I’m on the flight from Denver to San Francisco with my twelve-year-old daughter once I write this letter to IMA shoppers concerning the craziness I’m seeing within the markets. The turbulence on the flight gave me the pilot analogy. The remainder got here from what I see in valuations.
This market is beginning to really feel extremely bubbly, approaching circa 1999. The similarities are eerie. Intel and Corning, darlings of 1999, are at multidecade highs at nosebleed valuations. Walmart is buying and selling at 50 occasions earnings once more, the identical a number of that produced no returns for shareholders from 1999 to 2014. And Nvidia, essentially the most helpful firm on the planet, trades at 30 occasions 2026 earnings whereas SpaceX, Anthropic, and OpenAI put together to go public, all shedding cash, collectively throwing near a trillion {dollars} at AI information facilities.
I stroll by why the capital cycle in semiconductors appears just like the railroads in 1800s Britain and telecom in 1999, what it implies that Meta and Google have gone from shopping for again their very own inventory to issuing it, and why three IPOs plus two secondary choices could put a bow on this 12 months’s AI rally. I share why now we have been trimming positions, shopping for smaller, and proudly owning companies that march to their very own drummer. I quote a line from Jean-Marie Eveillard that has stayed with me for the reason that late 90s. And I clarify why our returns are more likely to underperform the neighbors for the foreseeable future, and why we’re not going to do something about it.
Learn the total letter at investor.fm.
_________________________________________________________ 🔗 LINKS MENTIONED: What AI, Tariffs, and International Uncertainty Imply for Your Portfolio https://investor.fm/what-ai-tariffs-and-global-uncertainty-mean-for-your-portfolio/
Charts: https://investor.fm/this-is-your-captain-speaking-buckle-up/#stock-chart
Dwelling and Investing with Intentionhttps://investor.fm/living-and-investing-with-intention/
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_________________________________________________________ WHO AM I: Vitaliy Katsenelson is the CEO of Funding Administration Associates (IMA) and an award-winning author. Forbes Journal referred to as him “The New Benjamin Graham.” His work has appeared within the Monetary Instances, The Wall Road Journal, Barron’s, Fortune, Institutional Investor, and Overseas Coverage. He’s the writer of three books, together with Soul within the Recreation: The Artwork of a Significant Life. _________________________________________________________ Please learn the next essential disclosure: https://investor.fm/disclosure/
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