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  Quant Weekly – Up over 72% since June 2025

• Quant 30 – Up over 78% since June 2025

• Legacy – Up over 400% since April 2023

• Changes to the Quant Portfolios

• Top Quant Stocks – Industrials

• Education – When oil prices Drop 20% suddenly – Which industries benefit and which suffer?

• Quick Links – at the bottom of the Post

USA Stock market week ending 05/29/26

Major Index Performance (Weekly)

• The S&P 500 (SPY) gained +1.5% from the close of 05/18/26 through the close of 05/22/26, continuing to show broad large-cap market strength.

• The Dow Jones Industrial Average (DIA) advanced +0.9% for the week, with blue-chip stocks posting steady gains.

• The Nasdaq Composite (^IXIC) led the major indexes with a strong +2.4% rally, outperforming the broader market during the period.

• The Russell 2000 (IWM) climbed +1.3% for the week, showing improving participation from small-cap stocks.

Market Drivers this Week (06/01/26 – 06/05/26)

• Monday 6/01/26 — Manufacturing Numbers Hit the Tape

  • S&P Global Manufacturing PMI and ISM Manufacturing both release in the morning.

  • Strong readings would support the ongoing industrial and AI infrastructure strength narrative.

  • JOLTS Job Openings also hits at 10:00 AM ET and remains one of the Fed’s key labor market indicators.

  • Any Iran ceasefire extension headlines over the weekend could sharply move oil prices and energy-sensitive stocks Monday morning.

• Tuesday 6/02/26 — CrowdStrike and HPE Earnings

  • CrowdStrike reports after the bell and could move the cybersecurity sector.

  • Hewlett Packard Enterprise also reports and gives investors another read on AI server demand after Dell’s strong quarter.

  • Factory Orders data releases Tuesday morning and will provide another look at industrial demand trends.

• Wednesday 6/03/26 — Jobs Data and Broadcom Earnings

  • ADP Private Payrolls releases before the open and gives traders an early read on the labor market.

  • ISM Services PMI follows at 10:00 AM ET and remains important since services drive most of the U.S. economy.

  • EIA Crude Oil Inventories also release during the morning session and could move energy markets.

  • Broadcom reports after the close and is expected to be one of the week’s biggest AI-related earnings events.

• Thursday 6/04/26 — Jobless Claims and Veeva Earnings

  • Weekly Initial Jobless Claims releases before the open and remains one of the market’s most closely watched labor indicators.

  • Veeva Systems reports after the close and could impact healthcare software and cloud names.

• Friday 6/05/26 — Jobs Report Takes Center Stage

  • Nonfarm Payrolls releases at 8:30 AM ET and is the biggest economic report of the week.

The CNN Fear and Greed Index ends the week at 60. This is the seventh week in row at the Greed setting. This follows nine straight weeks at the Fear or Extreme Fear setting. Risk-on continues to be in the drivers seat and the market is reflecting this over the last seven weeks.

The Quant Model Portfolios all finished higher this week. Quant Weekly and Quant 30 made new all time highs. Quant Legacy closed back over +400%.

Read more

• Subscribe now

  Quant Weekly – Up over 72% since June 2025

• Quant 30 – Up over 78% since June 2025

• Legacy – Up over 401% since April 2023

• Education – Pattern Day Trader (PDT) rules change on June 4, 2026

• Quick Links – At the bottom of the Post

USA Stock market week ending 05/29/26

Major Index Performance (Weekly)

• The S&P 500 (SPY) gained +1.5% from the close of 05/18/26 through the close of 05/22/26, continuing to show broad large-cap market strength.

• The Dow Jones Industrial Average (DIA) advanced +0.9% for the week, with blue-chip stocks posting steady gains.

• The Nasdaq Composite (^IXIC) led the major indexes with a strong +2.4% rally, outperforming the broader market during the period.

• The Russell 2000 (IWM) climbed +1.3% for the week, showing improving participation from small-cap stocks.

Market Drivers this Week (06/01/26 – 06/05/26)

• Monday 6/01/26 — Manufacturing Numbers Hit the Tape

  • S&P Global Manufacturing PMI and ISM Manufacturing both release in the morning.

  • Strong readings would support the ongoing industrial and AI infrastructure strength narrative.

  • JOLTS Job Openings also hits at 10:00 AM ET and remains one of the Fed’s key labor market indicators.

  • Any Iran ceasefire extension headlines over the weekend could sharply move oil prices and energy-sensitive stocks Monday morning.

• Tuesday 6/02/26 — CrowdStrike and HPE Earnings

  • CrowdStrike reports after the bell and could move the cybersecurity sector.

  • Hewlett Packard Enterprise also reports and gives investors another read on AI server demand after Dell’s strong quarter.

  • Factory Orders data releases Tuesday morning and will provide another look at industrial demand trends.

• Wednesday 6/03/26 — Jobs Data and Broadcom Earnings

  • ADP Private Payrolls releases before the open and gives traders an early read on the labor market.

  • ISM Services PMI follows at 10:00 AM ET and remains important since services drive most of the U.S. economy.

  • EIA Crude Oil Inventories also release during the morning session and could move energy markets.

  • Broadcom reports after the close and is expected to be one of the week’s biggest AI-related earnings events.

• Thursday 6/04/26 — Jobless Claims and Veeva Earnings

  • Weekly Initial Jobless Claims releases before the open and remains one of the market’s most closely watched labor indicators.

  • Veeva Systems reports after the close and could impact healthcare software and cloud names.

• Friday 6/05/26 — Jobs Report Takes Center Stage

  • Nonfarm Payrolls releases at 8:30 AM ET and is the biggest economic report of the week.

The CNN Fear and Greed Index ends the week at 60. This is the seventh week in row at the Greed setting. This follows nine straight weeks at the Fear or Extreme Fear setting. Risk-on continues to be in the drivers seat and the market is reflecting this over the last seven weeks.

The Quant Model Portfolios all finished higher this week. Quant Weekly and Quant 30 made new all time highs. Quant Legacy moves back over +400%.

Note: You are enjoying the free subscriber newsletter. Paid subscribers enjoy instant access to weekly Model Portfolio updates upon release and a Top Quant Stocks list. Free subscribers get access to Portfolio updates after a three-week delay but no Top Quant Stocks list. Want timely access to the new Adds/Removes and Top Quant Stocks list?

Subscribe now

Model Portfolio Quant Alpha Weekly

Any newly added stock is being released to Paid Subscribers today. Below are the updates from three weeks ago. This Portfolio continues to significantly outperform its benchmark, 72% versus 20%. It has 25 members.

Top five Quant stocks in the Portfolio (Paid subscribers only).

Add (05/08/26) : None

Outperformers: SSRM (SSR Mining) up over +90%, MU (Micron Technology) up over +510%, TTMI (TTM Technologies) up over +180%

Model Portfolio Quant 30

This week’s new update, if any, is being released to the paid subscribers. Shown below is the update made three weeks ago. This Portfolio continues to beat its benchmark by a wide margin, 78% to 20%. It has 30 members in it.

SSRM was added to the Portfolio on 8/7/25 and leaves the Portfolio with a +130% increase.

Top five Quant stocks in the Portfolio (Paid subscribers only).

Add (05/08/26): PBR-A (Petrobras) Oil and Gas

Remove (05/08/26): SSRM (SSR Mining)

Outperformers: MU (Micron Technology) up over +690%, LITE (Lumentum Holdings) up over +250%, TTMI (TTM Technologies) up over +140%, BTSG (BrightSpring Health) up over +170% and SNDK (Sandisk) up over +170%

Model Portfolio Quant Alpha’s – Legacy

The portfolio is up over +400% since it began in 2023. It has 17 stocks in it. Powell industries is now a 15 bagger. Celestica is now a 15 bagger and now Sterling Infrastructure has become a 13 bagger.

Sterling Infrastructure had blow out earnings three weeks ago. It started the week at $532 and ended the week at $844. It is now a 13 bagger.

Top five Quant stocks in the Portfolio (Paid subscribers only).

Remove (05/01/26): None

Outperformers: AGX (Argan) up over +800%, STRL (Sterling Infrastructure) up over +1300%, POWL (Powell Industries) up over +1500% and CLS (Celestica) is up over +1500%

Performance to 05-29-2026

Top Quant Stocks for this week – (Paid subscribers only feature)

Pattern Day Trader (PDT) rules change on June 4, 2026

The Pattern Day Trader (PDT) framework is undergoing one of the biggest changes in modern retail trading regulation. The old FINRA day-trading system is being retired and replaced with a new intraday risk-based margin framework focused more on real-time exposure and leverage instead of simply counting trades.

Even thou most of us are not daytraders and were not impacted by the Pattern Day Trader rule, you could still run afoul of it by having an active swing trading account. This happened to me a couple of times and I got an official warning from my broker that if I did not cut it out they would freeze my account for a period of time. The new rule should prevent that from happening in the future but may create problems of its own as investors realized they can push the envelope further now.

What The Old PDT Rule Was

Under the old FINRA Rule 4210 system:

• If you made 4 or more day trades within 5 business days in a margin account, your account could be designated as a “Pattern Day Trader.”

• Once flagged, the account generally needed at least $25,000 equity to continue unrestricted day trading.

The rule primarily applied to:

• stocks,

• ETFs,

• options,

• and margin accounts.

Cash accounts were not subject to the PDT designation itself.

What’s Changing

The FINRA PDT Framework Is Being Replaced

FINRA and the SEC approved amendments replacing the old PDT-specific margin framework with a modernized intraday margin system.

The amendments remove:

• the PDT designation,

• the “4 trades in 5 days” trigger,

• and the PDT-specific $25,000 equity requirement.

However:

• brokers may still maintain internal trading controls,

• some firms may phase out old PDT operational policies gradually,

• and firms can still impose their own house margin requirements.

New System: Intraday Risk-Based Margin Monitoring

Instead of counting trades, brokers will monitor:

• intraday exposure,

• leverage,

• maintenance margin,

• concentration risk,

• and real-time account volatility.

The focus shifts from:

“How many trades did you make?”

to:

“How much intraday risk are you taking?”

Key Changes Retail Traders Will Notice

1. The PDT-Specific $25,000 Minimum Is Going Away

Retail traders will no longer face the old PDT-specific $25K requirement tied to day-trading designation.

However:

• brokers may still impose their own minimums,

• and normal federal margin-account requirements still apply.

Many firms may continue allowing standard margin accounts starting near traditional Regulation T minimum levels, but policies will vary broker-to-broker.

2. The “4 Trades In 5 Days” Trigger Is Being Removed

The old PDT trade-counting system is being retired. Traders will no longer automatically receive PDT designation simply for making multiple intraday round-trip trades.

Instead, restrictions will increasingly depend on:

• real-time margin exposure,

• leverage,

• and broker risk controls.

3. Brokers Will Use Dynamic Risk Controls

Even though the PDT framework is changing, brokers will still actively manage risk.

Firms may:

• reduce intraday buying power,

• issue intraday margin calls,

• restrict trading activity,

• or liquidate positions if account exposure becomes excessive.

So the system becomes:

• more flexible,

• but also more dynamic and risk-sensitive.

4. Buying Power May Change Intraday

Under the old PDT system:

• buying power calculations were often relatively static.

Under the new framework:

• buying power may adjust dynamically throughout the day based on:

  • volatility,

  • open positions,

  • leverage,

  • maintenance margin,

  • and account concentration risk.

Effective Date

The new framework officially becomes effective:

June 4, 2026

Full Industry Transition Period

Broker-dealers have until approximately:

October 20, 2027 to fully transition operational systems and compliance procedures. This means implementation timing may differ across brokers.

What Brokers Are Saying

Some brokers have already indicated:

• PDT counting restrictions will disappear,

• the old PDT designation will be phased out,

• and risk controls will increasingly become intraday-margin based.

However:

• individual broker policies may still vary,

• and firms may implement additional safeguards beyond FINRA minimums.

What Is NOT Changing

Margin Risk Still Exists

This is not unlimited unrestricted leverage.

Traders can still:

• receive margin calls,

• face liquidations,

• or have buying power reduced if risk becomes too high.

Cash Accounts Still Follow Settlement Rules

Cash accounts still remain subject to:

• settlement timing requirements,

• freeriding restrictions,

• and good-faith violation rules.

Brokers Can Still Create House Rules

Even after the PDT framework changes:

• brokers may still impose:

  • stricter margin rules,

  • volatility controls,

  • concentration limits,

  • or additional trading restrictions.

Why Regulators Made The Change

FINRA argued the old PDT framework had become outdated and overly rigid.

Critics of the old system argued:

• smaller traders were unfairly restricted,

• while wealthier traders could take identical risks without limitations.

The new framework is designed to:

• modernize risk management,

• align restrictions with actual exposure,

• and reduce reliance on simple trade-count rules.

Risks And Criticism

Not everyone supports the changes. Critics worry the new system could encourage:

• more speculative trading,

• higher leverage usage,

• increased retail losses,

• and more volatility from short-term speculation.

Some investor-protection advocates believe the old PDT framework acted as a behavioral brake on inexperienced traders.

Bottom Line

The old FINRA Pattern Day Trader framework is being retired and replaced with a more modern intraday risk-based margin system.

The biggest practical changes are:

• removal of the PDT-specific $25K requirement,

• elimination of the fixed “4 trades in 5 days” trigger,

• and greater flexibility for active retail traders.

However:

• brokers will still monitor risk aggressively,

• intraday margin controls will remain active,

• and traders can still face restrictions or liquidations if leverage or exposure becomes excessive.

Quick Links

See comment after the article.

All content on this site is for informational purposes only and does not constitute financial advice. Consult relevant financial professionals in your country of residence to get personalized advice before you make any trading or investing decisions. This post was written with the assistance of artificial intelligence. The original ideas and final review are human-generated.

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  Selection for this week

• Some Pros about the stock

• Some Cons about the stock

• Criteria for choosing

• The previous selections

The selection last week, SNDK (Sandisk), has risen 14% since it was added to the Portfolio. A nice start for this Portfolio.

Add: LITE (Lumentum Holdings) – Communication Equipment

What does the company do?

Lumentum Holdings develops optical and photonic products for AI infrastructure, cloud data centers, networking, semiconductors, and industrial manufacturing markets. Its technologies include optical chips, lasers, transceivers, and photonic components used in high-speed networking, semiconductor production, EV battery manufacturing, and advanced industrial applications. Founded in 2015 in California.

Why Some Investors Are Bullish

Strong AI infrastructure demand

Lumentum is benefiting directly from growing AI data-center spending and high-speed optical networking demand from hyperscalers and cloud providers.

Improving revenue and margins

The company has recently delivered strong revenue growth alongside improving profitability driven by better utilization and a stronger AI-focused product mix.

Critical role in optical networking

Lumentum’s laser and optical technologies are increasingly important as AI workloads require faster data transmission and higher-bandwidth interconnect infrastructure.

Potential multi-year hyperscaler growth cycle

Current demand is being driven more by large cloud and AI infrastructure buildouts than traditional telecom spending cycles, potentially creating a longer-duration opportunity.

Positive long-term industry outlook

Wall Street remains generally constructive on Lumentum’s long-term positioning within AI infrastructure, optical networking, and advanced photonics.

What Bears Are Worried About

Valuation expectations have risen significantly

The stock has rallied sharply alongside AI enthusiasm, leaving less room for operational disappointments if growth slows.

Customer concentration risk

A relatively small number of hyperscale customers account for a significant portion of revenue, increasing dependency on large cloud-spending trends.

Supply-chain and capital spending pressures

Strong demand has created manufacturing constraints, while expanding production capacity requires substantial investment that may pressure near-term free cash flow.

Bottom Line

Lumentum appears well positioned to benefit from the continued expansion of AI infrastructure and optical networking demand, particularly in high-speed data-center connectivity. The long-term growth opportunity looks strong, but investors still need to weigh elevated expectations, customer concentration, supply constraints, and the capital-intensive nature of scaling advanced optical manufacturing capacity.

Top Quant Stock of the Week Criteria

Over the next few weeks, I will be detailing all the criteria I will use.

So far:

• I am using a Quantitative research platform that provides a daily list of top-ranked stocks to buy or sell, based on a Comprehensive Quant Score. This Quant system uses computer algorithms to come up with its rankings. This score incorporates multiple factors, including valuation, growth, profitability, momentum, and EPS revisions.

• I will be giving heavy weight to strong momentum and strong EPS revisions to make the weekly selection. Then, I will use my tested proprietary criteria to sort and then break any tie.

Additional Criteria:

• One stock will be selected each week. That would make 52 selections a year if I don’t miss any weeks because of internet problems.

• The hold times for the stocks added will be 1 week to years. Although a 1 week hold would be rare, it could happen if the stocks Quant metrics took a big nose dive right after being selected. If an added stock maintains its good metrics, it will be kept in the portfolio until it doesn’t. No time limit. The Quant system will tell me when it is time to let it go. So the hold time is short, medium and long depending on the Quant system metrics.

More color on the criteria next week.

Previous Selections:

All content on this site is for informational purposes only and does not constitute financial advice. Consult relevant financial professionals in your country of residence to get personalized advice before you make any trading or investing decisions. This post was written with the assistance of artificial intelligence. The original ideas and final review are human-generated.

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  Understanding Markets and Price Behavior

• The Case Against Active Management

• Index Funds and Passive Investing

• Risk, Behavior, and Investor Psychology

• Building Wealth: Practical Rules for Life

• Summary

• Related Video

Below are some highlights from the best selling book A Random Walk Down Wall Street by Burton Malkiel. The book was first published in 1973. Mr. Malkiel shows why an individual who saves consistently over time and buys a diversified set of index funds can achieve above-average investment results. In his updated version, he addresses current investment fads and critically analyzes cryptocurrencies, NFTs, and meme stocks. Malkiel reveals how to be a tax smart investor and how to make sense of recently popular investment management techniques, including factor investing, risk parity, and ESG portfolios.

Understanding Markets and Price Behavior

Stock prices move randomly and are extremely difficult to predict.

Malkiel’s core message is that short-term market movements are largely unpredictable because new information gets absorbed into prices so quickly. Yesterday’s stock move usually tells you very little about tomorrow’s.

Markets process information incredibly fast.

By the time most investors react to headlines or earnings reports, Wall Street has usually already priced the information in. That’s why consistently beating the market using public information is so difficult.

Fundamental analysis has limitations.

Studying earnings and business quality absolutely matters, but professional investors are looking at the exact same information every single day. Markets are highly competitive, which limits easy opportunities.

Technical analysis is less reliable than many traders believe.

Charts and patterns may look convincing, but most technical systems struggle to outperform consistently over time. Malkiel argues that investors often see patterns in randomness that don’t actually provide a real edge.

Market bubbles happen repeatedly throughout history.

Speculative manias are part of human nature. Investors become overly optimistic, prices disconnect from fundamentals, and eventually reality catches up.

Markets are often driven by emotion and momentum.

Sometimes investors buy assets simply because they believe someone else will pay a higher price later. Sentiment and speculation can temporarily overpower fundamentals.

The Case Against Active Management

Most active fund managers fail to beat the market.

Research consistently shows that most actively managed funds underperform their benchmarks after fees and taxes. Markets are simply too competitive for consistent outperformance to be common.

Past performance usually doesn’t predict future success.

The hottest fund from last year often struggles the following year. Chasing recent winners is one of the most common investing mistakes.

Fees quietly destroy long-term wealth.

Even small investment fees compound dramatically over decades. Keeping costs low is one of the biggest advantages long-term investors have.

Trading too much usually hurts returns.

Frequent buying and selling creates taxes, commissions, and emotional mistakes. Investors who stay patient often outperform those constantly trying to outsmart the market.

Large institutions face their own disadvantages.

Big funds can’t move money quickly without affecting prices, and many managers face pressure to avoid standing too far away from the crowd. Even professionals deal with structural limitations.

Index Funds and Passive Investing

Index funds are one of the best investing tools ever created.

They provide broad diversification, low fees, tax efficiency, and consistent market exposure. Malkiel strongly believes passive investing is one of the smartest long-term strategies for most investors.

Diversification protects investors from unnecessary risk.

Owning only a few stocks creates avoidable company-specific risk. Broad diversification helps smooth out the damage from individual losers.

Stocks reward patience over long periods.

Historically, stocks outperform cash and bonds because investors are compensated for tolerating volatility. The key is staying invested long enough for compounding to work.

Dollar-cost averaging helps remove emotion.

Investing consistently over time reduces the pressure of trying to perfectly time the market. It creates discipline and keeps investors participating during both good and bad periods.

Rebalancing keeps portfolios disciplined.

Over time, some investments grow faster than others and shift portfolio risk. Rebalancing helps investors maintain their intended allocation without emotional decision-making.

Risk, Behavior, and Investor Psychology

Higher returns always come with risk.

There’s no way to earn strong long-term returns without accepting volatility and occasional drawdowns. Investors often underestimate how emotionally difficult losses can feel.

Time horizon matters enormously.

Young investors can usually tolerate more volatility because they have decades to recover from downturns. Older investors often need greater stability and income protection.

Investor psychology causes many investing mistakes.

Fear, greed, overconfidence, and herd mentality regularly damage investor returns. Emotional decisions often matter more than market knowledge itself.

Overconfidence is dangerous in investing.

Many investors believe they can consistently pick winners or time the market better than they actually can. Overconfidence often leads to excessive risk-taking and unnecessary trading.

Market timing is incredibly hard to do consistently.

Investors must correctly predict both when to exit and when to reenter the market. Missing even a few strong market days can seriously hurt long-term returns.

Building Wealth: Practical Rules for Life

Starting early matters tremendously.

Compounding becomes far more powerful over long periods of time. Even small amounts invested early can grow into meaningful wealth decades later.

Tax-advantaged accounts are extremely valuable.

Retirement accounts allow investments to compound more efficiently by reducing taxes. Over long periods, those tax savings become significant.

A home is not automatically a perfect investment.

Housing includes maintenance, taxes, insurance, and transaction costs that many people underestimate. Buying a home should balance financial and lifestyle goals.

Portfolios should become more conservative with age.

Younger investors generally can tolerate more stock exposure, while older investors often need greater financial stability and lower volatility.

Diversification should extend beyond U.S. stocks.

Different asset classes react differently to changing economic conditions. Broad diversification creates more resilient portfolios over time.

Simple investing often works best.

Complicated products and strategies frequently benefit the financial industry more than the investor. Simple diversified portfolios often outperform more complex approaches after fees and taxes.

Emotional investing usually creates problems.

Bull markets encourage greed while bear markets create fear. Investors who stay disciplined during emotional extremes often achieve the best long-term results.

Summary

Consistently beating the market is extremely difficult.

Markets are highly competitive and efficient, making outperformance rare after costs and taxes. For most people, broad diversification and long-term investing are the most reliable path.

Long-term investing success comes from discipline and patience.

Low costs, diversification, emotional control, and consistency matter far more than trying to constantly outsmart the market. The biggest advantage investors can develop is staying disciplined and avoiding major mistakes.

All content on this site is for informational purposes only and does not constitute financial advice. Consult relevant financial professionals in your country of residence to get personalized advice before you make any trading or investing decisions. This post was written with the assistance of artificial intelligence. The original ideas and final review are human-generated.

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  Quant Weekly – Up over 65% since June 2025

• Quant 30 – Up over 69% since June 2025

• Legacy – Up over 380% since April 2023

• Changes to the Quant Portfolios

• Top Quant Stocks – Energy

• Education – Pattern Day Trader (PDT) rules change on June 4, 2026

• Quick Links – at the bottom of the Post

USA Stock market week ending 05/22/26

Major Index Performance (Weekly)

• SPY (S&P 500 ETF): Finished the week up +1.0%, showing steady large-cap strength and maintaining positive momentum into the May 22 close.

• DIA (Dow Jones Industrial Average ETF): Gained +1.8%, leading the major indexes as industrial and blue-chip names outperformed during the week.

• ^IXIC (Nasdaq Composite): Rose +0.4%, posting more modest gains compared to the broader market while still closing the week in positive territory.

• IWM (Russell 2000 ETF): Advanced +2.7%, making it the strongest-performing major index of the group as small caps showed notable relative strength.

Takeaways

• Small caps led the market, with IWM significantly outperforming the major large-cap indexes.

• Blue-chip industrials remained strong, helping DIA post the second-best weekly performance.

Market Drivers this Week (05/25/26 – 05/29/26)

• Monday, 5/26 — U.S. Markets Closed
  U.S. stock markets are closed for Memorial Day. No major earnings or economic reports are scheduled.

• Tuesday, 5/27 — Consumer Confidence and Economic Data
  The Consumer Confidence Index headlines the day alongside Durable Goods Orders and housing data. Earnings after the close include AutoZone (AZO) and Zscaler (ZS).

• Wednesday, 5/28 — Major Tech and AI Earnings
  Salesforce (CRM), Snowflake (SNOW), Marvell Technology (MRVL), and Synopsys (SNPS) report after the bell. Markets will also get the latest FOMC Minutes and MBA Mortgage Applications.

• Thursday, 5/29 — GDP Revision and Key Retail Earnings
  The second estimate for Q1 GDP, Weekly Jobless Claims, and Pending Home Sales are scheduled. Earnings include Dell (DELL), Costco (COST), Dollar Tree (DLTR), Best Buy (BBY), MongoDB (MDB), and Gap (GAP).

• Friday, 5/30 — Core PCE Inflation Data
  Core PCE and the broader PCE Price Index headline the week’s economic calendar. Personal Income, Personal Spending, Chicago PMI, and Consumer Sentiment data are also due before the open.

The CNN Fear and Greed Index ends the week at Greed 59. This is the sixth week in row at the Greed setting. This follows nine straight weeks at the Fear or Extreme Fear setting. Risk-on continues to be in the drivers seat and the market is reflecting this over the last six weeks.

The Quant 30 and Quant Weekly Model Portfolios all finished higher this week. Resuming their uptrend after suffering a loss last week. Before last week, they had been up seven weeks in a row.

Read more

• Subscribe now

  Quant Weekly – Up over 65% since June 2025

• Quant 30 – Up over 69% since June 2025

• Legacy – Up over 380% since April 2023

• Education – When a stock announces a stock split, is there a good way to profit from this?

• Quick Links – At the bottom of the Post

USA Stock market week ending 05/22/26

Major Index Performance (Weekly)

• SPY (S&P 500 ETF): Finished the week up +1.0%, showing steady large-cap strength and maintaining positive momentum into the May 22 close.

• DIA (Dow Jones Industrial Average ETF): Gained +1.8%, leading the major indexes as industrial and blue-chip names outperformed during the week.

• ^IXIC (Nasdaq Composite): Rose +0.4%, posting more modest gains compared to the broader market while still closing the week in positive territory.

• IWM (Russell 2000 ETF): Advanced +2.7%, making it the strongest-performing major index of the group as small caps showed notable relative strength.

Takeaways

• Small caps led the market, with IWM significantly outperforming the major large-cap indexes.

• Blue-chip industrials remained strong, helping DIA post the second-best weekly performance.

Market Drivers this Week (05/25/26 – 05/29/26)

• Monday, 5/26 — U.S. Markets Closed
  U.S. stock markets are closed for Memorial Day. No major earnings or economic reports are scheduled.

• Tuesday, 5/27 — Consumer Confidence and Economic Data
  The Consumer Confidence Index headlines the day alongside Durable Goods Orders and housing data. Earnings after the close include AutoZone (AZO) and Zscaler (ZS).

• Wednesday, 5/28 — Major Tech and AI Earnings
  Salesforce (CRM), Snowflake (SNOW), Marvell Technology (MRVL), and Synopsys (SNPS) report after the bell. Markets will also get the latest FOMC Minutes and MBA Mortgage Applications.

• Thursday, 5/29 — GDP Revision and Key Retail Earnings
  The second estimate for Q1 GDP, Weekly Jobless Claims, and Pending Home Sales are scheduled. Earnings include Dell (DELL), Costco (COST), Dollar Tree (DLTR), Best Buy (BBY), MongoDB (MDB), and Gap (GAP).

• Friday, 5/30 — Core PCE Inflation Data
  Core PCE and the broader PCE Price Index headline the week’s economic calendar. Personal Income, Personal Spending, Chicago PMI, and Consumer Sentiment data are also due before the open.

The CNN Fear and Greed Index ends the week at Greed 59. This is the sixth week in row at the Greed setting. This follows nine straight weeks at the Fear or Extreme Fear setting. Risk-on continues to be in the drivers seat and the market is reflecting this over the last six weeks.

The Quant 30 and Quant Weekly Model Portfolios all finished higher this week. Resuming their uptrend after suffering a loss last week. Before last week, they had been up seven weeks in a row.

Note: You are enjoying the free subscriber newsletter. Paid subscribers enjoy instant access to weekly Model Portfolio updates upon release and a Top Quant Stocks list. Free subscribers get access to Portfolio updates after a three-week delay but no Top Quant Stocks list. Want timely access to the new Adds/Removes and Top Quant Stocks list?

Subscribe now

Model Portfolio Quant Alpha Weekly

Any newly added stock is being released to Paid Subscribers today. Below are the updates from three weeks ago. This Portfolio continues to significantly outperform its benchmark, 65% versus 19%. It has 26 members.

Note: VISN (Vistance Networks) paid out a $10 per share dividend. Originally added to the Portfolio on 7/10/25 at $7.86 per share, it ended the week at $12.30. In addition, the company announced three weeks ago that it intends to sell part of the remaining company for $1.8 Billion. The transaction is expected to close within a few months. After this transaction only its Aurora Networks unit will be left. The current market cap of VISN is $2.8 Billion. It would be good bet that the remaining Aurora unit has a bright future as a fast growing small cap that is debt free.

MXL (MaxLinear) was added three weeks ago and is already up +28%. Paid subscribers were able to act. Free subscribers missed out.

Top five Quant stocks in the Portfolio (Paid subscribers only).

Add (05/01/26) : MXL (MaxLinear) – Semiconductors

Outperformers: SSRM (SSR Mining) up over +80%, MU (Micron Technology) up over +370%, VISN (Vistance Networks) up over +180%

Model Portfolio Quant 30

This week’s new update, if any, is being released to the paid subscribers. Shown below is the update made three weeks ago. This Portfolio continues to beat its benchmark by a wide margin, 69% to 19%. It has 30 members in it.

MXL (MaxLinear) was added three weeks ago and is already up +28%. Paid subscribers were able to act. Free subscribers missed out.

Top five Quant stocks in the Portfolio (Paid subscribers only).

Add (05/01/26): MXL (MaxLinear) – Semiconductors

Remove (05/01/26): ATI (ATI Inc)

Outperformers: MU (Micron Technology) up over +510%, LITE (Lumentum Holdings) up over +290%, TTMI (TTM Technologies) up over +170%, BTSG (BrightSpring Health) up over +160% and SNDK (Sandisk) up over +140%

Model Portfolio Quant Alpha’s – Legacy

The portfolio is up over +380% since it began in 2023. It has 18 stocks in it. Powell industries is now a 14 bagger. Celestica is now a 14 bagger and now Sterling Infrastructure has become a 11 bagger.

Top five Quant stocks in the Portfolio (Paid subscribers only).

Remove (05/01/26): None

Outperformers: AGX (Argan) up over +800%, STRL (Sterling Infrastructure) up over +1100%, POWL (Powell Industries) up over +1400% and CLS (Celestica) is up over +1400%

Performance to 05-22-2026

Top Quant Stocks for this week – (Paid subscribers only feature)

When a stock announces a stock split, is there a good way to profit from this?

Top 10 Pros of Trading Around a Stock Split

• Momentum often accelerates after the announcement

  • Many split stocks continue trending higher into the effective split date.

  • Traders and institutions frequently add exposure during the announcement-to-split window.

• Retail investor participation usually increases

  • Lower post-split prices attract smaller investors psychologically.

  • Increased retail buying can add short-term momentum.

• Stock splits often occur in elite growth companies

  • Strong companies usually split after major earnings and price appreciation.

  • Many historical market leaders announced multiple splits during long bull runs.

• Media attention rises significantly

  • Financial media heavily covers major split announcements.

  • Increased visibility can drive new buying interest.

• Liquidity improves after the split

  • Higher share count can tighten spreads and improve trading activity.

  • Options trading volume often increases as well.

• Institutional momentum may continue

  • Funds often keep accumulating leading growth stocks after splits.

  • Strong trends can persist well beyond the split event itself.

• Split announcements can reinforce bullish sentiment

  • Investors often view splits as a sign of management confidence.

  • Positive sentiment can attract trend-following capital.

• Options traders gain more flexibility

  • Lower share prices can make options contracts more accessible.

  • Increased options activity can amplify volatility and momentum.

• Technical setups often improve

  • Breakouts and momentum patterns can strengthen after announcements.

  • Strong relative strength frequently attracts technical traders.

• Historical data generally favors split stocks

  • Many studies show split stocks outperforming the broader market over time.

  • The strongest gains often occur before the actual split date.

Top 10 Cons of Trading Around a Stock Split

• The split itself creates no fundamental value

  • Revenue, earnings, and cash flow remain unchanged after the split.

  • Investors sometimes confuse lower share price with a cheaper valuation.

• “Buy the rumor, sell the news” risk is high

  • Stocks often peak near the split execution date.

  • Profit-taking can trigger sharp pullbacks afterward.

• Momentum traders can exit quickly

  • Split rallies can reverse suddenly when hype fades.

  • Short-term traders rarely stay committed during volatility.

• Valuations can become dangerously stretched

  • Excitement can push stocks far beyond reasonable fundamentals.

  • Overextended momentum often leads to large corrections later.

• Retail FOMO usually arrives late

  • Many investors buy after most of the move already occurred.

  • Chasing strength late often creates poor risk/reward setups.

• Volatility frequently increases

  • Heavy options activity can create exaggerated price swings.

  • Emotional trading tends to rise around split events.

• Not all split stocks continue outperforming

  • Some split stocks significantly underperform after the event.

  • Weakening earnings trends can quickly overpower split enthusiasm.

• Crowded trades become risky

  • When everyone expects a rally, expectations can become excessive.

  • Overcrowded momentum trades often unwind violently.

• Investors may ignore weakening fundamentals

  • Split excitement can distract from slowing growth or margin pressure.

  • Hype can temporarily mask operational problems.

• The strategy works best only in strong market environments

  • Split momentum performs better during bullish market conditions.

  • In weak markets, even strong split stocks can fail quickly.

Bottom Line

• The best way to profit from stock splits is usually focusing on fundamentally strong companies with accelerating earnings, institutional accumulation, and strong momentum before the crowd fully reacts.

• Historically, the strongest performance often occurs between the split announcement date and the actual split execution date, but risk management remains critical because split momentum can reverse sharply.

Is there a best time to get involved after the announcement?

Historically, the strongest performance period for many stock splits is actually the window between the split announcement date and the effective split date.

Studies over multiple decades have found that split stocks often gain approximately:

• 5% to 10% on average
  between:

• the announcement date
  and

• the actual split execution date.

Some high-momentum names have gained much more:

• NVIDIA

• Tesla

• Apple

Why This Period Often Performs Best

• Momentum traders pile in immediately

  • Split announcements attract attention quickly.

• Retail investor excitement increases

  • Many investors perceive the stock as becoming “more affordable.”

• Media coverage accelerates

  • Financial news outlets heavily cover popular split announcements.

• Institutions often continue accumulating

  • Strong companies usually announce splits during powerful uptrends.

• Options activity increases sharply

  • This can amplify upside momentum temporarily.

What Historically Happens Most Often

Typical pattern:

1. Strong stock already trending higher

2. Split announced

3. Stock rallies further into split date

4. Momentum eventually cools after split execution

That’s why many traders focus on:

the announcement-to-split window, rather than buying after the split already occurred.

But There Are Important Risks

• Sometimes the move is already mostly priced in.

• Late buyers often chase extended momentum.

• Many split stocks experience:

  • sharp pullbacks,

  • profit-taking,

  • or consolidation
    after the split becomes effective.

This is especially true when:

• valuation becomes extreme,

• earnings slow,

• or the split hype exceeds fundamentals.

Historically Stronger Setups

The best-performing split trades usually combine:

• strong earnings growth,

• upward guidance revisions,

• institutional accumulation,

• and powerful sector momentum.

The split itself is usually:

a confirmation signal, not the actual reason the stock becomes a winner.

Bottom Line

The strongest gains typically occur when the split is accompanied by strong earnings momentum, institutional buying, and leadership within a powerful market theme.

Historically, stocks often perform best in the period between the split announcement and the actual split date.

Quick Links

See comment below.

All content on this site is for informational purposes only and does not constitute financial advice. Consult relevant financial professionals in your country of residence to get personalized advice before you make any trading or investing decisions. This post was written with the assistance of artificial intelligence. The original ideas and final review are human-generated.

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Starting today, I am starting a weekly Top Quant Stock Pick of the Week article. At the end of the article is some of the criteria for the pick, if you are interested.

Add: SNDK (Sandisk) Computer Hardware

Why Sandisk? It has been in quite a strong uptrend this year but momentum traders do not fear that. The Quant system I follow is signaling that there is more upside ahead.

The Quant system identified Sandisk as a top prospect in mid February and without any break this top ranking has been maintained from $600 to the current $1392.

Some pro and con points about Sandisk

Why Some Investors Are Bullish On Sandisk (SNDK)

The main bull case for Sandisk right now centers around AI-driven enterprise storage demand remaining extremely strong, which has helped support elevated pricing across the industry.

Supporters believe that strong pricing power, improving profitability, and longer-term customer agreements could help create a more stable business model than investors have historically seen in memory and storage markets.

What Bulls Like About The Story

AI Demand Is Fueling Storage Growth

Much of the optimism comes from continued AI infrastructure spending.

As hyperscalers and enterprise customers expand AI capacity, demand for high-performance storage remains strong. Recent bullish coverage pointed to tightening inventories and healthy demand conditions helping support elevated pricing and margins.

Some analysts discussed near-term gross margin guidance in the 79%–81% range, which would represent unusually strong profitability for the storage industry.

Higher-End Data Center Products Are Becoming More Important

Another positive trend is Sandisk’s growing focus on higher-value enterprise and data center SSD products.

Bulls believe this mix shift may improve:

• profitability,

• customer visibility,

• and revenue stability over time.

Management also discussed:

• multi-year customer agreements,

• firm purchase commitments,

• revenue guidance between $7.75B–$8.25B,

• EPS guidance between $30–$33 near term,

• and a $6B buyback authorization.

Long-Term Contracts Could Reduce Volatility

Historically, memory and storage businesses have been highly cyclical.

One reason some investors are more constructive now is because Sandisk appears to be securing longer-term customer agreements instead of relying entirely on spot pricing.

That could potentially provide:

• better revenue visibility,

• more predictable cash flow,

• and less exposure to sudden pricing swings.

However, even bullish analysts acknowledged these agreements do not fully eliminate industry cyclicality.

The Kioxia Partnership Adds Strategic Strength

Another part of the bull case involves Sandisk’s long-term partnership with Kioxia.

Supporters believe the relationship:

• strengthens manufacturing scale,

• improves competitive positioning,

• and benefits from Japanese semiconductor support initiatives.

The joint venture reportedly extends through 2034.

Analysts Have Been Raising Targets

Citi recently reiterated a Buy rating and raised its price target on Sandisk.

The firm cited:

• strong AI-related storage demand,

• supportive pricing conditions,

• and long-term supply agreements helping support elevated margins.

What Bears Are Worried About

Even with strong momentum, several analysts remain cautious.

Growth May Be More Pricing-Driven Than Volume-Driven

Some bearish analysts argue shipment volumes have weakened and that recent growth may be relying more heavily on unusually strong pricing conditions than on underlying unit demand growth.

That could become a concern if pricing conditions normalize.

Valuation Has Become Aggressive

Another major concern is valuation.

Several cautious analysts believe the stock already reflects very optimistic expectations following a strong rally.

Some analysts also warned the stock may be benefiting from momentum-driven “FOMO” trading activity.

Margins May Not Stay This High Forever

A few neutral or Hold-rated views acknowledged current fundamentals remain strong, but questioned whether:

• 80%+ gross margins,

• elevated pricing,

• and unusually strong AI-related demand

can realistically remain at current levels over the long term.

That remains one of the biggest long-term debates surrounding the stock.

EPS Estimates

Analyst estimates included:

• FY2026 EPS estimate: 65.01

• FY2027 EPS estimate: 175.38

Revenue Estimates

Analysts also projected:

• FY2026 revenue estimate: $19.53B

• FY2027 revenue estimate: $42.36B

Those projections reflect very aggressive forward growth expectations tied largely to continued strength in AI-related storage demand.

Bottom Line

The bullish case for Sandisk is centered around:

• AI-driven storage demand,

• elevated pricing power,

• growing enterprise SSD exposure,

• improving profitability,

• and long-term customer agreements that could help improve business visibility.

The bearish side argues:

• valuation may already reflect extremely optimistic assumptions,

• margins may normalize over time,

• and recent gains could be heavily dependent on favorable pricing conditions continuing longer than expected.

Top Momentum Stock of the Week Criteria

Over the next few weeks, I will be detailing all the criteria I will use. To start, I am using a Quantitative research platform that provides a daily list of top-ranked stocks to buy or sell, based on a Comprehensive Quant Score. This score incorporates multiple factors, including valuation, growth, profitability, momentum, and EPS revisions.

I have had great success in using this system. For this particular Portfolio, I will be giving heavy weight to strong momentum and strong EPS revisions to make the weekly selection. Then, I will use my tested proprietary criteria to tie break.

More color on the criteria next week.

All content on this site is for informational purposes only and does not constitute financial advice. Consult relevant financial professionals in your country of residence to get personalized advice before you make any trading or investing decisions. This post was written with the assistance of artificial intelligence. The original ideas and final review are human-generated.

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  Understanding Market Reality

• Risk: What It Really Means

• The Role Of Psychology And Cycles

• Finding Value And Buying Well

• Building A Philosophy And Staying Disciplined

• Summary

• Related Video

Below are some highlights from the best selling book The Most Important Thing by Howard Marks. The book was written in 2011. The Most Important Thing explains the keys to successful investment and the pitfalls that can destroy capital or ruin a career. Utilizing passages from his memos to illustrate his ideas, Marks teaches by example, detailing the development of an investment philosophy that fully acknowledges the complexities of investing and the perils of the financial world. Brilliantly applying insight to today’s volatile markets, Marks offers a volume that is part memoir, part creed, with a number of broad takeaways.

Highlights

Understanding Market Reality

The Market Is Not Your Friend

Markets aren’t perfectly rational. Prices are driven by emotion, fear, greed, and crowd behavior just as much as fundamentals. Marks believes investors should stop assuming the market is always correct — and start treating every price as a negotiation between imperfect human beings.

Most Investors Are Average By Definition

If you do what everyone else does, you’ll get what everyone else gets. Outperforming requires independent thinking, discipline, and the willingness to occasionally look wrong before being proven right. Being different isn’t enough — you have to be differently correct.

Second-Level Thinking Is The Whole Game

First-level thinking says “this is a great company.” Second-level thinking asks “does everyone already know that, and is the stock already priced for perfection?” Great investing comes from thinking deeper than consensus — and then acting on it when the crowd hasn’t caught up yet.

Know What You Don’t Know

Marks is sharper on this than most summaries give him credit for. He doesn’t just say forecasting is hard — he says macro forecasting is largely useless, and that investors who try to predict economies and markets tend to underperform those who focus on valuation discipline. Acknowledging uncertainty isn’t weakness. It’s one of the most powerful edges you can have.

The Future Is A Range Of Possibilities

Investing is about probabilities, not certainty. Great investors don’t ask “what will happen?” They ask “what could happen, how likely is each outcome, and am I being compensated appropriately for the range of risks?” That mental shift changes everything about position sizing and risk management.

History Repeats — But Never Exactly

Markets move in cycles. Studying past bubbles, crashes, and recoveries helps investors recognize dangerous behavior before it gets extreme. The patterns are real. The timing and trigger are never identical — which is exactly why experience alone isn’t enough and why complacency is always lurking.

Risk: What It Really Means

Risk Is Not Volatility — It’s Permanent Loss

Marks believes the finance industry’s obsession with volatility as a proxy for risk is fundamentally misguided. Real risk is losing capital you can’t recover. Short-term price swings only become dangerous when they force you into a bad decision — like selling at the bottom because you can’t stomach the drawdown.

Risk And Return Always Travel Together

Higher potential returns always require accepting higher risk. This isn’t just a platitude — it’s a diagnostic tool. Whenever someone offers you outstanding returns with minimal risk, either they’re wrong about the returns or they’re hiding the risk. There is no free lunch, and the people who believe there is tend to find out the hard way.

The Riskiest Time Is When Everyone Feels Safe

This is one of Marks’ sharpest and most counterintuitive points. When investors are confident, they accept lower compensation for the risk they’re taking. Valuations rise, leverage increases, and caution gets dismissed as timidity. That complacency is exactly when markets become most dangerous — not when everyone is already scared.

You Can’t Judge Risk By The Outcome

A risky decision that worked out was still a risky decision. A cautious decision that missed upside was still the right process. Marks is insistent on this: outcomes don’t retroactively define the quality of the decision. Good investing is about building a sound process and accepting that even good processes produce bad outcomes sometimes.

Controlling The Downside Matters Most

Marks built his entire career around asymmetric outcomes — losing less when things go wrong while still participating when things go right. Avoiding large, permanent losses is the foundation of long-term compounding. A 50% loss requires a 100% gain just to break even. The math of ruin is brutal.

Concentration Can Destroy Portfolios

Even strong, disciplined investors can be wiped out by a single oversized mistake. Survival isn’t just a nice goal — it’s the prerequisite for everything else. You cannot compound wealth if you aren’t still in the game. Marks treats capital preservation not as a conservative instinct but as a strategic necessity.

The Role Of Psychology And Cycles

Cycles Are Inevitable

Markets, economies, and investor sentiment all move in cycles. But Marks is more specific than most — he pays particular attention to the credit cycle, which he views as one of the most reliable leading indicators available. When credit is loose and lenders stop asking hard questions, that’s a warning sign more useful than almost any macro forecast.

Greed And Fear Run The Market

Bull markets are driven by greed. Bear markets are driven by fear. The dangerous part is that both feel completely rational to the people experiencing them. The best investors stay calibrated during both — neither dismissing risk during euphoria nor abandoning sound assets during panic.

The Pendulum Always Swings Too Far

Markets don’t settle at fair value — they overshoot dramatically in both directions. Extreme optimism produces prices that can only disappoint. Extreme fear produces prices that almost guarantee recovery for patient buyers. The pendulum always swings back, and the investors who profit most are the ones who resist the emotional pull of wherever it currently sits.

Consensus Thinking Feels Safe — But Can Be Dangerous

The crowd is usually comfortable and usually approximately right — except at turning points, which is exactly when it matters most. Successful investors develop the ability to form independent conclusions and act on them even when the consensus feels overwhelming. That’s not contrarianism for its own sake. It’s intellectual honesty.

Bull Markets Create Complacency

Long bull markets gradually lower standards. Deals get done at prices that would have been rejected earlier. Leverage increases. Covenants weaken. Risk gets reframed as opportunity. This is how the seeds of the next crash get planted during the current boom — not through sudden recklessness, but through the slow erosion of discipline.

Your Emotional State Matters

Emotional discipline is one of the most durable investing edges available. Fear and greed don’t just affect bad investors — they affect everyone. The difference is that the best investors have built a process sturdy enough to override those impulses in the moments when they’re loudest. Without that, even a sound analytical framework will fail you.

Finding Value And Buying Well

Price Is Everything

A great company at a terrible price is a terrible investment. A mediocre company at a wonderful price can be an excellent one. Valuation discipline isn’t just one factor among many — it’s the factor that most reliably determines whether you make or lose money over time.

You Make Your Money When You Buy

Strong long-term returns are almost always traceable back to disciplined entry prices. By the time you’re ready to sell, your fate is largely already decided. The margin of safety gets built in at the purchase, not discovered afterward.

The Goal Is To Find Mispriced Assets

Marks isn’t just looking for cheap assets — he’s looking for assets the market has priced incorrectly relative to their true underlying value. That usually requires doing serious work on something unloved, misunderstood, or temporarily out of favor, and having enough conviction to act against the prevailing mood.

Distressed Debt Can Create Real Opportunity

This is where Marks made his name, and his conviction goes well beyond “risks are real.” His actual argument is that market inefficiency in distressed situations is structural — panic selling, forced liquidations, and investor mandates that prohibit holding below-investment-grade paper all create mispricings that have nothing to do with actual recovery value. For disciplined analysts willing to do the work, that gap between price and value is where exceptional returns live.

The Most Popular Ideas Are Often Overcrowded

When everyone loves the same investment, expectations and valuations are already stretched to reflect the good news. The upside is priced in and the downside is ignored. Some of the best opportunities in markets are in the places nobody is talking about, precisely because indifference keeps prices low.

Building A Philosophy And Staying Disciplined

Philosophy Comes Before Strategy

Before deciding what to buy, you need a clear framework for how markets work, where edges come from, and how you’ll behave across different environments. Without that foundation, every headline becomes a reason to change course, and emotions fill the vacuum where process should be.

Consistency Through Cycles Matters

Anyone can look smart during a bull market. The real test is whether your process holds up when conditions turn hostile. Marks values investors who maintain discipline across full cycles far more than those who generate spectacular short-term results and then blow up when the environment shifts.

Understanding The Cycle Helps Determine Aggression

When valuations are stretched, credit is loose, and sentiment is euphoric, the right move is caution — even when it feels like you’re missing out. When assets are cheap, credit is tight, and fear dominates, the right move is aggression — even when it feels terrifying. Marks knows this is easy to say and incredibly hard to execute emotionally.

Leverage Amplifies Everything

Borrowed money turns modest gains into impressive ones and manageable losses into catastrophic ones. Marks treats leverage with deep respect and views reckless use of it as one of the most reliable paths to ending your investing career. The math works against you when things go wrong under leverage — and things always go wrong eventually.

Survival Comes First

You cannot compound wealth if you blow yourself up. Marks is unambiguous: preserving the ability to stay in the game is the first rule of investing. Every other principle — value, patience, contrarianism — only matters if you’re still around to apply it.

Great Investing Is About Playing The Odds

Even the best investors are wrong regularly. The goal isn’t perfection — it’s building a repeatable process where the wins are bigger than the losses over time, and where the probabilities consistently tilt in your favor. Marks is fundamentally probabilistic. He accepts uncertainty and works to position himself correctly within it, not to eliminate it.

Summary

• Risk is the central theme. Nearly every lesson in the book circles back to understanding, measuring, and managing risk — not avoiding it entirely, but ensuring you’re compensated fairly for what you accept and that no single mistake can end you.

• The credit cycle is Marks’ most specific and underrated insight. Most summaries reduce him to generic cycle-watching, but his sharpest early-warning signal is credit conditions — loose lending, weakening covenants, and disappearing standards are more predictive than almost any macro forecast.

• Second-level thinking is the engine of outperformance. The skill isn’t spotting good businesses — it’s figuring out what the consensus already believes and identifying where the price diverges from reality in your favor.

• Macro forecasting is not just hard — Marks considers it largely useless. Investors who build strategies around predicting economies and interest rates tend to underperform those who focus relentlessly on what assets are worth and what they cost today.

• Process and philosophy outlast any single insight. Markets change, cycles turn, and hot strategies go cold. What survives across all of it is intellectual humility, emotional discipline, and a framework rigorous enough to hold when the pressure to abandon it is greatest.

All content on this site is for informational purposes only and does not constitute financial advice. Consult relevant financial professionals in your country of residence to get personalized advice before you make any trading or investing decisions. This post was written with the assistance of artificial intelligence. The original ideas and final review are human-generated.

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  Quant Weekly – Up over 62% since June 2025

• Quant 30 – Up over 64% since June 2025

• Legacy – Up over 390% since April 2023

• Changes to the Quant Portfolios

• Top Quant Stocks – IT without semiconductors

• Bonus scan – 6 Stocks For The Mid-Term Year And Market Uncertainty

• Education – When a stock announces a stock split, is there a good way to profit from this?

• Quick Links – at the bottom of the Post

USA Stock market week ending 05/15/26

Major Index Performance (Weekly)

• SPY (S&P 500 ETF) +0.2%

• The S&P 500 was relatively flat over the period, showing modest overall market resilience.

• DIA (Dow Jones Industrial Average ETF) -0.1%

• The Dow finished slightly lower, reflecting muted performance from large-cap industrial and value-oriented stocks.

• ^IXIC (Nasdaq Composite) -0.1%

• The Nasdaq was essentially unchanged, with technology and growth stocks consolidating after prior strength.

• IWM (Russell 2000 ETF) -2.3%

• Small-cap stocks materially underperformed large caps during the period, reflecting weaker relative momentum.

Takeaways

• Large-cap indexes remained relatively stable during the period despite mixed market performance underneath the surface.

• The Nasdaq and S&P 500 held near flat performance levels, suggesting continued resilience in major growth-oriented areas.

• Small caps lagged significantly, with the Russell 2000 posting the weakest performance among the major indexes.

Market Drivers this Week (05/18/26 – 05/22/26)

Friday, May 16 — Moody’s downgrade rattles the market

• Treasury yields are already climbing heading into the week, putting pressure on rate-sensitive sectors like REITs, utilities, homebuilders, and high-growth tech stocks.

Monday, May 18 — Iran tensions and Baidu earnings take center stage

• Iran’s Strait of Hormuz toll announcement may push oil prices higher, boosting energy names while potentially pressuring airlines, cruise lines, and consumer stocks; meanwhile Baidu $BIDU earnings will provide a major read on Chinese AI demand and tech spending momentum.

Tuesday, May 19 — Housing and consumer strength get tested

• Home Depot $HD, Toll Brothers $TOL, and CAVA $CAVA report earnings alongside April housing starts and building permits data, giving investors a broad look at housing demand and consumer spending trends under elevated mortgage rates.

Wednesday, May 20 — NVIDIA and the Fed could move the entire market

• NVIDIA $NVDA reports after the close in what may be the most important earnings release of the year, while Fed minutes earlier in the day could shift expectations on interest rates; Lowe’s $LOW, TJX $TJX, Williams-Sonoma $WSM, and Intuit $INTU also report.

Thursday, May 21 — Walmart and Deere provide key economic reads

• Walmart $WMT earnings will offer one of the clearest signals on U.S. consumer health, while Deere $DE results will give insight into industrial, agricultural, and equipment demand trends.

Friday, May 22 — Options expiration could amplify volatility

• Weekly options expiration and post-earnings positioning after NVIDIA may increase market swings and profit-taking activity heading into the weekend.

The CNN Fear and Greed Index ends the week at Greed 63. This is the fifth week in row at the Greed setting. This follows nine straight weeks at the Fear or Extreme Fear setting. Risk-on continues to be in the drivers seat and the market reflecting this over the last five weeks.

The Quant 30, Quant Weekly and Quant Legacy Model Portfolios all finished lower this week. The momentum stocks lost a little sparkle and generally gave up some recent gains. This breaks the string of seven up weeks in row.

Read more

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• Quant Weekly – Up over 62% since June 2025

• Quant 30 – Up over 64% since June 2025

• Legacy – Up over 390% since April 2023

• Education – Why shorting stocks is not a good idea for most investors.

• Quick Links – At the bottom of the Post

USA Stock market week ending 05/15/26

Major Index Performance (Weekly)

• SPY (S&P 500 ETF) +0.2%

• The S&P 500 was relatively flat over the period, showing modest overall market resilience.

• DIA (Dow Jones Industrial Average ETF) -0.1%

• The Dow finished slightly lower, reflecting muted performance from large-cap industrial and value-oriented stocks.

• ^IXIC (Nasdaq Composite) -0.1%

• The Nasdaq was essentially unchanged, with technology and growth stocks consolidating after prior strength.

• IWM (Russell 2000 ETF) -2.3%

• Small-cap stocks materially underperformed large caps during the period, reflecting weaker relative momentum.

Takeaways

• Large-cap indexes remained relatively stable during the period despite mixed market performance underneath the surface.

• The Nasdaq and S&P 500 held near flat performance levels, suggesting continued resilience in major growth-oriented areas.

• Small caps lagged significantly, with the Russell 2000 posting the weakest performance among the major indexes.

Market Drivers this Week (05/18/26 – 05/22/26)

Friday, May 16 — Moody’s downgrade rattles the market

• Treasury yields are already climbing heading into the week, putting pressure on rate-sensitive sectors like REITs, utilities, homebuilders, and high-growth tech stocks.

Monday, May 18 — Iran tensions and Baidu earnings take center stage

• Iran’s Strait of Hormuz toll announcement may push oil prices higher, boosting energy names while potentially pressuring airlines, cruise lines, and consumer stocks; meanwhile Baidu $BIDU earnings will provide a major read on Chinese AI demand and tech spending momentum.

Tuesday, May 19 — Housing and consumer strength get tested

• Home Depot $HD, Toll Brothers $TOL, and CAVA $CAVA report earnings alongside April housing starts and building permits data, giving investors a broad look at housing demand and consumer spending trends under elevated mortgage rates.

Wednesday, May 20 — NVIDIA and the Fed could move the entire market

• NVIDIA $NVDA reports after the close in what may be the most important earnings release of the year, while Fed minutes earlier in the day could shift expectations on interest rates; Lowe’s $LOW, TJX $TJX, Williams-Sonoma $WSM, and Intuit $INTU also report.

Thursday, May 21 — Walmart and Deere provide key economic reads

• Walmart $WMT earnings will offer one of the clearest signals on U.S. consumer health, while Deere $DE results will give insight into industrial, agricultural, and equipment demand trends.

Friday, May 22 — Options expiration could amplify volatility

• Weekly options expiration and post-earnings positioning after NVIDIA may increase market swings and profit-taking activity heading into the weekend.

The CNN Fear and Greed Index ends the week at Greed 63. This is the fifth week in row at the Greed setting. This follows nine straight weeks at the Fear or Extreme Fear setting. Risk-on continues to be in the drivers seat and the market reflecting this over the last five weeks.

The Quant 30, Quant Weekly and Quant Legacy Model Portfolios all finished lower this week. The momentum stocks lost a little sparkle and generally gave up some recent gains. This breaks the string of seven up weeks in row.

Note: You are enjoying the free subscriber newsletter. Paid subscribers enjoy instant access to weekly Model Portfolio updates upon release and a Top Quant Stocks list. Free subscribers get access to Portfolio updates after a three-week delay but no Top Quant Stocks list. Want timely access to the new Adds/Removes and Top Quant Stocks list?

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Model Portfolio Quant Alpha Weekly

Any newly added stock is being released to Paid Subscribers today. Below are the updates from three weeks ago. This Portfolio continues to significantly outperform its benchmark, 62% versus 16%. It has 25 members.

Top five Quant stocks in the Portfolio (Paid subscribers only).

Add (04/24/26) : ICHR (Ichor Holdings) – Semiconductor Equipment

Remove (04/24/26) : None

Outperformers: SSRM (SSR Mining) up over +90%, MU (Micron Technology) up over +360%, VISN (Vistance Networks) up over +170%

Model Portfolio Quant 30

This week’s new update, if any, is being released to the paid subscribers. Shown below is the update made three weeks ago. This Portfolio continues to beat its benchmark by a wide margin, 62% to 16%. It has 30 members in it.

StoneX Group (SNEX) had a 3X2 stock split. It’s price has been adjusted accordingly.

Top five Quant stocks in the Portfolio (Paid subscribers only).

Add (04/24/26): None

Remove (04/24/26): None

Outperformers: MU (Micron Technology) up over +490%, LITE (Lumentum Holdings) up over +300%, TTMI (TTM Technologies) up over +130%, BTSG (BrightSpring Health) up over +160% and SNDK (Sandisk) up over +120%

Model Portfolio Quant Alpha’s – Legacy

The portfolio is up over +390% since it began in 2023. It has 18 stocks in it. Powell industries is now a 15 bagger. Celestica is now a 14 bagger and now Sterling Infrastructure has become a 13 bagger.

Top five Quant stocks in the Portfolio (Paid subscribers only).

Remove (04/24/26): None

Outperformers: AGX (Argan) up over +900%, STRL (Sterling Infrastructure) up over +1300%, POWL (Powell Industries) up over +1500% and CLS (Celestica) is up over +1400%

Performance to 05-15-2026

Top Quant Stocks for this week – (Paid subscribers only feature)

Why shorting stocks is not a good idea for most investors.

HOW SHORTING ACTUALLY WORKS –THE BASIC MECHANICS

• You borrow shares first

  • Your broker lends you shares from someone else’s account

• You sell those borrowed shares immediately

  • You’re selling something you don’t own — welcome to shorting

• Now you owe those shares back

  • Doesn’t matter what happens — you got to return the same number of shares

• You wait for the price to drop

  • That’s the whole bet: lower price later = profit

• You buy the shares back (this is called “covering”)

  • Hopefully at a lower price

• You return the shares to the broker

  • Trade closed, books balanced

• Your profit = sell price – buyback price (minus fees)

  • Simple math… brutal consequences if wrong

WHAT YOU PAY ALONG THE WAY

• Borrow fee (stock loan fee)

  • Hard-to-borrow stocks? You’re paying up daily

• Margin requirements

  • You need collateral — broker is not trusting you for free

• Interest on borrowed money

  • Especially if you’re using margin

• Dividends (yep, you pay those too)

  • If the stock pays a dividend, you owe it to the lender

WHAT CAN GO WRONG (AND FAST)

• Stock goes up — you’re losing immediately

  • No ceiling on losses… it can keep going

• Margin call hits

  • Broker says “add cash or we close you out”

• Short squeeze

  • Everyone rushes to cover → price spikes → you get smoked

• Borrow gets pulled

  • Shares recalled → you’re forced to cover early

QUICK EXAMPLE (REAL SIMPLE)

• You short a stock at $100

• It drops to $70 → you buy it back

• You pocket $30 per share (minus fees)

But…

• It goes to $150 → now you’re down $50

• It goes to $300 → now it’s getting ugly real fast

THE TRUTH ABOUT PROFITABILITY

• Most people lose money shorting — straight up

  • Around ~70% of short positions lose money in strong markets

• Even pros struggle — this is not easy money

  • Some periods show ~75% of shorts unprofitable during rallies

• Retail success exists — but it’s rare and selective

  • Only a small subset of “informed” traders consistently profit on specific trades

PROS OF SHORTING (WHY PEOPLE DO IT)

• You can make money when stocks go down

  • Bear market? You’re eating while everyone else is starving

• Hedge your portfolio

  • Offsets long positions — keeps your book balanced

• Exposes overvalued garbage

  • Short sellers often sniff out frauds and hype stocks early

• Faster gains when you’re right

  • Stocks fall quicker than they rise — panic is powerful

• Adds flexibility to your strategy

  • You’re not just sitting there waiting for bull markets

• Improves market efficiency

  • Helps correct overpriced nonsense

• Great for tactical trades

  • Event-driven setups (earnings misses, bad news) can pay fast

• Leverage potential

  • You don’t need full capital upfront (margin)

• Works in sideways/choppy markets

  • Not everything needs to go up for you to win

• Psychological edge (if disciplined)

  • Forces you to think critically, not just blindly bullish

CONS OF SHORTING (WHERE PEOPLE GET WRECKED)

• Losses are UNLIMITED

  • Stock can go to infinity — your loss can too

• Win rate is stacked against you

  • Most short trades lose money, especially in bull markets

• Short squeezes will humble you fast

  • You’re right… until you’re forced to buy higher

• Timing has to be perfect

  • Being early = being wrong

• Borrow costs eat your profits

  • You’re paying to stay in the trade

• Margin calls = forced losses

  • Broker can close you out at the worst possible time

• Market bias is UP over time

  • You’re fighting the long-term trend

• Crowded trades can explode

  • Everyone short = rocket fuel upward

• Emotional pressure is brutal

  • Watching losses expand fast isn’t for beginners

• Limited upside, massive downside

  • Best case = stock goes to zero… that’s it

BOTTOM LINE

• Shorting isn’t investing — it’s gambling

• Pros use it to hedge or exploit specific setups, not live off it

• If you don’t have discipline, timing, and risk control…
  the market will run you over and not even slow down

Quick Links

See comment below for the Quick Links.

All content on this site is for informational purposes only and does not constitute financial advice. Consult relevant financial professionals in your country of residence to get personalized advice before you make any trading or investing decisions. This post was written with the assistance of artificial intelligence. The original ideas and final review are human-generated.

• Rational Thinking & Decision-Making

• Investing & Market Principles

• Learning, Knowledge & Preparation

• Discipline, Temperament & Compounding

• Character, Relationships & Living Well

• Bottom Line

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Below are some highlights from the best selling book Poor Charlie’s Almanack: The Essential Wit and Wisdom of Charles T. Munger by Charles Munger. First released in 2005, this collection of eleven speeches from legendary Berkshire Hathaway vice chairman Charlie Munger has become essential reading for investors, entrepreneurs, and lifelong learners looking to study the wisdom of one of the most respected thinkers of the modern era. Spanning talks delivered between 1986 and 2007, the book showcases Munger’s deep understanding of business, investing, history, psychology, philosophy, science, and human behavior. Through his famous “latticework of mental models,” Munger explains how rational thinking, continuous learning, and disciplined decision-making can improve both investing and life itself. Written with his trademark humor, blunt honesty, and intellectual clarity, Poor Charlie’s Almanack remains a timeless guide for anyone striving to become wiser and more thoughtful over time.

Highlights

Rational Thinking & Decision-Making

1. Invert, always invert
   • Munger believed avoiding obvious mistakes is one of the fastest ways to improve outcomes.
   • Instead of asking how to succeed, ask what causes failure and avoid it.
   • Rationality often comes more from removing stupidity than adding brilliance.

2. Avoid unnecessary complexity
   • Complexity often hides risks and confusion.
   • Simple ideas are easier to execute consistently.
   • Clear thinking usually produces better decisions under pressure.

3. Most people are irrational under pressure
   • Fear and greed dominate market behavior during extremes.
   • Emotional reactions often lead to terrible investment decisions.
   • Rational thinking becomes most valuable during uncertainty.

4. Spend less time forecasting
   • Predicting the future consistently is extremely difficult.
   • Building resilience matters more than perfect predictions.
   • Flexible investors adapt better to uncertainty and surprises.

5. Risk comes from not knowing what you’re doing
   • True understanding lowers unnecessary risk dramatically.
   • Confusion and overconfidence create dangerous situations.
   • Education and preparation improve investment judgment.

6. Understand incentives deeply
   • Incentives strongly influence human behavior.
   • Many bad decisions come from poorly aligned incentives.
   • Understanding motivation helps explain markets and organizations.

7. Incentives can overpower ethics and logic
   • People often behave differently when rewards are involved.
   • Misaligned incentives create dangerous outcomes in organizations.
   • Understanding this helps investors recognize hidden risks.

8. Independent thinking matters
   • Crowds are often emotional and reactive.
   • Independent judgment creates opportunities others overlook.
   • Great investors think critically instead of following trends blindly.

Investing & Market Principles

9. Patience is a superpower
   • Most investors feel pressured to constantly act or trade.
   • Waiting for high-probability opportunities improves long-term performance.
   • Great investing often requires sitting still while others chase excitement.

10. Stay within your circle of competence
    • Investors do not need to understand every industry or trend.
    • Deep understanding lowers the chance of major mistakes.
    • Confidence without true competence can become dangerous quickly.

11. Focus on high-quality businesses
    • Great businesses often continue compounding for many years.
    • Strong management and durable advantages matter enormously.
    • Munger preferred wonderful companies over cheap mediocre ones.

12. Avoid leverage whenever possible
    • Debt magnifies both gains and losses.
    • Even smart investors can fail if leverage removes flexibility.
    • Survival matters more than maximizing short-term returns.

13. The market transfers money from the impatient to the patient
    • Short-term speculation often destroys returns.
    • Time rewards disciplined investors who stay focused.
    • Patience allows compounding to fully work its magic.

14. A few great investments can make your life
    • Exceptional opportunities are rare but extremely powerful.
    • One or two major winners can dominate lifetime returns.
    • Investors should be prepared to act decisively when odds favor them.

15. Great businesses often look boring
    • The strongest companies are frequently steady and predictable.
    • Exciting stories do not always produce great returns.
    • Consistency usually beats drama over the long run.

16. Avoid catastrophic mistakes at all costs
    • One major error can wipe out years of progress.
    • Long-term survival is essential for compounding.
    • Munger valued durability over flashy short-term success.

17. Know when to do nothing
    • Constant activity is not the same as productive action.
    • Sometimes the best decision is patience and observation.
    • Overtrading often leads to worse outcomes.

Learning, Knowledge & Preparation

18. Read constantly
    • Munger credited much of his success to relentless reading and curiosity.
    • Broad knowledge improves decision-making and pattern recognition.
    • Learning continuously creates advantages that compound for decades.

19. Learn multidisciplinary thinking
    • The world does not operate through one field alone.
    • Munger used ideas from psychology, biology, math, and history together.
    • Combining mental models improves judgment dramatically.

20. Learn from other people’s mistakes
    • Studying failure saves time, money, and pain.
    • History provides valuable lessons if people pay attention.
    • Avoiding repeated mistakes creates a strong competitive advantage.

21. Preparation creates luck
    • Opportunities are easier to recognize when prepared.
    • Success often looks like luck from the outside.
    • Munger believed readiness creates advantages others miss.

22. Never stop improving yourself
    • Small daily improvements create massive long-term progress.
    • Personal growth compounds just like investing returns.
    • Continuous learning strengthens every area of life.

Discipline, Temperament & Compounding

23. Temperament beats IQ
    • Emotional discipline is critical during market volatility.
    • High intelligence alone does not guarantee good decisions.
    • Calm investors often outperform emotional geniuses over time.

24. Think long term
    • Short-term thinking creates emotional and reactive behavior.
    • Long-term investors benefit from patience and compounding.
    • Many opportunities only become obvious with time.

25. Success comes from consistency, not intensity
    • Small disciplined actions repeated daily create major results.
    • Sustainable habits outperform short bursts of motivation.
    • Long-term consistency builds both wealth and wisdom.

26. Compounding changes everything
    • Small gains repeated consistently become extraordinary over time.
    • The principle applies to money, habits, knowledge, and relationships.
    • Time is one of the most powerful forces in investing and life.

Character, Relationships & Living Well

27. Avoid toxic people and environments
    • Your environment heavily influences your thinking and habits.
    • Bad partnerships can quietly destroy success and happiness.
    • Munger emphasized surrounding yourself with rational, ethical people.

28. Reputation is priceless
    • Trust takes years to build and seconds to destroy.
    • Strong reputations attract opportunities and partnerships.
    • Integrity compounds quietly over a lifetime.

29. Avoid envy
    • Constant comparison creates frustration and poor judgment.
    • Chasing what others have often increases unnecessary risk.
    • Contentment improves long-term decision-making and happiness.

30. A fulfilling life matters more than money alone
    • Wealth without meaning or relationships can feel empty.
    • Munger valued wisdom, integrity, and happiness deeply.
    • True success includes purpose, character, and peace of mind.

Bottom Line:

Charlie Munger’s philosophy was built on rational thinking, patience, lifelong learning, disciplined investing, and strong personal character. His core message was that long-term success comes less from brilliance and more from avoiding mistakes, thinking independently, staying emotionally disciplined, continuously improving yourself, and allowing compounding to work over decades.

All content on this site is for informational purposes only and does not constitute financial advice. Consult relevant financial professionals in your country of residence to get personalized advice before you make any trading or investing decisions. This post was written with the assistance of artificial intelligence. The original ideas and final review are human-generated.

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  Quant Weekly – Up over 66% since June 2025

• Quant 30 – Up over 70% since June 2025

• Legacy – Up over 400% since April 2023

• Sterling Infrastructure (STRL) became a 13 bagger in the Legacy Portfolio this week

• Changes to the Quant Portfolios

• Top Quant Stocks – Real Estate

• Bonus scan – Top 5 AI Strong Buys with high EPS Growth (FWD)

• Education – Why shorting stocks is not a good idea for most investors.

• Quick Links – at the bottom of the Post

USA Stock market week ending 05/08/26

Major Index Performance (Weekly)

• SPY (S&P 500 ETF) +2.4%

• Large-cap U.S. stocks posted a strong weekly advance as investor sentiment improved and broader market participation expanded.

• ^IXIC (Nasdaq Composite) +4.5%

• Technology and growth stocks led the market sharply higher, giving the Nasdaq the strongest performance among the major indexes.

• DIA (Dow Jones Industrial Average ETF) +0.2%

• Blue-chip industrial and defensive names lagged the broader market, producing only modest gains for the week.

• IWM (Russell 2000 ETF) +1.8%

• Small-cap stocks moved higher as risk appetite improved, though performance still trailed the technology-heavy Nasdaq.

Takeaways

• Technology and growth stocks clearly dominated market performance during the week.

• The Nasdaq significantly outperformed the Dow, highlighting continued investor preference for higher-growth sectors.Broader market participation improved, with both large-cap and small-cap indexes finishing the week higher.

Market Drivers this Week (05/11/26 – 05/15/26)

Monday

• U.S.-China trade talks could move tech, retail, and industrial stocks hard depending on tariff headlines.

• New Fed Chair Kevin Warsh starts his first full week, and traders are watching for any shift in Fed tone.

Tuesday

• CPI inflation data drops and could completely change rate-cut expectations.

• Walmart earnings give a major read on consumer spending strength and retail demand.

Wednesday

• PPI inflation data could fuel more stagflation worries if wholesale prices stay hot.

• Cisco earnings are a key test for AI infrastructure and enterprise tech spending.

Thursday

• Retail sales numbers show whether the American consumer is still spending aggressively.

• Applied Materials earnings could swing the semiconductor and AI chip trade.

Friday

• Consumer sentiment and inflation expectations could move both stocks and bonds heading into the weekend.

• Options expiration and U.S.-China trade deal details could add extra volatility late in the week.

The CNN Fear and Greed Index ends the week at Greed 67. This is the fourth week in row at the Greed setting. This follows nine straight weeks at the Fear or Extreme Fear setting. Risk-on is certainly in the drivers seat and the market reflects this.

The Quant 30, Quant Weekly and Quant Legacy Model Portfolios all made all time highs this week. Quant Weekly and Quant 30 have been higher for seven weeks in a row. Risk On is fully in control and we continue to ride the wave up.

Read more

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• Quant Weekly – Up over 66% since June 2025

• Quant 30 – Up over 70% since June 2025

• Legacy – Up over 400% since April 2023

• Sterling Infrastructure (STRL) became a 13 bagger in the Legacy Portfolio this week

• Education – Is sell in May and go away a viable investment strategy?

USA Stock market week ending 05/08/26

Major Index Performance (Weekly)

• SPY (S&P 500 ETF) +2.4%

• Large-cap U.S. stocks posted a strong weekly advance as investor sentiment improved and broader market participation expanded.

• ^IXIC (Nasdaq Composite) +4.5%

• Technology and growth stocks led the market sharply higher, giving the Nasdaq the strongest performance among the major indexes.

• DIA (Dow Jones Industrial Average ETF) +0.2%

• Blue-chip industrial and defensive names lagged the broader market, producing only modest gains for the week.

• IWM (Russell 2000 ETF) +1.8%

• Small-cap stocks moved higher as risk appetite improved, though performance still trailed the technology-heavy Nasdaq.

Takeaways

• Technology and growth stocks clearly dominated market performance during the week.

• The Nasdaq significantly outperformed the Dow, highlighting continued investor preference for higher-growth sectors.Broader market participation improved, with both large-cap and small-cap indexes finishing the week higher.

Market Drivers this Week (05/11/26 – 05/15/26)

Monday

• U.S.-China trade talks could move tech, retail, and industrial stocks hard depending on tariff headlines.

• New Fed Chair Kevin Warsh starts his first full week, and traders are watching for any shift in Fed tone.

Tuesday

• CPI inflation data drops and could completely change rate-cut expectations.

• Walmart earnings give a major read on consumer spending strength and retail demand.

Wednesday

• PPI inflation data could fuel more stagflation worries if wholesale prices stay hot.

• Cisco earnings are a key test for AI infrastructure and enterprise tech spending.

Thursday

• Retail sales numbers show whether the American consumer is still spending aggressively.

• Applied Materials earnings could swing the semiconductor and AI chip trade.

Friday

• Consumer sentiment and inflation expectations could move both stocks and bonds heading into the weekend.

• Options expiration and U.S.-China trade deal details could add extra volatility late in the week.

The CNN Fear and Greed Index ends the week at Greed 67. This is the fourth week in row at the Greed setting. This follows nine straight weeks at the Fear or Extreme Fear setting. Risk-on is certainly in the drivers seat and the market reflects this.

The Quant 30, Quant Weekly and Quant Legacy Model Portfolios all made all time highs this week. Quant Weekly and Quant 30 have been higher for seven weeks in a row. Risk On is fully in control and we continue to ride the wave up.

Note: You are enjoying the free subscriber newsletter. Paid subscribers enjoy instant access to weekly Model Portfolio updates upon release and a Top Quant Stocks list. Free subscribers get access to Portfolio updates after a three-week delay but no Top Quant Stocks list. Want timely access to the new Adds/Removes and Top Quant Stocks list?

Subscribe now

Model Portfolio Quant Alpha Weekly

Any newly added stock is being released to Paid Subscribers today. Below are the updates from three weeks ago. This Portfolio continues to significantly outperform its benchmark, 66% versus 18%. It has 25 members.

Top five Quant stocks in the Portfolio (Paid subscribers only).

No changes to the Portfolio this week

Add (04/17/26) : None

Remove (04/17/26) : None

Outperformers: SSRM (SSR Mining) up over 110%, MU (Micron Technology) up over 370%, VISN (Vistance Networks) up over +170%

Model Portfolio Quant 30

This week’s new update, if any, is being released to the paid subscribers. Shown below is the update made three weeks ago. This Portfolio continues to beat its benchmark by a wide margin, 70% to 18%. It has 30 members in it.

Top five Quant stocks in the Portfolio (Paid subscribers only).

No changes to the Portfolio this week

Add (04/17/26): None

Remove (04/17/26): None

Outperformers: MU (Micron Technology) up over 510%, GFI (Gold Fields) up over 80%, LITE (Lumentum Holdings) up over 270% and TTMI (TTM Technologies) up over 120%

Model Portfolio Quant Alpha’s – Legacy

The portfolio is up over +400% since it began in 2023. It has 18 stocks in it. Powell industries is now a 16 bagger. Celestica is now a 15 bagger and now Sterling Infrastructure has become a 13 bagger.

Sterling Infrastructure had blow out earnings this past week. It started the week at $532 and ended the week at $844. It is now a 13 bagger.

Top five Quant stocks in the Portfolio (Paid subscribers only).

Remove (04/17/26): None

Outperformers: AGX (Argan) up over 800%, STRL (Sterling Infrastructure) up over 1300%, POWL (Powell Industries) up over 1600% and CLS (Celestica) is up over 1500%

Performance to 05-08-2026

Top Quant Stocks for this week – (Paid subscribers only feature)

Is sell in May and go away a viable investment strategy?

WHERE THE PHRASE COMES FROM

• Old-school Wall Street saying — not some modern quant model

  • Came from London traders who literally left for summer vacation

  • Idea: Stocks underperform May → October vs November → April

WHAT THE DATA ACTUALLY SHOWS (HISTORICALLY)

• Winter months have been stronger — no argument there

  • Nov–Apr avg return ~6–8% vs ~2–3% May–Oct

• Markets are still positive in the summer — just weaker on average

  • May–Oct positive ~2/3 of the time

• Long-term studies confirm the “gap” exists

  • Returns ~4% higher in winter vs summer periods

In other words – Yeah, there’s a seasonal pattern — but it’s not a crash season, just a slower one

BUT HERE’S THE PROBLEM — IT DOESN’T HOLD UP CONSISTENTLY

• Staying invested actually wins long-term

  • Buy & hold CAGR ~8.05% vs ~6.86% using Sell-in-May strategy

• You miss compounding by sitting out

  • Small differences each year → massive gap over decades

• Recent decades? Way less reliable

  • Markets have gone up in most May–Oct periods (25 of last 33 years)

• Some studies say it only worked ~14 out of 38 years

  • That’s basically a coin flip

It worked “kind of” in the past… but not enough to bet your portfolio on it

MODERN MARKET REALITY (THIS IS WHY IT’S FADING)

• Markets don’t shut down anymore

  • Algorithms, global trading, 24/7 flows

• AI, macro, geopolitics > seasonality now

  • Big drivers matter more than the calendar

• Summer can still rip

  • Plenty of strong rallies happen May–August

The calendar isn’t moving markets — money flows are

WHEN IT CAN STILL HAVE VALUE

• Short-term traders use it as a bias, not a rule

  • Helps frame expectations for weaker seasonality

• Late summer (Aug–Oct) tends to be the weakest stretch

  • That’s where most volatility historically shows up

• Works better in certain cycles (like election years)

  • Not consistent, but sometimes shows up

BOTTOM LINE

• “Sell in May” isn’t a strategy — it’s a tendency

• Yes, returns are weaker in summer… but still positive most of the time

• If you follow it blindly, you’re probably leaving money on the table

• Smart investors don’t sell because of the calendar —
  they sell because the setup changes

“SELL IN MAY” — WHEN IT ACTUALLY WORKS (AND WHEN IT BLOWS UP)

WHEN IT WORKS (EDGE CASES)

• Late-cycle or overextended markets

  • When valuations are stretched and momentum is fading

  • Think: market already ran hard → summer = digestion or pullback

• Rising interest rates / tightening liquidity

  • When the Fed is tightening, summer weakness shows up more

  • Liquidity dries up → fewer buyers → softer markets

• Pre-recession or macro uncertainty

  • When economic data starts rolling over

  • Summer becomes risk-off before the real damage hits

• Weak leadership / narrow market breadth

  • If only a few stocks are carrying the market, it’s fragile

  • Summer rotations can hit those leaders hard

• Post big Q1 rallies

  • If Jan–April was strong, May–Sept often cools off

  • Markets need to reset before next leg

• August–October window (THIS is the real danger zone)

  • Most historical volatility lives here — not May/June

  • That’s where corrections usually show up

WHEN IT FAILS (AND COSTS YOU MONEY)

• Early bull markets / fresh breakouts

  • When a new uptrend just started — you do NOT want to leave

  • That’s when big upside happens

• Strong earnings + strong macro combo

  • If companies are beating and economy is stable → market grinds higher

  • No reason for seasonal weakness to kick in

• AI / structural themes driving flows

  • When there’s a dominant narrative (like AI)

  • Money doesn’t care about the calendar — it chases growth

• Heavy institutional inflows

  • If big money is rotating in, seasonality gets ignored

  • Flows > historical averages

• Election years / stimulus cycles

  • Markets often stay supported longer than expected

• Low volatility environments

  • If VIX is low and stable → dips get bought quickly

BOTTOM LINE

• “Sell in May” isn’t wrong — it’s just incomplete

• The real edge is knowing when the environment matches the pattern

• If you treat it like a rule, you lose

Quick Links

See comments below for the links.

All content on this site is for informational purposes only and does not constitute financial advice. Consult relevant financial professionals in your country of residence to get personalized advice before you make any trading or investing decisions. This post was written with the assistance of artificial intelligence. The original ideas and final review are human-generated.

The Intelligent Investor’s Road to $1,000,000

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Ordinary people with a plan and self sacrifice can successfully build a retirement fund of their own

The example being shown here is of a person who graduated college with an Engineering degree but with no savings. Using a combination of steady savings and steady stock market investing, that person was able to to grow a retirement fund to be worth $1,000,000 by the age of 43.

In this story there are four stages.

• Stage 1 – 23 to 25 years old – going from $0 to $20,000 – Our young engineer having studied such popular and useful books as The Richest Man in Babylon, Pay yourself first by George Clasen and Rich Dad Poor Dad by Robert Kiyosaki, knew the key to building a retirement fund that he could use to retire early was to set aside 10% of his salary each month and then to invest that money in the stock market. “To convert savings into assets so that your money works for you.” per Robert Kiyosaki. He invested in established growth companies during those years and by the age of 25 had amassed $20,000 in a retirement fund.

• Stage 2 – 25 to 29 years old – going from $20,000 to $100,000 – Our young engineer makes some progress in their engineering career and gets steady raises. The 10% of salary deduction from payroll invested in the stock market is maintained. The Rich Dad Poor Dad guidance of “A house is a liability, you want to acquire assets” is followed. The engineer is tempted but decides not to buy a house during this time. Warren Buffett’s words of wisdom “Look for obvious singles – don’t swing for home runs” is taken to heart. He avoids risky Flyers and startups even thou people he knows in his peer group brag they are making big easy money on these risky investments. He takes Peter Lynch’s advice to heart “Go for a business that any idiot can run because sooner or later, any idiot is probably going to run it!” Risky investments were avoided and the original game plan is maintained. Buying established growth stocks every month from the payroll deduction.

• Stage 3 – 29 to 43 years old- going from S100K to $1 Million – Our now middle aged engineer started getting promotions, changed companies for better pay but continued to deduct 10% from payroll each month and invest in the stock market. He got married, had a kid or two and finally bought the house since he now had a family to support. During this time, the market had several big sell-offs. Down 50% at some point, below his original $100K starting point. He did not waver but keep plugging away at 10% each payroll, reinvesting dividends. He took the advice of Ben Graham to heart “If you are shopping for common stocks, choose them the way you would buy groceries, not the way you would buy perfume”. Meaning stocks on sale is a good thing, not a bad thing. Some months he made more in the stock market then he earned in his job and other months we lost more money in the stock market then he made in his job. He did not waver. He paid no attention to the doom and gloom talking heads on CNBC like a Jim Cramer or other headline grabbers like him.

• Stage 4 – Achieved his goal of over $1 Million in his retirement account at age 43. . Now his life is full of options. Retire early, travel, you name it. He and his family can do what they want with the rest of their life.

Conclusion: Our diligent Engineer showed that investing can be very straight forward and simple. It takes sacrifice, first and foremost. You must forgo spending today in order to benefit down the road. It takes an investing plan that you must stick to. In his case, he set aside 10% of his pay each month and he bought established growth stocks and held them indefinitely. One could do the same thing with broad based ETF’s and Mutual Funds such as SPY and VTI. He never pulled any money out of the retirement fund to pay daily expenses or to get that shiny new house or car. Those items were delayed and then funded with non-retirement funds, always.

All data used in this article come from the following video from the YouTube channel The Swedish Investor

All content on this site is for informational purposes only and does not constitute financial advice. Consult relevant financial professionals in your country of residence to get personalized advice before you make any trading or investing decisions.

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  Foundational Theory

• The Financial Metrics

• Execution & Systematic Rules

• Discipline & Market Psychology

• Results & The Long View

• How has the ‘Magic Formula’ performed 2005 – 2026?

• Bottom Line

• Related Video

Below are some highlights from the best selling book The Little Book That Still Beats the Market by Joel Greenblatt. . In a straightforward and accessible style, the book explores the basic principles of successful stock market investing and then reveals the author’s time-tested formula that makes buying above average companies at below average prices automatic. Though the formula has been extensively tested and is a breakthrough in the academic and professional world, Greenblatt explains it using 6^th grade math, plain language and humor. He shows how to use his method to beat both the market and professional managers by a wide margin. You’ll also learn why success eludes almost all individual and professional investors, and why the formula will continue to work even after everyone “knows” it. The third edition was recently released.

Highlights

I. Foundational Theory

• The Power of the Pedagogy (Jason’s Gum Shops) Before touching the stock market, Greenblatt uses a fictional gum shop to explain that a business is only worth what it earns relative to what it costs to build. This mental scaffolding ensures you understand the “why” of the math before you start clicking “buy” on a ticker.

• The Magic Formula Goal The strategy is built to consistently outperform the market by focusing on two specific financial metrics. It removes emotion and human error from the selection process by relying on cold, hard data.

• Market Efficiency is a Myth If the market were perfectly efficient, the Magic Formula wouldn’t work. The fact that it does work proves that stock prices and business values often disconnect.

• Mr. Market’s Irrationality Greenblatt uses the “Mr. Market” allegory to explain that stock prices fluctuate based on emotion, not always value. Investors should view these price swings as opportunities to buy low rather than reasons to panic.

• The Concept of a “Wonderful” Business A wonderful business is one that can reinvest its profits at high rates of return. The formula seeks these out because they compound wealth much faster than average companies.

II. The Financial Metrics

• Return on Capital (The “Good” Factor) This measures how efficiently a company turns its investments into profits. A high ROC indicates a “wonderful” business that has a competitive advantage or “moat” over its rivals.

• Earnings Yield (The “Cheap” Factor) This metric tells you how much profit a company generates per dollar of its market value. It helps identify stocks that are “on sale” relative to the actual cash they bring in.

• Focusing on Earning Power The formula looks at EBIT (Earnings Before Interest and Taxes) to see the true operating power of a business. This allows for a fair comparison between companies with different debt levels or tax rates.

• The Value of Earnings per Share (EPS) While EPS is popular, Greenblatt prefers Earnings Yield because it accounts for the price you pay. Knowing a company earns $5 a share is useless unless you know if you’re paying $50 or $500 for that share.

• Capital Allocation is Key A high ROC shows that management is skilled at capital allocation. Investing in companies that don’t waste money is one of the safest ways to ensure long-term growth.

• The Power of Combining Factors Individually, these metrics are strong, but together they are formidable. Buying a high-ROC company at a high earnings yield ensures you aren’t just buying a “cheap” lemon or an “expensive” winner.

III. Execution & Systematic Rules

• The Screening Tool (MagicFormulaInvesting.com) Greenblatt didn’t just write a book; he built a free tool to handle the heavy lifting. By referencing the site directly, he makes the strategy immediately executable, allowing readers to filter the top-ranked stocks without needing to manually calculate thousands of ROC and Earnings Yield ratios.

• Ranking the Universe The formula works by ranking the largest 3,500 companies based on ROC and Earnings Yield separately. The stocks with the best combined rank (the lowest total score) are the ones you want to buy.

• Excluding Financials and Utilities The formula typically excludes banks and utility companies because their financial structures are unique. Their debt levels and capital requirements make the standard ROC and Earnings Yield metrics less accurate.

• The “Stay Local” Guardrails The formula has specific boundaries: Greenblatt warns against applying it to recent IPOs or foreign ADRs. Sticking to established U.S. companies ensures the financial data is standardized and that the companies have a track record of earnings the formula can actually measure.

• The 20 to 30 Stock Rule Diversification is key to managing the risk of any single company failing. Holding 20 to 30 “Magic Formula” stocks provides enough variety to protect your portfolio without diluting your returns.

• The Staggered Entry Strategy To avoid the risk of deploying all your capital at a single market peak, the book recommends a tactical rollout. You should buy 5–7 stocks every few months until you reach your 20–30 stock goal, creating a “laddered” entry that smoothes out market volatility.

• The 1-Year Holding Period Greenblatt suggests holding each stock for one year before selling. This allows enough time for the market to recognize the value of the company and adjust the price upward.

• Tax Efficiency Strategy To maximize after-tax returns, sell “losers” a few days before they hit the one-year mark to claim a short-term loss. Sell “winners” a few days after the one-year mark to qualify for long-term capital gains rates.

IV. Discipline & Market Psychology

• A Multi-Year Commitment The formula can underperform the market for months or even a few years at a time. To see the “magic,” you must commit to the strategy for at least three to five years to allow the math to work.

• Trusting the System over Intuition Human intuition is often the enemy of the Magic Formula. Even if a company looks “scary” in the news, if the numbers say it’s a buy, the system says you should trust the data.

• Why It Works (Contrarianism) The formula often points you toward companies that are currently unpopular or facing temporary headwinds. Buying what others are afraid of is precisely why the returns are historically superior.

• The “Why Doesn’t Everyone Do It?” Problem Most people lack the discipline to stay invested when the formula is underperforming. Because it doesn’t work every year, it remains effective for the few who have the patience to stick with it.

• The Flaw of Professional Management Many fund managers are pressured to perform every quarter, which prevents them from holding unpopular stocks. Individual investors have the “unfair advantage” of being able to wait for the long term.

• Avoiding Large-Cap Bias While the formula works on large companies, it is often most effective with mid-cap and small-cap stocks. These are often overlooked by big institutional investors, leading to deeper discounts.

• Simplicity as a Strength The book argues that complex investing strategies often fail because they have more points of failure. The simplicity of the Magic Formula makes it robust and easier for a regular person to follow.

V. Results & The Long View

• The 30.8% Backtest Reality The strategy isn’t just a theory; it’s backed by a staggering 30.8% annual return from 1988–2004, compared to the S&P 500’s 12.4%. Perhaps more importantly, the formula outperformed the market in 96% of all rolling three-year periods, providing a massive evidentiary backbone for long-term believers.

• Beating the S&P 500 Historically, the Magic Formula has significantly outperformed the S&P 500 over long horizons. It provides a roadmap for “beating the market” without needing a Wall Street degree.

• Compounding Interest: The 8th Wonder By consistently reinvesting gains into new “Magic” stocks, you take advantage of compounding. Over decades, even small outperformance leads to massive differences in total wealth.

• Self-Reliance in Investing Ultimately, the book empowers the reader to stop relying on “tips” and expensive advisors. By using a systematic approach, you become a disciplined, data-driven investor.

How has the ‘Magic Formula’ performed 2005 – 2026?

Since the publication of The Little Book That Beats the Market in 2005, the performance of the Magic Formula has remained a subject of intense debate among quantitative and value investors. While it continues to show a long-term mathematical edge, the “magic” has become significantly more volatile and harder to capture than the original 30.8% backtest suggested.

Here is the breakdown of the strategy’s performance from 2005 through 2026:

1. Performance Overview (2005–2026)

The strategy has generally continued to outperform on a long-term basis, but its “alpha” (excess return) has narrowed. Recent data indicates that since 2005, a standard 20-stock Magic Formula portfolio has returned approximately 269.7%. While this is a significant gain, it actually underperformed the S&P 500 during that specific window, which saw a massive bull run led by mega-cap tech stocks—companies that the Magic Formula often filters out for being too “expensive.”

• Average CAGR: Most modern back tests (2003–2020) place the annualized return at roughly 11.4% to 13.9%, outperforming the S&P 500’s ~8.7% to 9.3% in those same periods, though far below the 30% historical claims.

• Recent Decade (2016–2025): The strategy returned a 10.7% CAGR versus 9.5% for the benchmark, showing it still provides a slight edge, albeit a much tighter one.

2. Critical Performance Phases

3. Why the Performance Changed

• The “Arbitrage” Effect: As thousands of retail investors and quant funds began using the same screening tools (like magicformulainvesting.com), the “cheapness” of these stocks was bid up faster, potentially shrinking the available profit margin.

• The Rise of Intangibles: The original formula uses Net Fixed Assets (physical stuff). In the modern economy, value is often in brand, data, and IP, which the original formula doesn’t account for, causing it to miss high-quality software and service firms.

• Psychological Fatigue: The most successful back tests assume a 96% success rate over rolling 3-year periods. However, in the real world, many investors abandoned the strategy during the 2018–2019 underperformance, missing the subsequent recovery.

Bottom Line

• The Data: A 30.8% historical return pre 2025 is your evidentiary anchor, but it only works if you stay in the boat.

• The Strategy: You must deploy capital in staggered stages (5–7 stocks every few months) to reach a diversified 20–30 stock portfolio.

• The Filter: You strictly avoid the noise—no IPOs, no ADRs, and no “story” stocks that don’t pass the ranking tool’s quantitative test.

Ultimately, the formula’s “magic” isn’t in the math itself—it’s in providing a reliable cage for your emotions, ensuring you stay invested long enough for compounding to turn a disciplined habit into significant wealth.

All content on this site is for informational purposes only and does not constitute financial advice. Consult relevant financial professionals in your country of residence to get personalized advice before you make any trading or investing decisions. This post was written with the assistance of artificial intelligence. The original ideas and final review are human-generated.

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“Think and Grow Rich,” written by Napoleon Hill, is a self-help and personal development book that outlines principles and strategies for achieving success and prosperity. The book is based on Hill’s study of successful individuals and his analysis of their common traits and behaviors. The key ideas and concepts in the book include:

Highlights

• Desire: The book emphasizes the importance of having a burning desire for a specific goal. This desire acts as the driving force behind one’s actions and determination to succeed.

• Faith: Hill discusses the significance of having unwavering faith in oneself and one’s ability to achieve their goals. Belief and positive affirmation play a crucial role in realizing success.

• Autosuggestion: Hill introduces the concept of autosuggestion, which involves repeating positive affirmations and visualizing success to reprogram the subconscious mind.

• Specialized Knowledge: The book advocates for the acquisition of specialized knowledge and expertise in a chosen field. Continuous learning and honing of skills contribute to success.

• Imagination: Hill encourages readers to use their imagination to create detailed mental pictures of their goals. Creative visualization can lead to innovative solutions and breakthroughs.

• Organized Planning: The book stresses the importance of setting clear and specific goals, backed by a detailed plan of action. Organized planning enables individuals to navigate challenges effectively.

• Decision: Making prompt and resolute decisions is vital for success. Procrastination and indecision can hinder progress.

• Persistence: Hill underscores the need for persistence and determination in the face of obstacles and setbacks. Successful individuals do not give up easily.

• Mastermind Groups: The book promotes the concept of surrounding oneself with like-minded and supportive individuals in mastermind groups. Collaborative effort can lead to innovative ideas and collective success.

• The Subconscious Mind: Hill explores the power of the subconscious mind and how it can be harnessed to achieve desired outcomes.

• The Brain: The book discusses how thoughts can be transformed into physical reality through consistent focus and action.

• The Sixth Sense: Hill introduces the idea of a “sixth sense” that provides intuitive guidance and insights when tapped into through meditation and self-awareness.

“Think and Grow Rich” emphasizes that success is not solely dependent on financial wealth but also encompasses personal growth, happiness, and fulfillment. The book provides readers with practical principles and strategies to cultivate a success-oriented mindset, take action, and overcome challenges on the path to achieving their goals and aspirations.

All content on this site is for informational purposes only and does not constitute financial advice. Consult relevant financial professionals in your country of residence to get personalized advice before you make any trading or investing decisions.

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  Quant Weekly – Up over 57% since June 2025

• Quant 30 – Up over 58% since June 2025

• Legacy – Up over 300% since April 2023

• Changes to the Quant Portfolios

• Top Quant Stocks – Top Healthcare excluding BioTechnology,

• Education – Is sell in May and go away a viable investment strategy?

USA Stock market week ending 05/01/26

Major Index Performance (Weekly)

• SPY (S&P 500) +1.0% — Broad market continued its steady climb, posting another week of gains.

• DIA (Dow Jones Industrial Average) +0.6% — Blue chips advanced modestly, trailing the broader market.

• ^IXIC (Nasdaq Composite) +1.2% — Tech remained the leader, delivering the strongest performance of the week.

• IWM (Russell 2000) +1.0% — Small caps matched the broader market, showing balanced strength.

Takeaways

• All major indexes finished higher, maintaining positive momentum

• Leadership remained slightly tilted toward tech-heavy Nasdaq

• Market performance stayed steady and broadly supported across segments

Market Drivers this Week (05/04/26 – 05/08/26)

• Monday — PLTR kicks it off, Iran still the wildcard

• Tuesday — Big macro + AMD = market mover combo

  • Services PMI = real read on the economy

  • AMD earnings = tells you if the AI trade is still real

• Wednesday — jobs preview

  • ADP jobs + ARM earnings = early signals on growth + AI demand

• Thursday — AI + consumer

  • CoreWeave = AI infrastructure reality check

  • ABNB, COIN, AFRM = consumer + risk appetite read

• Friday — Jobs report = everything hinges on this

The CNN Fear and Greed Index ends the week at Greed 66. This is the third week in row at the Greed setting. This follows nine straight weeks at the Fear or Extreme Fear setting. Risk-on is certainly in the drivers seat and the market reflects this.

The Quant 30, Quant Weekly and Quant Legacy Model Portfolios all made all time highs this week. Quant Weekly and Quant 30 have been higher for six weeks in a row. Risk On is fully in control and we have just the high quality momentum stocks needed to ride this wave up.

Read more

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  Quant Weekly – Up over 57% since June 2025

• Quant 30 – Up over 58% since June 2025

• Legacy – Up over 300% since April 2023

• Education – What is going on in private credit? A memo from Howard Marks 4/6/26

USA Stock market week ending 05/01/26

Major Index Performance (Weekly)

• SPY (S&P 500) +1.0% — Broad market continued its steady climb, posting another week of gains.

• DIA (Dow Jones Industrial Average) +0.6% — Blue chips advanced modestly, trailing the broader market.

• ^IXIC (Nasdaq Composite) +1.2% — Tech remained the leader, delivering the strongest performance of the week.

• IWM (Russell 2000) +1.0% — Small caps matched the broader market, showing balanced strength.

Takeaways

• All major indexes finished higher, maintaining positive momentum

• Leadership remained slightly tilted toward tech-heavy Nasdaq

• Market performance stayed steady and broadly supported across segments

Market Drivers this Week (05/04/26 – 05/08/26)

• Monday — PLTR kicks it off, Iran still the wildcard

• Tuesday — Big macro + AMD = market mover combo

  • Services PMI = real read on the economy

  • AMD earnings = tells you if the AI trade is still real

• Wednesday — jobs preview

  • ADP jobs + ARM earnings = early signals on growth + AI demand

• Thursday — AI + consumer

  • CoreWeave = AI infrastructure reality check

  • ABNB, COIN, AFRM = consumer + risk appetite read

• Friday — Jobs report = everything hinges on this

The CNN Fear and Greed Index ends the week at Greed 66. This is the third week in row at the Greed setting. This follows nine straight weeks at the Fear or Extreme Fear setting. Risk-on is certainly in the drivers seat and the market reflects this.

The Quant 30, Quant Weekly and Quant Legacy Model Portfolios all made all time highs this week. Quant Weekly and Quant 30 have been higher for six weeks in a row. Risk On is fully in control and we have just the high quality momentum stocks needed to ride this wave up.

Note: You are enjoying the free subscriber newsletter. Paid subscribers enjoy instant access to weekly Model Portfolio updates upon release and a Top Quant Stocks list. Free subscribers get access to Portfolio updates after a three-week delay but no Top Quant Stocks list.

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Model Portfolio Quant Alpha Weekly

Any newly added stock is being released to Paid Subscribers today. Below are the updates from three weeks ago. This Portfolio continues to significantly outperform its benchmark, 57% versus 18%. It has 24 members.

Top five Quant stocks in the Portfolio (Paid subscribers only).

One change to the Portfolio this week

Add (04/10/26) : NESR (National Energy Services Reunited)

Remove (04/10/26) : None

Outperformers: SSRM (SSR Mining) up over 80%, MU (Micron Technology) up over 240%, VISN (Vistance Networks) up over +170%

Model Portfolio Quant 30

This week’s new update, if any, is being released to the paid subscribers. Shown below is the update made three weeks ago. This Portfolio continues to beat its benchmark by a wide margin, 58% to 18%. It has 30 members in it.

Top five Quant stocks in the Portfolio (Paid subscribers only).

No changes to the Portfolio this week

Add (04/10/26): None

Remove (04/10/26): None

Outperformers: MU (Micron Technology) up over 340%, GFI (Gold Fields) up over 70%, LITE (Lumentum Holdings) up over 290% and TTMI (TTM Technologies) up over 120%

Model Portfolio Quant Alpha’s – Legacy

The portfolio is up over +300% since it began in 2023. It has around 18 stocks in it. Powell industries is now a 14 bagger. Celestica is now a 16 bagger.

Top five Quant stocks in the Portfolio (Paid subscribers only).

Remove (04/10/26): None

Outperformers: AGX (Argan) up over 900%, STRL (Sterling Infrastructure) up over 800%, POWL (Powell Industries) up over 1400% and CLS (Celestica) is up over 1600%

Performance to 05-01-2026

Click here for the Live Quant scorecard

Top 10 Quant Stocks for this week – Paid subscribers only feature

What is going on in private credit? A memo from Howard Marks 4/6/26

Full Article Breakdown

• Credit changed the whole game
  Back in the day, it was just stocks and bonds—real simple. Now credit is everywhere and it’s driving most of the action.

• High-yield bonds opened the floodgates
  Once risky companies could borrow, everything changed. Higher risk, higher return—that became the playbook.

• Private equity got supercharged
  Cheap debt let smaller players buy bigger companies. That’s how PE went from niche to powerhouse.

• LBOs went mainstream
  Borrow big, buy big—that was the move. And it worked… until it didn’t.

• Structured credit added rocket fuel
  Packaging debt into tranches made it easier to sell risk. Wall Street turned complexity into a business.

• Leveraged loans scaled the system
  Loans weren’t just for banks anymore. Institutions piled in and the market exploded.

• Dot-com crash shifted investor behavior
  Stocks burned people, so they looked elsewhere. That’s when “alternatives” became the hot ticket.

• Private equity became the new favorite
  Big funds, big promises, big inflows. Everyone wanted in on the next big thing.

• CLOs increased demand for loans
  More buyers meant more loans needed. That kept the whole machine running.

• Bad lending led to the GFC
  Loose standards caught up fast. When reality hit, everything broke at once.

• Banks pulled back after 2008
  They got burned and tightened up. That left a big gap in lending.

• Private credit filled the vacuum
  Non-bank lenders stepped in fast. And they weren’t exactly conservative.

• Direct lending took off
  Faster deals, fewer rules, big yields. It became the go-to for private equity deals.

• Too much money lowered standards
  When everyone’s chasing deals, discipline slips. That’s when problems start brewing.

• “Low volatility” was misleading
  Just because prices don’t move doesn’t mean risk isn’t there. It just means nobody’s marking it daily.

• Cracks are starting to show
  Defaults, liquidity issues, weird valuations—it’s all popping up now. Early warning signs.

• Software lending got overheated
  Big multiples, lots of leverage, easy assumptions. Looked great—until things got questioned.

• AI changed the narrative fast
  Suddenly software isn’t untouchable. That spooked investors real quick.

• Investor psychology flipped
  From “can’t lose” to “get me out.” Same cycle, different decade.

• Liquidity + leverage = real risk
  People didn’t think about getting stuck. Now they’re finding out the hard way.

Bottom Line

Same movie, new cast:
Money floods in → standards drop → risk builds → reality hits → panic follows.

Disclaimer: This is a simplified summary—review the full material and do your own research before making investment decisions.

All content on this site is for informational purposes only and does not constitute financial advice. Consult relevant financial professionals in your country of residence to get personalized advice before you make any trading or investing decisions. This post was written with the assistance of artificial intelligence. The original ideas and final review are human-generated.

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Below are some highlights from the bestselling book by Benjamin Graham and David Dodd. It details how the value investor must constantly be in the process of reinvention, of raising his or her game to navigate the terrain of new eras, novel securities, nascent businesses, emerging industries, shifting standards, and evolving market conditions. The book was originally published in 1934 and the current seventh edition has been updated with thoughts from modern day masters of value investing.

Highlights

Investing is about intrinsic value, not market price
The goal is to estimate what a business is truly worth and buy it below that level.

Markets are often irrational
Prices swing based on emotion, news, and sentiment—not always fundamentals.

Margin of safety is everything
Buying well below intrinsic value protects you from mistakes and bad luck.

Focus on downside first
Avoiding large losses is more important than maximizing gains.

Earnings matter, but quality matters more
Stable, repeatable earnings are far more valuable than volatile spikes.

Balance sheet strength is critical
Strong assets and manageable liabilities provide resilience during downturns.

Assets can provide a floor value
Tangible assets can support a stock’s value even if earnings disappoint.

Not all earnings are equal
Adjust reported numbers for one-time events and accounting tricks.

Diversification reduces risk of error
Even the best analysis can be wrong, so spread your bets.

Speculation and investing are not the same
Investing relies on analysis and value; speculation relies on price movement.

Market fluctuations are opportunities
Price swings allow you to buy cheap or sell expensive.

Buy unpopular or overlooked securities
The best bargains are often found where others aren’t looking.

Avoid overpaying for growth
High expectations are often priced in, leaving little margin for error.

Historical performance matters
Past data provides context but should not be blindly extrapolated.

Management quality matters
Good leadership can enhance value, but numbers still come first.

Debt is a major risk factor
Too much leverage can quickly turn a small problem into a disaster.

Preferred stocks and bonds require different analysis than equities
Income, coverage, and safety take priority over growth.

Fixed income investing is about safety and coverage
Focus on the issuer’s ability to meet obligations consistently.

Cyclical companies must be valued across cycles
Don’t judge them based on peak earnings alone.

Special situations can create opportunity
Events like restructurings or spin-offs often lead to mispricing.

Net-net investing offers deep value
Buying below net current asset value provides extreme downside protection.

Patience is required
Value may take time to be recognized by the market.

Discipline beats intelligence
Following a consistent process matters more than occasional brilliance.

The goal is to avoid big losses
Long-term success comes from preserving capital and compounding steadily.

Bottom Line

Buy value, not hype — focus on what a business is truly worth, not what the market is saying today

Protect downside first — margin of safety and balance sheet strength are your survival tools

Stay patient and disciplined — the edge comes from consistency, not chasing quick wins

All content on this site is for informational purposes only and does not constitute financial advice. Consult relevant financial professionals in your country of residence to get personalized advice before you make any trading or investing decisions. This post was written with the assistance of artificial intelligence. The original ideas and final review are human-generated.