October picks available soon
I’ll be publishing the Prime and Select picks for the month of October before Wednesday, October 1 (the first trading day of the month). As always, SPC’s performance measurement for the month of September, as well as SPC’s cumulative performance, will assume the sale of the September picks at the closing price (at the mid-point of the closing bid and ask prices) on the last trading day of the month (Tuesday, September 30). Performance tracking for the month of October will assume the October picks are bought at the open price (at the mid-point of the opening bid and ask prices) on the first trading day of the month (Wednesday, October 1).
What we’re reading (9/25)
“Day Trading Is About To Get Easier For Smaller Retail Investors” (CNBC). “The Financial Industry Regulatory Authority on Tuesday approved amendments that would replace the long-standing threshold, making active day trading more accessible to smaller accounts. The change is pending approval by the Securities and Exchange Commission. The $25,000 minimum equity rule mandates that traders must maintain a minimum account balance of $25,000 in a margin account to execute four or more day trades within a five-business-day period. The rule was put in place in 2001 amid the dot-com bubble and crash as regulators grew worried that small traders were taking excessive risks with volatile internet stock.”
“Get Rich Or Get Wiped Out: Bitcoin’s Hottest New Trade” (Wall Street Journal). “Traders seeking rapid returns have made a speculative bitcoin play one of the most popular crypto bets globally: so-called perpetual futures. These potentially offer returns of 10, 20 or even 100 times an initial investment—or huge losses that could leave a trader with nothing. Known as perps, the contracts give traders access to extreme leverage and have exploded in popularity during a rally that has sent bitcoin prices up more than 70% over the past year. Though popular in other parts of the world, perps were largely unavailable until recently to U.S. traders on regulated venues.”
“Intel Is Seeking An Investment From Apple As Part Of Its Comeback Bid” (Bloomberg). “Intel Corp. has approached Apple Inc. about securing an investment in the ailing chipmaker, according to people familiar with the matter, part of efforts to bolster a business that’s now partially owned by the US government. Apple and Intel also have discussed how to work more closely together, said the people, who asked not to be identified because the deliberations are private. The talks have been early-stage and may not lead to an agreement, the people said.”
“Fed Officials Are Divided In Their Interest-Rate Outlook. How To Make Sense Of The ‘Dot Plot.’” (Barron’s). “The Federal Reserve cut interest rates this past week by a quarter of a percentage point. But where rates go from here is a coin toss, at best, given that Fed members’ latest forecasts diverge widely. Even Fed Chair Jerome Powell conceded that confidence is in short supply. Yet, markets mistakenly cling to the central bank’s projections, even though they are usually the first word, and not the last, on the trajectory of rates.”
“‘Coffee-Badging’ And Other Quiet Revolts: How Workers Are Defying In-Office Mandates” (The Hill). “Required in-office time from employer mandates climbed 13 percent between 2024’s second quarter and this year’s, from 2.49 to 2.82 days per week. Yet physical attendance stayed nearly flat, inching up 1 percentage point over that time. Stanford economist Nick Bloom summarizes the pattern in six deflating words: ‘Attendance is flat as a pancake.’ Rules multiplied; compliance did not. The data expose a mismatch between what leaders decree and what professionals accept.”
What we’re reading (9/23)
“Fed’s Powell Sees ‘No Risk-Free Path’ For Interest Rates After Central Bank’s Cut Last Week” (Yahoo! Finance). “Federal Reserve Chair Jerome Powell said there is ‘no risk-free path’ for the central bank's next policy move as inflation remains elevated and the job market weakens. It's ‘a challenging situation,’ Powell said during a speech in Rhode Island on Tuesday, reiterating that the Fed must balance its dual goals of maximum employment and price stability.”
“Wall Street Is Poaching Bankers In A Red-Hot Job Market” (Wall Street Journal). “A pickup in dealmaking and initial public offerings is helping fuel a hot job market on Wall Street. Big banks had been adding staff over the past year in strategic expansions, but now sudden jumps in activity have them seeking to hire even more and slowing layoffs they might have otherwise executed.”
“Private Equity Is Getting Boring” (Matt Levine, Bloomberg). “A simple gloomy model you could have of private equity is: (1) Once upon a time, companies were mispriced. Lots of companies were available cheaply […] (2) A few ambitious risk-seeking entrepreneurs noticed this systematic mispricing and set out to fix it. They raised money from friends and family and patient investors who were willing to take risk, they bought companies at low prices, levered them up, fixed their operations and resold them after a few years at higher prices. (3) It helped, in doing this business, that interest rates were declining for decades and valuation multiples were rising […] (4) The people who started this business — private equity — made great returns for their investors and became billionaires themselves. [5] This attracted many, many more people to the business. […] (6) So now private equity is the default career path for smart ambitious people entering the financial industry, and private equity firms are now giant alternative asset managers with hundreds of billions of dollars under management. [7] Why would companies be mispriced?”
“World’s Largest Private Rembrandt Collection May Be Fractionalised, Owner Reveals” (The Art Newspaper). “Plans are underway for the Leiden Collection of Dutch Golden Age painting, amassed by billionaire investor Thomas S. Kaplan, to be offered as shares on a public stock exchange.”
“Boring Is Good” (Scott Jenson). “I want to answer the question: why should we still care? The tech is problematic, and signs point to the bubble bursting. When we hit the ‘Trough of Disillusionment,’ what rises from the ashes? Two lessons from my career help me navigate uncertainty: 1. technology flows downhill, and 2. we usually start on the wrong path.”
What we’re reading (9/17)
“Federal Reserve Cuts Interest Rates For First Time This Year, Sees 2 More Cuts In 2025” (Yahoo! Finance). “The Federal Reserve cut interest rates by a quarter percentage point on Wednesday — its first reduction of 2025 — and projected two more cuts for the rest of this year. The central bank voted in a split decision to cut its benchmark interest rate to a range of 4.00% to 4.25%. The 25 basis point cut marked the first time the Fed has eased rates since last December.”
“Miran’s Fed Dissent Makes A Splash, Fails To Sway The Outcome” (Reuters). “If President Donald Trump hoped that putting a close ally at the Federal Reserve would grab headlines, White House economic adviser Stephen Miran's dissent and way-below consensus interest rate projection on Wednesday delivered. If the hope was to have someone on the inside to get the Fed to lower interest rates as sharply as Trump wants, Miran's lone dissent was evidence the gambit had failed, at least for now.”
“SEC Allows Public Companies To Block Investors From Class-Action Lawsuits” (Financial Times). “The US Securities and Exchange Commission on Wednesday gave public companies a powerful new tool to curb shareholder lawsuits, as chair Paul Atkins pledged to ‘make IPOs great again’. The regulator said it will no longer block companies from the public markets if they banned shareholders from filing class-action lawsuits, ripping up a decades-old policy as it seeks to ease compliance requirements and fulfil President Donald Trump’s deregulation drive.”
“The Economy Is Turning Into A Black Box” (Peter Orszag, The Atlantic). “This situation is unsustainable. Business decisions about hiring, firing, and investment depend on knowledge of what’s happening in the wider economy. So do the choices made by policy makers in the White House and at the Federal Reserve. An incredible range of sophisticated private sources—including real-time payroll data, online transaction records, and consumer-spending databases—offer alternative sources of fine-grained, up-to-the-minute data that could, under the right conditions, be used to supplement a survey-based approach and provide a more dynamic and accurate picture of the state of the economy. The problem is that the government is not even trying to use them.”
“AI Agents Are Getting Ready To Handle Your Whole Financial Life” (Wall Street Journal). “Everyone who manages his or her own finances can relate to the headache. A half dozen apps and logins… Investments spread across several retirement and taxable accounts, employer-sponsored 401(k)s and pension funds.… It can be an arduous task to get a quick read on how much you have allocated to stocks, bonds and cash, not to mention picking the right mix of assets and periodically rebalancing it. Many people pay advisers to ease that burden of complexity. But in the not-too-distant future, your AI assistant could be doing much of that work for you.”
What we’re reading (9/16)
“Fed Meeting Likely To Produce First Rate Cut Of 2025. Will It Keep Going?” (Yahoo! Finance). “The Federal Reserve is widely expected this week to make its first interest rate cut of 2025, but the bigger question for investors is how many more cuts could be on the way as the central bank contends with a weak job market, sticky inflation, and mounting White House pressure…The last dot plot, released in June, revealed a consensus among Fed officials for two cuts this year amid uncertainties about how the Trump administration’s policies on tariffs, immigration, and taxes would impact the economy.”
“What To Watch At The Strangest Fed Meeting In Years” (Wall Street Journal). “The meeting is unfolding during an extraordinary political moment for the central bank, making it one of the strangest in years. It follows not only months of attacks from President Trump over the Fed’s reluctance to lower rates, but also parallel legal dramas that have cast doubt on who will attend the meeting.”
“Here’s How Trump Takes Over The Fed” (New York Times). “Every five years, all of the 12 regional bank presidents are reappointed by the board in Washington. In theory, this allows the board some oversight if, say, a bank president goes rogue. In practice, these reappointments have become formalities. No regional president has ever lost his or her job during the reappointment process, even when a bank president was under investigation by the F.B.I. and the Justice Department after breaking the Fed’s confidentiality rules and failing to disclose it. To call these reappointments pro forma is an understatement.”
“Credit Scores Drop At Fastest Pace Since The Great Recession” (CNN Business). “Credit scores are falling at the fastest pace since the Great Recession as Americans struggle to keep up with the high cost of living and the return of student debt payments. The national average FICO score dropped by two points this year, the most since 2009, according to data released Tuesday by the analytics company. Although credit scores remain significantly higher than during the Great Recession, they are down for the second year in a row. FICO found a growing share of borrowers are falling behind on car loans, credit cards and personal loans.”
“GSK Plans $30 Billion US Investment As Pharma Tariff Threat Looms” (Reuters). “GSK said on Wednesday it plans to invest $30 billion in research and development and supply chain infrastructure in the United States over the next five years, after U.S. President Donald Trump arrived in Britain for an unprecedented second state visit to seal investment deals.”
What we’re reading (9/15)
“Trump Says Companies Shouldn’t Have To Report Earnings Every Quarter” (Business Insider). “In a Truth Social post on Monday, Trump said that US companies should be able to report their earnings every six months, not every three months as currently required by the SEC. ‘This will save money, and allow managers to focus on properly running their companies,’ Trump said in his post.”
“Believe In A.I.? Buy Beaten-Down Value Stocks.” (New York Times). “Mr. Davis [of Vanguard] says value stocks are a good idea, whatever happens. Under the more upbeat of his two alternatives, A.I. turns out to be everything its promoters claim, and its benefits filter throughout the economy. Productivity soars. The advent of practical, widely available electricity at the turn of the 20th century may be an analogy, Mr. Davis says. Electricity made manufacturing immensely safer as factories ‘transitioned away from the steam-powered drives and pulleys that were often the cause of workplace fatalities,’ Mr. Davis wrote. And it spawned new industries, like mass-produced automobiles.”
“Former Fed Bullard, After Meeting Treasury Chief, Flags Conditions To Be Fed Chair” (Reuters). “James Bullard, the former president of the Federal Reserve Bank of St. Louis, said Monday he’d spoken last week with Treasury Secretary Scott Bessent about becoming central bank chair, and that he’s very interested in the job under the right set of conditions.”
“iOS 26: Liquid Glass Is Here And Your iPhone Will Never Be The Same” (Wall Street Journal). “When I started living with the new aesthetic this summer, my reaction was somewhere between ‘This is bad’ and ‘This is really bad.’ But that was the beta software. Over time, Apple softened some of the worst of it. Also? I resigned myself to living in a glass house. You’ll see it immediately: Menus are see-through, giving everything a layered look. Sometimes it’s a neat effect. Other times, especially with light backgrounds, it can be a mess. Text vanishes into whatever’s behind it.”
“Tesla Just Erased All Of Its Steep 2025 Losses After Elon Musk Buys $1 Billion Of Its Shares” (CNN Business). “Elon Musk just spent $1 billion of his own money to buy additional shares Tesla, giving the previously battered stock the vote of confidence needed to complete a comeback and turn positive for the year. The purchase, made Friday and disclosed in a filing Monday, represents a rare action – by Musk or any other CEO. Few business leaders use their own money to buy their company’s stock without exercising of options, which allows them to purchase shares at a fraction of their market price. The news lifted shares of Tesla (TSLA) 7% at the market open Monday. While it didn’t sustain those early gains, it did finish the day up nearly 4%.”
What we’re reading (9/14)
“‘Worst Kind Of Setup For The Fed’: What Wall Street Is Saying About The Central Bank’s Next Rate Decision” (Yahoo! Finance). “Weak labor market data overshadowed a sticky inflation print last week, keeping investor expectations intact that the Federal Reserve will cut interest rates at its policy meeting on Wednesday.”
“Exclusive: Fed Governor Cook Declared Her Atlanta Property As “Vacation Home,” Documents Show” (Reuters). “A loan estimate for an Atlanta home purchased by Lisa Cook, the Federal Reserve governor accused of mortgage fraud by the Trump administration, shows that Cook had declared the property as a ‘vacation home,’ according to a document reviewed by Reuters. The document, dated May 28, 2021, was issued to Cook by her credit union in the weeks before she completed the purchase and shows that she had told the lender that the Atlanta property wouldn’t be her primary residence. The document appears to counter other documentation that Cook’s critics have cited in support of their claims that she committed mortgage fraud by reporting two different homes as her primary residence, two independent real-estate experts said.”
“The Coming Electricity Crisis” (Foreign Affairs). “The surge in electricity demand is not inherently a problem. It reflects the technology-fueled progress that electrification can deliver. But rising demand is already starting to drive up electricity prices and push the grid to its limits. Without rapid action, consumers will pay more, businesses will be less competitive, and the country will risk losing its lead in technological innovation and advanced manufacturing.”
“The US Is Unlikely To Drop Into Recession” (Joachim Klement). “[T]he US is unlikely to drop into recession in 2025 or even 2026. A new study by the Boston Fed shows one key reason why this may be so. They wanted to find out why consumer spending has not slowed in the aftermath of the 2022 inflation spike and rising interest rates. They show that low-income households did indeed feel the pinch from the higher cost of living. Lacking any meaningful savings, they made up for the shortfall by using buy-now-pay-later schemes and – more commonly – racking up credit card debt. High-income households, meanwhile, kept on spending at almost unchanged growth rates thanks to excess savings from the pandemic years and low credit card balances overall. These high-income households masked an overall deterioration in consumer spending and prevented the US from dropping into a recession in 2022 or 2023.”
“The World’s Surprise Boomtown: Baghdad” (The Economist). “Cranes sprout above the Baghdad skyline. The shriek of electric saws echoes across the city. Under the heavy summer sun, workers lay a new pavement outside a chic fromagerie. Baghdad is enjoying a construction boom. Iraq looks remarkably stable—and that is drawing foreign investors and reshaping its capital.”
What we’re reading (9/12)
“The Fed Is Likely To Bet On Transitory Inflation” (Carson). “The problem is services outside of housing, including things like transportation services, pet services, personal care, and medical care. Normally, you’d expect to see elevated inflation in these categories when the labor market is running hot—if people earn more, they’ll tend to spend more on these services (like in 2021–2023). But the labor market is clearly running weak, and so it’s bit of a puzzle as to why services inflation remains elevated. But the reality is that it is, and CPI for services excluding housing has been accelerating recently[.]”
“Why You Don’t Want To Trade Stocks Like a Member of Congress” (Wall Street Journal). “In the bad old days, some unscrupulous brokers paid by commission churned their clients’ accounts, buying and selling stocks dozens of times a month. These days, stock commissions have mostly disappeared, yet many advisers still trade too often. That might not be their fault alone. Nearly a half-century after index funds made buy-and-hold investing convenient and cheap for just about any investor, people still want to believe in magic: the secret key, the holy grail, the hidden passageway to outperformance.”
“Fitch Downgrades Crisis-Strained France” (U.S. News & World Report). “Credit rating agency Fitch downgraded France's sovereign credit score on Friday to the country's lowest level on record, stripping the euro zone's second-largest economy of its AA- status as it grapples with political crisis and ballooning debt. The move, bringing Fitch's score to A+, heaps pressure on Prime Minister Sebastien Lecornu just days into the job as he scrambles to form a cabinet and draft a 2026 budget that can pass a deeply divided parliament.”
“The $18 Billion Industry Built On Anonymous Employee Complaints” (Wall Street Journal). “It’s an industry operating under the premise that companies run better when workers can safely sound the alarm on everything from bad breath to bribery. The task is often farmed out to third parties with names like SpeakUp, Navex and EQS. SpeakUp, based in Amsterdam, helps operate Nestlé’s line. In 2024, it handled 3,218 calls and messages with allegations ranging from bullying and harassment to fraud and conflicts of interest at Nestlé and its suppliers. Nestlé says it substantiated 20% of them, and 119 people left their jobs as a result.”
“David Ellison’s Hollywood Plan: Lights … Camera … Spend!” (New York Times). “David Ellison’s spending spree in Hollywood is starting to make Netflix’s industry-rocking largess look Lilliputian. It has been 37 days since Mr. Ellison, 42, took over Paramount Global as part of an $8 billion merger that combined his company, Skydance Media, with a beaten-up collection of old-media assets — MTV, the Paramount movie studio, CBS — and two streaming services. In that short amount of time, he has certainly made two things clear: He is moving fast, and he has access to a seemingly endless supply of his father’s cash.”
What we’re reading (9/11)
“Mortgage Rates Are At An 11-Month Low. Will That Save This Housing Market?” (Wall Street Journal). “Mortgage rates fell this week to their lowest level in nearly a year due to widespread expectations that the Federal Reserve will cut rates next week, offering the beleaguered housing market some relief. The average 30-year fixed mortgage rate fell to 6.35%. That’s the lowest level since October and a notable drop from January, when rates were above 7%, according to Freddie Mac.”
“Opendoor Stock Closes 78% Higher After Company Names New CEO” (CNBC). “Opendoor stock rocketed 78% higher on Thursday after the retail favorite named Shopify executive Kaz Nejatian as CEO and co-founder Keith Rabois as chairman. The meme stock hit a 52-week high and continued a stunning run this year, with shares up more than 500% so far.”
“Why France Is In Big Economic Trouble” (Washington Examiner). “The most recent attempt to put France’s finances in order failed. On Monday, the French Parliament, in a vote of no confidence, rejected the plan of then Prime Minister Francois Bayrou to address France’s intractable deficit problem. Bayrou had proposed that welfare payments be frozen and that two public holidays be eliminated. But the French Parliament, in a vote of 364-194, said ‘no’ to the plan, which would have reduced the fiscal deficit from almost 6% of GDP to around 4.6% of GDP, still far above the 3% limit of the E.U.”
“Sticky Inflation Report Unlikely To Keep Fed Off Course For Rate Cut Next Week” (Yahoo! Finance). “A stickier inflation report isn't likely to kick the Federal Reserve off course for an interest rate cut next week, but it is likely to prevent the central bank from making a jumbo cut of half a percentage point. The Consumer Price Index showed "core" prices, excluding volatile food and energy prices, rose 3.1% for the month of August, in line with expectations and holding the same level as July. Month over month inflation also held steady at 0.3%.”
“Microsoft, OpenAI Reach Non-Binding Deal To Allow OpenAI To Restructure” (Reuters). “Microsoft and OpenAI said on Thursday they have signed a non-binding deal for new relationship terms that would allow OpenAI to proceed to restructure itself into a for-profit company, marking a new phase of the most high-profile partnerships to fund the ChatGPT frenzy.”
What we’re reading (9/2)
“Google Won’t Be Forced To Sell Chrome After Judge Rules Divestment A ‘Poor Fit’ In Landmark Antitrust Case” (Yahoo! Finance). “Google won't be forced to sell Chrome after a federal district judge ruled divestment a ‘poor fit’ in a landmark antitrust case, but it will have to share data that helped it hold onto its search monopoly. The ruling from District of Columbia judge Amit Mehta sent Google's stock soaring by more than 8% in after-hours trading.”
“Analysis-Investors On Edge As September Reset Exposes Simmering US Market Risks” (Reuters). “Market participants have long fretted over frothy valuations in stocks and corporate bonds, even as signs of a slowing economy piled up this summer. At the same time, an escalating spat between Trump and the Federal Reserve raised concerns that political strong-arming of the U.S. central bank could rattle the U.S. Treasury market, even as markets had appeared to take that in stride in recent weeks. On Tuesday, those simmering anxieties boiled over, reignited by fresh doubts about the legality of Trump's tariffs that emerged over the holiday weekend. That pushed stocks and bonds down, with many in the market anticipating more turbulence ahead of a pivotal jobs report on Friday.”
“Eurozone Inflation Accelerates, Priming Continued Rate Pause By ECB” (Wall Street Journal). “Annual inflation picked up pace a little in the eurozone last month, cementing expectations that the European Central Bank will leave interest rates unchanged for a second-straight meeting next week. Consumer prices rose by 2.1% on year in August across the 20 nations that use the euro, European Union figures showed Tuesday. That marks an increase from the 2.0% rate of annual inflation booked in July. Core inflation, which strips out the more volatile shifts in the prices of energy and food, was unchanged at 2.3% on year last month.”
“Economy ‘On The Brink’ Of Recession By End Of Year, Moody’s Economist Warns” (Newsweek). “But to Mark Zandi, chief economist at Moody's Analytics, the warning signs—or ‘red indicators’—are showing up in every corner, from housing to employment to consumer prices. In an interview with Newsweek, Zandi said that his monthslong fears of a major economic downturn may soon come to a head, and that the U.S. economy could slip into a recession by the end of 2025.”
“Spin Magazine Sale Collapses After Buyer Doesn’t Wire The Money” (The Hollywood Reporter). “The wire transfer to seal the deal never went through, Spin CEO Jimmy Hutcheson says, a move that confounded the management team at the publisher as the window to close expired. Airtab’s Cunningham acknowledged the deadline for the deal, describing his company’s team as being cautious and needing to ‘confirm a few things’ but that his desire is still to come to terms on closing the sale. Spin staffers were informed of the deal falling through on Tuesday. Hutcheson describes the situation to THR as baffling, given the sign offs of all of the Next Management Partners’ investors on the deal, the monthslong process to closing, that Airtab had initiated the process of an acquisition and that, the exec claims, Airtab showed up to the deal close without sending cash (aside from a legal deposit).”
What we’re reading (9/1)
“Dow, S&P 500, Nasdaq Futures Waver As Wall Street Enters September With Trade, Fed Drama In Focus” (Yahoo! Finance). “US stocks futures wavered around the flatline Monday with Wall Street set for a delayed open to the week after Monday's closure for the Labor Day holiday. Investors are braced for a tumultuous month, with legal drama around President Trump's tariffs and concerns over Fed independence in high focus.”
“Americans Lose Faith That Hard Work Leads To Economic Gains, WSJ-NORC Poll Finds” (Wall Street Journal). “A new Wall Street Journal-NORC poll finds that the share of people who say they have a good chance of improving their standard of living fell to 25%, a record low in surveys dating to 1987. More than three-quarters said they lack confidence that life for the next generation will be better than their own, the poll found. Nearly 70% of people said they believe the American dream—that if you work hard, you will get ahead—no longer holds true or never did, the highest level in nearly 15 years of surveys.”
“Fed Rate Cut? Not So Fast” (Morgan Stanley). “Fed Chair Jerome Powell signaled in his annual speech in Jackson Hole, Wyoming, that a rate cut cycle could start in September. Morgan Stanley’s Global Investment Committee acknowledges the political pressures on the Fed to ease monetary policy. We also recognize that there has been some labor market cooling that might support a proactive rate cut. Overall, however, we see the case for a reduction as modest and put the odds much lower, at around 50-50.”
“Unlikely Allies: Trump, Pelosi And The Push To Ban Congressional Stock Trading” (Fox News). “Common sense would suggest that Congress shouldn’t be actively trading stocks and bonds while they’re holding office. And 86% of those surveyed in 2023 as part of a University of Maryland study favored a ban on congressional stock trading, with Republicans and Democrats showing nearly identical levels of support.”
“Eli Lilly Is Close To Launching The Strongest Weight-Loss Drug Ever. Somehow, Gym Bros Are Already Taking It To Shred Fat.” (Business Insider). “Retatrutide is a GLP-1 drug, in the same family as Ozempic (semaglutide) and Mounjaro (tirzepatide). It was developed by the pharmaceutical giant Eli Lilly, and it is unique because it mimics three hunger hormones (GLP, GIP, and glucagon), while similar drugs on the market target one or two. In theory, that means more staggering weight-loss results and potentially other benefits. Doctors and researchers are already jokingly referring to retatrutide as the ‘King Kong’ for weight loss because early results in clinical trials suggest it rivals bariatric surgery, and it seems to protect more lean muscle mass.”
August performance review
Prime portfolio: +4.42 percent
Select portfolio: +5.49 percent
SPY ETF: +2.99 percent
Bogleheads portfolio (80 percent VTI + 20 percent BND): +2.74%
September picks available now
The new Prime and Select picks for September are available starting now, based on a model run put through today (August 30). As a note, I will be measuring the performance on these picks from the first trading day of the month, Monday, September 1, 2025 (at the mid-spread open price) through the last trading day of the month, Tuesday, September 30, 2025 (at the mid-spread closing price).
What we’re reading (8/29)
“Dow, S&P 500, Nasdaq Slide On Inflation Worries, Ending 4th Winning Month Lower” (Yahoo! Finance). “US stocks retreated from record highs on Friday as Wall Street digested an update on consumer inflation that showed prices firming higher above the Fed's target in July.”
“There’s A Stunning Financial Problem With AI Data Centers” (Futurism). “[N]ew data centers have a very tiny runway in which to achieve profits that currently remain way out of reach. By Kupperman's projections, a brand new data center will quickly become a Theseus’ ship made up of some of the most expensive technology money can buy. If a new data center doesn't start raking in mountains of cash ASAP, the cost to maintain its aging parts will rapidly overtake the revenue it can bring in.”
“Why Aren’t Markets Freaking Out?” (Paul Krugman). “Do financial markets doubt that Trump will get his way [with the Fed]? Or do they reject mainstream economics and the clear examples of countries like Turkey and Argentina? Neither. My read of economic and financial history is that market pricing almost never takes into account the possibility of huge, disruptive events, even when the strong possibility of such events should be obvious. The usual pattern, instead, is one of market complacency until the last possible moment. That is, markets act as if everything is normal until it’s blindingly obvious that it isn’t.”
“Welcome To The New ‘Made In China’ Era — And It Looks A Lot Different” (Business Insider). “From Labubu to Luckin Coffee, Chinese retail chains are betting big that American consumers can revive the growth they're losing at home — and relying on cultural relevance and competitive pricing to make it happen. A Business Insider analysis of top Chinese brands shows how they're expanding their empires by opening brick-and-mortar stores beyond their borders.”
“Your Boss Doesn’t Have Time To Talk To You” (Wall Street Journal). “Need a minute with your boss? Good luck. Managers are overseeing more people as companies large and small gut layers of middle managers in the name of cutting bloat and creating nimbler yet larger teams. Bosses who survive the cuts now oversee roughly triple the people they did almost a decade ago, according to data from research and advisory firm Gartner. There was one manager for every five employees in 2017. That median ratio increased to one manager for every 15 employees by 2023, and it appears to be growing further today, Gartner says.”
What we’re reading (8/28)
“Higher Prices Are Coming For Household Staples” (Wall Street Journal). “U.S. companies have an unwelcome message for inflation-weary consumers: Prices are going up. Companies including Hormel Foods, J.M. Smucker and Ace Hardware said this week they would raise prices for reasons ranging from higher meat costs to tariffs. Large retailers like Walmart, Target and Best Buy said some tariff-related price increases are already in place. More are on the way.”
“Big Tech Investment Powers Nvidia Results, But Wall Street Says ‘Inevitable’ Slowdown Looms” (Yahoo! Finance). “Big Tech's massive artificial intelligence investments continued to fuel Nvidia’s (NVDA) rapidly growing data center business in the second quarter, but Wall Street is flagging the risk of a slowdown and what that means for the AI chipmaker.”
“The Calculus Of Value” (Howard Marks). “What’s the bottom line of the calculus? Fundamentals appear to me to be less good overall than they were seven months ago, but at the same time, asset prices are high relative to earnings, higher than they were at the end of 2024, and at high valuations relative to history. Most bull markets are built through the addition of a “constellation of positives” on top of a well-functioning economy. Today I see elements that include the following: the positive psychology and ‘wealth effect’ resulting from recent gains in markets, high-end real estate, and crypto, the belief that, for most investors, there really is no alternative to the U.S. markets, and the excitement surrounding today’s new, new thing: AI.”
“The Heroes Of US Central Banking” (Steven Roach). “The dual mandate – price stability and full employment – has created a tough balancing act for the central bank. Powell methodically laid out the factors currently weighing on both, from tariffs and immigration policy (which are affecting supply as well as demand) to the recent underlying loss of momentum in employment and GDP growth. Powell drew comfort from a still-low unemployment rate but emphasized a “curious kind of balance” in the labor market. That is Fedspeak for “precarious,” in that it could quickly give way to higher joblessness. I take this as a key factor in assessing the shifting balance of risks that will guide future policy actions.”
“The Boss Has Had It With All The Office Activists” (Wall Street Journal). “The new, hard-line playbook that companies are adopting to confront employee activism reflects two developments: One is a political climate in which companies risk the ire of the White House—and some consumers—if they appear to cater to ‘woke’ forces, including their own staff. The other is an ever-tougher job market in which white-collar workers—especially in tech—have lost considerable leverage. The result is a more adversarial employer-employee dynamic in which bosses are far less concerned with accommodating their workers’ political and personal views. These days, many business leaders would just as soon trim head count as appease vocal staff. That has fired up some office activists even more.”
September picks available soon
I’ll be publishing the Prime and Select picks for the month of September before Monday, September 1 (the first trading day of the month). As always, SPC’s performance measurement for the month of August, as well as SPC’s cumulative performance, will assume the sale of the August picks at the closing price (at the mid-point of the closing bid and ask prices) on the last trading day of the month (Friday, August 29). Performance tracking for the month of September will assume the September picks are bought at the open price (at the mid-point of the opening bid and ask prices) on the first trading day of the month (Monday, September 1).
What we’re reading (8/24)
“Dow, S&P 500, Nasdaq Futures Steady After Record Surge With Nvidia Earnings In Focus” (Yahoo! Finance). “With earnings season continuing to roll on, Nvidia, the most valuable stock in the S&P 500, reports results after the closing bell Wednesday. Analysts see the chipmaker posting earnings of $1.01 per share on $46.13 billion in revenue. Price targets have been climbing in the lead-up, reflecting optimism that demand for AI hardware remains high.”
“Stagnant Job Market Is A Rising Risk For The U.S. Economy” (Wall Street Journal). “The labor market has moved front and center for the Federal Reserve, highlighting its fragility and risk to the economy. The good news is that unemployment remains low, and employers haven’t been all that interested in laying people off. The bad news is that companies haven’t been all that interested in hiring, either. This precarious situation means even a relatively small increase in layoffs could lead the economy to start shedding jobs—a process that can be difficult to reverse once it starts.”
“‘Powell Clearly Opens The Door’: Markets Surge As Speculative Bets Get Another Boost From Dovish Jay Powell” (Yahoo! Finance). “‘Equity markets reacted very positively,’ Scott Chronert, managing director of US equity strategy at Citi, wrote in a Friday note, highlighting the Russell 2000, a benchmark for small-cap stocks, had the most ‘striking surge’ as investors shifted money into more economically sensitive names. That broadening story, which captured Wall Street’s attention this week, was also evident with the equal-weighted S&P 500, which gives smaller companies the same influence as megacap tech, slightly leading the headline index.”
“Why A Landmark Settlement On Realtor Fees Hasn’t Cut Costs” (Wall Street Journal). “The real-estate industry’s landmark settlement reworked how real-estate agents get paid, raising hopes that the costs associated with home buying and selling would come down. A year later, it hasn’t happened. The average commission paid to a buyer’s agent in the second quarter of 2025 was 2.43% of the home’s sale price, up from 2.38% a year earlier, according to an analysis by real-estate brokerage Redfin.”
“Diversifying Society’s Leaders? The Determinants And Causal Effects Of Admission To Highly Selective Private Colleges” (Raj Chetty, David Deming, and John Friedman). “We use anonymized admissions data from several colleges linked to income tax records and SAT and ACT test scores to study the determinants and causal effects of attending Ivy-Plus colleges (Ivy League, Stanford, MIT, Duke, and Chicago). Children from families in the top 1% are more than twice as likely to attend an Ivy-Plus college as those from middle-class families with comparable SAT/ACT scores. Two-thirds of this gap is due to higher admissions rates for students with comparable test scores from high-income families; the remaining third is due to differences in rates of application and matriculation. In contrast, children from high-income families have no admissions advantage at flagship public colleges. The high-income admissions advantage at Ivy-Plus colleges is driven by three factors: (1) preferences for children of alumni, (2) weight placed on non-academic credentials, and (3) athletic recruitment. Using a new research design that isolates idiosyncratic variation in admissions decisions for waitlisted applicants, we show that attending an Ivy-Plus college instead of the average flagship public college increases students’ chances of reaching the top 1% of the earnings distribution by 50%, nearly doubles their chances of attending an elite graduate school, and almost triples their chances of working at a prestigious firm. The three factors that give children from high-income families an admissions advantage are uncorrelated or negatively correlated with post-college outcomes, whereas academic credentials such as SAT/ACT scores are highly predictive of post-college success.”
What we’re reading (8/23)
“Powell’s Rate Cut Signal Reflects Economy’s Delicate Position” (Wall Street Journal). “Federal Reserve Chair Jerome Powell cautiously laced up an interest-rate cut next month but delivered a subtle message to anyone expecting aggressive easing: Don’t expect a downhill sprint. The debate among central bankers gathered in Wyoming’s Grand Teton National Park over the past two days suggests the focus is now shifting beyond the September meeting to whether the Fed will entertain cutting again at either of its final two meetings of the year, in October and December. Powell’s cautious tone reflected the tricky economic dynamics the Fed is grappling with: a labor market he described as showing “curious” signs of softness despite a low unemployment rate, and tariff-driven price increases that are just beginning to work their way through the economy.”
“The Fed Gives Up” (Scott Sumner). “The Fed…has basically given up on the whole idea of reforming monetary policy based on the insights of our top monetary theorists. They’ve removed the useful policy reforms of the 2020 document (average inflation targeting) but promised not to repeat the mistake of doing the very different policy that was actually implemented during 2021-22. In a sense, we are back to the 2% flexible inflation target announced back in 2012 and informally adhered to for the most part since the early 1990s.”
“Why Is The Yield Curve Steepening?” (Torsten Sløk). “The US yield curve has started steepening, not only 2s10s but also 10s30s, see the first chart below. There are three reasons why this is happening: 1. The Fed is cutting rates. 2. If the market thinks the Fed is cutting for political reasons, it puts upward pressure on inflation expectations and ultimately long rates, which also steepens the curve […] 3. Growing Treasury issuance is putting upward pressure on long rates[.]”
“Credit Fuels The AI Boom — And Fears Of A Bubble” (Bloomberg). “key players in the industry acknowledge there is probably pain ahead for AI investors. OpenAI Chief Executive Officer Sam Altman said this week that he sees parallels between the current investment frenzy in artificial intelligence and the dot-com bubble in the late 1990s. When discussing startup valuations he said, ‘someone’s gonna get burned there.’ And a Massachusetts Institute of Technology initiative released a report indicating that 95% of generative AI projects in the corporate world have failed to yield any profit.”
“Corporate Share Repurchases And The 2023 Excise Tax” (Don Autore, et al.). “The Inflation Reduction Act of 2022 imposes a 1 % excise tax on US corporate share repurchases, effective January 1, 2023. The tax's implementation is associated with a significant decline in corporate repurchases that is not offset by a corresponding increase in dividends. Aggregate repurchases decline from about $1 trillion in 2022 to just over $800 billion in 2023, and the average firm reduces quarterly repurchases (as a fraction of market capitalization) by roughly 25 %. The decline in repurchases by US firms far exceeds a contemporaneous decline in repurchases by Canadian firms, is large in a historical context, and is not driven by firm fundamentals. Tax-induced cuts to repurchases are associated with an increase in cash but no increase in investment, implying that the tax has not generated the stated policy objective.”
What we’re reading (8/17)
“Powell’s Last Stand: His Legacy And The Fed’s Independence Are On The Line At Jackson Hole” (Barron’s). “Federal Reserve Chair Jerome Powell will take the stage next Friday at the Fed’s annual Jackson Hole Economic Symposium to deliver what may be the defining speech of his career. The speech won’t be lengthy— last year’s version clocked in at just over 15 minutes—but with his term as chair ending next May and the Fed’s performance under attack by the Trump administration, Powell may see Jackson Hole as his last or, at least, his best chance to cement his legacy and make the case for the central bank’s independence.”
“Strong Crop Of Earnings Eases Investors’ Economic Concerns” (Wall Street Journal). “The job market is cooling. Tariff rates are rising. But American companies still seem to be doing just fine. With the latest earnings season nearly done, top- and bottom-line results from companies in the S&P 500 are handily beating expectations that had been lowered after President Trump announced sweeping duties on imports in April. Profits are expected to have risen around 12% in the second quarter from a year earlier, according to FactSet, far ahead of the 5% growth analysts predicted in early July. While much of that earnings growth has been driven by tech companies, corporate chiefs also have sounded more optimistic about the economy than they did in the spring. Earnings calls including the word “recession” have plummeted 84%, according to AlphaSense.”
“Inflation Alarm Bells Went Off Again And Prices Are Rising. Just How Bad Is It Going To Get?” (MarketWatch). “The biggest increase in wholesale prices in three and a half years stunned Wall Street, but is tariff-related inflation really set to soar? The proof is far from ironclad. The latest pair of inflation reports, to be sure, were not reassuring. A key measure of consumer prices showed the largest advance in six months and pushed the yearly rate back above 3%. Just six months ago — before the U.S. trade wars — the rate of inflation was widely expected to slow this year to close to the Federal Reserve’s 2% goal. Not anymore.”
“Why Hands-Off Investing Pays Off” (New York Times). “[A] new study of investor behavior by Morningstar…found that, on average, the actual returns of fund investors were significantly less than the posted market returns, a discrepancy explained by poor trading decisions — buying when the market was high and selling when prices were low. Over extended periods — say, 30 years — this drag on returns produces chilling results: a reduction in the money in an average investor’s portfolio of more than 18 percent, according to Morningstar calculations performed at my request.”
“1910: The Year the Modern World Lost Its Mind” (Derek Thompson). “When we hear about technological change and social crisis in the 21st century, it is easy to imagine that we are living through a special period of history. But many eras have grappled with the problems that seem to uniquely plague our own. The beginning of the 20th century was a period of speed and technological splendor (the automobile! the airplane! the bicycle!), shattered nerves, mass anxiety, and a widespread sense that the world had been forever knocked off its historical axis: a familiar stew of ideas.”
What we’re reading (8/15)
“Dow, S&P 500, Nasdaq Notch Weekly Wins As Slew Of Data Muddies Rate-Cut Path” (Yahoo! Finance). “US stocks were mixed on Friday as Wall Street tempered its rate-cut hopes amid economic data this week that showed higher-than-expected wholesale inflation and a rise in July retail sales. A meeting between President Trump and Russian President Vladimir Putin was also in focus as traders looked for clues on how the outcome could steer markets.”
“The Palantir Mafia Behind Silicon Valley’s Hottest Startups” (Wall Street Journal). “Alumni have either started or are leading more than 350 tech companies, and at least a dozen have been valued at over $1 billion, says Luba Lesiva, who was head of investor relations at Palantir from 2014 to 2016. Lesiva runs a venture firm called Palumni VC, a play on the words Palantir alumni, which invests in startups founded or led by ex-Palantir employees.”
“OpenAI Staffers To Sell $6 Billion In Stock To SoftBank, Other Investors” (Bloomberg). “Current and former OpenAI employees plan to sell approximately $6 billion worth of shares to an investor group that includes Thrive Capital, SoftBank Group Corp. and Dragoneer Investment Group, in a deal that values the ChatGPT maker at $500 billion, according to people familiar with the matter.”
“Spotting Clouds In A Carefree Summer Market” (Wall Street Journal). “The list of what is actually giving investors pause is remarkably short, itself a reason for concern. If stocks climb a wall of worry, they may be approaching the top—and the nasty slide down the slope of hope. What should be concerning them divides into three: the economy, stock valuations and politics.”
“This Is The Staggering Number Of Hours New Yorkers Spend On Their Phones Each Day: ‘Nonstop Loop of Distraction’” (New York Post). “To calculate the lengths, investigators converted the average screen time in every state into seconds, then multiplied each figure by 6.3 (the length of an iPhone 16 Pro Screen) over 10 (the frequency of a scroll, in seconds), resulting in the distance traveled in inches per day. The resulting figure was then divided by 12 to get the distance in feet per day. That figure was then divided by 5,280 to get the distance in miles per day, and then multiplied by 365 to get the final number.”