A Juneteenth Holiday ‘Ask Me Anything’

By Jim Woods

It’s Wednesday, June 19, also known as “Juneteenth,” and financial markets are closed in observance of the holiday. Now, Juneteenth has only been a recognized federal holiday since 2021, so it’s not that surprising to me that a few readers wrote me this morning to ask me why the markets were closed (and why the prices of their stocks weren’t changing).

One reader’s question prompted me to do another edition of one of my favorite The Deep Woods issue themes, “Ask Me Anything.” So, let’s kick it off with a Juneteenth inquiry from this morning.

David K. writes: “Jim, what is the deal with ‘Juneteenth’? Is this a real holiday? Why is this important? It seems like the government just makes up reasons not to work.”

David, I believe I first learned about Juneteenth in 2020, the year before it was designated a federal holiday. At the time, I must admit I was ignorant of the events Juneteenth was designed to commemorate. And while ignorance on a subject is nothing to be embarrassed by, choosing to remain ignorant should be a source of embarrassment to all thinking men.

So, a few years ago I chose to read about Juneteenth, what it was, what it means and why I think it’s an amazing occasion that should rightly be celebrated.

First, Juneteenth is celebrated on June 19 each year, and it commemorates the ending of slavery in the United States. The holiday’s name is a portmanteau of the words “June” and “nineteenth”, as it was on June 19, 1865, when Major General Gordon Granger ordered the final enforcement of the Emancipation Proclamation in Texas at the end of the Civil War.

Image courtesy of Shutterstock.com.

Writing today in Reason.com, Ilya Somin puts the significance of this day in brilliant perspective:

“… the abolition of slavery was the greatest achievement of the universal principles underlying the American Revolution, and a rebuke to ethnic nationalism and separatism. Slavery was America’s worst injustice, and its abolition is obviously worthy of celebration.”

I 100% agree with Somin’s take here. I also highly recommend reading his piece, as it addresses some of the unfortunate, yet easily predictable, culture war issues that have erupted around Juneteenth. Somin, however, correctly puts those issues in their proper perspective and focuses the reader on the importance and true meaning of the holiday.

Now, from the perspective of philosophic principles, the notion that one human being has the right to own another human being is perhaps the most repugnant idea that has ever infected humanity. Sadly, you can find sanction for this idea to this day, not only in the legal canons of many countries around the world, but also in many religious texts and traditions.

The abolishment by law of slavery in the United States should be lauded as a benchmark of moral progress in our nation’s laudable history of promoting individual rights, and the wider philosophic idea that man is an end in himself — and not a tool for other men, or the state or the church, to dispose of as they wish.

So, today, I am celebrating Juneteenth, and if you are someone who considers man as an end in himself, and not the means to another’s end — you should celebrate, too.

ETF Talk: Steer Your Ship Right with This ‘CIBR’-security ETF

“Then the ships were driven headlong, and their sails were torn to shreds by the violence of the wind. So we lowered the sails… and rowed the ships hurriedly toward the land. There for two nights and two days we lay… But when fair Dawn brought… the third day, we set up the masts and hoisted the white sails… and the wind and the helmsmen steered the ships.” — Homer, “The Odyssey”

The world is awash in artificial intelligence (AI) and emerging technologies. The internet has shifted much of our lives into the ocean of the online network, creating new vulnerabilities and necessarily prompting new forms of protection.

What kind of protection, you may ask. Well, dear reader, this is where cybersecurity comes into play. Cybersecurity is a large and growing industry that specializes in technologies, processes and controls that protect systems, networks, programs, devices and data from cyberattacks.

In other words, cybersecurity protects a business’s digital assets and employees, as well as your and my everyday personal transactions.

We get this not-so-newfangled word by combining “cyber” and “security,” but the origin of the former has its roots in the ancient Greek “κυβερνήτης,” meaning steersman or pilot (obviously of a ship, if you’re an ancient Greek man).

So, this week, I’ll be your helmsman, steering this ship to the cybersecurity exchange-traded fund (ETF): First Trust NASDAQ Cybersecurity ETF (NASDAQ: CIBR).

Launched in 2015, CIBR follows the price and yield of the Nasdaq CTA Cybersecurity Index and is made up of companies classified as engaging in cybersecurity, as defined by the Consumer Technology Association.

It includes companies primarily involved in the building, implementation and management of security protocols applied to private and public networks, computers and mobile devices to provide protection of the integrity of data and network operations.

With cybercrimes having become a major global threat (think malware, phishing, deepfakes, among others) and user-friendly generative AI being used to create malware and disinformation, having cybersecurity battleships patrolling the network waters has become imperative.

The World Economic Forum estimates that the cost to the global economy caused by cyberattacks will rise from $8.44 trillion in 2022 to $23.84 trillion by 2027.

In case all of this is taking the wind from your sails, let me remind you that with the rise of cybercrime comes the rise of spending to combat it. Overall global spending on amping up cybersecurity has risen, making this a high-growth industry worth investing in.

CIBR presents such an opportunity, with excellent exposure to the cybersecurity industry. It is one of the oldest ETFs in this space and is actively traded, maintaining solid performance, even in troubled market waters. The fund has outperformed similar ETFs over the last five years.

The fund has net assets of $6.11 billion, an expense ratio of 0.59% and a dividend yield of 0.47%. The fund is down 1.07% for the last month, down 7.35% for the past three months and up 21.67% year to date. It is evaluated semi-annually and rebalanced quarterly.

Perhaps unsurprisingly, the fund’s exposure heavily favors Software, at 54.43%, with IT Services following at 13.44% and Communications Equipment at 10.21%. Professional Services, 9.48%, Semiconductors and Semiconductor Equipment, 8.94% and Aerospace and Defense, 3.50% round out the fund.

Top holdings include Broadcom Inc. (AVGO), CrowdStrike Holdings, Inc. (CRWD), Palo Alto Networks, Inc. (PANW), Cisco Systems, Inc. (CSCO), Infosys Limited (INFY), Darktrace Plc (DARK.L), Leidos Holdings, Inc. (LDOS), Gen Digital, Inc. (GEN), Thales S.A. (THAL.VI/HO.PA) and Booz Allen Hamilton Holding Company (BAH).

Chart Courtesy of StockCharts.com.

While performance across the industry has been mixed of late, the long-term outlook is strong with significant growth predicted. That CrowdStrike is the second-highest holding in this fund (at 7.62%) makes this ETF a secure bet for investors; in the face of industry headwinds, CrowdStrike recently traded near its all-time high, gaining 33% in revenue in the first quarter.

Allocating to strong industry players like this one and keeping a diverse portfolio makes CIBR a worthy port at which to dock your investment ship. So, as Odysseus and his crew trusted their helmsman to steer them from danger, so let the fair winds of cybersecurity growth fill the sails of your portfolios.

Be aware, however, that this is a fast-moving industry with high competition and rapidly changing technologies. Investors should always do their due diligence before adding any stock, fund or ETF to their portfolio.

As always, I am happy to answer any of your questions about ETFs, so do not hesitate to email me. You may see your question answered in a future ETF Talk.

In case you missed it…

The Truth Is Out There (My Visit to Mar-a-Lago)

“Jim, how would you like to come to Mar-a-Lago and meet President Trump?”

That’s what a wired-in colleague of mine asked me recently, and knowing this man as I do, he was not asking in jest. Now, I must say that my initial reaction to the possibility of meeting Mr. Trump was a mixture of excitement, anticipation and ambivalence.

Excitement at meeting one of the most influential humans living today, because love him or loathe him, his impact cannot be denied. Anticipation at the prospect of hearing directly from the horse’s mouth the answer to a few hard questions already brewing in my mind. Ambivalence, because as a thinking entity, I have mixed opinions on the Trump presidency, the way it ended, the events of January 6th and other matters of critical import.

Probing a little further into my colleague’s inquiry, I was told that the proposed meeting at Mar-a-Lago was at the invitation of executives from Trump Media & Technology Group Corp. (NASDAQ: DJT). Trump Media is the parent company of online platform Truth Social, and the executive team wanted an opportunity to tell me about their plans to grow the business and to make DJT a leading company that delivers value for shareholders.

Of course, I said yes to the invitation (who wouldn’t?), and about a fortnight after that initial colleague call, I was on a plane headed to Palm Beach, Florida.

In preparation for this meeting with Trump Media, I did fair amount of research on the current state and future prospects for DJT. I mean, I had heard about DJT shares as we all did, but what we heard from the mainstream press and the financial press wasn’t flattering. The claim was that it was just another “meme” stock that had been financially engineered via a “SPAC” (special purpose acquisition company) to bring the investing public to Truth Social and to essentially enrich the former president, who owns a reported 115 million shares worth about $5.6 billion.

After conducting my own objective due diligence on DJT, there were a lot of open questions on the table. For example, what is the company’s plan to generate revenue and to become profitable? What is the vision for the company and its expanded operations going forward? What is the unique value proposition for Truth Social users? When should investors see progress on these fronts?

Unfortunately, asking Mr. Trump about these issues wasn’t possible. As you might have heard, he was immersed in a little legal proceeding in New York that took place at the time of the Trump Media presentation I attended. Fortunately, I did get to speak with former Congressman Devin Nunes, who, in addition to being one of the best representatives we’ve had (especially from my home state of California), is now the CEO of Trump Media & Technology Group.

Over the years, I had seen Nunes operate in Congress, and I liked his work as he was frequently on the side of free markets and protecting America’s interests abroad. But now the question was, would I like what he had to say about his new private sector venture?

Your editor discussing Truth Social and the future of DJT with CEO Devin Nunes.

“I always tell people, Trump didn’t need a new company and I didn’t need a new job. But out of necessity, we had to create a home for people that were canceled.”

That was what Nunes told me, during our interview, was the real impetus behind the creation of Truth Social, as he and Mr. Trump see the company as the social media alternative to the uber-woke behemoths in the space. These behemoths have proven themselves to be less-than-candid when it comes to canceling, demonetizing, shadow banning and otherwise throttling dissenting voices in the online square.

Now, I am all about any company’s right to conduct business the way it wants, i.e., I think that if social media entities want to be woke, liberal and anti-Trump, they have a right to do so. We, as consumers, have the right not to patronize them if we don’t like it. And I don’t consider the woke actions of these companies “censorship,” as censorship in the technical sense can only be conducted via government.

I do, however, know that the only solution to bad ideas is good ideas, and the only solution to a social media platform you don’t like is a social media platform you do like.

Creating that social media platform is what the originators of Truth Social see as not only a critical alternative to the current offerings out there, but also as a vehicle to create shareholder value.

You can watch my entire interview with Devin Nunes here at our YouTube Channel, which I highly recommend, because I think you’ll definitely gain a new sense of appreciation for the company’s mission, as well as its ambitious plans going forward.

Here, Nunes told me that he sees Truth Social as a “beachhead against Big Tech, and from there we are going to grow everything else.”

That “everything else” includes plans to continue growing Truth Social’s user base, continue capturing revenue from advertisers who see the value in a targeted and devoted audience, and perhaps most importantly, build out a social media infrastructure that includes an online streaming network similar to companies such as Pluto TV and even Netflix.

Trump Media also has its sights set on building an e-commerce platform complete with payment processing services similar to those offered by PayPal and Venmo. Not content to stop at those aspirations, Trump Media also has plans to offer web services (think cloud computing) such as those akin to what Amazon offers through its AWS segment.

Ambitious, you say? Yes, I agree. A vision that will take time, money and good fortune? Yes, I also agree. Impossible to implement? No, on that I do not agree.

I say that because time and again, people have underestimated the appeal of all things Donald Trump. I find this underestimation curious because, even if you are decidedly not a Trump fan, you have to admit that what he has done has been remarkable.

Indeed, Mr. Trump continues to defy all convention, leading the race for president in the latest 538 average of opinion polls, by an albeit slim margin of 41.0% to 39.8% over President Biden. Still, as of this writing, and despite impeachments, multiple legal issues pending and now 34 felony convictions, Mr. Trump continues to retain his amazing appeal with the American public.

So, will that amazing appeal, along with the execution of an ambitious business plan by Devin Nunes and the Trump Media team translate into greater value for DJT shareholders? Well, that truth is out there, but it’s still too early to say with any modicum of confidence.

That said, I do think the market for an alternative social media services company, one that is positioned in opposition to its woke counterparts, has potential to flourish. And if it flourishes, i.e., if it begins to make a profit (the only metric of flourishing I consider valid), then that will drive the share price higher. When that happens, it would go a very long way to persuading an investor like me to establish an equity stake in DJT, and to recommend such a stake to my newsletter advisory subscribers.

That’s the truth here, and as I suspect you’ve learned if you’ve read The Deep Woods for any length of time, truth is the only thing from me you’ll ever get.


Always More Homer

“But the great leveler, Death: not even the gods can defend a man, not even one they love, that day when fate takes hold and lays him out at last.”

–Homer, “The Odyssey”

The day when fate takes hold and lays us out at last will happen to us all. And right before that moment of finality, will you be able to say you lived as you chose? If not, then choose something different, and choose it right now. Moments are precious, and none of us know when fate will lay us out at last. So, don’t hesitate. Your happiness here, right now, is the moral purpose of your life. Waste not a second in pursuit of anything less.

Wisdom about money, investing and life can be found anywhere. If you have a good quote that you’d like me to share with your fellow readers, send it to me, along with any comments, questions and suggestions you have about my newsletters, seminars or anything else. Click here to ask Jim.

In the name of the best within us,

Jim Woods

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