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Register for a free website account above and we will send you periodic discounts and other offers to our research, books and Inner Circle membership as well as exclusive perks not available elsewhere.
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Market Snapshot – Heading Into the Week of Nov 17, 2025
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Equities: Major U.S. indexes had a sharp selloff on Thursday (Nov 13) led by tech, with the Dow dropping ~800 points after hitting a record above 48,000; futures have since stabilized, with a slightly positive bias after “worst day in over a month.” Investopedia
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Rates & Fed: Global equities and bonds remain under pressure as hopes for additional Fed cuts fade. Several Fed officials (Hammack, other hawks) are arguing against a December cut, even after two cuts earlier this year. Others (Miran, more dovish) say policy is still too tight and data are distorted by the shutdown and housing lags. Reuters
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Dollar & Shutdown Aftermath: The dollar has softened versus euro/yen after the U.S. government reopened, with markets now waiting for fresh data to gauge the true state of the economy and trust in U.S. assets post-shutdown. Reuters
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Week-Ahead Data: A heavy calendar of U.S. releases is coming (jobs, inflation, energy inventories, etc.), which will drive FX, bonds, commodities, and risk sentiment starting Monday. S&P Global
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Valuations & Positioning:
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Small-cap U.S. stocks trade at about a 16% discount to Morningstar fair value, vs. large-caps closer to fair or rich. Morningstar
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Emerging-market and carry trades (especially LatAm FX, some African and Asian risk) are flagged as crowded and vulnerable to a volatility spike. Bloomberg
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Dividend Landscape: Multiple outlets are highlighting high-quality dividend names (Realty Income, PepsiCo, Verizon, Prudential, Host Hotels & Resorts, and select global names) as core building blocks for income in a choppy rate environment. Yahoo Finance
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Small-cap U.S. stocks trade at about a 16% discount to Morningstar fair value
There is a lot of chatter about the overvalued market and the AI stocks possibly be in a bubble. In fact, this Friday I was a panelist on a podcast and we discussed precisely this topic (I will send out a link to the podcast when it is live). I do believe that there is a bubble in the AI stocks and at some point the astronomical AI spending that we see today will fail to generate the returns we expect. That will be a "falling off the cliff: moment.
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Very reminiscent of the internet bubble 25 years ago.
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It worries me a great deal that the S&P 500 is about a third Mag 7. If you are one of the "VOO and chill" index fund investor, the facade of safety through diversification is likely to be shattered soon. When the AI bubble pops, all the large cap indexes are exposed. If you insist on S&P 500, atleast go for a fund that equal weights all stocks (such as RSP).
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Where should You Invest Now?
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Small caps are at 16% discount to the fair value according to Morningstar's calculations.
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Small cap value is at 25% discount to the fair value.
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This is pretty close to the recommended margin of safety of 30%, if you are a classical value investor. If you start digging in the small cap value world, you will find great many opportunities today.
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The picture above shows where you should position your portfolio today and it is quite clear that the Small Cap Value is the place to be.
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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
- Detailed investment thesis for portfolio stocks, including target prices and expected returns emailed to you as soon as published
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Market Anomalies That Persist: Why Value, Size, and Low Volatility Still Work
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The efficient market hypothesis holds that all available information is already reflected in stock prices, making it impossible to consistently beat the market through fundamental analysis. It is an elegant theory. It is also, as decades of empirical evidence now demonstrate, substantially incomplete. Certain return patterns called anomalies because they should not exist in a fully efficient market have persisted …
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Tariffs, Trade Wars, and Your Portfolio: How Value Investors Should Respond in 2026
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Markets hate uncertainty. Value investors, at their best, are supposed to thrive in it. That is the theory. The practice requires more discipline because tariff-driven volatility feels different from a normal correction. The headlines are persistent, the policy outcomes are genuinely unpredictable, and the second-order effects on supply chains and corporate margins are harder to model than a simple revenue …
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Annual Report vs. 10-K: What's Different and Which Sections Value Investors Should Read
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Here is something many new investors do not realize: the glossy annual report your broker links to and the 10-K filed with the SEC are not the same document. One is a marketing tool. The other is a legal document. As a value investor, you should spend most of your time on the legal document. I have been reading 10-Ks …
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