Should Commodities Still Have a Place in Your Portfolio?
On this episode of Merryn Talks Money, Merryn Somerset Webb and John Stepek address listener questions.
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Starmer Faces Brewing Rebellion Over £5 Billion Benefit Cut
(Bloomberg) -- UK Prime Minister Keir Starmer is less than 10 days away from the biggest parliamentary challenge to his authority in his not-yet year-long tenure. Security Concerns Hit Some of the World's 'Most Livable Cities' One Architect's Quest to Save Mumbai's Heritage From Disappearing JFK AirTrain Cuts Fares 50% This Summer to Lure Riders Off Roads NYC Congestion Toll Cuts Manhattan Gridlock by 25%, RPA Reports Taser-Maker Axon Triggers a NIMBY Backlash in its Hometown Unpopular cuts to disability benefits unveiled earlier this year as part of Chancellor of the Exchequer Rachel Reeves' efforts to balance the country's books are due before the House of Commons for their first vote on July 1, with a large-scale rebellion brewing on the Labour back benches. So far, at least 150 of the governing party's Members of Parliament have indicated concerns about the cuts in two letters to the government. Other non-signatories have told Bloomberg they also intend to vote against the bill. While Starmer's attention this week was centered on the escalating tensions in the Middle East, the domestic threat was laid bare on Thursday when Vicky Foxcroft, a government whip who would have been tasked with helping quell the revolt, quit, citing her own objections. The rebellion threatens to bruise Starmer's and Reeves' credibility and further damage their stock with the left of their party. In order to avoid falling to what would be an unprecedented defeat for a government enjoying such a large majority so early in its tenure, ministers could at worst be forced into major concessions that reduce the bill's expected cost savings, forcing the Treasury to conjure up money from other cuts or tax rises at the budget in the fall. 'It's a test of Starmer's authority and the way he and Rachel Reeves are running the economy,' Tim Bale, professor of politics at Queen Mary University London, said in a phone interview. 'If the rebellion is too big, you start to run into questions about the loyalty of your backbenchers and even perhaps the future of your leadership.' The welfare reforms allowed Reeves to save about £5 billion ($6.5 billion) a year by 2030 by making it harder for disabled people to claim a benefit called the personal independence payment, or PIP. The chancellor factored them into a spring statement as part of spending cuts designed to help meet her self-imposed fiscal rules. Reeves says the changes are necessary because an extra thousand people a day have been signing on for PIP, creating an 'unsustainable' impact on the public finances. PIP payments had been projected to almost double to £41 billion by the end of the decade, within overall spending on disability and incapacity benefits that the Office for Budget Responsibility — the government's fiscal watchdog — sees rising to £100 billion from £65 billion last year. The government has also says there is a moral case for supporting people back into work. But Labour lawmakers are concerned the government announced changes in a rush to deliver savings, without thinking through the impact on vulnerable people. 'There are alternative and more compassionate ways to balance the books, rather than on the backs of disabled people,' one Labour backbencher, Debbie Abrahams, told the House of Commons. There are particular concerns about a new requirement for claimants to score four or above in one of the daily living components of the PIP assessment, meaning people who can't wash half their body or cook a meal will be denied the payments if they have no other impairments. One Labour MP describing the process as letting the OBR tail wag the government dog. Some 45 Labour MPs signed a public letter objecting to the measures, while another letter — arranged in secrecy so that even signatories couldn't see who they were joining — garnered 105 signatures and was sent to the chief whip. While some of the would-be rebels have indicated they could be swayed by the government whips, one of them told Bloomberg they are confident that more than 80 MPs will commit to voting against the government. Given Starmer's working majority is 165, if all opposition parties vote against the bill, it would take 83 Labour rebels to defeat the government. The main opposition Conservative Party is planning to vote against the changes, Danny Kruger, one of the party's work and pensions spokespeople, told parliament in May. Its reasons are different: the Tories argue the measures don't go far enough. One Labour MP told Bloomberg that concerned lawmakers plan to put forward a procedural challenge to the bill. While they don't expect the speaker to select that amendment for debate, the aim is to force further changes from the government, and organize would-be Labour rebels into a coherent group which could eventually vote down the bill. Many in Labour had been waiting to see the bill before making up their minds. When the text was published on Wednesday, the concessions to their concerns were minimal, largely amounting to a 13-week transition period for those losing their PIP. Foxcroft — the whip who had previously served for four years as Starmer's shadow disability minister in opposition — quit within hours of the publication, saying she didn't believe cutting the disability benefits should be part of the solution to tackling ballooning welfare costs. Culture Secretary Lisa Nandy said Friday that Foxcroft's resignation wasn't a sign of a major rebellion, while conceding that 'of course' there are dissenting voices on such a big reform. 'Vicky is the only front-bencher that I've had a conversation with about resigning,' she said. Nevertheless, many so-called 'red wall' Labour MPs in northern and central England face a tough decision. Health Equity North, a public health institute, found that all the places most affected financially by the PIP reforms are Labour constituencies in northern England. In several areas, the number of people affected by the welfare changes exceeds the Labour majority, meaning those MPs could see a crucial drop in support. The government is gearing up for a fight, indicating it will make no further concessions. On Wednesday, Deputy Prime Minister Angela Rayner failed to rule out stripping the whip from Labour rebels, while government enforcers are warning MPs that their political career prospects will be ruined if they oppose the bill. Whips and wannabe rebels alike expect the potential revolt to be whittled down as July 1 approaches. Some opponents are weighing whether to abstain at the second reading and wait until the third reading to take a more decisive vote, as whips are encouraging them to do. 'I'd be amazed if he were defeated here,' Anand Menon, director of the UK in a Changing Europe think-tank, said. 'If the whips got a whiff they were going to get defeated, they'd give some concessions. The worst of all outcomes is to lose this.' Luxury Counterfeiters Keep Outsmarting the Makers of $10,000 Handbags Ken Griffin on Trump, Harvard and Why Novice Investors Won't Beat the Pros Is Mark Cuban the Loudmouth Billionaire that Democrats Need for 2028? The US Has More Copper Than China But No Way to Refine All of It Can 'MAMUWT' Be to Musk What 'TACO' Is to Trump? ©2025 Bloomberg L.P. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
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Billionaire Seth Klarman Holds Just 1 "Magnificent Seven" Stock in His Hedge Fund's Portfolio -- and He Just Bought More
Seth Klarman is a staunch proponent of value investing, but he remains flexible in that approach. The Magnificent Seven stocks are expensive as a group, with most of them trading at a P/E above 30. This stock has been held down by multiple challenges, but the price is too attractive to pass up. 10 stocks we like better than Alphabet › Seth Klarman is a well-respected value investor with a global following. And there's good reason for that. His Baupost Group hedge fund returned an average of 20% per year over the first 30 years of its existence. That performance comes despite value stocks falling well out of favor over the last decade. But Klarman and his team emphasize that they "remain flexible in their application" of value investing. That means investing in stocks that are mispriced relative to their value, even if they won't show up on any stock screeners for deep value based on traditional metrics. As a result, this method can end up with some stocks that many investors would consider growth stocks, such as those found in the Magnificent Seven. But Klarman only sees one member of the vaunted group of trillion-dollar stocks as worth his and his investors' money, and he just added more of it to Baupost's portfolio. The Magnificent Seven is a group of stocks full of interesting opportunities for the right investor. And anyone who invested in any or all of them is probably happy with their returns over the last couple of years. But a few may not present the value necessary for an investment from someone like Klarman. As a group, they're relatively expensive based on traditional valuation standards. Four of the seven sport forward P/E ratios above 30, including Tesla (NASDAQ: TSLA) with its 168 times multiple. While Tesla could prove worth the price with its plans for a robotaxi service and humanoid robots, there's a lot of risk in buying the stock at its current price, especially as its core car business is facing stiff competition abroad. The other high-priced members are growing quickly and on relatively solid footing, but it's hard to argue they're a bargain at their current prices. But one member of the group trades for a valuation below the S&P 500's average, and that's kind of surprising for a stock with such strong growth potential. The stock has consistently traded at or near the lowest valuation of the Magnificent Seven, giving investors plenty of opportunities. That's why Klarman and his team have built up a position in Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL), including adding 652,000 more shares in the first quarter, increasing its stake in the company by 46%. There are good reasons for Alphabet to trade at a lower valuation than the rest of the group. It carries some significant risks. The first big risk facing Alphabet is regulatory risk. The company faces several lawsuits in the U.S. and elsewhere that could result in interventions to reduce any monopolistic powers, particularly in web search and digital advertising. That could include things like selling its Chrome browser or its ad marketplace and ending agreements like its $20 billion per year traffic acquisition partnership with Apple. Despite those risks, the impact on Alphabet's operations could be muted given the strength of its brand and product. That's where the second risk comes in. Many see artificial intelligence (AI) chatbots like OpenAI's ChatGPT eating into Google's dominance of web search. In a hearing last month, Apple's Senior VP for Services, Eddy Cue, suggested iPhone users are searching less in 2025 and spending more time in AI apps. However, the data from Alphabet doesn't support the narrative that it's losing significant share to AI. In fact, AI may be a boon to its search business thanks to three new features the company's introduced to leverage the power of large language models. Its AI Overviews (and now AI Mode) have led to increased user engagement and satisfaction, as users expand the search queries they send to Google. Importantly, management says it's able to monetize searches with AI Overviews at the same rate as searches without it. Two other AI-powered features driving search are circle-to-search and Google Lens, which have increased valuable product searches on Google. One piece of Alphabet's business that has seen very strong results without much regulatory threat is its Google Cloud platform. The cloud computing segment is seeing strong demand fueled by AI, which pushed its revenue 28% higher year over year in the first quarter. Moreover, its operating margin expanded to 17.8% from just 9.4% last year, and there's still significant upside from there. Alphabet is also home to "Other Bets," which includes the leading self-driving car company, Waymo. Waymo's made significant progress in its robotaxi business and remains years ahead of the next closest competitor. It now completes 250,000 paid trips per week, as of its most recent update at the start of May. As the market expands, Waymo could prove a significant growth driver for the company. All this is to say, the company as a whole should conservatively be able to produce double-digit revenue growth for the foreseeable future despite the regulatory and competitive challenges it faces. And as Google Cloud and Waymo scale, they should enable even faster earnings growth. At a forward P/E close to 18, Alphabet's stock looks like a bargain among the Magnificent Seven. It's no wonder Klarman and his team have continued to add shares around this price. Before you buy stock in Alphabet, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Alphabet wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $659,171!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $891,722!* Now, it's worth noting Stock Advisor's total average return is 995% — a market-crushing outperformance compared to 172% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of June 9, 2025 Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Adam Levy has positions in Alphabet and Apple. The Motley Fool has positions in and recommends Alphabet, Apple, and Tesla. The Motley Fool has a disclosure policy. Billionaire Seth Klarman Holds Just 1 "Magnificent Seven" Stock in His Hedge Fund's Portfolio -- and He Just Bought More was originally published by The Motley Fool Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
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Prediction: XRP Will Top $12.50 by 2028
Standard Chartered recently predicted that XRP would hit a price of $12.50 by 2028, implying a $750 billion total market capitalization. Given new regulatory clarity for crypto, XRP could see rapid growth in its cross-border payments business. New spot ETFs, tentatively scheduled for Q4 2025, could provide a boost to XRP. 10 stocks we like better than XRP › At the end of 2024, XRP (CRYPTO: XRP) suddenly went parabolic, eventually hitting a new 52-week high of $3.39 in January. After going up 600% in an astonishingly short period of time, it looked like XRP might finally be headed to the moon. So it's perhaps no surprise that a number of analysts and investors have put out some fairly aggressive price targets for XRP. For example, Standard Chartered recently predicted that XRP could hit a price of $12.50 by 2028. So are they right? To hit a price of $12.50 in just three years, a lot has to go right for XRP. So you can think of this as the ultimate bull-case scenario. Let's do the quick math. Given XRP's current price of $2.30, investors would need XRP to increase in value by a multiple of approximately 5.5 by 2028. The current market cap of XRP is $136 billion, so that implies that XRP will be a $750 billion asset within just three years. That's more than double the current market cap of Ethereum (CRYPTO: ETH). According to the numbers used by Standard Chartered, XRP will be worth $5.50 by the end of this year, $8 by the end of 2026, $10.40 by the end of 2027, and $12.50 by the end of 2028. In all fairness to Standard Chartered, the $12.50 price forecast came out in April, which is when the first real effects of tariffs began to be felt. And XRP was coming off a head-spinning performance after the election, so the future looked very bright indeed. But here's the reality: XRP will need to quadruple in value by the end of next year, amid a backdrop of global macroeconomic uncertainty. That's a tall task for any cryptocurrency. The good news is that XRP appears to have a number of solid growth catalysts that could catapult it forward. The first and most important of these is continued growth in XRP's primary use case: Facilitating cross-border payments. Using the XRP blockchain, it's cheaper, faster, and easier to do so than with traditional financial tools. So the big idea here is that financial institutions around the world will continue to integrate XRP into their payment mechanisms, thereby boosting demand for XRP. The second important growth catalyst is the imminent launch of new spot XRP ETFs, similar to the spot ETFs for Bitcoin (CRYPTO: BTC) that launched in January 2024. The thinking here is that these ETFs will be a way for both retail and institutional investors to get easy exposure to XRP. In theory, as much as $8 billion will pour into these new spot ETFs, and the price of XRP will move upward accordingly. The third and final growth catalyst is what Standard Chartered refers to as "regularity clarity." Ripple, the company behind the XRP token, was under a regulatory cloud during the Biden administration. In December 2020, the SEC claimed that XRP was a security, and that led to a bruising four-year court battle. However, under the pro-crypto Trump administration, all those regulatory issues appear to have been swept away, thereby allowing XRP to go back to business as usual. On the surface, each of those growth catalysts is quite compelling. However, if you peer under the surface, there's reason for concern. For example, there are now serious questions being raised about the potential effect of stablecoins on XRP. Many now think that dollar-pegged stablecoins will eventually supplant XRP as a way to send cross-border payments. If that's the case, then investors will need to downsize future growth expectations for XRP. Moreover, it's not entirely clear how much demand there will be for the new spot XRP ETFs. Based on recent data from CoinShares, which tracks institutional fund flows into different crypto assets, it now looks like money is moving out of XRP. That makes sense, given that XRP is down 32% from its January highs. At the end of the day, XRP is very much a boom-or-bust crypto. If you take a big-picture view, the chart for XRP should be reason for concern. There have been two massive rallies (in 2018 and after the 2024 election), and one mini-rally in 2020-2021. Other than that, XRP hasn't done much at all. In fact, in more than a decade, XRP has never once traded higher than $3.84, and this happened more than seven years ago. Thus, hitting a future price target of $12.50 could be quite challenging. Going forward, one key to unlocking future price action in XRP will be the launch of the new spot ETFs. If they under-promise and over-deliver, then I'll be much more likely to ratchet up my price target for XRP going forward. Before you buy stock in XRP, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and XRP wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $659,171!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $891,722!* Now, it's worth noting Stock Advisor's total average return is 995% — a market-crushing outperformance compared to 172% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of June 9, 2025 Dominic Basulto has positions in Bitcoin, Ethereum, and XRP. The Motley Fool has positions in and recommends Bitcoin, Ethereum, and XRP. The Motley Fool has a disclosure policy. Prediction: XRP Will Top $12.50 by 2028 was originally published by The Motley Fool Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
