MoneyLemma connects everyday things to how money actually works. No hype. No “get rich” tricks. Just clear thinking you can use.

It helps you see the hidden rules behind prices, trends, and decisions you already make.

If you want to understand money without feeling like you’re studying finance, this is worth your time.

MoneyLemma

the overlap between your world and the world of money

I’ll let MoneyLemma take over from here…

Now might seem like a strange time to pitch international equities. US markets are french-kissing all time highs in spite of a spate of wars (tariff & actual), sticky inflation, higher for longer rates, and the defection of our coolest Winter Olympic athletes. If American exceptionalism persists even now, why invest anywhere else? Well, as good as US stock markets are, other markets have been better. And they’ve been better for a while:

That’s right, US markets have been underperforming many international markets since the end of the Eras tour. And even where US performance is in-line, the imperfect correlation means it’s still additive diversification to a portfolio. The average American is ~20% underweight international equities (and 20% overweight domestics). It may be time to rebalance.

The above chart shows passive ETFs for each market, but for any American looking to hold specific international stocks, there are ~5,000 securities that are ADRs or F-shares. In both cases shares can usually be traded through a typical broker.

The rest of this post is going to quickly hop around the world and highlight what’s happening in some foreign markets, and why they may continue to outperform the US.

Japan: As any Weeb knows, Japan’s cultural exports are unmatched. HelloKitty, Sonic the Hedgehog, Mario, Gundam, Street Fighters, tentacle stuff (if you know you know), and so much more. All of those IPs, and many more, are investable - they are owned by publicly traded companies. If you’re more focused on the ongoing AI trade, Japan has hundreds, literally hundreds, of listed tech & industrial companies who supply critical components. If you’re sick of AI and too much of a twit to make sense of quality anime (it’s real art!), look at banks. Since breaking out of two decades of deflation Japanese banks have been among the best performing stocks on the planet.

South Korea: South Korea is having a bit of a moment. There’s always been a collection of super exciting tech companies calling Korea home. More recently there’s been a national value-up effort. Government, investors, regulators, exchanges are all pushing companies to be more capital efficient and shareholder friendly. That means a lot of companies that have been pariahs for decades are now getting much, much better - and a lot of still dirt cheap.

Hong Kong: Hong Kong has had a rough few years politically and economically but things are turning around. The housing market seems to be (finally) bottoming and the CCP is quietly reminding the world of the strategic importance of the Hong Kong Dollar. Both are positive for asset prices.

Mainland China: The headline China story is about slowing growth, devastating demographics, trade wars, salivation over a Taiwan conquest, and a property market crash that makes 2008 look a little pimple. Yet there is more going on under the surface. Don’t forget that China is big, like really, really big. There is economic pain there, but theres also a lot of thunder. China is 30% of global manufacturing output. According to the UN that’s more than the next four biggest countries combined. Chinese manufacturing is still growing, despite the trade war. While the overall economy is mixed, the manufacturing economy is better than ever. China is moving up the value chain and dominating the rest of the world across a diverse range of categories. Plus, government policies are supportive of inflows, which never hurts.

Greece: Later this year Greece will be welcomed back into the MSCI Developed Markets club, having been downgraded to Emerging after their spectacular economic collapse last decade. Greece has been one of the EU’s fastest growing economies but with purchasing parity wages still 30% below the late 2000s there’s plenty of room to go. The Greek stock market is a great place to find value. Low market liquidity boxes out big investors from investing in a lot of good businesses.

Spain: Another Southern European country outgrowing most of the world. Two ways to invest in the sunny beaches here. First is tourism, the cornerstone of the economy. Second is energy. If Europe is going green they’ll need solar power, and those sun-hungry panels sure as hell aren’t going to be in the UK.

Taiwan: Chips and dip. Chips, as in semiconductors, and then you dip out because this is what they call a heart attack stock market. Taiwan has some of the most active day traders in the world. Millions of desk jockeys shooting bets from the gut, clocking trades like they’re tossing Whoppers at a matinee, this market is more volatile than a rodeo bull with a hot pepper in its ass.

Germany: Germany is one of the few EU members with fiscal headroom, something they will be exploiting to the tune of $1 trillion over the next five years. That money is going to infrastructure, industry, and defense. Many listed German companies will participate in that spending, and if everything goes to plan (as it never does) that goliath fiscal impulse will transmit growth across the economy like a Mono virus at band camp. There is almost nothing markets like more than some good old fashioned Keynesian stimulus.

India: Among major stock markets, India is the best performing since Modi’s election in 2014. Out of all the countries MSCI calls emerging, India is the one that feels, on the ground, most like it is actively busting out of its drawers. The world’s largest population is highly educated, loaded with ambition, and still pretty impoverished at ~$12,000 PPP per capita. That low base makes it easier to deliver high growth, and with growth comes opportunity. It’s hard not to find good ideas in India. Publicly-listed jewelers are always interesting as 10% of the world’s gold is sitting in India households. India’s banks have been on a roll the last decade thanks to a credit boom bringing millions of people into the formal economic system each month. Don’t sleep on Indian tech either. The Indian government dipped into the country’s deep IT talent pool to develop UPI (unified payments interface) which has made India’s fintech sector as good as any country on earth. It’s also helped unleash a wave of tech innovation including quick commerce (think Postmates on steroids) and the subscription economy.

Caption: great video summarizing how local Indian startups outwitted the likes of Amazon and Walmart to reinvent the category of Quick Commerce (now a $7bil market in India)

This author loves Paul Revere, Oh Susana with a banjo on her knee, and all things American. Unfortunately, melting the rubber of my shoes on a campfire while drunkenly belting John Denver does not pay the bills, and Only Fans demand for pictures of my sweat-beaded navel is not what I had hoped (it’s that damn algorithm). And anyways, what’s more American than optimizing an investment portfolio? Nobody is saying sell America to zero, or even be underweight America. The average American’s equity exposure is 80% domestic and only 20% international. It’s prudent if not outright patriotic to revisit your international equity allocations. There’s a whole world out there, and it’s worth more than 20% of your portfolio.

MoneyLemma

the overlap between your world and the world of money

Nothing in this email is intended to serve as financial advice. Do your own research. See important disclaimer & terms of service.

This newsletter pulls real research. Not opinions. Not hype. Actual papers on how markets move, how trades happen, and where edge comes from.

It saves you time. It shows you how the game really works under the hood.

If you care about finding an edge—or just understanding what’s actually going on—this is worth reading.

Quant Papers (Market MicroStructure, Algo Trading and HFT)

This is a paper collection that curates the latest academic papers and research on market microstructure, algorithmic trading strategies, and high-frequency trading (HFT). AI is used to facilitate the curation process, ensuring that the most relevant and

By Charles X

I’ll let Quant Papers take over from here…

This paper provides a rare, data-driven look at how retail broker liquidations create predictable microstructure effects. It’s essential reading for HFTs and market makers operating in US options.

Paper Metadata

• Publication Date: 2026-02-23

• Source: SSRN

• Link: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=6272179

Keywords

• Robinhood

• market microstructure

• transaction costs

• meme stocks

• execution costs

• retail investor behavior

Notes for Review

This paper is a must-read for any quant researcher focused on market microstructure and high-frequency trading, particularly in the US equity and options markets. The study leverages a unique natural experiment: the predictable liquidation of Robinhood customers’ options positions shortly before expiration. This creates a quasi-experimental setting where the timing and underlying symbols of large trade bursts are known in advance, allowing for a clean identification of causal price impacts.

Key Strengths for a Quant Researcher:

1. High-Frequency Data & Microstructure Focus: The paper utilizes granular OPRA (Options Price Reporting Authority) data, which is the gold standard for US options market analysis. It examines trade-level details, including execution types (LOB, auction, complex orders), and analyzes intraday quote dynamics. This aligns perfectly with the needs of an HFT researcher who cares about order book dynamics, liquidity, and execution quality.

2. Identifiable Alpha Signal (or rather, a predictable inefficiency): While the paper itself doesn’t propose a trading strategy, it uncovers a highly predictable market inefficiency. The ‘Robinhood Liquidation Window’ (RLW) at 15:00-15:05 (and later 15:30-15:35) creates systematic price pressure. A quant could potentially design strategies to either front-run these flows (if possible) or, more likely, to provide liquidity and capture the adverse execution costs incurred by the liquidating market makers. This is a direct, data-driven insight into a source of temporary alpha.

3. Actionable Insights for Market Makers: The paper demonstrates that options market makers, when absorbing the Robinhood flow, execute delta hedges that create price pressure in the underlying equity/ETF markets. This is a critical finding for anyone involved in options market making. It highlights a specific risk and cost associated with retail order flow, which can be modeled and potentially mitigated.

4. Strong Data-Driven Methodology: The authors use a large sample (2020-2025) and a clear identification strategy. They control for general expiration-day effects by focusing on the specific RLW intervals. The use of SpiderRock data, which includes surface volatilities and Greeks, allows for a deep analysis of options pricing dynamics.

5. Reputable Source: The use of high-quality data and the focus on a well-known, real-world phenomenon suggest a rigorous academic or industry-backed study. The data section describes standard, robust filters used in empirical finance research.

Why this paper is highly recommended: For a quant researcher in microstructure, this paper is a goldmine. It provides a concrete example of how broker frictions translate into market-wide price effects. The findings are directly applicable to:

• Developing HFT strategies around predictable liquidity events.

• Calibrating execution models for options market makers to account for retail-driven price pressure.

• Understanding the second-order effects of retail participation in derivatives markets.

The paper scores highly on all relevant criteria: it’s traditional finance (US markets), data-driven, deeply embedded in market microstructure, and provides insights that can be used to inform trading strategies, even if it doesn’t explicitly generate a plug-and-play alpha signal. The score of 92.5 reflects its high relevance, data quality, and actionable insights for an HFT/microstructure quant, with a slight deduction only because it describes an inefficiency rather than a direct, tradable alpha model.

Abstract

Shortly before expiration, Robinhood submits trades to close out the options positions of its customers who do not have the cash or shares to exercise their options or accept assignment. These liquidations result in bursts of customer trades at known times, and allow us to identify the underlying symbols and options positions popular with Robinhood customers. The liquidating trades face adverse execution, as options prices move in unfavorable directions. Underlying equity and ETF prices move in directions consistent with price pressure in the equity and ETF markets as options market makers execute delta hedge trades as they absorb the Robinhood order flow. Our results reveal how brokerage frictions in retail options trading impact options and underlying prices.

Quant Papers (Market MicroStructure, Algo Trading and HFT)

This is a paper collection that curates the latest academic papers and research on market microstructure, algorithmic trading strategies, and high-frequency trading (HFT). AI is used to facilitate the curation process, ensuring that the most relevant and

By Charles X

Nothing in this email is intended to serve as financial advice. Do your own research. See important disclaimer & terms of service.

As anticipated, the S&P 500 experienced shallow consolidation last week after the extended rally.

Meanwhile, the asset managers bought $9.7 billion in Nasdaq futures, the largest weekly purchase in at least 10 years.

This is a clear signal that the market is supported by the institutions as they bought on the way up from the deep selloff and continued to scale even at all-time-high.

As long as the minor support zone at 7050-7070 is not violated, the S&P 500 is likely to trend higher to challenge 7300 next week.

Let’s focus on the setups (refer to the trade ideas below) while managing the risk (stop loss) accordingly to maximize the profit.

Check out this week’s trade ideas.

Last week’s sector performance

Read more

1. $60B SpaceX deal Wall Street is mispricing.

2. The first SaaS unicorn handed back the keys.

3. The $553B AI backlog nobody's pricing in.

4. DC just had the worst job year in America.

And more. Let’s get to it!

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Top Insights of the Week

1. 🚀 $60B SpaceX deal Wall Street is mispricing

• There’s a deal nobody is pricing in correctly. SpaceX announced on April 21 that it has an option to acquire Cursor for $60 billion by the end of 2026—or pay Cursor $10 billion as a “collaboration fee” if no deal closes. Either way, the math is wild…

  • Cursor is the coding tool that ate Silicon Valley. Its annualized revenue hit $2 billion in February—doubling in just three months. The company is targeting $6 billion by year-end.

  • Their proprietary Composer 2 model already beats Claude Opus 4.6 on Terminal-Bench, trailing only the very top frontier models.

  • But Cursor is bottlenecked on compute. And SpaceX—via Elon’s Colossus data center—has 555,000 GPUs scaling toward 1 million. Peanut butter, meet chocolate.

• Here’s the move…

  • SpaceX confidentially filed to IPO on April 1 at a target valuation north of $2 trillion. Issuing $60B in stock at that mark effectively buys Cursor at a 50% discount.

  • Elon gets the model. He gets the developer base. He gets a cracked engineering team.

  • And he vertically integrates compute → model → developer tooling—the same playbook he ran on cars, batteries, and rockets.

• Polymarket currently has the deal at 74% odds to close by year-end. Markets price an end-of-2026 SpaceX IPO at over 90%.

• The takeaway is bigger than one acquisition. The frontier labs spent two years convincing everyone the moat was the model. The smart money is now betting the moat is the stack—who owns the chips, the model, AND where developers actually live. The next 12 months of the coding wars just got a lot more interesting.

2. 🔥 The quiet $6.4 billion wipeout that just broke SaaS

• Something is breaking in software. And it’s not what you think. Thoma Bravo is reportedly handing Medallia back to its creditors—a customer experience software company they bought in 2021 for $6.4 billion in cash. The restructuring will wipe out roughly $5.1 billion of equity…

  • Medallia’s debt servicing was about to triple from roughly $100M a year to nearly $300M as PIK flexibility ended.

  • Net dollar retention is collapsing because customers are either canceling, downgrading, or quietly building bespoke replacements with AI.

  • When your cash flows go from “predictable” to “anyone’s guess,” the leverage model breaks.

• Why? AI deflation is here, and it’s eating SaaS alive. The setup that broke them: SaaS companies spent the last decade pricing their software at a fat percentage of the value they delivered. AI agents now do the same job for a fraction of the cost. So at renewal, customers are demanding 50–75% price cuts—or walking.

• Look at the public comps over the last 6 months…

  • Salesforce: ~-32%

  • ServiceNow: ~-54%

  • Snowflake: ~-48%

  • Adobe: ~-33%

  • Figma: ~-71%

  • SaaS used to trade at 13–18x ARR at the 2021 peak. Today it’s closer to 3–6x. Salesforce now trades at roughly 10x free cash flow ($150B EV / $14.4B FCF)—a multiple you usually see on shrinking industrials, not the bluechip of enterprise software.

• This is the AI productivity dividend everyone was promised. It just landed somewhere unexpected. The winners are the buyers of software, not the sellers. The real question now: which “AI-native” SaaS company is next to discover their pricing power was always borrowed?

3. 💸 This Is your investing edge

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4. 🏗️ The $553B AI backlog nobody's pricing in

Everyone’s watching the chips. The chatbots. The next $50 billion round. Nobody is watching the plumbing. That’s a mistake. The plumbing is where the AI money is actually moving—and one company is winning more of it than anyone else. Enter Oracle (ORCL)…

• Wall Street still treats Oracle like a database company from 2012. Slow. Sleepy. Past its peak. They’re missing what’s actually happening.

• Larry Ellison—still running point at 81 as chairman and CTO—is quietly turning Oracle into one of the most important AI infrastructure providers on the planet. The contracted backlog is screaming that he’s right:

  • The Backlog Bomb. Oracle’s contracted future revenue just hit $553 billion. Up 325% in a year. That’s roughly 10x Oracle’s entire FY25 sales. One customer reportedly told Ellison: “We will take all the capacity you have, wherever it is.” That’s not a buyer being patient. That’s a buyer being desperate.

  • The Ellison Bet. Career CEOs don’t bet the company. Founders do. Ellison just bumped Oracle’s annual capex plan by $15 billion—from $35B to $50B—in one revision. You don’t sign that check unless the customers on the other side are very, very real.

  • The Re-rate. Oracle is guiding for ~$90B in FY27 revenue, most of it already under contract. OCI grew 84% YoY last quarter. Sleepy software companies don’t grow like that. Hyperscalers do. The multiple hasn’t caught up yet.

• The numbers (Q3 FY2026)…

  • Market Cap: ~$498.4B

  • Forward P/E (FY26): 23.2

  • FY25 Revenue: $57.4B (+8% YoY)

  • FY27 Revenue Guidance: ~$90B

  • 52-week high: $345.72

  • 52-week low: $134.57

• The risks…

  • The Cash Burn. Trailing free cash flow is -$24.7 billion. Oracle is spending faster than the backlog is converting to revenue. That gap has to close.

  • The Leverage. Net debt to EBITDA is now 4.2x. That’s a lot of borrowed conviction. Higher rates or a slower ramp and the math gets ugly.

  • The Concentration. One big AI customer slips and the backlog story has a hole in it. The narrative is only as strong as the contracts behind it.

• Bottom line… Wall Street sees a database company past its prime. We see a hyperscaler hiding in plain sight. The chart is down close to 50% from its September peak. The backlog is up 325%. Become a premium subscriber and get alerted when this stock triggers our setup for entry point, target price, and stop loss.

Top 3 Charts of the Week

1. 🏛️ Washington DC just lost 104,000 jobs. That's 3.5x worse than anywhere else.

• The home of the federal government just had the worst employment year of any metro area in America. DC lost 103,900 jobs from January 2025 to January 2026 (BLS)—about 3.5x more than Boston, the next worst metro.

• The federal civilian workforce is now near 2.66 million, the lowest level since 1966. Roughly 355,000 federal jobs have been cut since October 2024—an 11.8% drop. DOGE was the single biggest driver of US layoffs in 2025 per Challenger Gray data, and DC is paying the bill.

• When the largest employer in your city shrinks by double digits, everything downstream gets hit. Office leases. Restaurants. Real estate. Watch DC commercial property next.

2. 🚭 The UK just banned cigarettes—forever—for anyone born after Jan 1, 2009.

• This isn’t a tax hike. It’s a lifetime ban. If you were born after January 1, 2009, you will never legally be able to buy a cigarette, vape, or tobacco product in the UK. The Tobacco and Vapes Bill cleared Parliament on April 21. King Charles still needs to sign—a formality.

• New Zealand passed nearly the same law in 2022. The next government reversed it before it took effect. The UK is betting they can make it stick.

• About 7.2% of US middle and high schoolers used a tobacco product in the last 30 days in 2025. Adult smoking just dropped under 10% for the first time on record (CDC). If this UK model spreads, the long tail of Big Tobacco gets shorter—fast. Watch Altria (MO) and BAT.

3. 🛡️ S&P 500 CEO security just hit an all-time high. Here's why.

• In December 2024, UnitedHealth’s insurance arm CEO Brian Thompson was shot and killed in Manhattan. The reaction across corporate America was immediate.

• Nearly 38% of S&P 500 companies disclosed paying for executive security in 2025 (Equilar), up from roughly 24% four years ago. The median spend hit $130,468—a 20% jump in a year. Meta still leads by a mile: $25.1 million spent protecting Mark Zuckerberg in 2025 alone.

• Then Sam Altman’s home was attacked twice in mid-April—a Molotov cocktail on the 10th, gunfire on the 12th. The bills are only going up from here.

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Last Monday, the S&P 500 gapped down but quickly filled the gap and ramped higher after the US-Iran negotiations produced no resolution.

The market just ignored the bad news and that’s a very bullish characteristic. The hot themes like space, memory and optics as highlighted last week continue to outperform.

A sign of strength rally is unfolding as anticipated last week, but at a faster pace.

However, the S&P 500 is short-term overbought and extended after going up for 5 continuous days.

Next week, any shallow consolidation or pullback to the meaningful support zone at 6950-7050. could provide a low-risk opportunity to scale in.

Let’s focus on the setups (refer to the trade ideas below) while managing the risk (stop loss) accordingly to maximize the profit.

Check out this week’s trade ideas.

Last week’s sector performance

Read more

As discussed last week, the bullish scenario is unfolding. The S&P 500 gapped up and broke above the MA200, rallied to the edge of the supply line of the down channel.

This was the best week since the trading range formed in Oct 2025, which could kick start the bullish momentum of the current accumulation structure.

However, short-term overbought together with the decreasing of the demand at the top part of the down channel could trigger profit-taking next week.

A pullback to the support zone at 6700-6750 to test the supply will form a healthy rally in future.

Meanwhile, space, memory, optics and relevant groups to the AI theme are outperforming.

Let’s focus on the setups (refer to the trade ideas below) while managing the risk (stop loss) accordingly to maximize the profit.

Check out this week’s trade ideas.

Last week’s sector performance

Read more

Last week marked the best rally in the S&P 500 since the war started 5 weeks ago.

This relief rally is similar to Mar 2025’s where there was a break below the MA200 followed by a relief rally to test the MA200 and a failure.

Next week, the rally is likely to continue to further push to test the MA200 and the resistance zone at 6700-6750 as the short-term market breadth is improving with a bullish divergence.

It is crucial to monitor how the S&P 500 reacts at the resistance zone. A rejection and reversal could trigger the next down swing, which could be a potential capitulation movement.

Meanwhile, some of the outperformers standout during the high volatility period in the past weeks.

Let’s focus on the setups (refer to the trade ideas below) while managing the risk (stop loss) accordingly to maximize the profit.

Last week’s sector performance

Read more

As anticipated last week, the rebound attempt on Monday failed to commit above 6700 followed by two big bearish bars breaking below the swing low support at 6540.

The high supply level and volatility could further push down the S&P 500 to test the first target at 6250 next week and the next meaningful downside target is at 6000-6100.

Although the sentiment is at extreme fear, the short-term market breadth is yet to hit the extreme oversold level, which could be acted as a contrarian signal.

This is the time to be cautious and conservative (if you are trading).

Let’s focus on the setups (refer to the trade ideas below) while managing the risk (stop loss) accordingly to maximize the profit.

Check out this week’s trade ideas.

Last week’s sector performance

Read more

This week’s market, investing, and business insights from insiders and experts outside the mainstream media:

1. The software is the pilot now.

2. Focus is a superpower most companies trade for a bigger ego.

3. The $200 billion “boring” business that pays you to wait.

4. The surprising truth about our screen time today.

And more. Let’s get to it!

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Top Insights of the Week

1. 🧠 The $12.7B “brain” rewriting the rules of flight

• Most military hardware is a paperweight if you pull the plug. If an enemy jams the GPS or cuts the radio, a standard drone just falls out of the sky or sits there spinning. It’s a $20M kite with no string. Shield AI is changing the math…

  • They just hit a $12.7B valuation. That is a 140% jump in one year. Why? Because they built a brain called Hivemind that doesn’t need a map or a pilot to tell it what to do.

  • It’s software that lets a jet fly itself through a storm of electronic noise. No satellites. No ground control. Just the machine making decisions in real time.

  • The U.S. Air Force just went all in. They selected Shield AI to provide the “mission autonomy” for their new fleet of robot wingmen.

• But the real story is how they’re perfecting it…

  • Shield AI is using part of a fresh $2 billion war chest to buy a company called Aechelon. They make the simulations. They build the digital world where these AI pilots “live” and train before they ever touch a real runway.

  • Think of it as a closed loop. Build the pilot. Put it in the simulator. Stress-test it until it’s perfect. Then ship the code to the F-16.

• We are moving away from $100 million planes with one human in the seat. The future is “affordable mass.” Hundreds of smart, autonomous jets that cost a fraction of the price and never get tired.

• The hardware used to be the story. Now, the software is the pilot. The sky just got a lot more crowded.

2. 🪦 RIP to the "first-mover advantage"

• The “first-mover advantage” is a myth that’s currently imploding. ChatGPT once commanded nearly 100% of the AI chatbot market. Today? It’s closer to 45%. When you’re the only one in the room, you own the room. But now Google, Anthropic, and Grok are all walking through the door — and OpenAI is starting to look like they’re losing their breath.

  • They just killed Sora — their big video project — causing Disney to walk away from a planned $1 billion deal before it even got off the ground. Why? Because they’re scrambling to pivot into the enterprise world — the same lane Anthropic has been dominating for two years. They even offered private equity firms a 17.5% guaranteed minimum return just to get AI embedded in corporate offices. That’s not a move you make when you’re winning. It’s a move you make when you’re desperate for a foothold.

• Anthropic is winning because they picked a lane — coding and enterprise — and stayed in it. About 80% of their revenue comes from business clients. Their annual revenue run rate has gone from $1 billion in early 2025 to nearly $19 billion by March 2026 — adding $6 billion in a single month. OpenAI is trying to be everything to everyone — chatbots, video, hardware, browsers, robotics — which usually means becoming nothing to anyone.

• Focus is a superpower. If you try to chase every competitor, you’ll end up running in circles. OpenAI still has 800 million weekly active users and “ChatGPT” is now a verb in the culture — that brand is real. But if they don’t stop reacting and start leading again, they’ll just be the giant that cleared the path for everyone else to walk over them.

3. 💸 This Is your investing edge

Join 6,000+ self-directed investors who have already placed themselves on the path to greater wealth—potentially making $500, $1,000, $2,000, $3,000, or more every month with our trade ideas.

Subscribe today for just $299/year.

Become a premium subscriber

🚨 What you get when you become a premium subscriber ($13,890.80 value) 🚨

• TOP 5 HIGH CONVICTION TRADE IDEAS ($6,690.80 value) picked with sniper precision, delivered to your inbox every Monday morning, before the market opens.

• Access to OUR COMMUNITY ($1,200 value) of fellow traders, where you can ask questions & post comments.

• END OF THE MONTH SUMMARY ($600 value) of which ideas performed best.

• NO GUESSWORK ($2,400 value). You'll get to see our entry point, stop loss, and profit target.

• INSTANT ACCESS, no strings attached. No commitment. Cancel anytime.

• UNCONVENTIONAL MARKET & MACRO INSIGHTS ($3,000 value), discover opportunities and risks not highlighted elsewhere.

• GET YOUR MONEY BACK GUARANTEE. Subscribe today and if you decide it's not for you, no worries, just let us know within 7-days and we'll refund every penny of your subscription.

Get $13,890.80 worth of value for just $299/year to our premium newsletter. Hands down, Money Machine Newsletter is the most valuable investing service out there.

Just ONE great trade could pay for the premium subscription—MANY times over.

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4. 💸 The $200 billion "boring" business that pays you to wait

• Everyone is chasing the next shiny object. The AI play, the moonshot, the pre-revenue dream. But while the market tries to figure out geopolitical noise and Fed jitters, there’s a massive business sitting right in front of us. It’s not sexy. It’s been around forever. Nobody talks about it at dinner parties. That’s exactly why it’s interesting. Enter PepsiCo (PEP)…

  • You know the name, but you’re likely missing the setup. The market sees a soda and chip company. We see a defensive fortress with a massive “hidden” catalyst.

  • They don’t just sell snacks; they own the infrastructure of the grocery aisle. And right now, they’re sitting on a massive pile of “boring” value that’s about to get unlocked:

    • The Buyback Signal: They just authorized $10 billion to buy back their own shares. When a company this size bets that much on itself, they’re telling you the market has the price wrong.

    • The 53-Year Paycheck: They’ve raised their dividend every single year for over five decades. While tech stocks swing 10% in a day, Pepsi just keeps sending checks.

    • The “Secret” Catalyst: There’s a high probability they spin off or sell their North American bottling rights. It’s a classic move: shed the heavy, low-margin hardware (the trucks and plants) and keep the high-margin software (the brand and the syrup).

• The numbers (Q4 2025)...

  • Market Cap: ~$207B

  • P/E Ratio: 25.4

  • Organic Revenue Growth: 2-4% (projected 2026)

  • Dividend Yield: 3.73% (53 consecutive years of increases)

  • 52-week high: $171.48

  • 52-week low: $150.47

• The risks…

  • The Health Shift: People are swapping sugar for health kicks. Pepsi has to keep reinventing the snack bag to keep up with changing tastes.

  • The Execution: Moving from “owning the bottling plants” to “licensing the brand” is a multi-year slog. It takes discipline to pull off a restructuring this big without breaking the machine.

  • The Competition: Dr. Pepper and Sprite have been nibbling at their ankles in the US beverage market. They can’t afford to coast.

• Bottom line… Wall Street is bored. We’re interested. You’re looking at a recession-resistant giant that is currently trimming the fat and buying back its own stock at a discount. It’s the ultimate “pay me to wait” play. Become a premium subscriber and get alerted when this stock triggers our setup for entry point, target price, and stop loss.

Top 3 Charts of the Week

1. 📱 The surprising truth about our screen time today

• A jury ordered Meta and YouTube to pay $6 million. Why? They built sneaky features like endless scrolling to hook young people and never warned anyone about the dangers.

• More lawsuits are coming. A few million dollars is nothing to these giants, but strict new laws could force them to finally fix their broken, addictive apps.

• These dirty tricks hurt kids. People are already waking up—daily Facebook use dropped from 71% down to 52%. But with 95% of young adults on YouTube, this fight is just starting.

2. 😳 How impending deregulation could supercharge the peptide industry

• New rules may let pharmacies sell peptides—healing body compounds—legally. Online searches for them now beat Ozempic.

• No more sketchy “research” chemicals. Companies are rushing to sell these mainstream. Access is getting easier. It’s moving from “underground” to a massive, regulated business.

3. 🛢️ Oil's hidden tax on everything

• Direct energy costs are only 6.3% of the inflation index. It sounds small, but oil prices act like a tax on the entire economy. When oil hits $100 a barrel, everything gets more expensive to make and move.

• If oil stays around $100, inflation could jump to 3.5% soon. Even though we use less “direct” energy than we did in the 70s, oil is still the primary ingredient in fertilizer and the primary fuel for the trucks that deliver 15% of our food.

• Even if you don’t drive, you’ll feel it. Higher oil prices ripple through the system, raising the price of groceries and basic goods.

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Congrats to everyone who executed our trade ideas from the past few weeks:

ALGT 21%, NVS 15%, NSER 25%, SU 14%, ROST 9%.

As hinted by the bearish characteristics last week, the S&P 500 headed down to test the swing low support level at 6540.

A little demand tail was observed last Friday where there was a rebound right at this support level.

Should the attempt to rebound continue next week, the S&P 500 needs to commit above the first resistance level at 6700, to continue the consolidation mode between 6540-6800.

If the S&P 500 breaks below 6540, the next meaningful downside target is at 6000-6100.

During a choppy and risk-off market environment, a smaller position size is preferred (if you are taking any trades).

Let’s focus on the setups (refer to the trade ideas below) while managing the risk (stop loss) accordingly to maximize the profit.

Last week’s sector performance

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Hitting: ALGT 21%, NVS 15%, NSER 25%, SU 14%, ROST 9%.

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Here’s a full breakdown of our recent big money trades:

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Volatility continued to develop in the S&P 500. The axis zone at 6760-6800 has been tested and confirmed as a resistance zone after a rally attempt initiated since Monday.

The weak rally and failure at the axis zone (6760-6800) was accompanied by high and consistent supply.

These bearish characteristics are likely to further push the S&P 500 to test the swing low support level at 6540 before we see a meaningful relief rally.

Narrowing market breadth further confirms the risk-off market environment. It is essential to take a conservative approach (e.g. smaller position size) should you decide to test the water in the setups.

Let’s focus on the setups (refer to the trade ideas below) while managing the risk (stop loss) accordingly to maximize the profit.

Last week’s sector performance

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This week’s market, investing, and business insights from insiders and experts outside the mainstream media:

1. The path to peace in the Middle East actually runs through China.

2. AI isn't competing with your IT budget—it's coming for your payroll.

3. The "crypto" era is over—the era of invisible money has started.

4. McDonald’s forgot that their only real job was being cheap.

And more. Let’s get to it!

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Top Insights of the Week

1. 🇨🇳 The China off-ramp

• Oil spiked to $119 a barrel on March 9th — the highest since 2022 — before settling back near $100. The Strait of Hormuz is functionally closed. On March 11th alone, three cargo ships took hits, with one catching fire and crew missing. Fourteen vessels have been struck since hostilities began. Prediction markets now put U.S. boots on the ground in Iran before year-end at 59–60%. That’s the noise. Here’s the signal… China…

• Iran and Venezuela supply roughly 17–20% of China’s total crude imports. For the independent “teapot” refineries in Shandong, Iranian crude is effectively their entire feedstock. China’s official youth unemployment rate is 16.5%. Cut the oil for six months, and that number moves fast.

• The U.S. needs an off-ramp. Long wars destroy presidencies. But escalation is worse — Iran’s next move is soft infrastructure. Specifically, desalination plants. Nearly 100 million people across the Gulf depend on them. Saudi Arabia gets 70% of its water from desalination; Riyadh’s supply is pumped hundreds of miles from the coast. Take out the water, the Gulf becomes uninhabitable.

• The exit is a grand bargain. Trump visits China March 31 to April 2. Xi needs the oil flowing. The Gulf States need their water. If the U.S. declares victory and steps back, the regional powers handle Iran. It’s their backyard.

2. 😳 We’ve never seen growth like this. Ever.

• OpenAI ended 2025 at a $20 billion annualized run rate. They went from $2 billion in actual 2023 revenue to a $20 billion run rate by end of 2025. The company is closing a funding round valuing it at up to $830 billion.

• Then there’s Anthropic. They hit a $14 billion run rate in February — then blew past it to $19 billion by the end of the same month. They went from a $1 billion run rate in January 2025 to $14 billion in 14 months. They are valued at $380 billion.

• It took Snowflake and Databricks over 12 years to hit $3–4 billion in annual revenue. Anthropic’s run rate is already 5x that. Why?

  • Because AI isn’t competing for IT budgets. It’s competing for labor budgets. Writing code used to mean hiring an engineer, adding perks, and waiting. Now you just buy tokens. It’s electricity for intelligence.

  • But watch the backend math. OpenAI’s own CFO put the cost of standing up a 1-gigawatt data center at $50 billion. Nvidia’s estimates run $50–60 billion. That’s a multi-year payback period — and OpenAI itself doesn’t project cash flow positive until 2029, with $115 billion in cumulative losses between now and then.

• The revenue is real. The scale is unprecedented. But the real test is how much of it moves from pilot to production.

3. 💸 This Is your investing edge

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4. 👻 Hiding the blockchain

• Mastercard just stopped playing around. On March 11, they launched the Crypto Partner Program. It isn’t a small pilot. They brought 85+ heavyweights to the table—Circle, Binance, PayPal, Ripple, Gemini, Paxos, SoFi, Worldpay, Polygon, Solana, Fireblocks, and BitGo…

  • The goal is simple. Take digital assets out of the experimental sandbox and plug them directly into Mastercard’s 150+ million global merchant network.

  • They aren’t focused on speculation. They are focused on utility. Cross-border remittances. B2B transfers. Payouts. Settlements. They want to move money at the speed of software.

• Circle is front and center here. Their mandate is to make sending a USDC stablecoin completely invisible. It should feel like typing a web address. The end user just sends dollars. The blockchain handles the heavy lifting, entirely out of sight.

• This is a tipping point. For years, crypto and traditional finance ran on parallel tracks. Now, the regulation has cleared the runway. The giants are stepping in to fuse the programmability of digital assets with the established card rails we already trust.

• The future of payments isn’t complicated. It’s borderless, 24/7 transfers approaching zero marginal cost. And it’s going to run quietly in the background.

Top 3 Charts of the Week

1. 🍔 McDonald’s plans $3 menu items as fast food loses its price edge

• McDonald’s is rolling out $3 menu items and $4 breakfasts this April. This adds to the $5 deals they tried in 2024 because their food simply got too expensive.

• People are fed up with the prices. A 2024 survey found 78% of folks think fast food is now a “luxury.” Back in 2020, fast food grabbed 38% of all money spent eating out. But by 2024, sit-down places took the lead at 36.3%, edging out fast food’s 36.2%.

• Fast food forgot its main job: being the cheap option. Now, real sit-down restaurants are winning back customers by offering their own combo deals. When the prices are the same, people choose the better meal.

2. 🏆 Three of the 10 Best Picture nominees at this year’s Oscars cost $10M or less to make

• At the upcoming 98th Academy Awards, big money isn’t stealing the show. 3 out of the 10 Best Picture nominees cost just $10 million or less to make.

• You don’t need a massive budget to be the best. The movie “F1” spent an insane $250 million on production and $100 million on marketing. That’s almost double the second-biggest spender, “One Battle After Another.” But history tells a different story: since 1990, almost 80% of top nominees cost $100 million or less. Over half came in under $50 million, and only 14 movies ever crossed the $200 million mark.

• It proves a simple truth: throwing tons of cash at a project doesn’t buy greatness. Whether you’re making a movie or building a product, small teams with tiny budgets can still beat the giants if the work is actually good.

3. ❄️ Western US ski resorts are weathering a record snow drought

• The Western US had its warmest winter on record. Colorado and Utah hit their lowest snowpacks since the early 1980s, while the East actually beat its 20-year snow average. Simply put: the ski resorts have no snow.

• Bad weather equals bad business. Vail Resorts had to slash its FY2026 profit guess to somewhere between $144 million and $190 million—way short of the $237 million everyone expected. In Q2, customer visits sank 12.5% to just 6.8 million. Looking at the past 12 months, they had 16.9 million total visits. That’s down 6% from last year and 11% below the ~19 million peak they hit back in Q2 2023.

• Building a massive business that completely relies on unpredictable weather is incredibly fragile. Because of the drought, Vail’s main moneymaker—lift passes—dropped 2.9%. Rentals fell 6.8% and ski school dropped 9.3% (though those two still made 1.7x more money than their hotels). With their subscription passes stalling out, they face a hard reality: you can’t sell an experience if nature refuses to deliver the core ingredient.

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Most investors look at one thing. Charts. Or macro. Or fundamentals.

The Market Mosaic looks at all three.

Macro, technicals, and market internals. Put together like puzzle pieces.

The author has 20+ years on both sides of the market. Research desks and portfolio management.

The result: clearer signals. Less guessing.

If you want charts with real trade levels—and a smarter read on where the market may move next—this one’s worth following.

The Market Mosaic

Divining the stock market's next move by looking at macro, technicals, and market internals. Long + short trade ideas.

By Mosaic Asset Company

I’ll let The Market Mosaic take over from here…

There’s never been a riskier time to be an index investor.

It’s no secret that companies leveraged to massive investments and spreading adoption in AI have been among the top performing stocks since this cyclical bull market started in late 2022. That trend continued into last year, driving concentration in the market’s biggest names to levels never seen before.

The top 10 stocks in the S&P 500 comprise over 40% of the index. Their forward price-to-earnings ratio stands at 27.1 compared to the historic average of 20.7.

Their movements will drive changes in the S&P 500. But just as the biggest AI names drove the bulk of the S&P’s gains over the last several years, 2026 is showing it can work the other way as well.

While the S&P struggles for traction this year, there’s a massive rotation taking place under the hood. Growth and AI stocks are struggling while value and cyclical sectors outperform. At one point, the equal-weight version of the S&P was outperforming the cap-weighted index by the most in 34 years.

And it could just be the start. Expensive valuations make the biggest stocks susceptible to the shifting rate outlook around the Fed. A hawkish pause at the last Fed rate-setting meeting is growing more hawkish still as officials worry about the inflation outlook. Some are even floating the idea of hiking rates.

That impacts the discounting mechanism for future expected profits (higher rates hurt) while the outlook for market liquidity can have a massive impact on more speculative stocks.

That’s why I say there has never been a riskier time to approach the markets as a buy and hold investor in index funds and ETFs.

In order to navigate volatility and come out ahead, you need an active approach that rotates along with the market.

Trade the Setup, Not the Stock

Following 20+ years of trading experience, I’ve learned to trade the setup and not the stock.

You won’t find deep dives on value stocks in The Market Mosaic. Instead, I’ve studied thousands of stocks and the characteristics they share in common across both fundamentals and chart patterns leading up to a breakout.

You will find similar themes and recurring patterns before a stock makes a big move. So while the stocks in the spotlight may change, the setup leading to a breakout often remains the same.

My setups focus on stocks trading in a basing pattern featuring a series of higher lows (i.e. showing accumulation) along with companies experiencing accelerating year-over-year sales and earnings growth. The breakout from a setup should occur on a significant jump in volume and other qualifying indicators like the relative strength line (RS) to new 52-week highs.

By studying past winners and our own trades, we can stay prepared to spot new setups ahead. Today, I want to look at a breakout setup and trade alerted to Mosaic Traders Hub members back on September 8 with Planet Labs PBC (PL).

Planet Labs provides satellite imagery data and geospatial services for government and commercial organizations. Investor excitement was growing around the company as stocks leveraged to the space theme were performing well.

The company’s revenue growth accelerated during recent quarters and hit 20% year-over-year leading up to the breakout. Although improving, the main drawback in PL was that net earnings remained in negative territory.

Here’s the chart leading up to a breakout in PL.

After running up to the $6.50 level in February, the stock made a pullback into early April as the rest of the stock market sold off around trade war headlines. PL took out those highs and ran to the $7.00 area in July.

From there, PL traded in a relatively tight range while testing resistance at the $7.00 level on several occasions. The tight trading range around new highs was evidence of accumulation in the shares. That rangebound trading also allowed for a bullish MACD momentum reset above the zero line.

On September 8, PL broke out above our level of interest at $7.00 following the company’s earnings release. The jump also saw a surge in volume nearly six standard deviations above the average while the RS line made a new high.

The single-day surge in PL made it risky to properly position size in shares. I would normally place my stop loss underneath the breakout candle, which was too much downside risk in this case.

So instead, Hub members were alerted to the PL January 16 $10 call options. By utilizing options, we could define our risk on the trade since the option premium represents the maximum possible loss. Please note that the vast majority of my trades are single-stock or ETFs, and not options.

From there, PL went on to rally by 62% through October 7 which is when Hub members were alerted to close out the option position and take gains. The rally in PL drove a 244.4% gain in the call options.

The past several months has seen a constructive trading environment that’s receiving a boost from Fed rate cuts, loose financial conditions, and an economy that’s showing solid activity. Those are key ingredients to see stocks like PL breakout and deliver strong gains.

The Market Mosaic

Divining the stock market's next move by looking at macro, technicals, and market internals. Long + short trade ideas.

By Mosaic Asset Company

Nothing in this email is intended to serve as financial advice. Do your own research. See important disclaimer & terms of service.

I like this newsletter for one simple reason. It focuses on what actually moves stocks.

Too many investors chase “cheap.” Cheap alone doesn’t make money.

The Investor’s Compass looks at catalysts, timing, and market context. The real drivers behind price moves.

If you want hot tips, skip it. If you want clearer thinking and fewer value traps, it’s worth your time.

The Investor's Compass

Stock analysis focused on what actually moves prices: catalysts, expectations, and avoiding value traps. Guiding you like a market compass.

I’ll let The Investor’s Compass take over from here…

A quick framework for spotting businesses with real moats, long growth runways, and the ability to compound earnings for years.

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People love saying “just buy great companies and hold them forever.”

On paper, that sounds simple. In reality, it’s much harder to execute.

The problem usually isn’t finding good companies. There are plenty of them. The real challenge is deciding which great company deserves your next dollar.

When you’re looking at businesses like Constellation Software, Nvidia, MercadoLibre, Mastercard, or Microsoft, you’re not choosing between a good company and a bad one. You’re choosing between multiple elite businesses that could all compound for years.

But every dollar you put into one company is a dollar you can’t put somewhere else.

That’s where investing gets real.

Over time I’ve built a simple checklist I run through whenever I analyze a company. It only takes about a minute, but it quickly tells me whether a business even deserves deeper research.

What I Mean By A “Compounder”

Before getting into the framework, it’s worth defining what I actually mean by a compounder.

A compounder is a business that can grow earnings consistently for a very long period of time while reinvesting capital at high returns. The key word here is consistently. Lots of companies can grow quickly for a few years. Far fewer can keep doing it for a decade or longer.

When you find companies that can grow earnings around 10%–20% annually for many years, the math becomes extremely powerful. A company compounding earnings at 15% for 20 years increases profits by more than 16 times. If the valuation multiple stays reasonably stable, the stock price tends to follow those earnings higher over time.

This is why so many of the best investments in history came from businesses that just kept growing steadily. Think about companies like Microsoft, Mastercard, or Constellation Software. None of them necessarily looked “cheap” most of the time. But they kept compounding.

The hard part is figuring out which companies can actually do that.

My Basic Checklist For Finding Compounders

Whenever I look at a company, I’m basically running through a mental checklist.

No business is going to check every box perfectly, and that’s fine. The goal is simply stacking enough advantages so the odds of long-term compounding are clearly in your favor.

My 60-Second Compounder Checklist

• A real competitive advantage. Something structural protecting the business — duopoly/oligopoly, network effects, switching costs, regulation, or infrastructure advantages.

• Consistent growth. Revenue growing roughly 8–12%+ annually over time.

• Per-share growth. EPS and free cash flow per share trending up over long periods.

• Per-share tailwinds. Margin expansion, operating leverage, or regular buybacks that can push EPS growth even higher.

• Stable estimates. Analysts aren’t constantly cutting forecasts.

• Long reinvestment runway. Plenty of opportunities to keep deploying capital at good returns.

• Debt that makes sense. Leverage is fine if cash flows comfortably support it.

• Secular tailwinds. Industry is growing structurally.

• AI positioning. Either benefiting from AI or unlikely to be disrupted by it.

• Valuation check. Does the price make sense relative to growth?

• Quick technical check.

Share

Durable Competitive Advantage (Moat)

The first thing I look for is a real moat. And when I say moat, I don’t mean a buzzword management throws around on an earnings call. I mean something structural that actually protects the business.

If competitors can easily enter the industry, copy the product, and undercut prices, then the company probably doesn’t have a durable advantage. In those situations, profits tend to get competed away over time.

There are several types of moats that tend to show up again and again in great compounders.

One of the strongest is a duopoly or oligopoly structure. When an industry naturally supports only a few competitors, those players often gain enormous pricing power and stability. Airbus is a perfect example. Commercial aircraft manufacturing requires immense engineering expertise, billions of dollars in development costs, complex regulatory approvals, and a global supply chain. Because the barriers are so high, the industry effectively operates as a duopoly between Airbus and Boeing (although Boeing has its problems). That’s the kind of structural moat that’s extremely hard to break.

Another powerful moat comes from network effects. These occur when the value of a product or platform increases as more people use it. Mastercard is a great example of this. Merchants accept Mastercard because millions of consumers use it, and consumers use it because merchants accept it everywhere. That feedback loop reinforces itself and makes it extremely difficult for a new payment network to displace it.

Another type of moat comes from switching costs. This is very common in enterprise software. Once a company builds its workflows around a piece of software, switching to something else can be expensive, time-consuming, and disruptive. You might have to retrain employees, migrate data, and rebuild internal processes.

Because of that, most companies simply stick with what they already use, which gives the software provider a lot of pricing power and extremely sticky customers.

Then there are moats created by regulation or infrastructure. Utilities are a classic example. In many regions they operate under regulated monopolies where only one company is allowed to provide electricity or water service. Railroads have similar advantages because the physical infrastructure and right-of-way networks would be almost impossible to replicate today.

The important thing is understanding what actually protects the business. If you can’t clearly identify why competitors can’t easily take market share, the moat might not be as strong as it appears.

Consistent Revenue, EPS, and Free Cash Flow Growth

Once I’m confident a business actually has a real moat, the next question becomes whether that moat can translate into consistent financial growth over time. A moat protects the business from competition, but protection alone doesn’t create great stock returns. For a company to become a true compounder, the financials still need to expand steadily for many years.

Ideally, I’m looking for companies that can grow revenue around 8–12% or higher over long periods of time. That’s not a hard rule, but it’s a useful benchmark. Businesses that can grow at those kinds of rates for a decade or more often end up producing great long-term returns because the compounding effect becomes powerful.

But revenue growth is only part of the story. What really matters from a shareholder perspective is per-share growth, specifically earnings per share and free cash flow per share. Those numbers reflect how much value is actually accruing to each shareholder over time.

A company might grow revenue 10% per year, but if it’s also improving margins and regularly buying back stock, EPS and FCF per share can grow even faster. That’s where the compounding really starts to accelerate.

Margins can improve for a lot of reasons. One of the biggest is simple scale. As a company grows, many of its costs don’t rise nearly as fast as revenue, so more of each additional dollar ends up turning into profit.

Software is a great example. Once the product is built, selling another subscription costs almost nothing. That means a lot of that extra revenue flows straight to the bottom line. Pricing power and operational improvements can also help margins creep higher over time.

Share buybacks can amplify this effect even further. When a company consistently reduces its share count, each remaining share represents a slightly larger ownership stake in the business. That means EPS and free cash flow per share can grow faster than the business itself.

This is why I pay close attention to companies that generate a lot of free cash flow and actually use it well. If management consistently uses that cash to buy back shares at reasonable prices, the long-term compounding for shareholders can become very powerful.

Take Mastercard as an example. The company benefits from steady global growth in digital payments, which drives consistent revenue growth as more transactions move from cash to electronic networks. But the real magic happens when you combine that growth with Mastercard’s extremely high margins and share buybacks, which have sent the share count lower over the years, as you can see below.

Because the payments network is already built, additional transaction volume comes with very little incremental cost. That allows margins to remain extremely strong. At the same time, the company generates enormous amounts of free cash flow, a large portion of which is returned to shareholders through buybacks.

The result is that EPS and free cash flow per share have historically grown faster than revenue. Revenue might grow at a healthy rate, but per-share earnings growth ends up even stronger because of margin leverage and the shrinking share count.

This kind of dynamic is exactly what I’m looking for in a compounder.

Consistency is the key. A company that grows earnings 30% one year and then stalls the next isn’t nearly as attractive as one that compounds steadily year after year. Investors pay up for predictability. In other words, predictable stocks often have higher multiples.

Strong Competitive Positioning

Even in industries with strong moats, some companies are simply in a much better position than others. Two businesses might technically operate in the same industry, but one can still have a huge advantage because of its scale, market share, ecosystem, or brand.

In general, I like companies that are either the clear leader in their industry or one of just a few dominant players. When a company reaches that level, a lot of advantages start stacking on top of each other, and it becomes very hard for competitors to catch up.

Scale is one of the biggest advantages.

Large companies can spread their fixed costs across a much bigger revenue base, invest more heavily in research and development, and build infrastructure that smaller competitors simply can’t afford. And once that gap opens up, it often keeps getting wider.

Microsoft is a good example.

The company dominates multiple layers of enterprise technology. Windows still runs most desktop computers in the world. Office is deeply embedded in how businesses operate. And Azure has become one of the largest cloud platforms on the planet.

Because Microsoft already has relationships with millions of businesses, it can introduce new products much more easily than a smaller competitor. If a company already uses Microsoft tools, adopting Azure, Teams, or other Microsoft products is a pretty natural step since everything already works together.

That creates a powerful ecosystem where the products reinforce each other.

Scale also creates switching costs. Once a company has built its workflows around Microsoft software, replacing it would mean retraining employees, migrating systems, and potentially disrupting operations. Most businesses simply don’t want that headache.

You see similar dynamics with companies like Mastercard.

Payments networks are incredibly difficult to build because they need both merchants and consumers to participate. Mastercard already has millions of merchants connected to its network and billions of cards in circulation. A new competitor would have to convince both sides of the market to adopt its system at the same time, which is extremely difficult.

On top of that, Mastercard’s network is global. It processes transactions across dozens of countries and currencies and connects banks, merchants, and financial institutions all over the world. That infrastructure took decades to build and is almost impossible to replicate from scratch.

Another pattern I like to see is companies that dominate very specific niches.

TransDigm is a great example.

The company focuses on highly specialized aerospace components, many of which are sole-source parts used in aircraft systems. Once those components are certified and integrated into an aircraft design, replacing them becomes extremely difficult.

That gives TransDigm significant pricing power and incredibly long product lifecycles.

It has also led to this stock being an amazing performer, returning around 3,700% in the past 15 years. Not bad for a stock you probably haven’t looked into before!

When companies reach that kind of dominant position, the competitive landscape usually becomes much more stable. They’re not constantly worrying about new competitors showing up and taking share. Their leadership is already well established, and catching up becomes extremely difficult for anyone else in the industry.

That’s the kind of positioning I like to see.

Reasonable Valuation (But Don’t Obsess Over “Cheap”)

Valuation obviously matters. If you pay a completely absurd price for a stock, even an incredible business can end up delivering mediocre returns. At some point, expectations get so high that the company basically has to be perfect for years just to justify the price.

But at the same time, one of the biggest mistakes I see investors make is becoming too obsessed with finding something that looks cheap.

The reality is that truly great compounders are rarely cheap in the traditional sense. Businesses with strong moats, consistent growth, and long reinvestment runways usually trade at premium valuations because the market understands how valuable those characteristics are.

If you spend all your time screening for the lowest price-to-earnings ratios or the cheapest price-to-book stocks, you’ll often end up in businesses that look statistically cheap but lack the qualities needed for long-term compounding. These are the classic value traps. On paper they look like bargains, but they’re usually cheap for a reason.

Maybe the industry is slowly declining. Maybe the company has no pricing power. Maybe competition is intensifying. Or maybe earnings are at the peak of a cycle and about to fall. Whatever the reason, cheap stocks often stay cheap because the underlying business simply isn’t that great.

Instead of focusing purely on valuation multiples, I try to ask a different question: does the valuation make sense relative to the company’s long-term growth potential?

For example, a company growing earnings at 15–20% per year with a strong moat might look expensive on a traditional valuation metric. But if that growth can continue for many years, the valuation can actually become very reasonable over time as earnings catch up to the price.

This is why some of the best long-term compounders often look “expensive” when you first analyze them. The market is already pricing in the fact that these businesses are unusually durable and capable of growing for a long time.

But is Mastercard really that expensive at 27x forward EPS when it can grow its EPS at 15% per year for a while? My take: nope.

This doesn’t mean valuation should be ignored. Paying 80 or 100 times earnings for a business growing at 10% probably isn’t going to work out very well. But it does mean that quality and growth should come first, and valuation should be analyzed in that context.

In many cases, paying a reasonable premium for an exceptional business is far better than buying a mediocre business just because it looks cheap.

Remember that classic Warren Buffett quote: “It’s Better To Buy A Wonderful Company At Fair Price Than A Fair Company At A Wonderful Price.”

Over long periods of time, the businesses with the strongest economics tend to keep growing, while the cheap businesses often remain stuck exactly where they were.

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Earnings Revision Momentum

Another thing I pay attention to is earnings revision momentum.

The best-case scenario is explosive upward revisions every quarter, and I’ll give an example of that below. Nvidia is a company where upward revisions keep happening. Those uptrending lines you see below are EPS estimates over time for each fiscal year. Analysts keep revising them higher.

Like I said, that’s the best-case scenario, but it’s not strictly required for a business to be a strong long-term compounder. What I’m really trying to understand is whether earnings expectations are generally stable and credible, or whether they’re constantly falling apart.

In the Nvidia-type scenario, analysts are gradually revising earnings higher over time because the company keeps outperforming expectations. That’s usually a very good sign. It often means the business has strong demand, pricing power, or operating leverage that analysts underestimated.

But the reality is that even great companies don’t have perfectly upward revision momentum all the time.

Sometimes revisions will be flat, which is totally fine if the business itself is still growing steadily. Analysts might already have a good understanding of the company’s growth trajectory, so the estimates don’t move much. In that situation, the company can still deliver strong long-term returns simply by executing consistently.

There are also times when revisions move slightly downward, and that doesn’t automatically mean something is wrong. Maybe the industry is going through a short-term slowdown, or maybe the company is investing heavily for future growth, which temporarily pressures margins. If the long-term thesis is still intact and the decline looks temporary, that doesn’t necessarily change the investment case.

What I’m really trying to avoid are businesses where estimates are constantly collapsing.

If analysts are repeatedly cutting forecasts because demand keeps disappointing or management keeps missing guidance, that’s usually a red flag. It often means the business is less predictable than it looks, or that the competitive position isn’t as strong as investors thought.

A lot of mediocre companies fall into this category. They might look attractive at first glance, but the underlying business turns out to be far more cyclical or unstable than expected. As estimates keep getting revised downward, the stock tends to follow.

By contrast, strong compounders usually develop a reputation for reliable execution. Management tends to understand their business well, demand trends are relatively predictable, and results come in close to expectations or slightly above them over time.

That consistency builds confidence with investors and analysts. Even if revisions aren’t constantly moving upward, the market tends to trust the company’s long-term trajectory.

And over long periods, that kind of steady execution often matters far more than short-term estimate changes.

Returns on Capital Matter, But Reinvestment Matters More

Returns on capital are definitely something I pay attention to. Metrics like return on invested capital (ROIC), return on equity (ROE), or cash return on invested capital (CROIC) can tell you a lot about the quality of a business.

At a basic level, these metrics show how efficiently a company turns the money invested in the business into profits. If a company consistently earns high returns on capital, that usually means something structurally advantageous is going on. Maybe the company has pricing power, maybe customers are locked into its ecosystem, or maybe the industry simply doesn’t allow much competition.

That’s why so many great businesses tend to have strong return metrics. Software companies, payments networks, and certain asset-light businesses can generate extremely high returns on capital because once their platforms are built, incremental revenue comes with very little additional cost.

But here’s the nuance that often gets missed: high returns on capital by themselves don’t automatically make something a great long-term compounder.

What really matters is what the company does with those returns.

A business might generate fantastic returns on capital, but if it doesn’t have good places to reinvest that capital, the compounding engine eventually slows down. Cash starts piling up on the balance sheet, growth stalls, and the stock stops performing the way investors expected.

A good example of this dynamic is InMode (INMD), an aesthetic medical devices company.

A few years ago, InMode looked incredible on paper. The company was generating extremely high returns on equity — at one point well above 60%.

On the surface, that made it look like one of the most efficient businesses in the market. Investors looking at those numbers could easily conclude that it was an elite compounder. I know I did.

But the problem was that the company didn’t have many attractive reinvestment opportunities.

Instead of deploying capital into large new growth initiatives, acquisitions, or other expansion opportunities, a lot of the cash simply accumulated on the balance sheet. The company remained profitable, but the reinvestment engine wasn’t nearly as powerful as those return metrics initially suggested.

On top of that, parts of the business turned out to be more cyclical than many investors expected. Demand for aesthetic medical devices slowed, growth decelerated, and earnings momentum faded.

The result was a dramatic disconnect between the early perception of the business and what actually happened. InMode’s stock went from nearly $100 at its peak in 2021 to around $13 today, even though the company still shows respectable profitability metrics.

Investors who bought the stock purely because of its extremely high ROE ended up learning a painful lesson: return metrics alone don’t tell the whole story.

Businesses like Constellation Software, Mastercard, or Microsoft don’t just generate strong returns. They also have enormous opportunities to keep reinvesting those returns into new products, acquisitions, infrastructure, or expanding markets. That reinvestment engine is what allows earnings per share to keep growing year after year.

At the end of the day, the metric that really matters for shareholders is per-share growth. If earnings per share and free cash flow per share keep compounding over time, the stock price usually follows.

Returns on capital can help you identify strong businesses. But what ultimately drives long-term performance is whether the company can keep reinvesting capital productively for many years.

That’s the difference between a company that looks great on a spreadsheet for a few years and one that actually compounds wealth over decades.

Debt Is Fine If The Business Supports It

Another thing that scares a lot of investors away from otherwise great companies is debt. The moment people see a big debt number on the balance sheet, the instinct is often to immediately avoid the stock.

But the reality is that debt by itself isn’t automatically a problem. What really matters is the type of business carrying that debt and how predictable its cash flows are.

Some industries naturally operate with a lot of leverage because their cash flows are extremely stable and predictable. In those situations, debt can actually make sense because it allows the company to finance assets cheaply and improve returns for shareholders.

Utilities are a classic example of this.

Most regulated utilities carry large amounts of debt relative to their equity. At first glance, their balance sheets can look intimidating. Nextera Energy is a utilities company with $97.2 billion in debt and “just” $2.8 billion in cash and short-term investments. You might think that’s a horrible company.

But the reason they can support that leverage is because their revenues are usually regulated and very predictable. People need electricity and water regardless of the economic cycle, and regulators typically allow utilities to earn a set return on the infrastructure they build.

Because of that stability, utilities can borrow heavily to finance new power plants, transmission lines, and grid infrastructure. The debt helps fund the assets, the assets generate regulated cash flows, and those cash flows service the debt over time. In that kind of system, leverage isn’t a red flag — it’s simply part of how the industry works.

Another interesting example is Fair Isaac (FICO), the FICO credit score company.

FICO isn’t a capital-heavy company at all. In fact, it’s a software and analytics business that generates extremely high margins and very strong free cash flow. Yet if you look at the balance sheet, the company carries far more debt than cash. Recently it had roughly $3.2 billion in total debt compared to only about $160 million in cash.

At first glance that might look risky. But when you understand the business model, it makes a lot more sense.

FICO’s credit scores are used all across the U.S. financial system. Banks rely on them every day to evaluate borrowers, so the product is deeply embedded in how lending works.

Because of that, FICO generates extremely predictable and high-margin cash flow. Management has leaned into that by using debt and free cash flow to buy back stock over time, which has helped drive strong growth in earnings per share.

So while the debt number might look large at first glance, the business easily supports it.

This is why looking at the raw debt number by itself can be misleading.

What really matters is whether the company generates stable, reliable cash flow to service that debt. If demand is predictable and margins are strong, a business can often carry more leverage than investors initially expect.

On the other hand, companies with cyclical or volatile earnings can get into trouble even with relatively modest debt.

So when I look at leverage, I’m not asking “does this company have debt?” I’m asking a more important question:

Is the business stable enough that the debt simply becomes another tool for capital allocation rather than a real risk?

In many cases — especially with companies that generate strong free cash flow — the answer is yes.

Exposure To Secular Trends

Another thing I pay attention to is whether a company is positioned to benefit from long-term secular trends.

Think about things like cloud computing, digital payments, AI infrastructure, cybersecurity, automation, and global e-commerce. These aren’t short-term fads. They’re multi-decade shifts in how businesses operate and how consumers interact with technology.

Take cloud computing for example. Businesses used to run most of their software on physical servers inside their own buildings. Now more and more of that computing power is moving to centralized cloud platforms. As that shift continues, companies providing cloud infrastructure and related services benefit from a steadily expanding market.

What’s important here is that these trends create a natural growth engine. Even if a company doesn’t do everything perfectly, the industry itself is expanding, which gives well-positioned businesses more room to grow.

Of course, being exposed to a secular trend doesn’t automatically make a company a good investment. Plenty of companies operate in attractive industries but still struggle because of poor management, weak competitive positioning, or intense competition.

But when you combine a strong business model, a durable competitive advantage, and exposure to a powerful secular trend, the odds of long-term growth improve quite a bit.

Long Reinvestment Runways

Earlier we talked about how returns on capital by themselves don’t guarantee long-term success. A company can generate very high returns for a while, but if it runs out of places to reinvest that capital, growth eventually slows.

If a business dominates a niche but that niche is small, it may grow quickly at first and then hit a wall. Once the core market is saturated, the company often either has to find new areas to expand into or accept slower growth.

This is where expanding the total addressable market (TAM) becomes critical.

MercadoLibre (MELI) is a great example of this in action.

The company started primarily as an e-commerce marketplace in Latin America. But instead of staying just an online retailer, it kept expanding the ecosystem.

First came Mercado Pago, which built out a massive digital payments platform. Then the company invested heavily in logistics and fulfillment, improving delivery speeds and control over the customer experience. After that it expanded further into lending and broader financial services, using the data from its platform to underwrite credit.

Each new layer expanded MercadoLibre’s opportunity set and created new ways to reinvest capital. Instead of relying on just one growth engine, the company built an ecosystem where multiple businesses reinforce each other.

That’s the kind of reinvestment runway I like. When a company can keep finding new areas to deploy capital at good returns, the compounding process can last far longer than investors initially expect.

AI Resilience or AI Leverage

Another thing I think about a lot now is how AI might affect a business.

AI is moving incredibly fast, and in some industries it could completely change how work gets done over the next decade.

In general, I think companies fall into three groups. Some clearly benefit from AI, some probably won’t be affected much, and others could get disrupted by it.

The obvious winners are companies tied to AI infrastructure. Businesses that design chips, build networking equipment, or provide cloud computing power benefit directly as AI adoption grows. The more companies use AI, the more computing power they need, which is great for the companies supplying it.

At the same time, some industries are naturally protected from rapid AI disruption.

Take commercial aircraft manufacturing. Designing and building commercial planes requires massive engineering teams, decades of certifications, complex supply chains, and enormous capital investment. AI might improve parts of the process, but it’s not going to suddenly create a startup that can compete with Airbus or Boeing.

But there are also businesses where AI is a clear threat.

Chegg (CHGG) is a good example. For years the company made money helping students with homework and study questions through paid subscriptions. Once large language models became widely available, students could just ask AI tools the same questions and get detailed explanations instantly.

Not surprisingly, Chegg’s traffic and subscriber growth took a big hit. The stock used to be over $100. Now, it’s 66 cents.

That’s a good example of what happens when AI disrupts a company.

So when I look at a business today, I usually ask two simple questions:

Could AI realistically disrupt this business?

Or could AI actually make the business stronger?

Technical Trends Matter (But Context Matters More)

Fundamentals always come first for me, but I do pay some attention to technical trends. Not because I’m trying to trade short-term moves for my long-term investments, but because the price action can sometimes give clues about how the market currently views the company.

It’s important to distinguish between normal pullbacks and genuinely bad technicals.

A multi-month decline after a big run higher isn’t necessarily a problem at all. In fact, that’s often completely healthy. MSFT is an example.

Stocks frequently need time to digest gains, reset expectations, and consolidate before the next leg higher. A six-month pullback after a big rally can easily end up being the best buying opportunity, not a warning sign.

What I’m more cautious about are true long-term downtrends.

If a stock has been trending downward for several years while the broader market is strong — and especially if its sector is doing well — that can sometimes signal deeper issues. Maybe the company’s growth has slowed, maybe competitors are catching up, or maybe the market is gradually realizing that the business isn’t as strong as it once thought.

Those are the kinds of charts where it’s worth asking harder questions about the underlying thesis.

One practical way to handle situations like that is simply not going all in immediately. If you still believe in the long-term story, it can make sense to build the position gradually instead of committing all your capital at once. That way you’re not betting everything on perfect timing while the market is still skeptical.

That said, it’s also important not to obsess over charts too much. If you want to keep investing relatively headache-free, the reality is that over long periods of time, the business usually wins.

Great companies often go through ugly technical periods. Sentiment swings around, valuations compress, and investors move on to the next hot theme. But if the company keeps growing revenue, earnings, and free cash flow over many years, the stock price usually follows eventually.

So technicals are really just a secondary layer of context. They can help with timing around the edges — maybe scaling into positions or being cautious with stocks in true multi-year downtrends — but they’re not the main driver of long-term returns.

Quality of the business almost always matters more than the chart.

The Takeaway

At the end of the day, the hardest part about “buy great companies and hold” isn’t finding great companies. The hard part is deciding which great company deserves your next dollar, how big you should size it, and whether you can actually hold it through the inevitable volatility without doing something stupid at the worst time.

That’s why this whole framework exists. It’s basically my way of stacking the odds in my favor.

I’m looking for companies with real moats, strong competitive positions, and steady long-term growth that shows up where it actually matters: EPS and free cash flow per share. I try not to get trapped by surface-level metrics like “cheap valuation” or “high ROE,” because those can be misleading if the reinvestment runway isn’t there or the business turns out to be more cyclical than it first appeared.

I also want businesses aligned with major structural trends, companies that either benefit from AI or are unlikely to be disrupted by it. And I want management teams that allocate capital intelligently — whether that means reinvesting internally, buying back stock, or even carrying debt safely when the cash flows support it.

On the timing side, I’m not pretending technicals drive long-term returns. But I do use them as context to avoid going all-in on stocks that are stuck in true multi-year downtrends for reasons that might be fundamental.

None of this is a magic formula. It’s just a way to stay disciplined when you’re staring at a list of elite companies and trying to decide where your next dollar should go.

Because in the real world, the difference between decent returns and great returns usually comes down to two things: owning the right businesses and holding them long enough for compounding to do its work.

P.S.

If this checklist seems like a lot to keep track of, that’s exactly why I write this newsletter. I spend my time applying this framework to real companies and sharing the ones that look like potential long-term compounders.

If you want, subscribe. I’m gonna keep running this checklist on real stocks in future post.

The Investor's Compass

Stock analysis focused on what actually moves prices: catalysts, expectations, and avoiding value traps. Guiding you like a market compass.

Nothing in this email is intended to serve as financial advice. Do your own research. See important disclaimer & terms of service.

The S&P 500 experienced a volatile week and tested the support zone 6760-6800, influenced by geopolitical tensions from the U.S.-Iran conflict and rising oil prices.

The attempt to bounce from the support zone at 6760-6800 in the past 4 sessions was violated on Friday.

The overwhelming supply is expected to further push the S&P 500 to test the lower target at 6550 in the coming week.

During a risk-off market environment, either engaging exclusively with stocks that remain insulated from geopolitical turbulence or maintaining a liquid cash position.

Let’s focus on the setups (refer to the trade ideas below) while managing the risk (stop loss) accordingly to maximize the profit.

Last week’s sector performance

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This week’s market, investing, and business insights from insiders and experts outside the mainstream media:

1. A 300-year-old monopoly just got a wake-up call.

2. A legacy utility just became the most important backbone in AI.

3. GPT-5.4 arrives, OpenAI just leveled up again.

4. THIS company is burning cash to buy your mortgage rate.

And more. Let’s get to it!

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Top Insights of the Week

1. The world saw a crisis. The U.S. saw a market.

• When the Strait of Hormuz gets wobbly, the world holds its breath. And right now, it’s not breathing…

  • After U.S. and Israeli strikes on Iran, insurance consortiums voided existing war risk policies overnight. The London market’s Joint War Committee expanded the official war zone to cover the entire Persian Gulf. P&I clubs — the mutual insurers that backstop global shipping — announced existing coverage would lapse, requiring entirely new policies for any vessel entering the region. Premiums spiked from 0.25% of a ship’s hull value to 1% — and in some cases as high as 3%. For a $100 million supertanker, that’s a jump from $250,000 to $2–3 million per voyage.

  • If a shipping company can’t get insurance, their lenders won’t let the boats sail. Simple as that.

• Tanker traffic through the Strait dropped 94% — from 50 transits on February 28 to just 3 on March 1. Oil surged to $84 a barrel. This is how inflation starts…

  • Now, the Strait normally moves about 20 million barrels of oil a day — roughly 20% of global consumption. That flow didn’t just slow down. It stopped. And every day it stays stopped, production across the Gulf backs up. JPMorgan estimates that by eight days of closure, forced production shutdowns could reach 3.3 million barrels per day. Meanwhile, pipeline alternatives through Saudi Arabia and the UAE can only reroute 2.6 to 4.2 million barrels — nowhere near enough.

• Most people saw a crisis. Trump saw a market…

  • The U.S. stepped in. The International Development Finance Corporation announced a $20 billion reinsurance facility for Gulf shipping — hull, machinery, cargo — backed by the U.S. government in coordination with CENTCOM. If the risk is too hot for the private market to price, Washington will backstop it.​

• Here’s where it gets interesting…

  • Lloyd’s of London has dominated maritime insurance for over 300 years. And to be fair, Lloyd’s didn’t fully walk away — the Lloyd’s Market Association confirmed on March 5 that it is still quoting war risk insurance and that coverage “currently remains in place” for most vessels in Gulf waters. But it doesn’t matter. The DFC already identified “best-in-class, preferred American insurance partners”. The U.S. government is building the infrastructure to route this business through American firms.

  • This matters beyond oil. About 90% of Iran’s crude exports go to China. Controlling who insures the ships that carry the world’s energy gives you leverage over everyone who depends on it.​

  • Whether this becomes a permanent reshoring of maritime insurance or just a wartime emergency measure is the real question. Lloyd’s has survived centuries of wars and isn’t going quietly — they’re already in talks with the DFC about a joint public-private arrangement. But the precedent is set. The U.S. government has proven it can step into the insurance game at scale.​ We’re not just protecting ships. We’re staking a claim on the industry.

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3. 52-year-old dividend stock running tomorrow's AI

• Everyone is talking about AI chips. Nobody is talking about the plug. You can’t run a supercomputer on good intentions. You need electricity. Massive, non-stop power. The current grid is tapped out. Renewables are too inconsistent, and nuclear takes a decade to approve. The only scalable fix right now? Natural gas. Enter Williams Companies (WMB)…

  • They already move a third of all natural gas in the US. They own the pipes. But now, they’re cutting out the middleman.

  • Instead of just shipping gas, they’re building power plants directly on-site for tech giants. When a massive data center needs power today, Williams routes a pipe right to them, builds a plant next door, and locks in a long-term contract.

  • They’ve committed $5.1 billion to these direct-to-customer projects, with a backlog expected to hit 6 gigawatts by 2030. It’s an entirely new, highly profitable monopoly.

• The numbers (Q4 2025)...

  • Market Cap: ~$91B

  • Forward P/E: ~34x

  • 2025 Revenue: $11.83B

  • Adjusted EBITDA: $7.75B (targeting $8.20B in 2026)

  • Dividend Yield: 2.8% (raised for the 52nd consecutive year)

  • 52-week high: $76.87

  • 52-week low: $51.58

• The risks…

  • It’s expensive. Building plants costs real money. 2026 capital expenditures will top $6 billion.

  • It requires debt. They run at a 4.0x leverage ratio. If interest rates stay sticky, carrying that debt hurts.

  • It’s regulated. Laying pipe and building plants always means fighting through environmental and political red tape.

• Bottom line… Wall Street sees a boring, legacy pipeline. We see the physical backbone making the AI boom possible. Become a premium subscriber and get alerted when this stock triggers our setup for entry point, target price, and stop loss.

Top 3 Charts of the Week

1. GPT-5.4 arrives, OpenAI just leveled up again

• OpenAI released GPT-5.4. It’s their smartest tool yet, scoring 83.3% on a big logic test. It’s faster, handles bigger tasks, and even uses your computer for you. It solves harder problems, though it costs more—up to $180 for 1 million tokens.

2. Opendoor bets on 4.99% mortgages while its own profits take a hit

• Opendoor is offering 4.99% mortgages by cutting out middlemen. They’re losing money elsewhere—net losses hit $1.3 billion—so they’re trying something new to sell houses faster.

• They’re using automation to lower rates below the 5.98% average. It’s a gamble to fix their shrinking profit, which dropped from $13,500 to just $3,500 per home.

• Buying a house might get cheaper, but the company providing the loan is struggling. If their “new math” doesn’t work, this deal won’t last forever.

3. 1 in 5 California home transfers are now inheritances

• In California, 17.5% of home moves are now inheritances. That’s double the national average and twice what it was thirty years ago.

• Buying a house is so expensive that people just wait for their parents’ homes. Low taxes keep families staying put for 20 years. The “California Dream” is changing. Unless you’re born into a house, getting one is harder than ever. It’s a closed loop.

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The S&P 500 futures continued the rally last week but was resisted by the supply line formed by the diamond pattern.

The volatility has contracted together with the supply level, pending a breakout of the diamond pattern.

The poor quality of the demand is likely to cause the S&P 500 to break down and to test the support zone at 6760-6800 again in the coming week.

Middle East escalation is likely to drive up oil prices and cause pressure on the stock market.

Defensive sectors like the utilities, consumer staple, together with energy and industrial are leading the way up.

Let’s focus on the setups (refer to the trade ideas below) while managing the risk (stop loss) accordingly to maximize the profit.

Last week’s sector performance

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As anticipated last week, the S&P 500 formed a temporary bottom and an up swing is in progress.

The S&P 500 is expected to swing up to test the resistance level at 7000 to complete a diamond formation.

The battlefield is still set between 6800-7000.

Russell 2000 is setting up for challenging the new high while the volatility continues to show up in the S&P 500 and the Nasdaq 100.

Market rotation to small/mid caps, cyclicals, industrials is still on-going. Both energy and industrial sectors have been leading since January 2026.

Let’s focus on the setups (refer to the trade ideas below) while managing the risk (stop loss) accordingly to maximize the profit.

Last week’s sector performance

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1. We don’t need more taxes; we need to stop funding fake hospices.

2. Year of the agent is here.

3. Public sector shrinks, private sector builds, the boom begins.

4. We’re trading 6.3 hours of life for 6.3 hours of video.

And more. Let’s get to it!

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Top Insights of the Past Few Weeks

1. 🤔 Hospice fraud robbing millions from taxpayers

• If you ran your business like California handles healthcare, you’d be bankrupt. Probably in jail, too. Everyone clamors for more revenue—wealth taxes, fair shares. It’s like cranking the faucet to drown out a leak. But math is math. The money is pouring out the bottom.

• Take hospice in LA. Hospice is end-of-life care. Yet some centers have live discharge rates over 50%. That’s not a medical miracle; it’s a scam. You enroll healthy people, bill the state, and disappear. The DOJ already busted schemes worth $16M in bogus billings.

• The oversight is non-existent. The state pays first, asks questions later. The result? California owes the feds over $1B from past audits. In LA alone, there are $1.2B in suspicious claims.

• The fix isn’t a new tax. It’s basic business hygiene. Verify the ID. Audit the invoice. Stop writing checks to ghosts.

2. 🤖 The “lethal trifecta” inside your PC

• AI isn’t answering questions anymore. It’s clicking buttons, filing reports, running 24/7 shifts. “Year of the Agent” is the buzzword. For once, it fits…

  • Novo Nordisk: 12 weeks and 50 people to produce one clinical report. Now? 10 minutes. 3 people.

  • Gartner says 40% of enterprise apps will have agents built in by year’s end.

• But 88% of organizations have already had an AI agent security incident. Average company runs 37 agents. Only 6% have a real security plan. House keys, meet stranger.

• Then there’s OpenClaw, the viral open-source agent (formerly Clawdbot, then Moltbot). Made by a single developer in Austria. It manages your email, calendar, files, messages, and much more. The catch? It needs your passwords, API keys, browser history, and root file access to work. Some call this the “lethal trifecta.” The most exciting AI tool of the year is also a walking security nightmare. Still, a remarkable breakthrough.

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4. 📈 The quiet roar of a new golden age

• If you listen to mainstream media, the sky is always falling. Look at the math instead. We aren’t in a crisis. We’re at the starting line of a boom…

  • We grew by over 4% in Q3 last year. January blew past expectations, adding 172,000 private sector jobs when the street expected just 70,000. Unemployment is sitting at a healthy 4.3%.

• But the real story isn’t the number of jobs. It’s where those jobs are going…

  • The government just shed tens of thousands of roles. Meanwhile, the private sector is furiously scooping up talent. The builders are building again.

  • Construction is booming just to support the AI revolution. 5 major tech companies are dropping $600B on AI infrastructure this year alone. That isn’t a passing trend. It’s a guaranteed 2% tailwind to the entire country’s GDP.

• It feels exactly like the late 90s. Back then, everyone was distracted by political scandal of Bill Clinton and Monica Lewinsky. But underneath the noise, the internet was quietly laying the tracks for a golden era of wealth and productivity.

• Ignore the daily outrage. The actual shift is the reprivatization of the economy. The public sector shrinks. The private sector builds. Most people are just too busy doomscrolling to notice.

Top 3 Charts of the Past Few Weeks

1. 👀 The kids are all right—it’s the adults who are hooked

• Adults over 36 now use phones 352 minutes daily, finally outpacing younger people. Everyone is hooked.

• We spend 6.3 hours a day staring at screens, mostly watching videos. Time is your only finite resource. We’re all sliding into a habit that’s hard to quit.

2. 🎈 Alphabet’s capex just keeps ballooning

• Google’s parent company, Alphabet, plans to spend $180B this year on tech. That is double what they spent last year.

• AI is expensive. They are spending more now than in their first 20 years combined. This money could buy Uber or 25 NFL teams.

• They are trading piles of cash for chips and servers to win the AI race.

3. 😳 The software panic spreads

• VC Investors poured $172B into startups last year, but they flipped the script. They used to love funding standard business software (like HR or accounting tools). Now, for the first time, AI companies are getting the bigger slice of that cash.

• The “castle walls” are crumbling. It used to be hard to make software, which kept the big companies safe. Now, new AI tools let almost anyone build apps just by typing.

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