👉 Walmart Seems Overvalued

Together with Betterment

Happy Sunday.

The past week in the markets turned very sour on Friday as volatility remains top of mind for everyone. Remember, I alluded to this in my podcast episode titled “Our 2025 Market Predictions.”

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Portfolio Updates (YTD Performance):

Quickly addressing some confusion — as you all might know, I’m on a journey to build a $2M dividend growth portfolio. The end goal is to have $2M invested into dividend growth stocks. However, I’m an investor in his mid-to-late 20s and realize it’s silly to limit myself to only dividend growth stocks as investment options while I’m building this portfolio.

I began the portfolio in January of 2023 with a sole focus on single stocks and ETFs. The very top screenshot is that stock-only portfolio. It’s broken out into three subsections: Long Risky, Dividend Growth Stocks, and Long Technology. Additionally, I hold VOO and BRK.B in this stock-only section of my portfolio.

That stock-only portfolio is up +7.2% YTD, compared to the S&P 500’s +2.7%.

Inside of these subsection, like Long Risky for example, include single stocks and ETFs that I believe will do well over the coming years. The Long Risky section is comprised of companies I’m a long-term investor in that are on the riskier side of the equation — think names like Uber or Hims and Hers Health. Big volatility.

Long Technology is the same thing except with Big Tech stocks I’m bullish on. Dividend Growth Stocks are the same thing except with … you guessed it… dividend growth stocks I’m bullish on!

When I realized Bitcoin had likely bottomed in early-2023, I began allocating net new capital toward it — and that position has grown to over $227K in value. I’m up over $100K and I haven’t sold it. I bought a little bit of Ethereum throughout the years, which is down YTD.

Additionally, I carved out a separate section of my portfolio that was originally going to be 100% invested into monthly-paying dividend ETFs like SPYI, QQQI, and other NEOS Funds. However, I decided to take roughly $75K of that $100K late-2024 and allocate it toward ETHA (iShares Ethereum ETF). I continue to believe Ethereum will see new all-time highs and inch closer to $6,000 sometime in 2025.

Unfortunately for me, I’m down horrendously on that idea YTD. Total I’m down roughly -$26K in unrealized losses. But… that’s what crypto does. It’s a volatile asset class that frequently contracts by -35-50% during bull markets.

There was some confusion about me “hiding these losses” from you all. I’m not hiding anything. I’m an open book. I take my short-term losers on the chin, just like I brag about my long-term winners (HIMS was officially up 10X since this post) publicly. I continue to be bullish on Ethereum, and once it hits the $5-6K range I’m cashing out and re-allocating those funds toward monthly-paying dividend ETFs like SPYI and QQQI.

Should I have stayed completely in SPYI instead of allocating toward ETHA? In hindsight, probably. But that’s the risk people like me on the internet take by doing everything in the public’s purview on a weekly basis. You’re watching me make mistakes, or win big, in real-time.

And the best part? The “ideas” I share are what worth exactly what you pay for them… absolutely nothing. 

This newsletter is completely free to read. If you want to join our monthly livestreams and unlock access to the single stocks and ETFs inside of the subsections of my stock-only portfolio then you can become a paid subscriber and access those perks (as well as GRIT Alpha and countless other perks that come with being a paid subscriber).

But the vast majority of what I share with you all is free, and I’m very proud to say that.

With that being said, I haven’t made any portfolio changes this week — however, I plan to open a position in Snowflake (SNOW) inside of the Long Risky subsection of my portfolio soon. Giving y’all a heads up on that first!

Week in Review —TLDR:

Walmart’s stock is seemingly over-valued, Alibaba’s growth is reaccelerating, and Analog Devices’ free cash flow is picking back up.

A new Covid-like virus was discovered, Buffett’s annual letter was released on Saturday, the largest-ever crypto heist took place last week, DOGE “dividend” checks could be a reality, the FOMC Meeting Minutes revealed doubts about inflation being tamed, and the Empire State Manufacturing Survey saw business optimism drop substantially.

Key Earnings Announcements:

Walmart’s stock is seemingly over-valued, Alibaba’s growth is reaccelerating, and Analog Devices’ free cash flow is picking back up.

• Walmart (WMT)

Key Metrics

Revenue: $180.5 billion, an increase of +4.1% YoY

Operating Income: $7.8 billion, an increase of +8.3% YoY

Profits: $5.3 billion, compared to $5.5 billion last year

Earnings Release Callout

“We have momentum driven by our low prices, a growing assortment, and an eCommerce business driven by faster delivery times. We’re gaining market share, our top line is healthy, and we’re in great shape with inventory. We’ll stay focused on growth, improving operating margins, and strengthening ROI as we invest to serve our customers and members even better.”

My Takeaway

• Alibaba (BABA)

Key Metrics

Revenue: $38.4 billion, an increase of +8% YoY

Operating Income: $5.6 billion, an increase of +83% YoY

Profits: $6.4 billion, an increase of +333% YoY

Earnings Release Callout

“While we made substantial investments to spark growth re-acceleration in our core businesses, we maintained financial discipline with enhanced operational efficiency, achieving positive EBITA growth in Taobao and Tmall Group.”

My Takeaway

• Analog Devices (ADI)

Key Metrics

Revenue: $2.4 billion, compared to $2.5 billion last year

Operating Income: $491.3 million, compared to $586.0 million last year

Profits: $391.3 million, compared to $462.7 million last year

Earnings Release Callout

“ADI delivered first quarter revenue, profitability, and earnings per share above the midpoint of our outlook, despite the challenging macro and geopolitical backdrop.

Our recovery is being propelled by improving cyclical dynamics and numerous new wins across our franchise converting to revenue. We remain firmly committed to delivering ever higher levels of value for customers through differentiated innovation and customer experience, coupled with an agile and resilient supply chain.”

My Takeaway

Investor Events / Global Affairs:

A new Covid-like virus was discovered, Buffett’s annual letter was released on Saturday, the largest-ever crypto heist took place last week, and DOGE “dividend” checks could be a reality.

• Covid-Like Bat Virus Discovered by Researchers in Chinese Lab

Researchers at the Wuhan Institute of Virology have identified a new bat coronavirus that enters cells similarly to the virus that causes Covid-19, though it has not yet been detected in humans. News of the discovery caused vaccine stocks to rise, with Moderna, Novavax, BioNTech, and Pfizer seeing notable gains. The lab's finding raises concerns about the potential for the virus to spread from animals to humans, though there is no evidence of human infection so far.

The Wuhan research center, previously linked to the origins of Covid-19, has denied involvement in developing pandemic-causing viruses and lost U.S. funding in 2023. The newly discovered virus is closely related to MERS, which has infected about 2,600 people globally since 2012, with a fatality rate of 36%.

• Warren Buffett’s Annual Shareholder Letter

Warren Buffett’s latest annual letter did not explain why Berkshire Hathaway has been selling stocks and amassing a record $334 billion in cash.

Despite the defensive stance, Buffett reassured investors that Berkshire remains committed to equities, particularly American companies with international operations. The company has now net sold equities for nine consecutive quarters, including over $134 billion worth of stocks in 2024, primarily reducing its positions in Apple and Bank of America.

Berkshire also continued its buyback halt, refraining from repurchasing shares despite strong operating earnings. Buffett hinted that high stock valuations might be limiting investment opportunities, stating, “Often, nothing looks compelling.”

He reaffirmed confidence in his successor Greg Abel, who will oversee investment decisions moving forward. One area where Buffett confirmed future investment is Japan, indicating Berkshire may increase its holdings in five Japanese trading houses.

• The Largest-Ever Crypto Heist Happened Last Week

Bybit, a major cryptocurrency exchange, was hacked for $1.5 billion in what is now the largest crypto heist in history. The attack compromised the exchange’s cold wallet, allowing hackers to swiftly transfer and liquidate the stolen funds, primarily in Ethereum. Blockchain analysts, including Elliptic, traced the stolen assets and linked the breach to North Korea’s Lazarus Group, a state-sponsored hacking collective.

Bybit CEO Ben Zhou reassured users that other cold wallets remained secure and announced a bridge loan to cover any unrecoverable losses. The hack triggered a rush of withdrawals, but Zhou later stated that outflows had stabilized. Despite ongoing efforts to track the stolen assets, experts warn that large-scale crypto thefts remain a persistent risk in the industry.

• DOGE “Dividend Checks” Could Be Coming?

President Trump announced he is considering using 20% of the savings from Elon Musk’s cost-cutting initiative, DOGE, to issue direct payments to Americans and another 20% to pay down national debt. Some estimates conclude that if $400 billion of the targeted $2 trillion savings were distributed, taxpaying households could receive around $5,000 each.

Trump did not provide details on how much DOGE has definitively saved so far, but Musk acknowledged the proposal and said he would check with Trump. Musk, who aims to cut $2 trillion in federal spending, received praise from Trump at the FII Priority investment summit in Miami, where Trump called him a "seriously high IQ individual." He even made remarks over the weekend that Musk should kick things up a notch.

Meanwhile, the administration is planning more workforce reductions, including laying off at least 6,000 IRS employees and having government employees send a weekly email to their manages stating what they accomplished the week before.

If they don’t respond to the email by the end of Monday night — they will be considered to be resigning. Let’s see where all of the DOGE drama goes next.

Major Economic Events:

The FOMC Meeting Minutes revealed doubts about inflation being tamed, and the Empire State Manufacturing Survey saw business optimism drop substantially.

• FOMC Meeting Minutes

Federal Reserve officials decided to keep interest rates steady in January, citing the need for further inflation decline before considering cuts. The Fed Meeting Minutes revealed that they expressed concerns that President Trump’s proposed tariffs, particularly on autos, pharmaceuticals, and semiconductors, could push inflation higher, complicating future policy decisions. While some policymakers were optimistic about potential economic growth from regulatory and tax changes, they acknowledged the risk of tariffs raising consumer prices.

The committee emphasized that current policy allows time to assess economic conditions, with most members agreeing that inflation must show sustained improvement before any adjustments. Market expectations suggest the next rate cut might not happen until July or September, depending on inflation trends and the impact of trade policies.

• Empire State Manufacturing Survey

Manufacturing activity in New York State improved in February, with the Empire State Manufacturing Survey's General Business Conditions index rising 18.3 points to 5.7 — surpassing expectations. New orders and shipments saw moderate growth, while delivery times lengthened slightly, and inventories expanded modestly. However, employment levels declined, and input prices rose at the fastest pace in nearly two years, leading to noticeable increases in selling prices.

Despite the current improvement, business optimism for the next six months dropped significantly. The index, which has been volatile over past business cycles, turned positive for the first time in over 2.5 years after a sharp decline at the start of 2024.

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