What we’re reading (11/12)
“Why Buying The Biggest Stock-Market Losers Can Be A Winning strategy” (MarketWatch). “[I]t’s human nature to chase performance — favoring those stocks that are doing the best and avoiding those whose recent returns are at the bottom. But history teaches us that the contrarians are on to something. Consider a hypothetical portfolio that each month owned the 10% of stocks with the worst performance over the prior month. Since 1926, according to data compiled by Dartmouth’s Ken French, this portfolio produced an annualized gain of 13.2%. That’s 8.9 annualized percentage points better than a second portfolio that owned the decile of stocks with the prior month’s best returns. The source of this so-called short-term reversal effect, according to a consensus of researchers, is overreaction by investors: They exaggerate both the good news surrounding a stock that is performing well and the bad news about a stock that is losing. It therefore doesn’t take much for a stock that is losing to beat expectations and for a winning stock to fall short — thereby causing the prior loser to beat the prior winner.”
“FanDuel To Debut Prediction Market App To Fend Off Competitors” (Bloomberg). “FanDuel, the US online gambling division of Flutter Entertainment Plc, is launching its own prediction market product, which will allow it to open up in states where traditional sports betting is illegal and deal with competitive pressure from new startup exchanges in the space. The company plans to introduce a new mobile app in December, FanDuel Predicts, where users can bet on the outcome of sports and economic indicators, the company announced on Wednesday at the same time that it released quarterly financial results that fell short of analysts’ expectations.”
“Do Gamblers Invest Differently?” (Joachim Klement). “People who are at higher risk of problem gambling also tend to trade more in stock markets. So a propensity to gamble translates into investment behaviour. And we know that people who trade more tend to have worse returns due to transaction costs and other frictions that eat away at the returns. Hence, in real life, people who are naturally inclined to gamble should also have lower returns. Most people trade less in a low-volatility market, which means that as long as markets remain calm, their returns should be better. But for the most extreme gamblers, it doesn’t matter whether the market is low volatility or high volatility. They will always trade a lot. They truly are compulsive gamblers, no matter the environment they are in.”
“Streaming Prices Are Soaring—And Consumers Are Still Paying” (Wall Street Journal). “In recent weeks, the streaming platforms HBO Max, Hulu and Disney+ all hiked prices for at least some of their services. Netflix did so in January, Peacock unveiled increases in July, and Apple TV detailed its latest bump in August. Paramount said Monday it would raise the price of Paramount+ early next year…Despite the price hikes, households aren’t significantly recalibrating their subscription habits.”
“Artificial Intelligence, Competition, And Welfare” (Susan Athey and Fiona Scott Morton). “We study how market power in artificial intelligence (AI) shapes wages and welfare in open-economy general equilibrium by treating AI as a priced, imported factor…When AI reduces unit costs and increases variety, it will not pull U from non-tradables, instead it will displace workers from the AI-using sector and lower wage due to diminishing returns in alternative sectors. Strategic upstream pricing of AI then harms welfare through unit-cost (usage fees) and variety (access fees) channels, with income leakage abroad.”
What we’re reading (11/11)
“Brokers And Bubbles” (Owen Lamont). “How can you tell if you’re in a speculative bubble? Well, bubbles are all about frenzied trading activity. And who benefits from frenzied trading activity? Brokers and other providers of trading services. Just as it’s profitable to sell picks and shovels during a gold rush, it’s profitable to sell trading services during a speculative bubble. Thus, when retail brokerages are extremely successful, that’s a clue that you may be in a bubble. Today, retail broker stocks are ripping. As shown in Figure 1, Robinhood is up more than 15x in the past two years, with Interactive Brokers up more than 3x. Both were added to the S&P 500 this year (Interactive Brokers in August and Robinhood in September).”
“Anthropic Is On Track To Turn A Profit Much Faster Than OpenAI” (Wall Street Journal). “The finances of Silicon Valley’s two largest artificial-intelligence startups show their diverging approaches to the AI boom, with Anthropic on a pace to turn a profit far more quickly than rival OpenAI, according to documents obtained by The Wall Street Journal. Anthropic, which has a growing number of business users because of the capabilities of its Claude chatbot in coding and other arenas, expects to break even for the first time in 2028, the documents show.”
“AI Fueled The Stock Market Rally. Earnings Are Now Giving It Staying Power.” (Yahoo! Finance). “After a year dominated by artificial intelligence headlines, Wall Street’s bull case is shifting toward something more fundamental to stocks: earnings power that’s beginning to broaden beyond Big Tech. Morgan Stanley, UBS, and other major firms are pointing to a clear throughline this earnings season: Profits are strong, margins are stabilizing, and growth, while still concentrated in AI-heavy tech, is beginning to spread.”
“SoftBank Just Sold Out Of Nvidia. Should You?” (CNBC). “Nvidia briefly tumbled nearly 4% Tuesday after the Japanese investment firm said it zeroed out its position in the AI chipmaker for $5.8 billion. That left investors wondering if SoftBank’s decision to exit the stock was a bad omen for Nvidia’s future stock performance, or if it was simply taking profits on a market leader.”
“The Roman Empire’s Entire Road Network Just Got Mapped, And It’s Mind-Blowing” (Gizmodo). “They say all roads lead to Rome—but exactly how many Roman roads were there? According to new research, potentially over 68,000 miles (over 110,000 kilometers) more than previously known. Meet Itiner-e, a new high-resolution digital dataset and map of the Roman Empire’s roads around 150 CE. A team of researchers used archaeological and historical records, topographic maps, and satellite imagery to create the behemoth, which charts 185,896 miles (299,171 km) of roads across almost 1,544,409 square miles (4,000,000 square km).”
What we’re reading (11/10)
“Investing In AI: The View From One Big Investor” (Wall Street Journal). “[Laela] Sturdy [of CapitalG:] AI companies are growing almost five times faster than the software companies that came before them, which is good and bad. It’s good because it demonstrates the market pull. You can really understand the customer value that’s being provided. But things like differentiation and moats [that is, whether a company has a durable, competitive advantage] are a lot more challenging to assess.”
“State Street Buys Private-Sector Inflation Data Provider” (American Banker). “On Monday, State Street Corporation announced that it has acquired PriceStats, a for-profit gatherer of daily inflation statistics. The Boston-based holding company of State Street Bank and Trust Company did not disclose the price of the acquisition. State Street had already been exclusively partnering with PriceStats since 2011, providing the custody bank's clients with proprietary data on the prices of goods and services. But acquiring the Cambridge, Massachusetts-based company outright, State Street said, will allow its research to go further.”
“Why The Buzziest IPO In History May Never Happen” (CNN Business). “ It’s a tad early for 2026 predictions, but given how the past few weeks have gone for OpenAI, I’ll offer one of my own: OpenAI isn’t going public. Not in 2026, anyway. Maybe not ever.”
“Trump Tariff Trouble” (Paul Krugman). “…the prize for doublethink surely went to Trump’s pitiful Solicitor General, John Sauer. With the Justices suggesting that Trump’s tariffs infringe on Congress’s unique right to set tax rates, Sauer declared that ‘they are not revenue-raising tariffs’. That’s essentially an impossible position to argue[.]”
“Paramount Skydance Expects Another $1B In Merger Savings As David Ellison Resets Spending” (CNBC). “Paramount Skydance said on Monday it expects $1 billion more in merger savings than it previously forecast as it outlines CEO David Ellison’s ambitions for the company. The update came in Paramount’s third-quarter earnings report — the company’s first since its merger closed in early August. Ellison has been investing heavily in streaming and content, including live sports rights, and paying for it in part with cuts to other parts of the business. Paramount on Monday announced a new round of layoffs, affecting roughly 1,600 employees, tied to divestitures of assets in Argentina and Chile. Those cuts come weeks after Paramount began the process to lay off approximately 1,000 employees.”
What we’re reading (11/9)
“Dow, S&P 500, Nasdaq Futures Rise As Hopes Grow For End To Government Shutdown” (Yahoo! Finance). “The move higher comes as investors watch closely for a deal in Washington. Lawmakers spent the weekend negotiating a deal, hoping to restore government funding after a 39-day shutdown that has disrupted federal services and frozen key economic data releases.”
“Gold Advances With Weakening US Economy Aiding Haven Demand” (Bloomberg). “Gold rose for a second day as a weakening US economy outweighed progress on ending the government shutdown in Washington. Bullion traded near $4,045 an ounce after finishing last week little changed. The precious metal built on gains made on Friday as a measure of US consumer sentiment fell to near the lowest on record, with the shutdown and rising prices souring the outlook.”
“Will Private Equity’s ‘Window of Opportunity’ Last?” (Institutional Investor). “‘For much of the past two and a half years, valuation mismatches have represented the greatest obstacle to deal making,’ Witte said. ‘As recently as last December, investors cited the valuation gap as the single largest impediment to transactions. Today that barrier has meaningfully receded.’ Two thirds of general partners that EY surveyed recently said that the gap has narrowed, ‘enabling buyers and sellers to find common ground and move forward with confidence,’ he said.”
“The Year’s Hottest Crypto Trade Is Crumbling” (Wall Street Journal). “The hottest crypto trade has turned cold. Some investors are saying ‘told you so,’ while others are doubling down. It was the move to make for much of the year: Sell shares or borrow money, then plow the cash into bitcoin, ether and other cryptocurrencies. Investors bid up shares of these “crypto-treasury” companies, seeing them as a way to turbocharge wagers on the volatile crypto market. Michael Saylor pioneered the move in 2020 when he transformed a tiny software company, then called MicroStrategy, into a bitcoin whale now known as Strategy. But with bitcoin and ether prices now tumbling, so are shares in Strategy and its copycats. Strategy was worth around $128 billion at its peak in July; it is now worth about $70 billion. The selloff is hitting big-name investors including Peter Thiel, the famed venture capitalist who has backed multiple crypto-treasury companies, as well as individuals who followed evangelists into these stocks”
“Build, Baby, Build: How Housing Shapes Fertility” (Benjamin K. Couillard, Univ. of Toronto). “Many developed countries face low and falling birthrates, potentially affected by rising costs of housing. Existing evidence on the fertility-housing cost relationship typically uses geographic variation (raising selection issues), neglects unit size, and says little about policy. To progress on these fronts, I first specify a dynamic model of the joint housing-fertility choice allowing choices over location and house size, estimated using US Census Bureau data…To study the causal effect of rising housing costs on fertility, I vary them directly within the model, finding that rising costs since 1990 are responsible for 11% fewer children, 51% of the total fertility rate decline between the 2000s and 2010s, and 7 percentage points fewer young families in the 2010s. Policy counterfactuals indicate that a supply shift for large units generates 2.3 times more births than an equal-cost shift for small units.”
What we’re reading (11/8)
“Cockroaches In The Coal Mine” (Howard Marks). “One of the most prominent characteristics of the financial markets that I’ve detected over the years is their tendency to obsess over a single topic at a given point in time. The topic eventually changes to another, but before it does, it’s often the thing people want to discuss to the near exclusion of everything else. Today it’s the recent string of episodes in sub-investment grade credit.”
“Debt Has Entered The A.I. Boom” (DealBook). “[The] offering is part of the latest push in the A.I. infrastructure financing blitz. According to McKinsey, $7 trillion in data center investment will be required by 2030 to keep up with projected demand. Google, Meta, Microsoft and Amazon have together spent $112 billion on capital expenditures in the past three months alone. The sheer scale of spending is spooking investors: Meta’s stock tumbled 11 percent after the company revealed its aggressive capital expenditure plans last week, and tech stocks have sold off this week on overvaluation fears.”
“Global Week Ahead: AI Wobble Casts Shadow Over ‘Davos For Geeks’” (CNBC). “The event comes as the AI-fueled market rally faces increased scrutiny from investors, big market voices, politicians and regulators. Concerns of a bubble in the sector spooked global markets into a rollercoaster week, after famed short-seller Michael Burry placed a massive $1.1 billion bet against AI darlings Nvidia and Palantir.”
“Alaska’s New Mining Rush Chases Something More Coveted Than Gold” (Wall Street Journal). “At a mining site here, Rod Blakestad cracked open a shiny rock with his pick. He found quartz, a sign that the rock may contain gold. But Blakestad, a veteran gold hunter, tossed the rock aside. He and his team of geologists were searching for something even more sought-after: antimony, an obscure element widely used in the defense industry that is now at the center of the bitter U.S.-China trade fight. ‘If we were looking for gold, we’d be high-fiving,’ he said. Until recently, antimony, which is often found in gold mines, was treated as detritus by gold miners.”
“Warner Bros. Is For Sale, Who’s Buying?” (The Hollywood Reporter). “The battle for Warner Bros. Discovery is officially underway. Offers are being made. Banks have been hired. Who will wind up with the treasure trove of IP, HBO, and abundant cable TV cashflow? Will it sell as one piece? Or will it be broken up into studios and networks? The clock is ticking.”
What we’re reading (11/7)
“The Week The AI Boom Got A Reality Check On Wall Street” (Wall Street Journal). “Investors’ confidence in the outlook for the economy and the artificial intelligence boom has powered stocks to record highs. Their faith is wavering. The tech-heavy Nasdaq Composite Index, long buoyed by excitement over AI, had its worst week since President Trump unveiled his ‘Liberation Day’ plans to impose tariffs on the rest of the world. Some of the biggest beneficiaries of that rally fell sharply amid concerns of overspending, and overpromising, on AI initiatives.”
“The Astonishing Bull Market Will End One Day. Are You Ready?” (New York Times). “Investors who stuck with the S&P 500 index after the dot-com crash were still hurting a decade later. The numbers are sobering. Those unfortunate enough to have bought S&P 500 index funds at the March 2000 peak were sitting on a loss of 8.3 percent, including dividends, a decade later, according to calculations I ran on FactSet…far worse has happened in the U.S. stock market, when you go back as far as the Great Depression of the 1920s and 1930s. Using inflation-adjusted data, Robert Shiller, a Nobel laureate in economics, found that it took 29 years to recover from the stock market crash of 1929.”
“AI Valuation Fears Grip Global Investors As Tech Bubble Concerns Grow” (CNBC). “Goldman Sachs CEO David Solomon warned this week of a “likely” 10-20% drawdown in equity markets at some point within the next two years, while the International Monetary Fund and the Bank of England have both sounded the alarm bells. Bank of England Governor Andrew Bailey highlighted the possibilities of an AI bubble in an interview with CNBC on Thursday, noting that the ‘very positive productivity contribution’ from technology companies could be offset by uncertainty around future earning streams in the sector. ‘We have to be very alert to these risks,’ Bailey said.”
“Legendary Investor Mark Mobius Says The AI Bubble Could Lead To A 40% Drop In Stocks, And Flags One Area Of The Market Investors Should Buy” (Business Insider). “‘When I look at a correction, I look at 30%, down 30%, 40%,’ Mobius speculated, though he said he believed in the long-term uptrend for the AI. ‘That will happen, but it will be short-lived.’”
“Does Momentum Exist In Prediction Markets? A Short Analysis” (No Dumb Ideas). “ In theory, a high liquidity market like the mayoral race (nearly $400 million in volume!) should arbitrage out big swings that diverge from the conventional wisdom of the traders. So people began asking the obvious question: does momentum exist in election prediction markets? After two days of learning the Polymarket API, I can definitively confirm the answer is: yes, but with some caveats.”
What we’re reading (11/6)
“SoftBank Stares At Over $50 Billion In Weekly Losses After Stock Drops 8% As Investors Sour On AI Plays” (CNBC). “This comes after SoftBank gained nearly 3% in the previous session, having plunged 10% on Wednesday to clock its worst day since April. It stares at about $53 billion market cap wipeout this week and its worst weekly loss since March 2020, if Friday’s losses hold. ‘SoftBank Group’s shares are falling as many bought it as the only listed proxy for OpenAI,’ said David Gibson, senior research analyst at financial services firm MST Financial.”
“The Performance Fee Puzzle” (Behavioral Investment). “Performance fees are one of the more puzzling aspects of the fund industry. They are often hailed as a way of best aligning the incentives of fund manager and client yet, in reality, frequently benefit the former at the expense of the latter. Often in an egregious manner. If we developed our own high conviction investment strategy and sought to make it as lucrative as possible (for ourselves), we would want access to a large pot of assets (ideally somebody else’s) and to participate directly in its performance. Getting paid a healthy annual retainer would be the cherry on the cake. Is it unreasonable to suggest that fund managers levying performance fees should actually be paying clients for gaining access to sizeable asset pools? Perhaps, or maybe it is just unrealistic (the lights need to stay on). Clients are, however, providing the necessary capital, bearing the vast majority of downside risk and often paying out fees for volatility. Hardly a textbook example of incentive alignment.”
“Tesla Shareholders Approve Elon Musk’s $1 Trillion Pay Package” (Wall Street Journal). “Tesla shareholders approved a record-setting pay package for Chief Executive Elon Musk, a plan designed to motivate the world’s richest man with as much as $1 trillion in additional stock. Flanked by dancing humanoid robots on a stage bathed in pink and blue light at Tesla’s Austin, Texas, headquarters, Musk thanked the crowd of shareholders who supported the pay package with more than 75% of the votes cast.”
“Fed’s Hammack: ‘It’s Not Obvious’ The Central Bank Should Cut Rates Further” (Yahoo! Finance). “Cleveland Fed president Beth Hammack doubled down Thursday on her concerns about inflation, saying that it’s not obvious the central bank should cut rates further. ‘I remain concerned about high inflation and believe policy should be leaning against it,’ Hammack said at the Economic Club of New York. ‘After last week’s meeting, I see monetary policy as barely restrictive, if at all, and it’s not obvious to me that monetary policy should do more at this time. But the future is inherently uncertain, and I’m watching developments closely.’”
“American Suburbs Have A Financial Secret” (The Atlantic). “Municipal debt is a secret American pastime, defining—and dividing—suburbs across the United States. In his new book, Cracked Foundations: Debt and Inequality in Suburban America, the urban historian Michael Glass looks behind the marketing that attracted flocks of Americans to places like Levittown and uses debt as a lens through which to understand suburban disparities. The U.S. is one of the only countries in the world where municipalities raise money primarily through bonds, and their differential treatment on the private market has quietly driven inequality across the nation. Saddled with higher interest rates on their bonds, people in poor cities and towns today pay double the amount in property taxes, often suffer higher home-foreclosure rates, and wield paltrier education budgets compared with their wealthier counterparts.”
What we’re reading (11/5)
“Thoughts By A Non-Economist On AI And Economics” (Windows On Theory). “A remarkable fact is that (adjusted for inflation) U.S. GDP per capita has been growing at essentially a constant rate of roughly 2% over the past 150 years. None of the inventions in this period— including electrification, internal combustion engine, computers and the Internet— changed this trajectory. Note that 2% growth corresponds to a GDP ‘doubling rate’ of 35 years…The trillion dollar question is whether AI will break the 2% trend or not. Will AI be just another technology that allows us to sustain 2% growth for another couple of decades? Or will the “AI moment” be for us like post-WWII Japan? That is, should we model it as if we are meeting a new “AI frontier economy” which is vastly more productive, and this interaction will enable rapid growth, with GDP at least doubling every decade as was the case for Japan.”
“Gold Steadies As Traders Assess Outlook For US Interest Rates” (Bloomberg). “Gold steadied after the biggest gain in about a week, as traders assessed the outlook for US interest rates following private-sector jobs data. Bullion held just above $3,980 an ounce, after rising 1.2% on Wednesday. Figures from ADP Research showed payrolls rose 42,000 after two months of decline. While tempering concerns of a faster deterioration, the modest increase is consistent with a general softening in labor demand.”
“The Hurdles Elon Musk Must Clear To Unlock $1 Trillion In Tesla Pay” (Wall Street Journal). “Tesla shareholders will decide on Thursday whether to approve a record-setting pay package for Elon Musk that could ultimately give him new stock worth $1 trillion and a roughly 25% stake. Tesla’s longtime leader is already the company’s largest shareholder, with control over roughly 500 million shares, or a 15% stake. That includes interim shares he received in August but not options from a 2018 award that are held up in a court dispute.”
“Kazakhstan As The Solution To The ‘Rare Earths’ Problem” (RealClear Markets). “The country is among the world’s largest by its mineral reserves, with large deposits of copper, uranium, and rare earths. More than 100 deposits have been identified, and its rare-earth reserves are estimated at 2.6 million tons. In uranium, Kazakhstan remains the world’s largest producer, accounting for nearly 40 percent of global output in 2024 and maintaining a steady record of supply to U.S. utilities.”
“James Hardie Dealt Fresh Blow By Deepening US Housing Woes” (Bloomberg). “James Hardie Industries Plc shares tumbled after rivals sounded fresh warnings on the US home-improvement market, worsening what’s been a disastrous year for the company’s management and investors. The building products firm, listed in both the US and Australia, slumped as much as 17% in early Sydney trading on Thursday, following updates from a raft of companies exposed to US housing that fell short of expectations. The shares were down 12% at 1:25 p.m. as trading resumed after a suspension.”
What we’re reading (11/4)
“Wall Street Couldn’t Prevent Mayor Mamdani. Now It Has to Work With Him.” (Wall Street Journal). “Wall Street heavyweights failed to stop New York City voters from electing a democratic socialist mayor. Now what? There was an air of defeat on Tuesday evening in New York’s upper echelons as it became clear that Zohran Mamdani had won the mayor’s race. Some top figures in the city’s finance industry found the notion of a Mamdani administration unthinkable and had spent millions to elevate other candidates.”
“This Famous Method Of Valuing Stocks Is Pointing Toward Some Rough Years Ahead” (Wall Street Journal). “Consider what seems like one of the clearest comparisons of how much we pay for a piece of the world’s largest, most-rewarding stock index. As of last week, its multiple of sales was higher than at any point in history, including the peak of the tech-stock bubble. In part, though, that just reflects the U.S. economy’s transformation. Microsoft has an operating margin about five times as high as Exxon Mobil and 10 times that of retailer Walmart. Asset-light companies make up a lot more of the index than they did in the past and they earn a lot more profit on their sales. But the “companies are just better” excuse starts to wear thin when the gold standard of valuation enters the discussion. Rather than the forward-looking price/earnings ratio based on analyst forecasts and favored by most fund managers, that is the cyclically adjusted version first proposed by Warren Buffett’s mentor Benjamin Graham. It is sending a clear signal: Expect paltry stock returns in coming years.”
“Gold Rebounds On Haven Demand As Risk-Off Mood Rattles Markets” (Bloomberg). “Gold rebounded as investors sought safety following a slump in global stocks due to concerns around elevated valuations. Spot bullion rose toward $4,000 an ounce, after falling almost 2% in the previous session as a gauge of the US currency advanced for a fifth day. Global stocks were lower on Wednesday after suffering the steepest drop in nearly a month. Treasuries also rallied on haven demand.”
“Denny’s Is Being Taken Private And Pizza Hut May Be For Sale” (CNN Business). “Denny’s, the struggling, 72-year-old diner chain, is selling itself to a group of investors who are taking the business private. The company announced Monday that it’s sold itself to TriArtisan Capital Advisors, a private equity firm that also owns P.F. Chang’s, and Yadav Enterprises, a major Denny’s franchisee, in a $322 million deal (excluding its substantial debt load).”
“Britain’s 300-Year Tradition Of Wearing Wigs In Court Gets A Trim” (Washington Post). “The British legal system isn’t abandoning its 300-year tradition of curly white wigs just yet, but it is making room for lawyers who may not want to look like they are auditioning for a production of ‘Amadeus’ while arguing armed robbery cases. Some barristers — lawyers operating in the courtroom — practicing criminal law in England and Wales are no longer required to wear the classic horsehair headpieces in cases where they prove ‘uncomfortable or impractical,’ codifying a growing recognition within the profession that not everyone’s hair was built for Georgian-era fashion.”
October performance update
Prime: -1.28%
Select: +1.22%
SPY ETF: +2.85%
Bogleheads (80% VTI + 20% BND): +2.15%
November picks available now
The new Prime and Select picks for November are available starting now, based on a model run put through today (November 1). As a note, I will be measuring the performance on these picks from the first trading day of the month, Monday, November 3, 2025 (at the mid-spread open price) through the last trading day of the month, Friday, November 28, 2025 (at the mid-spread closing price).
What we’re reading (10/31)
“Stock Market Today: Dow, S&P 500, Nasdaq Climb To Cap Winning Month As Strong Earnings, Easing Rates Fuel Amazon, Tech Stocks” (Yahoo! Finance). “US stocks bounced back Friday, with Wall Street notching weekly and monthly wins as investors embraced strong earnings from Amazon (AMZN) that eased some doubts about prospects for Big Tech. The Nasdaq Composite (^IXIC) rose 0.6%, while the S&P 500 (^GSPC) gained 0.3%, both restoring solid gains after wavering earlier in the session. The Dow Jones Industrial Average (^DJI), which includes fewer tech stocks, rose 0.1%.”
“The End Of The Rip-Off Economy” (The Economist). “If you know how to use artificial intelligence, it can save you a lot of time and money. Leasing a new car? Be sure to upload a photograph of the contract to ChatGPT first. Need help with a leaky tap? AI often understands the issue—and at a lower cost than a handyman. Parents with a fussy baby can now use chatbots to answer questions in seconds, rather than waiting for a doctor’s appointment. Giving Claude a PDF of a wine list is a great way to find the best-value bottles.”
“How Tim Cook Evaded Disaster At Apple This Year” (Wall Street Journal). “During Cook’s years at the helm, Apple hasn’t unveiled a revolutionary technology or introduced a new product that will reshape people’s lives the way the iPhone did. Instead, Cook, who turns 65 on Saturday, has won over shareholders by doing just enough to protect and grow the business, a conservative strategy that has been on display this year with clever political and legal maneuvering and enticing new iPhones.”
“Treasury Department Announces New Series I Bond Rate Of 4.03% For The Next Six Months” (CNBC). “The U.S. Department of the Treasury has announced new rates for Series I bonds. Newly purchased I bonds will pay 4.03% annual interest from Nov. 1 through April 30, which is up from the 3.98% yield offered through Oct. 31. The new rate includes a variable portion of 3.12%, based on inflation data, and a fixed portion of 0.90%. The combined rate is 4.03% after rounding, according to the Treasury. The fixed rate is down from 1.10% announced in May.”
“Cities Across The U.S. Are Putting Robots To Work” (Wall Street Journal). “Robots are coming to a town near you—deployed by cities to do work that is labor-intensive, repetitive or dangerous for humans. Cities have long lagged behind the private sector when it comes to giving jobs to robots. That’s because robots are expensive and work best in highly controlled environments, not exactly the definition of city streets. Questions about safety, cybersecurity and job displacement also loom large in public settings. Police robots, for example, have occasionally stirred up fears about surveillance and the potential for lethal force.”
What we’re reading (10/30)
“Big Tech Is Spending More Than Ever On AI And It’s Still Not Enough” (Wall Street Journal). “Silicon Valley’s biggest companies are already planning to pour $400 billion into artificial intelligence efforts this year. They all say it’s nowhere near enough. Meta Platforms says it is still running up against capacity constraints as it tries to train new AI models and power its existing products at the same time. Microsoft says it is seeing so much customer demand for its data-center-driven services that it plans to double its data-center footprint in the next two years. And Amazon.com says it is racing to bring more cloud capacity online as soon as it can.”
“Amazon Q3 Earnings Beat On Top And Bottom Lines As AWS Growth Sends Stock Higher” (Yahoo! Finance). “Amazon (AMZN) reported its third quarter earnings after the bell on Thursday, beating on the top and bottom lines as its cloud business grew faster than expected. The results come just a day after rivals Microsoft (MSFT) and Google (GOOG, GOOGL) announced their own results, with both companies saying they'll spend more on AI data centers going forward.”
“Meta Stock Plunges More Than 10% As Analysts Cut Price Targets On Sky-High AI Spending” (Yahoo! Finance). “Meta (META) stock took a beating on Thursday after the company said during its third quarter earnings report that it plans to further hike AI spending for the rest of this year and in 2026. Shares of Meta fell more than 11% by the close, as Wall Street analysts and investors digested the news. CEO Mark Zuckerberg summed up the spending plan as a means to keep up with the demand for AI, but he said that if the company overbuilds, it can absorb the extra computing capacity in the future.”
“Coinbase Earnings Top Estimates, Helped By Robust Trading Volume” (CNBC). “Coinbase shares ticked up nearly 3% Thursday as the digital assets company posted better-than-expected financial results, largely fueled by a resurgence in retail and institutional crypto trading on its platform, even as tokens are now just one of several assets at the center of its ‘everything exchange’ vision.”
“‘Bond King’ Jeff Gundlach Slashed His Investment In Gold After Its Vicious Sell-Off, And Says You Should Too” (Business Insider). “Jeffrey Gundlach, the famed fixed-income investor and CEO of DoubleLine Capital, said he was cutting his holdings of gold in his portfolio — and urged investors to do a similar ‘rebalance.’ That's because gold's latest rally burned too hot — and the correction in the precious metal likely has more room to go, he said, speaking in a recent interview with CNBC.”
November picks available soon
I’ll be publishing the Prime and Select picks for the month of November before Monday, November 3 (the first trading day of the month). As always, SPC’s performance measurement for the month of October, as well as SPC’s cumulative performance, will assume the sale of the October 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, October 31). Performance tracking for the month of November will assume the November 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, November 3).
What we’re reading (10/27)
“The Good Vibes Are Back On Wall Street” (Wall Street Journal). “From trade deals and foreign elections to merger announcements to corporate earnings, investors are finding plenty of reasons to be happy. Stocks hit fresh records on Monday, marking a significant pickup in momentum after a bumpy stretch in which tariff fears and worries about loan losses at regional banks weighed on major indexes.”
“Why Your Beef, Bananas And Coffee Beans Have Gotten So Expensive” (CBS News). “Banana prices were up 6.9% in September from a year ago, ground beef has risen 12.9% and roasted coffee has jumped an eye-watering 18.9%, according to the most recent Consumer Price Index data for September. And now for the bad news. ‘One of the questions that I'm asked a lot is, when are prices coming down? And my answer is simple: never,’ Phil Lempert, food industry analyst and editor of SupermarketGuru, told CBS News.”
“Qualcomm Announces AI Chips To Compete With AMD And Nvidia — Stock Soars 11%” (CNBC). “The AI chips are a shift from Qualcomm, which has thus far focused on semiconductors for wireless connectivity and mobile devices, not massive data centers. Qualcomm said that both the AI200, which will go on sale in 2026, and the AI250, planned for 2027, can come in a system that fills up a full, liquid-cooled server rack.”
“Amazon To Lay Off Up To 30,000 Corporate Workers” (Wall Street Journal). “Thousands of corporate pink slips are expected to go out Tuesday, cutting across the organization and hitting human resources, cloud computing, advertising and a number of other business units, the people said. The total number of reductions hasn’t been finalized, one of the people said.”
“Tesla ‘May Lose’ Elon Musk If Shareholders Don’t Approve $1 Trillion Pay Package, Chairperson Warns” (Yahoo! Finance). “In a letter sent to shareholders Monday morning, which follows a prior letter sent last week, Denholm warned the company stands to lose Musk's leadership if shareholders do not approve the plan. The proposed package — revealed in early September—would grant Musk 12 massive tranches of stock options tied to targets the board argues are aggressive.”
What we’re reading (10/23)
“September CPI Preview: Inflation Seen Holding Firm Near 3% As Tariffs Complicate Fed’s Path” (Yahoo! Finance). “September's Consumer Price Index (CPI) is expected to show inflation holding stubbornly around 3%, underscoring how tariffs and service-sector stickiness continue to complicate the Federal Reserve's path toward its 2% target. The report, set for release on Friday at 8:30 a.m. ET, was delayed by the ongoing government shutdown. It marks the first major piece of federal economic data since the shutdown began — now the second-longest in US history with no end in sight.”
“Strong Earnings Reassure Jittery, Data-Deprived Investors” (Wall Street Journal). “Strong corporate earnings are easing investors’ anxieties about the health of the U.S. economy, providing support to markets buffeted by renewed trade tensions with China and worries about bad business loans.”
“Intel Stock Jumps As Q3 Earnings Beat Expectations, AI Drives Chip Demand” (Yahoo! Finance). “Intel (INTC) stock jumped as much as 7% after the bell Thursday as the chipmaker reported third quarter earnings and revenue that topped Wall Street's expectations. Intel reported $13.7 billion in revenue for the three months ended Sept. 27, higher than the $13.15 billion expected by analysts tracked by Bloomberg and $13.28 billion the previous year. The chipmaker said that adjusted earnings per share was $0.23, above the $0.01 projected by Wall Street. The company reported a loss of $0.46 during the same period in 2024.”
“Addressing The Gold Price From An Iran/China Barter Angle” (RealClear Markets). “The increase in price since February has not been accidental. This is when the U.S. announced its policy to harshly enforce sanctions targeting Iran’s oil supply chain, to blockade the country’s petroleum exports. The sanctions applied to many entities across countries, but the evidence is that Iran still exported $43 billion of mainly crude oil in 2024, according to estimates by the U.S. Energy Information Administration. Officials estimate that around 90% of those exports went to China. The Wall Street Journal described in an October 5 article how China and Iran avoid the sanctions through bartering. Iran is shipping oil to China and, in return, state-backed Chinese companies build infrastructure in Iran. Involved in this transaction are a Chinese state-owned insurer that, according to the Journal, calls itself the world’s largest export-credit agency, along with a secretive Chinese financial entity whose name is not on any public list of Chinese banks or financial firms.”
“When Will Quantum Computing Work?” (Tom McCarthy). “Huge investments are flowing into QC companies today. IonQ has a $19B market cap, Rigetti has a $10B cap, and PsiQuantum recently raised $1B. This is a lot of money for an industry generating no real revenue, and without an apparent path to revenue over the next 5 years. Qubit counts have not been doubling each year, but even if they did, we'd have 32 kq machines in 2030. There are few - if any - commercial applications for machines of that size. Will these companies keep raising larger rounds until they achieve 100 kq? Or have they got some secret sauce we don't know about that investors are betting on? If there has been a true breakthrough, we should see much faster growth in qubit count, as well as larger and larger quantum processors, running increasingly massive programs. Note that the QC ecosystem is reasonably public and both private companies and university labs are competitive players. Advances tend to get published rather than stowed away.”
What we’re reading (10/22)
“Bubble-Talk Is Breaking Out Everywhere” (Financial Times). “The whole point of financial stability reports is to warn about stuff that might go wrong in the future but probably won’t. Even so, the latest missive from the IMF last week was bracing…These things are extremely precisely worded. When such august institutions talk of valuations ‘well’ in excess of observable reality, and of ‘sharp’ or ‘disorderly’ corrections, they are very much switching on the fasten-your-seatbelts sign.”
“Is There An ‘AI Bubble’? We Asked The Experts: AI Chatbots.” (Forbes). “‘Yes, there’s an AI bubble,’ Grok said, adding the hype around AI’s potential has ‘driven massive investments, inflated valuations and unrealistic expectations, reminiscent of the dot-com bubble.’ The chatbot said many AI startups ‘lack sustainable business models,’ and the ‘gap between promised breakthroughs and actual deliverables is growing,’ but—in the first defensive note—noted ‘AI’s transformative potential remains real.’ ChatGPT—responding ‘yes and no’—argued that while there existed ‘classic bubble behavior,’ including ‘undeniably high’ investment and hype as well as some companies being ‘overvalued or chasing AI without real substance,’ AI is ‘already delivering real utility across industries.’”
“Is The Flurry Of Circular AI Deals A Win-Win—Or Sign Of A Bubble?” (Wall Street Journal). “During the late 1990s and early 2000s, such dependency loops mainly consisted of telecom-equipment makers lending money or extending credit to customers so the customers could afford to buy their gear. In those days, this was widely referred to as vendor financing. The poster child for vendor financing run amok was Lucent Technologies. It lent billions of dollars to upstart telecom providers building out their infrastructure and networks. In the boom years, their purchases helped fuel Lucent’s rapid sales growth. When those customers went bust—because they ran out of cash and couldn’t raise fresh capital—Lucent had to write off their bad debts and book huge losses.”
“‘Finances Are Getting Tighter’: US Car Repossessions Surge As More Americans Default On Auto Loans” (The Guardian). “Alarm bells are ringing on Wall Street. The recent collapses of Tricolor, a used car seller and sub-prime auto lender, and First Brands, an auto parts supplier, have put the finance industry on edge, almost two decades after problems in the sub-prime mortgage lending market set the stage for the global financial crisis. ‘When you see one cockroach, there are probably more,’ Jamie Dimon, the JPMorgan Chase CEO, ominously cautioned analysts this week, after the US’s largest bank disclosed a $170m charge tied to Tricolor’s bankruptcy. ‘Everyone should be forewarned on this one.’”
“RIP Zoomtowns” (Business Insider) .”[T]he big ‘winners’ of the work-from-home reshuffle — metros that drew hordes of footloose workers and disaffected coastal dwellers — have turned into losers. Fewer people are moving to so-called Zoomtowns. Home listings are piling up on the market. Prices are dropping. The anxiety has shifted from buyers trying to elbow their way in to sellers just trying to offload their properties. A new report by the real estate analytics firm Parcl Labs, shared exclusively with Business Insider, shows that home sellers in the lower half of the US, also known as the Sun Belt, are the most desperate in the country.”
What we’re reading (10/21)
“Gold, Silver Tumble In Biggest Daily Drop In Years As Stunning Precious Metals Rally Comes To A Halt” (Yahoo! Finance). “Gold futures prices tumbled in their biggest daily drop in over a decade as a stunning rally in precious metals came to a halt. Spot gold dropped as much as 6%, to hover around $4,105 per troy ounce, its largest one-day drop since 2013. Silver also tumbled more than 8% to mark their largest daily drop since 2021.”
“I Test Drove a Flying Car. Get Ready, They’re Here.” (Wall Street Journal). “Welcome, and congratulations. You’ve lived long enough to see the age of flying cars—privately owned, solo-piloted aircraft, free to operate in unrestricted airspace, much as automobiles can take to the open road. And they’re all electric. I knew you’d be thrilled.”
“Breakthrough Blood Test Could Spot Dozens Of Cancers Before Symptoms Appear” (Fox News). A new type of blood test could help detect multiple cancers early. A team of researchers in California studied a new multi-cancer early detection (MCED) test called Galleri, which can reportedly detect more than 50 types of disease. The study analyzed about 23,161 participants 50 years of age and older across the U.S. and Canada who did not have any symptoms…Out of the more than 23,000 people sampled, the Galleri test detected a cancer signal in 216 of them, 133 of whom were confirmed to have the disease.”
“US Army Turns To Private Equity For Infrastructure Funding” (Semafor). “The army secretary told the Financial Times that he wanted $150 billion in capital expenditure over the next decade, but only had a budget of $15 billion, so needed outside investment. Military spending is growing across the West, and private firms are benefiting. The EU spent a record $402 billion on defense last year, up 19% year-on-year, and the figure is expected to rise, Defense News reported. One military-focused index has seen its value double in the last 12 months.”
“The Internet Is Going To Break Again” (The Atlantic). “Everything is in “the cloud” now, except the cloud is a real place, and it’s in Northern Virginia. Rows and rows of servers stacked in Amazon-owned warehouses across Ashburn, Haymarket, McNair, Manassas, and Sterling make up a chunk of the infrastructure for the modern internet—equipment as crucial as railway tracks and the electric grid. When a technical issue disrupted operations at those facilities yesterday, it was enough to temporarily crash the internet for users around the world. The incident marked at least the third time in the past five years that Amazon Web Services’ Northern Virginia facilities contributed to a widespread internet outage.”
What we’re reading (10/20)
“The Day Amazon Broke The Internet For Millions Of Americans” (Wall Street Journal). “The trouble started a few hours after midnight on the East Coast. A minor update to what’s called the Domain Name System—the kind of software tweak that happens millions of times a day on the internet—sent the well-oiled machine that underpins the modern web careening toward a crash. DNS acts as a kind of telephone directory for the internet, instructing machines on how to find each other. The faulty update gave the wrong information for DynamoDB, an Amazon Web Services product that has become one of the world’s most important databases. Suddenly, machines on the East Coast that tried to process trillions of requests were getting the internet’s equivalent of a wrong number.”
“Massive Amazon Cloud Outage Has Been Resolved After Disrupting Internet Use Worldwide” (Associated Press). “Amazon says a massive outage of its cloud computing service has been resolved as of Monday evening, after a problem disrupted internet use around the world, taking down a broad range of online services, including social media, gaming, food delivery, streaming and financial platforms.”
“White House Economic Advisor Hassett Says Shutdown Could End This Week” (CNBC). “Top White House economic advisor Kevin Hassett on Monday predicted the government shutdown is ‘likely to end sometime this week.’ But if that does not happen, the Trump administration may impose ‘stronger measures’ to force Democrats to cooperate, Hassett, director of the National Economic Council, said on CNBC’s ‘Squawk Box.’”
“Cleveland-Cliffs Stock Soars After Company Touts Plans To ‘Re-Focus’ Its Rare Earth Mining Efforts” (Yahoo! Finance). “Cleveland-Cliffs stock rallied as much as 24% Monday, ending the day up over 20% after the company announced it would redouble efforts related to mining for rare earth minerals, which has become one of the hottest commodities trades on Wall Street this year. ‘Beyond steelmaking, the renewed importance of rare earths has driven us to re-focus on this potential opportunity at our upstream mining assets,’ CEO Lourenco Goncalves said in the company's earnings release.”
“Mysterious Spot In Earth’s Magnetic Field Now Growing Rapidly” (Futurism). “A major dip in the Earth’s magnetic field over the South Atlantic has been puzzling scientists for over a century. Perhaps most strangely, the weak spot — dubbed the South Atlantic Anomaly — has grown rapidly over the last eleven years. That’s according to satellite data suggests showing it’s expanded by an area equivalent to half the size of continental Europe, as detailed in a new paper published in the journal Physics of the Earth and Planetary Interiors. An international team of researchers analyzed data collected by the European Space Agency’s Swarm, a constellation comprised of three identical satellites that measure the Earth’s magnetic signals. The findings could allow us to improve existing magnetic models that play a crucial role in navigation and tracking of space weather, while also furthering our understanding of how the Earth’s layers interact with each other.”
What we’re reading (10/19)
“The Warning Signs Lurking Below The Surface Of A Record Market” (Wall Street Journal). “Wall Street is starting to get a little defensive. In the midst of the market’s most unsettling stretch since August, investors have turned to utilities, healthcare stocks and consumer staples—industries that reliably churn out profits no matter the economic conditions. Electricity, drugs and groceries are always in demand, even when consumers buy fewer cars, phones and streaming services. Those three defensive sectors are on track to lead the S&P 500 index this month for the first time since June 2022. Investors have also sheltered in bonds”
“IMF Chief Economist Discusses Tariffs, ‘Dim’ 2026 Growth Outlook” (Yahoo! Finance). “The International Monetary Fund (IMF) released its 2026 World Economic Outlook. IMF chief economist, Pierre Olivier Gourinchas, sits down with Yahoo Finance Fed Correspondent Jennifer Schonberger to discuss the report and how President Trump's tariff policies contribute to ‘dim’ anticipated economic growth in 2026.”
“Wall Street Has Been Worried About Bad Loans For Weeks. Now Those Fears Are Spreading” (CNN Business). “Several financial groups are wrestling with bad loans, raising worries on Wall Street of more to come. For weeks, investors have focused on Jefferies Financial Group, an investment bank that has at least $45 million worth of exposure to First Brands, an auto-parts supplier that filed for bankruptcy last month. But on Thursday, they turned some of their attention to two regional banks, Western Alliance Bancorp and Zions Bancorp, after concerns about some of their loans as well.”
“Rise Of ‘Shadow Banking’ Brings New Financial Risks, Experts Say” (Washington Post). “A spate of recent fraud cases and bankruptcies has raised new concerns about a growing class of largely unregulated loans, with a sell-off in U.S. banking stocks bleeding into global markets this week. A pair of regional banks this week disclosed lawsuits involving allegedly fraudulent business loans, while the failure of two companies in the automotive sector dinged some Wall Street titans, including JPMorgan.”
“Why The AI Economy Might Not Be 1990s Redux” (Axios). “There are significant differences in the current economic and demographic backdrop — and the nature of the AI rollout — that could mean inflation remains a problem and the job picture more worrying, even if AI lives up to its promise.”