In this video, we explore the history of the CAPE (Shiller PE) ratio, how it’s calculated, why its average has shifted higher since 1990, and why it’s a powerful predictor of long-term market returns—but not the short term. Discover how…
Passive investing has exploded over the past decade — but is it distorting stock prices and squeezing out returns? In this video, we explore the massive inflows into index funds, their effect on market valuations, rising concentration in mega-cap stocks,…
How does AI value AI? We prompted Perplexity Labs to create a DCF for #NVDA, #MSFT, #GOOG, #META, #AAPL and #AMZN. The results may surprise you.
From Liberation Day Chaos to Cautious Recovery The second quarter of 2025 started with the April 2nd "Liberation Day" tariff announcement that sent shockwaves through global financial markets. What began as extreme volatility and panic selling evolved into a remarkable…
Stock Price Performance in Review We postponed publication of our quarterly memo awaiting the statement from President Trump on tariffs. That turned out to be wise. His statement hit the market, which was already down from year-end 2024, like a…
The P/E for automobile manufacturers is normally very low. Ford, GM and Toyota currently trade at 7 times earnings. Tesla’s P/E of 114 is unique in the auto industry. Elon Musk’s promises of future growth from humanoid robots and robotaxis…
By Rob Arnott, Bradford Cornell, Forrest Henslee, Thomas Verghese March 2025 Key Points Big market delusions (BMD) develop when investors anticipate that most early entrants in an exciting new market/technology will generate outsized returns. The recent electric vehicle (EV) craze demonstrates BMDs’ three-stage…
Today, we're going to talk about one of the most basic concepts of investing—risk. There's overwhelming evidence that when it comes to a large part of their net worth, like their retirement savings, investors are risk-averse. What that means is they…
Stock Price Performance in ReviewThe year 2023 ended on a high note. During the year, the S&P 500 Index rose 24.2% to close the year at 4,769.83. The total return on the index, including dividends, was 26.3%. However, as of…
