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I am active on LinkedIn and X. Please connect with me on these 2 platforms.
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Market Snapshot, Monday, December 8, 2025
- The Fed decision is expected Wednesday, with markets pricing in roughly an 86–90% chance of a 25 bps cut, although some see the possibility of dissent among policymakers given sticky inflation and mixed labor‑market signals. S&P Global
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Global equities are largely steady: Asian markets trade mixed (Hong Kong down, Japan slightly up) as investors wait for the Fed’s move. The Times of India
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Meanwhile, a warning published today by the Bank for International Settlements (BIS) flagged rising retail‑driven flows into gold and U.S. equities as signs of a potential bubble, especially in sectors tied to AI and high valuations. Financial Times
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On the corporate front, a few headline movers: a big acquisition rumor in the tech space, some volatility among crypto- and tech-linked stocks, and new structural developments in energy/commodities with cross‑listing moves. Barron's
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Actionable Thesis:
The market stands at a crossroads. A rate cut seems likely — but uncertainty around the Fed’s stance afterward, elevated valuations, and signs of retail exuberance argue for thoughtful positioning. This moment rewards discipline, balance, and a focus on cash flow + quality over speculation.
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My Take
Gold maybe a bubble but I seriously doubt it. Gold has no intrinsic value. I agree with Buffett on this point. However, Gold reflects the fear and anxiety around the globe as investors and non-investors alike rush to find safe havens to protect their wealth.
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I do not yet see many of these anxieties going away.
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The wars continue. Inflation is high and recession is around the corner. There are layoffs and expectations of many more as many jobs are going away.
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Gold is one asset among many that can serve as a safe haven. I would consider other real assets as well, including commodities and real estate.
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The Big Short Michael Burry has some thoughts on the AI trade:
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2 key points he is making:
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- Netscape spawned a whole new tech revolution but did not survive as a company. He thinks OpenAI is headed towards a similar fate, and,
- DiamondCluster was the hottest management consulting firm back when I was interviewing for consulting jobs coming out of business school. At that time it was still Diamond Technology Partners. They went on to buy Cluster Consulting soon after. I did not join them, but man they were big on campus. Internet bubble had not yet burst and they were riding the wave. Apparently, so is Palantir.
I have no arguments against these 2 points and I do agree with him on both. I disagree with him on many other points, but as a value investor watching the AI industry evolve, I cannot help but draw parallels to what has come before.
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If you are investing in this sector, stay safe.
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Inner Circle Portfolio Performance
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The portfolio performance is updated once a month, and tracked YTD until the end of the prior month. Performance is tracked as time weighted total return.
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Upgrade to Inner Circle
- My actual Small Cap Value portfolio with highly profitable but under followed stocks and Kelly Criterion optimized weights
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Piotroski F-Score in Practice: How I Use It to Confirm a Value Pick
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I want to be upfront about something: I do not use the Piotroski F-Score as a primary stock screen most of the time. That might surprise you, given how much ink gets spilled on Piotroski scores in value investing circles. But my process is different: I use it as a confirmation tool, not a discovery tool. Most of the cases, …
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Managing Drawdowns: How I Protect Capital Without Losing Upside
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In 2008, one of my portfolio positions fell 67% in four months. I had bought a small industrial company with a clean balance sheet, a long operating history, and what I thought was a conservative valuation. Then the financial crisis hit, credit markets froze, and customers stopped ordering. The stock went from $18 to $6 in the time it takes …
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Shannon's Demon Explained: Why Rebalancing Beats Buy-and-Hold Over Time
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I want to tell you about one of the most counterintuitive ideas in all of investing, an idea so strange that when I first encountered it, I spent about an hour with a spreadsheet trying to convince myself it was wrong before I finally accepted that it was right. It is called Shannon's Demon. And once you understand it, you …
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