AI-infrastructure outlays stand like a Giant Sequoia in the dense forest of economic activity; the accelerated buildout is masking softer conditions across the rest of the economy. Figures for S&P 500 capex and GDP growth are being distorted by a narrow group of AI beneficiaries.

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Q1 book value changes across most BDCs were modest, implying that the sell-off was driven more by perceived fear than actual erosion in credit quality or loan value. Yet, major BDCs still trade at levels that can be interpreted as genuine discomfort over credit concerns.

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Wall Street estimates show first-quarter earnings soaring an amazing 27% over 2025’s opener. Just as striking was the extent to which estimates were revised upward as the quarter unfolded.

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The Dow Jones Industrial Average debuted on May 26, 1896, when Charles Dow summed the prices of a dozen industrial companies and divided by 12.

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If AI is the darling of Wall Street, major packaged food brands may be the most hated theme of the day. Record-low EPS growth, record-low LTG rates, record-low P/E multiples, and record-low relative prices are priming this group for a classic contrarian opportunity.

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In May, “Flight S&P 500” covered an amazing chunk of miles flying on just one engine: Info Tech’s tremendous 16% gain, which overshadowed pervasive losses in eight of the other ten sectors. Semiconductors and tech hardware accounted for three-quarters of the index’s upside in May. YTD, over one-tenth of the SPX gain is attributable solely to Micron (more than any other firm).

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The greatest investment risk from the trillions of dollars betting on AI is that overbuilding will lead to excess capacity with competition driving pricing toward marginal costs. Many players are tossing their hats into the ring, but new-era spending booms often end with just a few dominant firms.

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Elevated VIX readings capture the early stages of major bear markets, where anxiety was often justified by subsequent larger declines. Investors should treat VIX readings in the 20-30 range as a transition zone—it is the most dangerous area for premature entry, as it captures both recoveries and the early stages of major bear markets.

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In a strategic pivot, Allbirds, Inc. withdrew from the footwear trade to redeploy assets into an AI data center rental business. Its stock jumped 582% within three days. The notion of a “582% blip” prompted us to further explore the phenomenon of lottery stocks and the behavioral-finance research into investors’ appetite for lottery-like payoffs.

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April market action delivered two rare events: a 13-day winning streak in the NASDAQ and a +12% month  in the S&P 500 (trough to peak). Both have historically pointed toward strong forward returns. And yet they could not be more different in how they get there.

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Sentiment is generally a contrarian indicator, i.e., extreme optimism foretells lower future returns and vice versa. Yet, there are backdrops in which enthusiastic sentiment coexists with ongoing equity gains.

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Private credit has dominated headlines for all the wrong reasons, devastating alternative asset managers linked to that space. When we see a group of stocks with 30%+ losses in a matter of months, our contrarian “Spidey-Sense” starts to tingle, and we begin to wonder if a bargain is in the making.

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The evolution of BDC asset values may shed new light on how much of the bear market in alternative asset management stocks is due to genuine economic risk and how much is fueled by an over-reaction to the software and redemption scare.

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Walmart’s performance and expanding P/E ratio contradicts the Staples sector’s less dynamic results, so either Walmart is commanding a growth premium, or investors are applying different valuation standards across the sector. Either way, count us as skeptical.

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There’s been a major return benefit for selling AAPL when it hits a 7% SPX weight and repurchasing after reverting back to a 6% weight. We tracked three options to switch into after a 7% “sell” trigger, holding till a new buy is flagged, and each crushed the approach of holding AAPL through the rotation.

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When bombs fly, the reward for bravery is rarely paid on schedule. We do not think this is the time to heroically outguess geopolitics or to confuse short-term fortitude with long-term clarity.

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AI disruption-hysteria sent a stock market scare across waves of industries, with headlines pointing to serious adverse consequences for those firms’ business models. We examine the impact on prominent industry victims to ascertain if stock prices are still distressed and/or the extent to which any have recovered.

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If the dot-com boom was a tale of public markets eagerly underwriting a technological future and then abruptly withdrawing that support, the AI fervor looks like a story of private capital and corporate balance sheets quietly doing the same—but with far less accountability.

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Those complaining about the “Top 1%” controlling all the wealth may finally be getting some satisfaction. Since Halloween, it has been mostly rough sledding for our five-member “4% Club” contingent.

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Employment growth across sectors is now highly concentrated, indicating the job market is being held up by an ever-dwindling cohort of prosperous industries. Coupled with lackluster growth in 2025, this is cause for concern. Yet, history suggests that relief could be just beyond the horizon.

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