The Lemonade Times Vol. 20

✅ "The Tortoise of the Stock World" — Meet defensive stocks: slow, steady, and tough as nails

✅ "Why Do Things Keep Getting More Expensive?" — Inflation explained with REAL stories from history

✅ "The Company That Makes the World's Coolest Fighter Jets" — Inside Lockheed Martin

✅ "Jobs Came in HOT" — Why a good jobs number kind of confused the stock market

🍋 Hi, Lemonade Squad! It's Summer! 👋

This week we're going to learn about something super important: defensive stocks. They're like the tortoises of the stock world — slow but rock solid. Then in Econ 101, we'll dig deeper into INFLATION with some wild stories from history. And in Lemonade Picks, get ready to meet a company that builds the most advanced fighter jets on the planet: Lockheed Martin! ✈️

Plus, we got a brand new jobs report on Friday, and it threw everyone for a loop. Let's go! 🍋

Stocks had another exciting week, with several brand new all-time highs! But Friday's jobs report turned things upside down. Let's break it all down.

Monday: AI Rally Continues 🤖 The S&P 500 hit a brand new record high on the very first day of June. NVIDIA jumped 6% after unveiling a new chip for PCs. Tech kept rolling!

Tuesday: S&P 500 Closes Above 7,600 for the First Time EVER! 🎉 The S&P 500 crossed the 7,600 mark, a brand new milestone. Marvell Technology surged 25% after NVIDIA's CEO Jensen Huang said it could be "the next trillion dollar company."

Wednesday: Broadcom Earnings Drama 📊 Broadcom (a giant chip company) reported AMAZING earnings: AI chip sales grew 143% from a year ago! But the stock STILL fell 12% after hours. Why? Because some investors expected even MORE. Sometimes "great" isn't great enough on Wall Street!

Thursday: Dow Rockets Up 874 Points! 🚀 The Dow Jones jumped almost 1.73% to a new record high. Investors started rotating OUT of tech and INTO non-tech stocks. UnitedHealth jumped over 5%, JPMorgan rose 3%.

Friday: The Jobs Report Surprise 💼 The May jobs report came out and showed 172,000 new jobs were added! That's WAY more than the 80,000 economists expected. Markets had a confusing reaction. (More on that below!)

Here's the puzzle. Normally, a strong jobs report is GOOD news. It means the economy is healthy, people have jobs, and they're spending money.

But this time, the report was almost TOO good. Why is that a problem? Because if the economy is too hot, inflation might keep going up. And if inflation stays high, the Fed (Kevin Warsh!) probably can't cut interest rates as fast as investors hoped.

It's like getting an A+ on a test, but then your teacher decides next week's test will be even harder. You're happy about the A+, but a little worried about what's next!

Remember the story of the Tortoise and the Hare? The hare ran super fast but kept getting distracted. The tortoise just kept moving slowly and steadily... and won the race in the end!

There's a special type of stock that works EXACTLY like that turtle. They're called defensive stocks. Today you're going to learn why pros LOVE these slow-and-steady winners.

A defensive stock is the stock of a company that does business in things people NEED no matter what — even during scary times like recessions.

Think about it. Even when the economy is bad, people still need to:

So companies that sell these "must-have" things keep making money even when other companies struggle!

The word "defensive" comes from sports. In basketball, defensive players protect the basket. They don't score lots of flashy points, but they STOP the other team from scoring.

Defensive stocks are like that. They don't usually have HUGE gains (no flashy points!). But during bear markets and recessions, they help PROTECT your money from big losses. That's why they're so valuable!

Here are some famous defensive companies you might know:

Now look at last week's stock market. When investors got nervous about the strong jobs report, they SOLD some tech stocks and BOUGHT defensive ones like UnitedHealth (which jumped 5%) and JPMorgan! This is called a "rotation"— investors moving money from one type of stock to another.

Let's compare the two types of stocks:

Tech Stocks (the Hares 🐰):

Defensive Stocks (the Tortoises 🐢):

Smart investors don't just pick one type. They mix them together! It's like a balanced lunch. You wouldn't eat ONLY candy. You'd eat some veggies (defensive stocks) too. 🥦

We've talked about inflation before, but this week we're going to dig DEEPER. We'll learn about some WILD real-life inflation stories that will blow your mind. Get ready!

Inflation is when prices keep going UP over time. A candy bar that cost $1 last year might cost $1.10 this year. That's inflation in action!

A little bit of inflation is normal. The Fed's goal is about 2% per year. But sometimes inflation goes WAY higher than that, and crazy things happen...

Picture this. You're in Germany in 1923. You walk into a bakery to buy a loaf of bread. The price? 200 BILLION marks(the German money back then).

Yes. Billion. With a "B." 🤯

How did this happen? After World War I, Germany owed a TON of money. So the government just printed more and more money to pay its debts. Prices went up SO fast that people had to carry wheelbarrows of cash just to buy groceries!

Stores stopped using price tags. They just changed prices throughout the day. Workers got paid TWICE a day so they could rush out and spend their money before it lost more value!

This is called hyperinflation (super-fast inflation). It's terrifying.

In 2008, the African country of Zimbabwe had the WORST hyperinflation in history. Prices were doubling every 24 HOURS!

The government printed bills worth $100 trillion. ONE bill! And guess what you could barely buy with it? Not even a simple bus ride!

Today, those $100 trillion bills are sold as collector items. People buy them as souvenirs!

You don't have to go far back to find inflation. Just look at what happened in America in 2022!

After COVID-19, the U.S. government printed lots of money to help people during the pandemic. Then supply chains got messed up. Result? Inflation jumped to 9.1% in June 2022 — the highest in 40 years!

Things got WAY more expensive almost overnight:

This is why the Fed had to RAISE interest rates so much in 2022 and 2023. They were trying to cool down the economy and stop inflation from getting worse.

Here are the BIG lessons from these inflation stories:

1. Printing too much money is dangerous. 💵 When governments print too much money without making more stuff, prices go crazy. (Remember our island and coconuts story from Vol. 16?)

2. Inflation affects YOU. 🛒 Even if you're a kid, inflation makes your allowance buy less. That's why grown-ups worry about it so much!

3. Inflation has happened MANY times in history. 📚 It's not new. It's an ongoing battle between governments, central banks, and the economy.

4. Smart investing fights inflation. 💡 This is why people invest in stocks! Over time, stock returns usually beat inflation. Your money in a piggy bank LOSES value with inflation. But your money in good stocks usually GROWS faster than inflation!

This week's Lemonade Pick is one of the most important companies in America, even though most kids have never heard of it. Meet Lockheed Martin!

Ticker: LMT | Traded on: NYSE | Stock Price: ~$523.76

Lockheed Martin is what we call a defense company. That means they build things that help protect countries:

The U.S. government is their BIGGEST customer. About 75% of Lockheed's $72 billion in yearly sales comes from the U.S. military!

Lockheed Martin's most famous product is the F-35 Lightning II. It's one of the most advanced fighter jets ever built. Here's why it's so cool:

Lockheed has 3 versions of the F-35:

In 2024, Lockheed delivered 110 F-35s. And in late 2025, they signed the BIGGEST F-35 contract ever — $24 billion for 296 new F-35s! 🤯

Lockheed Martin was born in 1995 when two old aerospace companies — Lockheed and Martin Marietta — merged into one super-company. Together, they became America's biggest defense contractor.

The company has been involved in some of the most famous projects in history. They made parts for the Apollo space missions, built spy planes during the Cold War, and now they're working on cutting-edge AI and hypersonic missiles. 🚀

Lockheed is interesting because it has features of BOTH defensive stocks AND growth stocks:

Defensive features 🛡️:

Growth features 📈:

So Lockheed is kind of like a tortoise that has a little bit of hare in it. Slow and steady, but with growth potential.

Lockheed has had some recent struggles too. In 2025, they had a "$950 million loss on a classified program" (we don't even know what it was — it's TOP SECRET!). Lockheed had a tough 2025, with a $950 million loss on a classified program. But the stock has been bouncing back in 2026.

That's an important lesson. Even great companies have tough years sometimes!

Five questions! How many can you get right?

Q1: What's a "defensive stock"?

Q2: Why was the May jobs report (172,000 new jobs) kind of confusing for the stock market?

Q3: What is "hyperinflation"?

Q4: What is Lockheed Martin's most famous product?

Q5: Why might investors move money from tech stocks INTO defensive stocks like UnitedHealth and JPMorgan?

🕵️‍♀️ Check Your Answers!

Scroll down to see if you are a Wall Street Wizard.

"Summer, last week you said McDonald's biggest secret is real estate. That blew my mind! Do other famous companies have surprising secrets like that too?" — Aiden, age 11, Illinois

Aiden, what an AWESOME question! And the answer is... YES! TONS of famous companies make money in surprising ways. 💡

Here are some mind-blowing examples:

🍎 Apple — They sell phones, but their REAL money maker? Services! Apple makes huge money from the App Store, iCloud storage, Apple Music, and Apple TV+. Every time someone buys an app on their iPhone, Apple takes a cut. That's a HUGE business!

🚗 Amazon — They sell stuff, but their REAL money maker? Cloud computing! Amazon Web Services (AWS) lets other companies store their data and run their websites. AWS makes WAY more profit than Amazon's online shopping business!

🎮 Microsoft — They make Windows and Xbox, but their REAL money maker? Office software AND cloud computing! Microsoft 365 (Word, Excel, PowerPoint) and their cloud service Azure are MASSIVE moneymakers.

🥤 Coca-Cola — They sell drinks, but their REAL money maker? Syrup and branding! Coca-Cola doesn't actually make most of its drinks. They sell the secret syrup formula to bottlers around the world, who do the actual work!

The lesson? Always ask "How does this company REALLY make money?" Because the answer often isn't what you'd expect!

It's like learning that a famous chef's restaurant doesn't actually make money from food — they make money from their cookbooks. Surprises everywhere! 🤯

Mission 1 — Defensive Stock Hunter 🛡️ Walk around your house and find 5 things you use EVERY day no matter what (like toothpaste, milk, bread, soap). Now look at the brand on each. Did you find any famous companies like Procter & Gamble, Pepsi, or Johnson & Johnson? Those are defensive stocks in action!

Mission 2 — Inflation Time Machine ⏰ Ask a grandparent: "What was the price of a movie ticket when you were my age?" Compare it to today's prices. The difference? That's inflation over many years!

Mission 3 — Lockheed Spotter ✈️ Next time you see a fighter jet in a movie, video game, or on TV news, see if you can spot the F-35! It has a unique shape with a stealthy nose. Once you know what it looks like, you'll see it EVERYWHERE!

Summer's Reflection: This week we learned that not all stocks are the same. Defensive stocks are like steady tortoises that protect your money during scary times. We saw how inflation has shaped history — sometimes in scary ways! And we met Lockheed Martin, the company building America's most advanced fighter jets. The world of money is full of surprises, but the more you learn, the less surprised you'll be. Knowledge is your best investment! See you next week! 🍋

📌 This newsletter is for learning only. Investing always carries risk. Always ask a trusted adult before making any money decisions!