The Danger of Single-Digit Returns at 22x MultiplesAt the time of writing the S&P 500 trades 7674. Many leading analysts remain bullish – with some raising their forecasts for the S&P 500 to be north of 8,000 next year. For example, UBS lifted its S&P 500 earnings…
The Market Does Not Care If You Are RightYou can be completely right about the future and still make a terrible investment. That distinction took me ~30 years and a large financial scar to fully appreciate. In the late 1990s, I invested in Cisco. The thesis was logical:…
AI: Focus on Unit Economics (Not Innovation)Earlier this week, I wrote that every generation experiences its own technological revolution. Railroads, electricity, radio, and the internet all changed the world in ways that were almost impossible to appreciate while they were unfolding. Artificial Intelligence (AI) is in…
Why Stocks Rise While Consumers Feel WorseThe financial markets currently present a striking paradox. On one hand, stocks are hovering near record highs. On the other, consumer sentiment has fallen to historic lows, as reflected in the University of Michigan sentiment index. This divergence between Wall…
Why the Equity Risk Premium Signals Danger for the S&P 500Howard Marks of Oaktree Capital Management has long argued that markets are driven less by objective reality and more by the emotional pendulum of human psychology. Over the course of the past ~30 years investing – I”ve also come to…
Why Stock Valuation Multiples Matter More Than GrowthThose who have been reading my blog over the past ~15 years will have heard me say “buying the best company in the world can still be a terrible investment”. This is one of the most uncomfortable truths in investing and…
Why Capital is Finding its Way Back to StaplesThe investment landscape has spent the better part of the last two years intoxicated by the potential returns of hyper-scalers, software, artificial intelligence, and similar assets. And you can understand why… These asset-light businesses offered massive free cash flows, unmatched…
NVDA Valuation Analysis: AI Capex, Free Cash Flow, and Market RealityMarkets are shifting from AI euphoria to demanding real cash flow. Private credit cracks, circular AI financing, and stretched valuations are raising hard questions about sustainability. As growth slows and multiples compress, 2026 is shaping up to be a true “show me the money” year for investors.
Agentic AI and the Future of SaaS: Disruption vs. Structural DestructionMarkets weigh Agentic AI”s threat to traditional application layers. Will AI enhance existing workflows or structurally impair legacy SaaS business models? From blanket euphoria to strategic redistribution On the surface, you could be forgiven for thinking the S&P 500 looks…
The AI Adoption Gap: Applying the Toothbrush Test to Generative AI ValuationsWhile AI remains undeniably impressive, its transition from a helpful assistant to a mission-critical necessity is facing a significant adoption gap. With daily active use remains thin, investors are beginning to question the durability of "asset-light" returns as capital expenditure soars into the hundreds of billions. This shift from software-driven scalability to hardware-heavy reinvestment suggests a major reassessment of valuations is underway, as markets weigh the probability of long-term value capture against extreme multiples.
