Stock Market Investors

[…] Therefore, most investors are asking the question: Is this a great buying opportunity? Our experience in the stock market would argue that these stocks are trapped in the mineshaft. First, we are early in what is likely to be a bear market in tech/AI shares. The assumption investors have made is that economic importance equates to financial success in the stock market. History would argue otherwise. […]

Headlines are popping up left and right about how high the 10-year Treasury yield has risen. While investors make decisions about what is the “right” longer-term cost of government debt, many journalists focus on single-factor ways of viewing it. They will support the ideas that it is tariffs, or government spending and so on and so forth. We will seek to provide a multi-factor view of this and discuss what investors are missing in plain sight. […]

For a quarter of a century, the hyperscalers have been some of the most profitable and technologically innovative businesses ever created. The reason was clear: their marginal cost per additional customer was almost zero. Costs were fixed and scale was effectively unlimited, which meant margins widened as volume grew. In the years before the current AI build, Alphabet earned 39 cents and Microsoft earned 61 cents on every dollar of capital . Paying 24 to 33 times profit to own them was aggressive but defensible. […]