February,
2026 Meeting Minutes
March 1, 2026
The monthly meeting of Unable Investment Club was held at Dust
Bowl Brewing in Elk Grove on Friday, February 6, 2026. The meeting commenced at 3:10 pm with KS
presiding for FN. PR, JL, CX, CJ, RT, DK and HT were also in attendance.
Unable Investment Club has 1 opening.
The Valuation and Member Status reports were reviewed and the
checks were collected.
Late: JD!
Old Business:
Note: The 2025 UIC 1065/K-1 tax
forms were sent to each member by email on Saturday, February 21st. Please
contact the Treasurer
if you need it sent again. Email, USPS and fax are available delivery methods.
New Business:
None.
Stock News:
AMT AI stocks have been the hot trade
over the past year. That's due to surging demand for chips by companies
building AI models and applications. However, chips and related hardware are
only part of the AI story. Companies need infrastructure to house all this
high-tech hardware and transmit all their AI-related data. That plays right
into American Tower's American Tower is one of the world's largest REITs. It's
a leading independent owner, operator, and developer of multitenant
communications real estate with a global portfolio of over 149,000 sites.
Additionally, it owns a highly interconnected footprint of U.S. data center
facilities. The REIT bought its data center platform in 2021 through its $10.1
billion acquisition of CoreSite. The data center REIT owned 25 data centers
across eight major U.S. markets. While it was a sizable deal, it wasn't a major
deviation from the REIT's strategy. American Tower bought CoreSite to support
the accelerating global deployment of 5G networks. The deal followed its $9.4
billion purchase of Telxius Towers earlier in the year and its $3.5 billion
purchase of InSite Wireless Group the previous year. 5G was also the primary
focus of those tower deals. While 5G was the initial rationale behind buying
CoreSite, the company has since started to leverage its expertise in building
data centers to develop facilities for AI. Last month, CoreSite announced the
launch of native 400 Gbps (400G) Amazon Web Services (AWS) Direct Connect at
its Chicago data center campus. That made it an ideal location for
high-bandwidth, performance-intensive workloads such as AI applications,
including training, interface, and agentic automation. The company now has
three locations with 400G capabilities. Several CoreSite customers are already
capitalizing on the advantages of 400G connectivity. For example, a leading
cybersecurity company is leveraging it to process large quantities of data and
accelerate real-time threat analysis. Additionally, several financial firms are
evaluating 400G to deliver the speed and reliability they need for high-speed
trading and quantitative research. As a result, American Tower's data centers
could soon become Wall Street's secret weapon for boosting returns. By securing
space in one of these CoreSite facilities, these financial firms will be able
to accelerate the modernization of their IT and scale their AI operations,
thereby saving time and money. Wall Street's financial firms are racing to
capitalize on AI to improve their trading and performance. American Tower's
data centers could hold the secret weapon to their future success. The REIT is
building high-speed, interconnected facilities that are ideally suited to the
needs of financial firms. Most investors haven't yet caught on to the AI-driven
growth potential hidden in American Tower's portfolio. That makes the REIT an
under-the-radar way to capitalize on AI, as it helps more companies leverage
this powerful technology to enhance their operations. The continued expansion
of its data center platform could enable this REIT to deliver towering returns
in the coming years.
AAPL When it comes to streaming video,
there's Netflix and there's everybody else. The company singlehandedly wrote
the winning playbook for a successful streaming business and established many
of the steps its rivals imitate to this day. For example, when Netflix first
launched its streaming service, the company relied on licensed movies and
television shows from other providers before ultimately bringing the process
in-house and betting big on its own original content. Since then, the company
has regularly acquired intellectual property and hired some of Hollywood's top
talent to create Netflix Originals to augment its licensed content. In a move
that turned heads, Apple has acquired full ownership of Severance, according to
Hollywood industry publication Deadline. The dystopian thriller is one of the
most-watched programs ever on Apple TV and the most-nominated program at the
2025 Emmy Awards, bagging 27 nominations and winning eight awards. It acquired
the rights from television studio Fifth Season in a deal reportedly worth $70
million. Apple is also keeping the successful creative team together, including
creator, executive producer, and showrunner Dan Erikson and executive producer
and director Ben Stiller. Despite its popularity, Severance has had its share
of challenges, including significant restrictions while filming during the
global pandemic and a nearly nine-month shutdown courtesy of back-to-back
Hollywood strikes in 2023. That caused a three-year lapse between the release
of season one and season two, something Apple is looking to avoid in the
future. Fans have been eager for the next chapter of the show, and reports
suggest the third season could begin filming as early as this summer. Apple has
big plans for the critically acclaimed series, including producing future
seasons of the hit show in-house and potentially expanding the Severance
franchise. Under consideration are possible spin-offs, a prequel, and foreign
versions of the show. As I pointed out earlier, Netflix was a pioneer in the
streaming space, relying on licensed content while building a library of wholly
owned original programming. Apple's move to acquire the full rights to
Severance follows the playbook that Netflix has used so successfully.
Furthermore, the show is already a hit, so it's a known quantity and has
already established its value for Apple TV. While most of the streaming
services bill themselves as all-you-can-watch buffets, Apple has taken the high
ground, positioning itself as a premium brand. The company continues to focus
on fewer creator-driven shows and award-winning programs. Management doesn't
break out Apple TV results, but aggregates them with its services segment.
Furthermore, Apple hasn't disclosed how many streaming subscribers it has,
though industry estimates put the figure at 45 million. Reports also suggest
the company is losing more than $1 billion annually on the service as it builds
out its content library and focuses on the long term. Apple has always
positioned itself as a premium brand, and that has worked extremely well for
the iPhone, which closed out 2025 as the world's top-selling smartphone. It
makes sense that the company would take the same approach with its streaming
service. Owning the rights to Severance is another step in establishing its
bona fides as a premium provider, a move that will pay dividends for Apple over
the long term. Furthermore, investors shouldn't underestimate Apple. The
company has a long history of entering markets slowly and building its business
over time before becoming the market leader. The strategy has been used
successfully with the iPhone, iPad, AirPods, and Apple Watch. Netflix closed
out 2025 with 325 million subscribers, so Apple may never become the market
leader in streaming video, but I certainly wouldn't count the company out. It
has proven doubters wrong before. At 33 times earnings, Apple is selling for a
premium, but given the company's track record and the recent rebound in iPhone
sales, the stock is worth every penny.
AMAT Applied Materials is the largest
U.S. semiconductor equipment player, and it supplies specialized manufacturing
tools that chipmakers use to build semiconductor chips. These include machines
that deposit ultra-thin material layers on the wafers, etch microscopic circuit
patterns, and inspect wafers for defects. With AI data centers driving a surge
in demand for cutting-edge logic chips and memory players, and foundries
increasingly investing in capacity expansions for DRAM, HBM, and advanced
packaging, these tools are also seeing accelerated demand. According to
industry group SEMI, semiconductor equipment sales are estimated to rise around
9% year over year to $126 billion in 2026 and an additional 7.3% year over year
to $135 billion in 2027. Management expects Applied Materials' semiconductor
equipment business to grow by over 20% in calendar year 2026. Demand is
expected to be stronger in the second half of 2026 as chipmakers can only add
new equipment when cleanroom space becomes available. Hence, the company
expects strong momentum in 2027. The way the AI chips are built also favors
Applied Materials. HBM, used in AI chips, requires three to four times more
wafers to be processed than traditional memory. These memory chips are also
stacked in more layers, rising from 12 to 16 and now to 20 or even more. Hence,
each AI memory module requires more chips to be manufactured and assembled,
thereby increasing production volumes and packaging complexity. Chip
manufacturing for logic chips has also become more complex, requiring
additional deposition, etching, and inspection steps. Applied Materials expects
to benefit from these technology shifts, sell more tools per chip, and expand
market share. Hence, the company seems well positioned to benefit from
accelerated AI-driven spending in 2026.
BWXT Fears abound in the financial media
of an artificial intelligence (AI) bubble forming. Whether it is or isn't is up
for debate. So, what's an investor to do? You want to capture any gains the AI
bull run still has in it but you also want to hedge against a potential bubble.
Fortunately, there are many industries set to profit from the AI industry
without being directly involved in it. One such industry is energy, nuclear
energy in particular. According to the International Energy Agency (IEA) the
global demand for electricity from AI data centers is set to double by the end
of the decade. The U.S. Department of Energy has set a goal to triple America's
nuclear energy capacity by 2050 and small modular reactors (SMRs) are shaping
up to potentially be a solution as well. BWX Technologies Based in Virginia,
BWX Technologies has long been a leader in naval nuclear propulsion. The
company has built over 400 nuclear power systems for U.S. Navy submarines and
surface vessels. Building pint-sized nuclear reactors is something it has been
doing since the 1950s when it designed and fabricated parts for the USS
Nautilus, the world's first nuclear-powered submarine. And today the government
remains BWXT's largest single customer. For its most recently reported quarter
(the third quarter of 2025) government operations generated $617 million in
revenue for BWX, up 10% year over year. By comparison, its commercial
operations generated $251 million. But that sector is where most of the
company's growth comes from as commercial revenue was up 122% year over year in
Q3 2025. Also worth noting, in its latest results, the company saw its
operating free cash flow climb 338% and it achieved an operating margin of
17.7%. In addition to reactors and engineering, BWX also produces advanced
nuclear fuel for use in next-gen reactors. Namely, it makes tristructural
isotropic (or TRISO) fuel, which is significantly more robust than conventional
fuel and is capable of resisting meltdown by being its own containment system
and withstanding high temperatures. That fuel is what the company's BWXT
Advanced Nuclear Reactor (BANR) is meant to use. The BANR is capable of being
built in a factory and transported to where it's needed. There, it's put
together and can generate 50 megawatts of power from a high-temperature gas
reactor. The whole thing takes up a fraction of the space of a conventional
nuclear reactor and was designed with data centers in mind. The idea is you
build a cluster of data centers, plop an SMR in the middle of them, and it
powers the data centers without drawing power from the grid and spiking local
energy costs. However, while the BANR can be used for data centers, it was also
designed for remote municipalities; oil, gas, and mining facilities; and
campuses. So, you can profit from AI's power demands without having to buy any
AI stocks. BWX Technologies is a fast-growing company with a cozy relationship
with the U.S. government and the capability to profit from AI without the risks
of a potential bubble. And if that bubble pops, BWX will be well insulated as
AI isn't yet a particularly large part of its business.
CNI No news.
COST Shares of membership-based
wholesale retailer Costco Wholesale are once again trading at levels near
$1,000 after rising about 15% this year, crushing the S&P 500. Is the
stock's strong outperformance a sign that shares are undervalued, or does its
recent rise make the investment decision to buy even more difficult? Ultimately,
the investing question with Costco stock is not whether the company is
executing. That's arguably its specialty -- consistently strong execution month
in and month out. The bigger question for investors is whether the fundamentals
are strong enough to justify the price investors are still paying for the
stock. And at today's valuation, I do not think they are. Costco's latest
monthly update showed the business is still growing at an enviable pace. In the
four-week retail month of January (ended Feb. 1, 2026), net sales rose 9.3%
year over year to $21.3 billion. And for the first 22 weeks of the fiscal year,
net sales increased 8.5% to $123.2 billion. Looking at the retailer's
comparable sales trends, or its sales trends at stores open for more than a
year, the key metric shows that the company continues to find ways to get more
out of its stores. Costco reported total company comparable sales of 7.1% in
January. But when you strip out changes in gasoline prices and foreign
exchange, total company comparable sales were 6.4% for the month. Worth noting:
Costco's digitally enabled comparable sales were especially strong in January,
rising 34.4% as reported, or 33.1% when adjusted for gas and foreign exchange.
This compares to 18.3% adjusted growth in digitally enabled sales during
Costco's retail month of December. Costco's fiscal first-quarter results (ended
Nov. 23, 2025) tell a similar story: steady, high-quality growth. Net sales
during the period rose 8.2% year over year to $66.0 billion. And membership
fees rose even faster, growing at a rate of 14% year over year. And the
company's adjusted comparable sales for the quarter -- excluding gasoline and
foreign exchange -- were 6.4% for total company comparable sales and 20.5% for
digitally enabled comparable sales. In short, the business is executing. Costco
continues to grow comparable sales in the mid-6% range, and its e-commerce
growth is running much faster than its core warehouse base, showing that the
company is well-positioned to succeed in a world where e-commerce continues to
gain momentum. This is a good sign for investors worried about Amazon as a
potential long-term threat to Costco. Steady growth like this, derived from a
business built on durability with a loyal customer base and a recurring,
high-margin revenue stream from membership fees, demands a premium valuation
from investors. But this doesn't mean investors should pay just any price to
get into this growth story. As of this writing, Costco trades at about 53 times
earnings. A multiple like this prices in exceptional
growth without any slowdown -- years of mid-single-digit (or better) comparable
store sales, continued membership fee growth, and meaningful profit margin
expansion. Of course, this is exactly what Costco is delivering right now. But
what if sales growth unexpectedly slows? Or what if competition from Amazon or
Walmart's Sam's Club starts to chip away at Costco's growth prospects? The
problem isn't necessarily that Costco stock is grossly overvalued. It's not.
But there's no room for error in its current valuation. Investors may want to
demand at least some margin of safety when buying. For this reason, I think a
price around $830 per share, or better, is probably a better entry point than
$1,000.
EME No news.
GOOGL Artificial intelligence (AI) stocks
led the S&P 500 higher in recent years as investors aimed to get involved
early in this high-growth market. The AI story is far from over, but it may
soon have to share its status as "the next big thing" with another
technology. I'm talking about quantum computing, which may tackle problems that
are impossible even for today's most powerful supercomputers. Researchers and
companies are making tremendous progress in quantum computing, and some predict
that general usefulness of these systems is just a few years down the road.
That's why now is a great time to get in on potential winners. You could choose
pure-play quantum companies or those focused uniquely on this technology. But
the best bet for investors who remain a bit cautious, yet still hope to benefit
as quantum computing takes off, is buying shares of companies that don't depend
uniquely on this technology for revenue. Alphabet is a company you probably
turn to every day. That's because it's the owner of Google Search, the world's
most popular search engine. And this Google platform is Alphabet's biggest
revenue driver as advertisers rush to promote their products and services here.
Meanwhile, Alphabet also is working on a variety of other technologies, from AI
to quantum computing. And it's made significant advancements in quantum in
recent quarters. It announced its quantum chip, Willow, which has the ability
to reduce errors exponentially as the system scales up. Alphabet, using Willow,
ran its Quantum Echoes algorithm and produced results that topped those of
classical computers. And today, Alphabet shares trade at 26x forward earnings
estimates, making them a fantastic buy.
LIN No news.
MSFT Microsoft has been a hot name in
the AI investing realm for a while. While it isn't competing directly in
generative AI with its own large language model, the company has become a top
option to train and run AI workloads on its cloud computing platform, Azure.
Azure offers many of the leading AI models on its platform, despite Microsoft
being a large investor in OpenAI. Microsoft is staying neutral in the AI race,
which is a great position to be in. Microsoft is also doing quite well, with
revenue rising 17% during its last quarter, and Azure's increase an impressive
39% year over year. Despite this strength, Microsoft's stock trades at a
price-to-earnings ratio seldom seen during the past decade. It's a rare
occurrence for Microsoft's stock to trade for less than 25 times earnings, yet
investors can scoop up the stock at that price tag today. Now is the time to
load up on Microsoft stock, as deals like this don't come around often.
NU Nu
is an all-digital bank based in Brazil, and it's changing how people manage
their finances in its three markets of Brazil, Mexico, and Colombia. Before it
got started, even affluent people who could engage with the banking system had
high barriers to access, and lower-income customers were largely shut out. Nu
has operated until recently as a non-bank financial company, which is how it's
been able to offer its limited assortment of services. Growth has been
explosive, and Nu has more than 60% of the adult population in Brazil on the
platform, attracting business from all socio-economic demographics. And while
that might sound like its near saturation, there's still a huge opportunity in
a number of ways. Beyond getting more customers in Brazil, where it still
onboards about 1 million new members every month, it's monetizing its user
base. Customers often have only NuBank product, and many have a different
primary bank. It also has tons of room to add users in Mexico, where it has 14%
of the adult population as customers, and Colombia, where that's 10%.
Management has also implied that it will open in new markets, and it recently
applied for a banking charter in the U.S. Nu is just getting started, and it
should reward investors well over the next five years and longer
NVDA Chipmaker Nvidia just reminded
investors how unusual this AI cycle still is. The company reported fiscal
fourth-quarter revenue of $68.1 billion and then guided to extraordinary $78.0
billion in first-quarter fiscal 2027 revenue, plus or minus 2%. That is a
staggering number on its own. But the more telling point is what it implies
about growth: Against revenue of $44.1 billion in the year-ago quarter,
Nvidia's midpoint guide calls for about 77% year-over-year growth -- a
significant acceleration over its fiscal fourth-quarter year-over-year growth
rate. Nvidia's latest quarter was already an acceleration. Revenue rose 73%
year over year in fiscal Q4, up from 62% growth in fiscal Q3. The core driver
of Nvidia's growth remains the same: its data center segment. In other words,
the AI boom. Nvidia said data center revenue rose 75% year over year in fiscal
Q4 to $62.3 billion, showing how the AI chip build-out remains the dominant
part of Nvidia's growth story. One of the reasons the demand for AI is
increasing so fast is because of companies' growing appetite for agentic AI, or
the automation of using AI with minimal human oversight. "We have now seen
the inflection of agentic AI and the usefulness of agents across the world and
enterprises everywhere," said Nvidia CEO Jensen Huang during the company's
fiscal fourth-quarter earnings call. "You are seeing incredible compute
demand because of it." This helps explain why Nvidia's revenue growth has
been accelerating and why management is calling for such a huge fiscal first
quarter. And it'd be difficult to overstate just how incredible Nvidia's
revenue guidance is. In fact, one detail in the outlook is easy to miss but
important: Nvidia said it is not assuming any data center compute revenue from
China in its first-quarter forecast. In other words, the $78.0 billion guide is
coming without help from a market that used to be meaningful. Of course, this
isn't just a top-line growth story. Nvidia's profitability is holding up, too.
Nvidia's generally accepted accounting principles (GAAP) gross margin was 75%
in fiscal Q4, up from 73% in the year-ago quarter. In short, the company is
growing at an extraordinary, accelerating rate -- and doing so with very high
margins. But the key question is not whether Nvidia can grow year over year. It
is whether the pace is starting to top out. This is where the sequential trend
comes in. Nvidia's revenue in fiscal Q4 rose 20% from the prior quarter. The
midpoint of its fiscal Q1 guide implies about 15% sequential growth. For a
typical company, a 15% quarter-over-quarter jump would be exceptional. For
Nvidia, however, a step-down like that is the kind of detail the market will
scrutinize, because this boom has been defined by rapid sequential ramps. In
short, a sequential deceleration could signal that we are near a top to this
trend of accelerating year-over-year growth rates. Then there's Nvidia's high
valuation. As of this writing, shares trade at about 46 times earnings. A
multiple like that already assumes strong double-digit top and bottom-line
growth for years to come. None of this is to say Nvidia's growth could
disappoint anytime soon. But if revenue trends continue to decelerate
sequentially, it could suggest we are nearing peak demand for this AI build-out
and affect the investment thesis for Nvidia stock. In the meantime, Nvidia is
still executing extremely well. The guidance implies another acceleration in
year-over-year growth, and the company is doing it while explicitly excluding
China data center compute revenue from its outlook. Still, I would be cautious
at this price. Nvidia can keep delivering spectacular business results and
still disappoint shareholders if growth cools even modestly. That said,
Nvidia's guidance for even faster year-over-year revenue growth strengthens the
bull case. The sequential trend is just a reason to be cautious about buying
the stock at today's valuation, which seems closer to fairly valued than
undervalued.
SPGI Somewhat uncomfortably, on
Tuesday, February 10 the performance of S&P Global stock was far worse than
that of its most popular offering, the S&P 500 index. The company's shares
lost nearly 10% of their value that day, due to an earnings report that didn't
meet expectations. Meanwhile, the index dipped marginally, falling by 0.3%. S&P
Global's fourth quarter saw the financial data and information company earn
almost $3.92 billion in revenue, which bettered the year-ago figure by 9%. Net
income not in accordance with generally accepted accounting principles (GAAP)
saw a more robust gain of 12% to hit nearly $1.3 billion, or $4.30 per share. That
meant a mixed quarter for S&P Global. While it edged past the average
analyst revenue estimate of $3.9 billion, it fell just short of the
$4.32-per-share consensus for non-GAAP (adjusted) profitability. All of the
company's revenue streams increased during the quarter. Two standouts were its
indices business, which advanced by 14% to produce $498 million, and its
ratings service, up 12% to almost $1.19 billion. In its earnings release,
S&P Global also proffered revenue guidance for the entirety of this year.
It's modeling organic constant currency revenue growth of 6% to 8% over the
2024 tally, and GAAP earnings per share of $19.40 to $19.65. However, the consensus
analyst projection for the latter is $19.96; the discrepancy was likely a key
factor in Tuesday's sell-off. To me, that's an overreaction on the part of
investors. S&P Global's numbers weren't spectacular, but the company is
still posting high-margin net income on a business that continues to grow from
those multiple revenue streams. I wouldn't be so discouraged; in fact, I still
think the stock is a buy candidate.
TSM Taiwan Semiconductor
Manufacturing hasn't gotten quite the same amount of attention that other
players in the AI stock world have received. Nevertheless, without Taiwan
Semi's chip manufacturing equipment, a host of better-known tech giants would
be stuck with greatly inferior processes for making the semiconductors they
need. In this second article in the three-part series on Taiwan Semi for the
Voyager Portfolio, you'll see just how much the tech company's vital machinery
has allowed it to turn its work into cold, hard cash. The past decade has been
a strong one for technology companies. Because of its relationships with both
giants of the field and up-and-coming chip design businesses, Taiwan Semi has
been able to reap the financial rewards from rising interest in semiconductors.
Since 2015, Taiwan Semi has grown its revenue by more than 350%. In particular,
large gains in sales at the beginning of the COVID-19 pandemic in 2020 got
things rolling for the company, and AI demand powered further top-line
increases for the semiconductor equipment maker. But the more important story
for shareholders has come from Taiwan Semi's discipline in controlling costs.
Efficient manufacturing processes minimize Taiwan Semi's expenses related to
production, which has resulted in gross profit jumping over 460%. Gross margin
has expanded from less than 49% 10 years ago to nearly 60% today. Also, keeping
operating expenses in check has helped Taiwan Semi thrive. The company hasn't
skimped on research and development activities, but it's been careful with its
overhead. As a result, operating income has climbed more than seven times, and
operating margin has climbed almost 13 percentage points to 50.8%. Earnings
have followed a similar trajectory, as a greater than nine percentage point
increase in net margin has helped net income climb almost 475% over the decade.
All of these factors have contributed to Taiwan Semi's impressive performance.
Return on equity jumped more than five percentage points during 2025 to 35.4%.
The company paid out 29% more in dividend distributions to shareholders than it
did in 2024. Yet it also strengthened its balance sheet, increasing its cash
and marketable securities position by 27%. A look at Taiwan Semi's
fourth-quarter financial report reveals that the company is enjoying favorable
trends beyond just artificial intelligence. To be clear, AI drives much of the
demand for high-performance computing chips, and that area was the biggest
contributor to Taiwan Semi's growth, rising 48% and constituting 58% of total
revenue for the company. However, other areas were also strong. Growth in chips
for the automotive sector jumped 34%. Internet of things applications saw a 15%
rise. And the important smartphone market, which represents almost 30% of
Taiwan Semi's total sales, enjoyed a more modest but still significant gain of
11% year over year. The net result of Taiwan Semi's prowess in providing
foundry services to chip design companies has been a soaring share price that
has set new all-time highs countless times over the past year. Investors are
extremely optimistic about Taiwan Semi stock's ability to keep up its momentum.
To determine whether that optimism is justified, the third and final article on
Taiwan Semi for the Voyager Portfolio will focus on the semiconductor equipment
maker's prospects to keep expanding its business in 2026 and beyond.
V The Trump Administration is
again pressuring credit card issuers to cap the interest rates they charge card
holders. "James Dimon, lower your friggin' credit card interest
rates," White House trade advisor Peter Navarro said Thursday on Bloomberg
Radio. "You are a criminal the way you charge the American people at 22,
25 and 30% and the president wants you to lower that," You might recall
that early in January President Donald Trump called for a one-year, 10% cap on
credit card interest rates. He said the cap would become effective on Jan. 20,
the one-year anniversary of his second inauguration. "Please be informed
that we will no longer let the American Public be 'ripped off' by Credit Card
Companies that are charging Interest Rates of 20 to 30%, and even more,"
Trump wrote on X on Jan. 9. No rate cap has been imposed, of course, as that
would require legislation. And Congress watchers say that's unlikely. The
powerful financial industry has already vowed to fight the proposal with every
weapon at its disposal. Legislation to cap credit card rates introduced by
Vermont Senator Bernie Sanders early last year stalled in Congress while the
financial industry killed a similar effort by the Consumer Financial Protection
Bureau to cap late fees on credit card rates. Despite that, Navarro's
statements sent share prices of the major card issuers lower last week. In
fact, bank and financial industry stocks should be heading higher right now due
to the outlook for interest rates. The futures market was pricing in two
quarter-percent rate cuts (0.25%) by the Federal Reserve in 2026 (as of Feb.
13). The Consumer Price Index data published the Bureau of Labor Statistics
last week indicated that inflation continued to moderate in January, even more
than expected. As a result, futures markets are now starting to price in a
third cut this year. That's good news for banks. When the Fed cuts rates, it
pushes short-term rates down more quickly than long-term rates, leading to a
steeper yield curve. Simply compare the falling short-term federal funds rate
to the 10-year Treasury yield (the longer end of the curve), and you see that
the difference between the two rates is widening. This should help banks,
because they borrow money from depositors at lower short-term rates and then
lend it to consumers and businesses at higher long-term rates. So, when the
yield curve steepens -- short-term rates fall and longer-term rates remain
higher -- bank profits rise. So, a cap on credit card rates doesn't look
likely, despite White House demands, while the rate picture for banks is
suddenly looking even brighter. And now may be a good time to buy the dip in
bank stocks.
WM No news
Stock Picks:
HT: Buy Caterpillar (CAT). The
company engages in the business of manufacturing construction and mining
equipment, off-highway diesel and natural gas engines, industrial gas turbines,
and diesel-electric locomotives. It operates through the following segments:
Construction Industries, Resource Industries, Energy and Transportation,
Financial Products, and All Other. The Construction Industries segment is
involved in supporting customers using machinery in infrastructure and building
construction applications. The Resource Industries segment offers machinery in
mining, heavy construction, quarry, and aggregates. The Energy and
Transportation segment focuses on reciprocating engines, turbines,
diesel-electric locomotives, and related services across industries serving oil
and gas, power generation, industrial, and transportation applications
including marine- and rail-related businesses. The Financial Products segment
provides financing alternatives to customers and dealers for Caterpillar
products and services, as well as financing for power generation facilities
Buy additional Boeing (BA).
CX: Buy additional Boeing (BA), Microsoft (MSFT) and/or Caterpillar
(CAT).
PR: Add to existing stock holdings
and sell the remainder of The Trade Desk (TTD). TTD stock price has suffered a
large decline due to competition from Amazon, a slowing growth rate, customers
decreasing ad spending and recent volatility in management.
KS: Buy additional Microsoft
(MSFT).
CJ: Use one-half of UIC cash to
purchase MSFT, BA, CAT and BWXT in equal amounts.
RT: Buy additional MSFT.
DK: Buy additional BWXT and/or
Intuitive Surgical (ISRG); engages in the provision of robotic-assisted
surgical solutions and invasive care through a comprehensive ecosystem of
products and services. Its products include Da Vinci Surgical and Ion
Endoluminal systems.
JL: Buy CAT and additional BA and
MSFT.
On Monday, February 9, 2026, the following order(s) filled:
Sell 1712 TTD @ $26.89/share; net
$46,035.68
Buy 24 BA @ $244.04/share; total $5856.96
Buy 29 BWXT @ $203.17/share; total
$5891.93
Buy 8 CAT @ $731.935/share; total $5855.48
Buy 14 MSFT @ $409.8793/share;
total $5738.31
Meeting adjourned at 3:49 PM.
Respectfully submitted by Ken Bauman.
Next Meeting: Thursday, March 5, 2026 at 2:30 p.m. at:
3054
Sunrise Blvd Suite J
Rancho
Cordova, CA 95742
(916)
706-0343