Thinking about what I am going to write about is a bit hard since I feel like Noel already gives everyone who reads this great advice, so hopefully I can also give some good opinions and not make this too boring.
I liked the idea of calling my section Gabriel’s Trumpet (Thanks to Noel’s fantastic ability to come up with names) because,
- My parents did name me after the Archangel Gabriel (Because, according to my parents, it was a miracle that I was even born in the first place due to complications)
- And like the Angel delivering the message to Mary about the coming of Jesus, I will be delivering a message to all of y’all (But not even close to the level of importance of what the actual Gabriel accomplished)
Anyway, let me tell you what has been on my mind lately. I didn’t grow up reading balance sheets for fun. But somewhere along the way, I got hooked on the idea that the best investors aren’t the ones chasing what’s already working. They’re the ones with the patience to buy what everyone else has given up on. That idea comes straight from the playbook of Warren Buffett, Benjamin Graham, and Philip Fisher — three thinkers who, in my view, laid the foundation for intelligent, long-term investing. I also stay sharp by listening to a range of contemporary voices in the value investing world, and lately, a few conversations have really stuck with me.
The Mag 7 Party Might Be Winding Down. For the better part of a decade, a handful of mega-cap technology companies have dominated market returns. And look…. they’ve earned it. Their earnings grew dramatically, and prices followed. That’s how it’s supposed to work.
But here’s what’s starting to shift: the earnings growth engine for those same companies is slowing, while capital expenditures (The money the company is spending to expand its business) have exploded. They’re spending more and growing less. At the same time, the other 493 companies in the S&P 500 — the ones nobody has been paying attention to — are quietly seeing their earnings estimates move higher (People are starting to estimate they will make more money than they originally thought). One group’s multiple is still stretched; the other’s is still modest. History has a pretty clear opinion on which one to own in that situation.
Market leadership is cyclical. It always has been. The question isn’t whether this rotation happens — it’s whether you’re positioned before or after it does.
Healthcare: Hated for the Wrong Reasons. The sector I’ve been watching most closely right now is healthcare. It’s an area that, frankly, the market has been treating like a lost cause. Policy uncertainty, regulatory headlines, and general investor frustration have pushed fund managers to cut their healthcare exposure to multi-year lows — we’re talking $17 billion in outflows so far this year alone, which is on track to set a record.
Here’s the thing, though the underlying demand for healthcare isn’t going anywhere. People still need hospitals, IV fluids, medications, and medical devices regardless of what Washington or A.I is doing. What we’re seeing is investors selling the headline, not the business — and that’s exactly the kind of environment that creates compelling long-term entry points for patient investors.
The last time healthcare was this underweight in the S&P 500 was around 2000 — right when technology was at peak concentration. The five years that followed were very good for healthcare investors. I’m not saying history repeats exactly, but I do think it rhymes.
