Actionable market insights that have outperformed the S&P 500 for over 26 years.

  My 50+ years of investing taught me some valuable lessons. Among the most important are to stay diversified and manage risk. I keep in mind that a 50 percent decline, for example, requires a 100 percent recovery just to break even. Hedging against severe declines, along with analyzing the risk/reward ratios of individual investments, is the secret to superior investment results over the long term, even if the cost of downside hedges means giving up some upside. This is why the Sound Advice portfolio has not only outperformed the S&P 500 and other market indexes for more than 25 years, it has done so with lower risk, as measured by the Sharpe Ratio, a widely accepted method used to quantify risk by...

The hot topic in September was the controversy stirred up by the major AI companies when they asked for government regulation, stating that AI is on the verge of becoming dangerous.  A manager of Anthropic’s technical staff predicted that there is greater than a 10 percent chance that AI could cause the extinction of the human race within the next decade.

This warning may have been dismissed if it were not for statements from OpenAI President Greg Brockman and Nvidia CEO Jensen Huang, publicly claiming that Artificial General Intelligence (AGI) had arrived with OpenAI's new Astra model.  

The dot com bubble of the late 1990s stemmed from the tremendous capital expenditures for laying fiber-optic cable in anticipation of the need from the country’s new internet. It wasn’t a mistake to make the investments. However, the problem was that the demand and profits did not come soon enough to realize adequate profits. Most went bankrupt, sending their inflated stocks crashing. The installed fiber was sold for pennies on the dollar to a new generation of companies who profited from what became today’s robust internet. This scenario is the primary risk of investing in the current AI boom.

Moderna (MRNA) skyrocketed today, more than doubling, up 177 percent, on the news of a successful Phase 3 melanoma trial. The combination of Moderna's vaccine with Merck's Keytruda significantly reduced the risk of melanoma returning or spreading compared with Keytruda alone. This was the first successful late-stage trial of an individualized mRNA cancer vaccine and validates Moderna's mRNA oncology platform for other cancers.