This Is Your Captain Speaking – Buckle Up – Ep 293

I am on the flight from Denver to San Francisco with my twelve-year-old daughter when I write this letter to IMA clients about the craziness I am seeing in the markets. The turbulence on the flight gave me the pilot analogy. The rest came from what I see in valuations.

This market is starting to feel incredibly bubbly, approaching circa 1999. The similarities are eerie. Intel and Corning, darlings of 1999, are at multidecade highs at nosebleed valuations. Walmart is trading at 50 times earnings again, the same multiple that produced no returns for shareholders from 1999 to 2014. And Nvidia, the most valuable company in the world, trades at 30 times 2026 earnings while SpaceX, Anthropic, and OpenAI prepare to go public, all losing money, collectively throwing close to a trillion dollars at AI data centers.

I walk through why the capital cycle in semiconductors looks like the railroads in 1800s Britain and telecom in 1999, what it means that Meta and Google have gone from buying back their own stock to issuing it, and why three IPOs plus two secondary offerings may put a bow on this year’s AI rally. I share why we have been trimming positions, buying smaller, and owning businesses that march to their own drummer. I quote a line from Jean-Marie Eveillard that has stayed with me since the late 90s. And I explain why our returns are likely to underperform the neighbors for the foreseeable future, and why we are not going to do anything about it.

Read the full letter at investor.fm.

_________________________________________________________ 🔗 LINKS MENTIONED: What AI, Tariffs, and Global Uncertainty Mean for Your Portfolio https://investor.fm/what-ai-tariffs-and-global-uncertainty-mean-for-your-portfolio/

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_________________________________________________________ WHO AM I: Vitaliy Katsenelson is the CEO of Investment Management Associates (IMA) and an award-winning writer. Forbes Magazine called him “The New Benjamin Graham.” His work has appeared in the Financial Times, The Wall Street Journal, Barron’s, Fortune, Institutional Investor, and Foreign Policy. He is the author of three books, including Soul in the Game: The Art of a Meaningful Life. _________________________________________________________ Please read the following important disclosure: https://investor.fm/disclosure/

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