We all know about the tariffs and the delayed AI rollout, but I was definitely concerned by a couple announcements that would have large impacts on Apple’s service revenue. This segment has been a bright spot for Apple, but in the most recent quarter it missed expectations and grew at just 11.6% compared to last year.

The big concern I have is around Alphabet’s estimated payment of around $20 billion annually to be the default search engine. There is concern if this will hold up given the ruling that Alphabet holds a monopoly and the need for remedies, but also this week Apple executive, Eddy Cue, added additional concerns. He stated the searches in Apple’s Safari browser fell for the first time in April, something that has never happened in 20 years. He then added that the iPhone maker is looking at adding AI search options to the Safari browser. If they did this, would Alphabet really want to keep paying $20 billion a year for that right? I don’t think so!

The other major concern that seemed to get little attention was the fact that in a recent ruling a judge ordered Apple to immediately stop imposing commissions on purchases made for iPhone apps through web links inside its apps. This has enabled developers like Amazon and Spotify to update their apps to avoid Apple’s commissions and direct customers to their own website for payments. This commission rate was around 27% for Apple and it could cost Apple billions of dollars annually. All this comes with the fact that Apple still trades around 25x 2026 earnings even though revenue is only estimated to grow low to mid-single digits. In my opinion, Apple really needs some good/exciting news to get this stock moving higher and at this time I don’t see where that is going to come from. 

Financial Planning: Breaking Down Retirement Income Taxation

Retirement income varies widely in tax treatment, with some sources being far less tax-friendly than others. In order from worst to best, pension payments and traditional IRA withdrawals are among the least favorable—they're fully taxable as ordinary income at both the federal and state levels. Interest income from bonds, CDs, and savings accounts, as well as annuity earnings from non-retirement accounts, are also taxed as ordinary income at both levels and can trigger the additional 3.8% Net Investment Income Tax (NIIT) if income thresholds are exceeded.

Rental income is similarly taxed but allows deductions and depreciation to offset some of the tax burden. Long-term capital gains and qualified dividends receive preferential federal tax rates—as low as 0%—but are still taxed as ordinary income in California and many other states. Social Security is partially taxed at the federal level—between 0% and 85% is included as taxable income depending on total income—but is not taxed in most states, including California, making it relatively tax-favorable.

Roth IRA withdrawals are the most tax-friendly, being completely tax-free at both the federal and state levels if qualified. Understanding how each income type is taxed can help guide investment decisions during working years and inform how to structure withdrawals in retirement for optimal tax efficiency.

People claiming early Social Security is up 16%

Americans are getting concerned about their future with Social Security and some are deciding to claim their benefits early rather than wait until their full retirement age when they may collect roughly 76% more than if they started at age 62. The numbers show that last year pending Social Security claims for retirement were 500,527 and as of March 2025 that number has jumped to 580,887, a 16% increase.

We continue to tell people you need a good financial planner because maybe it does make sense to take your benefits early but not just because you think Social Security will be cut. This is more of an emotion decision rather than a financial one and the emotions seem to be taking hold of the situation given that a recent Gallup poll revealed that over 75% of US citizens have between a fair amount and a good deal of concern on Social Security, that is a 13 year high. The estimates still show that reserves will be exhausted by 2033 and that would be a reduction in benefits of 21%. What people are not realizing is that you may get your benefits early at a lower amount but a 21% deduction on a lower amount means when the reduction comes you will get less than had you waited and what if the reductions don’t come?

If you’re taking early benefits and receiving $1500/month, a 21% cut would reduce your benefit to $1185. If you waited for full benefits and received $1633, the 21% cut would be around $1290 after the reduction so you would still be receiving more after the cut. Keep in mind once you take Social Security you generally cannot stop it. It is never a good idea to make an emotional decision, make sure you or your financial planner do the math to see how long your breakeven point would be when looking at if you should take your benefit early or continue to wait. You should also look at your family history to see if you have longevity. That can make a huge difference in the total amount you’ll receive in your lifetime.

High-end companies with luxury items have a problem

It seems like just a short couple of years ago so many people were buying those high-end purses and watches thinking that the gravy train would continue on forever. Well, here we are in 2025 and your high-end luxury companies are struggling as they face many problems. First and most obvious is they will be hit with the tariffs on products they bring to the United States. Some believe they can just pass those higher costs onto the high-end consumer, but there are others who will forgo putting out that extra money for a high-end purse or shoes. They are also being hit by the increase in the price of gold because if you notice some of the high-end purses like to add gold on the handles or in the purses themselves.

With the price of gold over $3300, that has brought up the price of luxury purses as well. Don’t forget that many high-end brands are manufactured in Italy and France and as the dollar has depreciated against other currencies it will take more dollars to purchase the high-end luxury brands. According to consulting firm Bain & Company, they said the number of luxury goods sold between 2022 and 2024 fell more than 20%. With all of these headwinds, I would have to say stay away from buying the high-end luxury brands and not just their products, but also their stocks as well. I think it will be a while before they turn around.

Hospital stocks may be on sale

So far this year, hospital stocks like Tenet Healthcare, Universal Health Services, and HCA Healthcare have had various problems they’ve had to face. One of the big concerns is Medicare spending with companies like Universal Health Services receiving about 45% of EBITDA, which stands for earnings before interest, taxes, depreciation, and amortization, from Medicare supplements. Tenet Healthcare received roughly 25% of their EBITDA from this source and HCA Healthcare received around 18%.

With Medicare covering roughly 79,000,000 people and paying out $618 billion last year, there are Republican lawmakers that want to just leave it alone. It will be a tough battle as the current administration has been trying to crack down on fraud. I think there are some opportunities in healthcare companies and hospital chains that are not tied directly or depend heavily on Medicare payments.

We could see some cuts in Medicaid, but I’m pretty confident based on what I’ve been reading if there are cuts, they will not be that large. Also, remember the population is getting older and unfortunately, as we become older, we do need more medical attention. I think it could make some sense to put a good quality hospital company in your portfolio.

America’s top CEOs get paid a lot!

Based on the top 100 CEOs in America with revenue over $1billion, the average annual pay is $25,612,208 which is a record high. Before you get all irritated about the big salaries, you should understand that 73% of their pay is in stock awards. Ask yourself this question, if your boss said you’re going to get a 10% raise and it’s going to be all in stock or you can take a 5% cash raise, what would you take? My guess is 90% of people would take the 5% cash raise.

This runs counter to CEO pay as more of them are taking more pay in stock as it increased 41% from 2023. The total compensation was up 9.5% from 2023, but that was not as large as the gain from 2022 to 2023 of 11.4%. You may not recognize the highest paid CEO who earned $101.5 million in compensation, his name is James Anderson and he is CEO of Coherent. Before you start thinking about what he would do with $100 million in cash understand that 99.4% of his compensation was in stock.

Well-known CEOs you may recognize would be Satya Nadella, CEO of Microsoft, had total compensation of $79.1 million, that was 63% higher than last year. Another name you likely recognize is Tim Cook, Apple’s CEO, had total compensation of $74.6 million. Mr. Cook took the most amount of cash pays of the top 100 CEOs with an annual cash compensation of $16.5 million. Maybe he too has some concern on the future of Apple Stock?

What will college graduates face when they graduate in a few weeks? 

In a few weeks roughly 700,000 college students will receive either a master’s degree, a bachelor’s degree or an associate’s degree. On the bright side employers expect to hire about the same number of graduates as they did last year. Six months ago, it was predicted that they were going to hire about 7.3% more graduates than in 2024. Depending on what their degree is in it may be easier for some more than others. If students have a degree dealing with software products, energy, manufacturing, healthcare or finance their prospects look much better.

On the other hand, if they were looking to get a job in government or policy work, they will not be so lucky. There is a big disconnect between what graduating seniors are expecting with a survey showing that more than 80% expect to be working within three months of graduation. There are 7.2 million jobs open, but employers are a little bit hesitant until we get clarity on what is going on with the trade situation and some employers have found that artificial intelligence can replace some entry-level jobs.

If a graduate wants to get a job, they’re really going to have to do something to stand out. Just sending out 100 resumes or applications will probably be very disappointing as it will just get lost in a stack of the hundreds of applications and resumes coming in to the company. 

Stocks receive little love as a great place to invest

It always amazes me with the long-term track record for stocks that people still believe they are dangerous investment. Don’t get me wrong they are still volatile, but volatile and dangerous are two totally different things in my mind. Also, if you do stupid things when investing in stocks like chasing popular names to ridiculous valuations, then yes that is risky as well.

The reason I bring this up is because in a recent Gallup poll, just 16% of respondents indicated stocks or mutual funds were the best long-term investment. This compares to 37% of respondents that viewed real estate as the best long-term investment and 23% of respondents that said gold was the best investment. This comes even though stocks have averaged 10.29% over the 30-yearperiod the ended in April versus 8.78% for real estate and 7.38% for gold.

The interesting thing is this includes two of the most challenging periods for stocks which were the Tech Bust from 2000-2002 and the Great Recession in 2008/2009. In terms of ease of ownership and long term results I still believe stocks are the best way to build long-term wealth!