Companies providing AI are expensive. Companies using AI aren't.

"For this not to be a bubble... it requires that the benefits of [AI] are much more evenly spread … not just economic growth driven by capital expenses." - Satya Nadella, Microsoft CEO Even the CEO of one of AI's biggest winners is worried. Here's what the data shows: 👇

The average return of the S&P 500 is about 8.5% per year. But it's hardly ever 8.5% in any single year.

Lots of companies are using AI. About a third are seeing returns from it.

Everyone understands the first order effects. Great investors think beyond the first order.

Diversification works... to a point.

Super Bowl ads might be the best bubble indicator we have. 15 AI companies advertised during this year's game. That's not a coincidence. It's a warning sign. Here's what history tells us:

The Investor's Manifesto:

Pricing power is the most important (and most overlooked) factor in dividend growth. No pricing power = inflation erodes margins = dividend cuts eventually.

I just listened to an interview with Ricky Sandler that put into words something I've been thinking about for years. His message? Markets have changed because investors have changed. This changes everything about how we should invest. Here's what he said:

Stocks aren't categories. They're ownership in real businesses. When you forget that, you stop being an investor and start being a gambler.

Warren Buffett keeps adding to his Domino's Pizza $DPZ position. Berkshire now owns 3,350,000 shares, which is about 10% of the company. They may not buy any more, as when you own more than 10% of a company, you are subject to special reporting requirements.

Where US homes are getting cheaper and more expensive: h/t @ResidentialClub

Great investors ask: • Did I do the research? • Was my logic sound? • Did I follow my rules? Bad investors ask: • Did it go up?

Genuine question on the SaaS selloff... Haven't free, open source alternatives like LibreOffice and ERPNext existed for forever? If businesses won't install free software that already exists, why are they going to code their own with AI?

Never underestimate the power of incentives:

Most people think wealth is a bigger house or a nicer car. Wrong. Here's what real wealth is: • Spending weekdays at the park with your kids • Saying no to meetings that don't matter • Flying on a random Thursday because flights are cheaper Wealth isn't what you own. It's control of your time.

Your brain is wired to lose money in the stock market. Recency bias. Confirmation bias. Anchoring. Loss aversion. 25 mental mistakes that cost investors billions:

Best dividend growers: • 2-3% yield today • 8-10% growth rate • 40-60% payout ratio

The Richest People in the World:

It’s a repeating pattern where technology does indeed change the world, but the early investors and the companies that build the infrastructure don’t do so well. If you want to dive into it, feel free to research: • Canals • Bicycles • Radio • Electricity • Railroads • Automobiles • The internet

Apple went from 1,000 songs in your pocket to 60 million songs on your wrist in 24 years.

There's a big difference between returns on paper and cash in your account. Most investors don't realize they're confusing the two.

Sector performance through the busienss cycle:

Most investors think the market is efficient. They’re wrong. We're relying almost completely on the EMH, and we’ve broken the price discovery mechanism - because nobody is analyzing businesses anymore. The result? Total irrationality and wider swings from intrinsic value than we've ever seen.

Market multiples have gone down while EPS has gone up:

AI is taking more and more startup capital:

S&P 500 returns with and without dividends reinvested. If you don't need the dividends to live off of, make sure you're buying more assets with them.

Charlie Munger said take a simple idea and take it seriously. My simple idea is that stocks are real businesses. I focus on cash flow and dividends. Capital gains may be the majority of your total return, but they should be a secondary effect of the underlying business growing its cash flow.

Dividend investor? You need to know these dates:

Pills vs. Injectables: The convenience is obvious, but the real win for $NVO will be solving the nausea and inconsistent hunger control that come with the shot. The pill market is likely the much larger opportunity. www.theguardian.com/science/202...

The Best and Worst performers in the Compounding Dividends universe for January:

Most dividend investors make the same mistake when hunting for income. They sort stocks by yield and buy the highest ones. This strategy has underperformed the market for nearly a century. Here's what actually works:

Terry Smith on index funds:

Investors who lose: • Chase past returns • Sell in crashes • Judge by outcomes only • Ignore their behavior Investors who win: • Focus on process • Build for their life • Respect uncertainty • Stick with the plan

It's amazing how well Buffett's net worth tracks the exponential curve you'll see on a compound growth calculator.

JP Morgan is as big as the next 3 competitors.

Housing inventory compared to pre-pandemic levels:

Heads, I win; tails, I don't lose much. Mohnish Pabrai's entire investing philosophy in one sentence. Here's what it means and how to actually use it:

7 Investing Rules

Risk ≠ Reward Risk = Chanse of loss Rward only comes if your'e right. If the reward was guaranteed, there'd be no risk.

11 Cash Flow Formulas

Francois Rochon has a theory that the best investors are missing the "tribal gene" that makes them want to run with the crowd. I don't know if it's a gene, but I know it's hard to be different, especially when it makes you look wrong, even if you're only wrong in the short-run.

Questions to ask before you buy a stock: • Can you understand it? • Does it have a competitive advantage? • Will it likely do well in the future? • Is management good? • Does it pay cash distributions (dividends)?

Charlie Munger said take a simple idea and take it seriously. My simple idea is that stocks are real businesses. I focus on cash flow and dividends. Capital gains may be the majority of your total return, but they should be a secondary effect of the underlying business growing its cash flow.

In 1998, an analyst made the boldest call on Wall Street. He predicted Amazon would double in a year. It took 3 weeks. He became an instant celebrity with one of the highest salaries on Wall Street. Then the SEC banned him for life. Here's what every investor needs to know:

There's a lot of AI stocks hyped to IPO in 2026 AI stocks today look a lot like internet stocks in 2000. The technology is real. The valuations are inflated. Most will fail. A few will 100x.

Peter Lynch's Investment Philosophy:

How dividends work