“Are the good times about to end, or are they just beginning?”
I am on vacation right now, enjoying time with my three beautiful kids and wife.
I always use time away from the office to do the obvious, which is to hang out and make memories together as a family, but also to ponder the big questions, catch up on some podcasts I am behind on, and just think about the current state of the markets and the world.
So this week, rather than giving you a typical piece, I wanted to share with you a few of these questions I am mulling over as we head into the end of the year and into 2025.
They are in no order of importance.
- Will geopolitical tensions rise or fall in 2025? We have had two-and-a-half years of massive tension—the war in Ukraine, the Middle East tensions, and China pushing Taiwan around. My instincts say it’ll die down, but something else happens whenever I think we’re at the peak. The markets have looked past them, and so far, they have been right.
- Where will the $6T in cash on the sidelines go? If you can believe it, we are still sitting at near or all-time highs in cash. The market is up 62% since the lows of 2022. Investors on the sidelines missed out on a heck of a rally. But what will it take to get that cash into the markets?
- Where will insurance rates be in two years after the unprecedented back-to-back hurricanes in Florida and the massive forest fires since 2020? Inflation has subsided, prices are still high (looking at you, housing), and I can assure you of one thing: We will all be paying more for insurance in the coming years, but just how much is the question.
- Will AI be a massive flop, a race to the bottom of sorts, or will it transform society like we are being told? There seem to be two camps: AI will be a race to the bottom and a commodity, or it’ll change everything and everybody. I’m a realist on this one and say the answer will be in the middle, but it will be fascinating to watch this play out in the next few years. As investors, getting this right is massive.
- What fads will die in 2025? Remember blockchain, the internet of things, SPACS, NFTs… they are still alive, but you probably haven’t heard about them from Wall Street, for good reason: they were investing fads. My call here is AI. There has been a trillion dollars invested in space. Much of that will be eviscerated; a few companies will come out ahead. But in a year from now, we’ll have a much clearer direction and how much of AI was a fad (it’ll be a lot).
- Will 2025 be the year of small-cap stocks and international outperformance vs. the Mag Seven?If you couldn’t tell, I love technology and finance; this newsletter is an odd combination of both. I also love investing in those spaces, but I am wondering if the US large-cap space will take a breather while small / mid-cap stocks and International take center stage. This is a massive story that seems to be unfolding before our eyes right now.
- Where will interest rates land in Q1 of 2026? Everyone thinks rates will end somewhere between 3-4% (that’s 1-2% lower than they are right now). Where the Fed stops doesn’t matter a whole lot if you consider how amazing our economy has performed in light of their massive hike over 2022 and 2023. But where they stop and how long they keep them there has me wondering.
- Will smartphones ever get cool again? I just got the new iPhone. I had the iPhone 13 previously, and the latest 16 feels much like the 13. I wonder if technologists have hit a limit on these things. Will they ever be cool again? If not, what will be the next insane piece of tech (but not software) that will change the world?
- What was Tom Brady’s deal structure to buy 5% of the Raiders, and what would his distributions be?The good times are rolling for the GOAT. Tom Brady just inked a deal to become a 5% owners of the Las Vegas Raiders. I’ve been curious for a while about the financials of NFL teams. I did some googling a while back, and aside from some information on the Green Bay Packers (they have a unique ownership structure), I found zilch. I feel like that was on purpose, too. They are trophy assets and I’d love to know the deal structure, yield, price, and performance.
- When will everyone just get along? Finally, with the election coming up, the massive tensions around the world, social media, etc., we’re all in a post-pandemic funk. When will people put aside their differences and realize how amazing life can be when we assume the best in people?
These are just a few questions I have as I am away from the grind, hanging out with my wife and kids, and thinking about the world around us.
While I wish I could offer you something more in-depth (those pieces are in the works), I need to practice being tired and rich, which for me, means taking a break from the hustle, giving my kids a measure of quality and quantity of time with their dad they usually don’t get, dreaming with my wife, and getting out of town to recalibrate.
And remember, as you invest, always ask questions and seek wisdom as you build your portfolio.
Asking the right questions will lead to the right outcome for you.
Alright, that’s going to be a wrap. My son, Bode, just asked me to stop working.
Back to being a dad. See you next week.
