View the video of this post here.
Over the last 30 years, the purchasing power of the US Consumer Dollar has been cut in half due to inflation. At the same time, the S&P 500 has gained 852% (7.8% per year) AFTER adjusting for inflation. Why you need to invest for the long run, in one chart…
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The most important charts and themes in markets and investing…
1) The Four Most Dangerous Words
The four most dangerous words in investing, according to legendary fund manager Sir John Templeton, are: “This time it’s different.”
Which is why alarm bells went off in my head last week when many were saying just that in regards to the SpaceX IPO.
When I noted how every major IPO in the last 15 years traded below its first day close at some point in its first year, the overwhelming response was: “This time it’s different. None of these companies were SpaceX.”
Fast forward to today and the laws of gravity are starting to take hold, with SpaceX in a 35% drawdown and trading below its first day close.
Where will it go from here?
Nobody knows. But a wave of supply is coming, and it wouldn’t be unprecedented to see additional selling pressure when it comes.
When are insiders allowed to start selling?
Most pre-IPO investors and employees can sell after the first earnings report, which is estimated to be sometime in early August. After that, there are a series of staggered unlocks at 70, 90, 105, 120, 135, and 180 days after the IPO. Elon Musk and certain extended pre-IPO investors are subject to a longer 366-day lockup.
In terms of supply, these shares will dwarf the initial float which was less than 5% of outstanding shares. By 180 days, an estimated 58% of the company’s total shares outstanding will be floated. Keep in mind: these are investors and employees with enormous unrealized gains (SpaceX was a $10 billion company 10 years ago), and the temptation to lock in at least part of these lottery-sized winnings will be extremely high.
2) From Equity Bubble to Credit Bubble
The AI hyperscalers (Google, Amazon, Meta, Microsoft, and Oracle) have issued 47% more debt in the first 5 months of this year ($159 billion) than all of last year ($108 billion). Their YTD debt issuance exceeds the combined issuance from 2020-2024.
In the past week, Nvidia ($25 billion sale) and SpaceX ($25 billion sale) have joined the party.
Every equity bubble inevitably becomes a credit bubble before it bursts.
3) Narrowing Tech Leadership
20 stocks in the S&P 500 have doubled so far this year.
Of these,19 are related to the AI-infrastructure boom.
This is the type of narrow leadership often seen during speculative manias.
While semiconductor stocks ($SOXX ETF) have more than doubled so far this year, the Magnificent 7 ($MAGS ETF) are down 3%.
Old Wall Street warning: “They’re shooting the generals.”
Translation: the former market leaders are starting to break.
Also notable: the spread between the top and bottom performing Tech companies is at its widest level since the dot-com bubble peak in 2000.
Who are these bottom performers?
13 of the 20 worst-performing stocks in the S&P 500 this year are software and related services companies.
The market is treating AI as an existential threat to large parts of the software industry.
4) Capital Voting With Its Feet
One of the widest performance gaps we’ve ever seen:
-South Korea stocks are up 126% in 2026.
-Taiwan stocks are up 73%.
-China stocks are down 12%.
Capital is voting with its feet.
5) Warsh Passes His First Test
“The commitment to deliver [on reducing inflation] is strong, unanimous and unambiguous. And that’s, I think, an important message. We’ve missed for 5 years. And we’re gonna fix that.”
So said Kevin Warsh at his first FOMC press conference last week. In doing so, he passed his first test: establishing Fed independence (he voted in lockstep with the other 11 FOMC members in choosing to hold rates steady) and not ignoring the elephant in the room.
That elephant: an inflation rate that has been above the Fed’s target level for over 5 years.
The key sentence from significantly shorter FOMC statement (half the length of previous versions): “The Committee will deliver price stability.”
What does that mean?
Tighter monetary policy and rate hikes at some point this year.
There was a big shift in Fed dot plots with the median member now forecasting 1 rate HIKE this year when previously they were forecasting 1 rate CUT.
And the bond market is now pricing in 2 Fed HIKES by the end of the year, a 1% swing in expectations from where we started the year (2 Fed rate CUTS).
This is the right move if the Fed wants to regain any credibility as an inflation fighter.
6) There’s No Free Lunch
Back in April, Michael Saylor (Executive Chairman of Strategy, a Bitcoin Treasury Company) had this to say in promoting his preferred stock offering (Ticker: $STRC): “delivers money market-like stability” with “market-leading risk-adjusted returns.”
If that seems too good to be true, that’s because it was. Strategy’s preferred stock has since experienced a 16% max drawdown and is down 8% on the year.
Lesson: There’s no such thing as money market-like stability with market-leading returns. Every investment with the promise of a higher return than cash comes with higher risk. There’s no free lunch in markets.
7) A Few Interesting Stats…
a) The S&P 500 is up 15.6% per year since the start of 2020, on pace for its strongest decade since the 1990s.
b) The 2020s are on pace to be the worst decade in history for 10-Year Treasury bonds with annualized total returns of -0.6%.
c) The US Strategic Petroleum Reserve is now at its lowest level since July 1983. Over the past 5 years we’ve seen a drawdown of 285 million barrels (46% decline).
d) The US government has never consumed a larger share of the economy than it does today.
e) The Memory ETF is now the fastest ETF in history to hit $10 billion, $15 billion, and $20 billion in assets under management.
f) Elon Musk made 99.9% of his $1.2 trillion net worth after turning 40.
And that’s it for this week. Thanks for reading!
Every week I do a video breaking down the most important charts and themes in markets and investing. Subscribe to our YouTube channel HERE for the latest content.
Disclaimer: All information provided is for educational purposes only and does not constitute investment, legal or tax advice, or an offer to buy or sell any security. Read our full disclosures here.
PakarPBN
A Private Blog Network (PBN) is a collection of websites that are controlled by a single individual or organization and used primarily to build backlinks to a “money site” in order to influence its ranking in search engines such as Google. The core idea behind a PBN is based on the importance of backlinks in Google’s ranking algorithm. Since Google views backlinks as signals of authority and trust, some website owners attempt to artificially create these signals through a controlled network of sites.
In a typical PBN setup, the owner acquires expired or aged domains that already have existing authority, backlinks, and history. These domains are rebuilt with new content and hosted separately, often using different IP addresses, hosting providers, themes, and ownership details to make them appear unrelated. Within the content published on these sites, links are strategically placed that point to the main website the owner wants to rank higher. By doing this, the owner attempts to pass link equity (also known as “link juice”) from the PBN sites to the target website.
The purpose of a PBN is to give the impression that the target website is naturally earning links from multiple independent sources. If done effectively, this can temporarily improve keyword rankings, increase organic visibility, and drive more traffic from search results.
