 But when it comes to money management, there's nothing more embarrassing, more dark thought inducing than running a public portfolio. Because at any given time, you're going to feel the pain, pain of a wrong move, far more than you will feel the joy, the joy of a good stock pick coming home. There's a reason why you never get this kind of behind the scenes look at what goes on before trades and after trades from anyone else. The reason's simple. It's just too mortified when it's bad. But how else can I teach you how to manage your own money, the true purpose of the product if I don't show you the truth about the pain? How else can I answer your fabulous questions, respond to your amazing feedback that we get hundreds, hundreds of people tell us what they want? How can I analyze what went wrong if I don't admit that it was wrong or don't show it? Am I supposed to say it's early? That's why after I'm done giving you my outlook, I will share with you some of the thought processes that go through my head during these periods so we can break them down and make them into teachable moments as excruciating as that is, even though I can throw in some good ones too. So where are we? At this very moment, we are once again gripped by the binary nature of potential North Korean conflict. I wish I could offer more than others on this existential nuclear nor nothing narrative. We have plenty of cash, more than any time this year, $250,000. The popular things have grown uncertain on this particular issue. It is so hard to factor in other than, well, it's an increasing negative. Let's put it this way. We are ready to buy real weakness, but we are not going to live or invest in fear of our own lives. We are banking on a peaceful resolution and we'll stay that way until our country issues a statement saying that non-essential US personnel should leave South Korea. Until then, I think the issue will ebb and flow. And when it ebbs, I don't know, we're a little tempted if the market's down, this is not market down. We will be as ready as you can possibly be in these instances. Only way to be ready? Cash, that's the best hedge. Yes, gold, if you have to, we're not selecting gold right now. It's not acting as the hedge that it should be. Long term, you know I do like gold. Now that we are almost through earning season, it's become clear that the only thing that's really working in the US equity market's favor is management skill at individual companies, management skill alone. The President has not been all that effectual. Now that's not a left, right, pro-Trump anti-Trump statement. He simply hasn't been able to get anything done besides stopping more regulations, which is a big deal, and opening up more latest for coal, not a big deal. His government light stand when it comes to business has made for a better atmosphere for capital for certain. But the dreams of tax reform, they're fading fast, replaced by worries about debt ceilings and busted budgets. We often joke at work that the best stocks are those of the companies he has picked on, namely United Technologies Lockheed and Boeing, look at Lockheed up for today, amazing. We had it, we had a good game, we took it. You can't select stocks forever based on that kind of worry, although I do like all three of those. The economy, some pockets of strength and pockets of weakness. Housing good, retail bad. Jobs very strong, auto is just terrible. Profit margin expanding, labor market tightening expensive. In short, there's not enough strength to make companies that need a robust economy here to prosper for the long term, although I'm looking at a caterpillar, that looks good. But that's because business is strong overseas. Nor is there enough activity to raise interest rates in any rapid fashion, but there's not enough weakness to hurt earnings for most companies. The Fed, how about the Fed? It wants to raise rates, but not if it means that we go back to 1% growth because of the slowdown that it's caused. The Fed's confused because there are still people on the board who think that easy money is the root of all evil. But Chief Janet Yellen wants to be data-driven, and her judgment has been impeccable, even as you rarely hear that, probably only from this quarter, frankly. That data doesn't support more than one rate hike this year. Does that mean the Fed's a non-entity? Wow, can you believe that, that'll be hard. But I do think that they should raise rates in September, should of, could of, I don't think they will. It's looking less and less likely, which is why the bank rally always stalls out when we get to these levels. Thank heavens for sitting down 85 cents today. That remains the cheapest of the major banks, but that's because of value. It's tangible book value is right around these levels. So every share of common stock purchased by Mike Corbat, a favorite of mine, is good for the earnings per share. They're going to buy 7% of the company back this year. Keyback works too. Key is getting hit today down 20 cents opportunity, but that's only because of Beth Mooney's very smart acquisition of First Niagara and the ability to be able to raise the net interest margin. The world? China's OK, fits and starts. Latin America? OK, pending upon the country. Asia away from China? Pretty good, provided no thermonuclear war, something I am not joking about after President Trump's fire and fury comments slammed into the bull yesterday afternoon and is on top of the negativity today. And Europe away from the UK? It's fabulous, which is why we own the EZU down 32 cents today, again, opportunity. That's the unhedged ETF that gives us the exact currency exposure we want. Remember, we are big believers in the euro, even though I think we're the only ones. I think it goes much higher. And I still think the dollar's further to fall. That's really helping the earnings of our international companies, as anyone who's on the fabulous PepsiCo quarter knows. That was good competition. So where does this leave us? It leaves us trying to find companies with the best earning surprises or the possibility of good catalysts down the road. The latter, catalysts drive a lot of our thinking. Catalysts. Classic examples near term in the portfolio that have catalysts. First, DAO Chemical. When it merges with DuPont, which will happen at the end of the month, we will get some DAO DuPont, which will then split into three companies. That will not be the end of the value creation, though. I believe the new CEO of the combined companies, Ed Breen, will push for more opportunities to create wealth through more spin-offs, as he did with Tyco. He's one of the best CEOs in the world. When I talk to him, I feel so confident, confident of the synergies, confident of the earnings growth. If we didn't own a lot, we would still be buyers of DAO even up here. And I would encourage you to buy some before the merger date at the end of August if you don't have some already or you're new to our club. Catalysts like NXP Semi. Let's see, off $0.19 today. But where we urge you not to tender, and for once held on to a takeover stock, we always sell them instantly. Because we simply believe from the get-go that the company is being undervalued even by its own management. We are confident that ultimately Qualcomm, the suitor, will have to pay more to get the deal closed. Perhaps as much as $5 more. After all, if it is sold at $1.10, that's Qualcomm's bid price, that would be a 15 times earnings. Celestine would pay for Texas Instruments or analog devices right now. And that's without the control block. This stock would be higher without the deal. So we do not tender. We hold. Catalysts like Danaher, DHR, it's in to buy that below 80. We believe that management will not let another quarter go buy without fixing the one narrow to well division it has, the dental division. I feel even more strongly about this after Turkey and Stanley Bergman yesterday from Henry Shine, the largest in the sector, and by the way, they sell Danaher stock. See, it's hurt Danaher twice. And the reason why historically Danaher is a great company and a great stock is because management doesn't tolerate screw ups. Call us patient even if it is unnerving at times. I feel even more strongly today that they will do something soon to help the situation after I've interviewed Bergman. The segment's just too hot, too soft. The whole dental segment, whether it be Serona, Dense Ply, everything but a line, which is really good, but that's a millennial play. It is too soft for Danaher to keep holding on to it. This stock would be in the 90s instead of $80. If it didn't have that darn dental business, how can they not get rid of it? Catalysts like Activision Blizzard, which even as it is the most stable game franchise out there, with the exception of Take Two's Grand Theft Auto, is supremely undervalued, even up here, because of the phenomenon of eSports, of which I think it is ahead of Take Two, even though Take Two is the NBA. Right now, eSports gamers, where you watch other gamers play each other, has tens of millions of fans worldwide. Korea, China, US, Europe. And it's only growing in popularity by the day. While League of Legends, which is owned by Tencent, which does an officially trader, is currently the dominant eSports game, I am confident that Bobby Kodak, the incredibly hard-charging CEO of Activision Blizzard, will make his overwatch with 30 million players, the rival to the League of Legends, when it comes to eSports. Right now, he is setting up the league, and there are big-time owners of teams, like the Crafts, How Smart Are They, in New England. There will be sponsorships. Tons of them, I got that from Logitech, which is doing them already. There will be an explosion of adoption. Do you know what there might even be an eSport team in a few years at every major college? NCAA scholarships. In the meantime, Crush, Call of Duty, those franchises, they're doing quite well. So are many of his games all part of the stay-at-home economy. You hear me talk about so often. But the news flow out of eSports has a chance to move the stock every time, which is why we are so excited about this new position.