Dear Investors.

Zee here. I decided to write this article urgently to allay 2 irrational fears:
(i) That a Democratic Congress, with a Republican President can affect the markets

(ii) That a Democratic Congress can stop US Data centers build out.

On November 3, US voters in a number of states did something the AI industry had mostly avoided thinking about: they treated data centers as a local nuisance to be voted on, not an inevitable feature of progress.

At the same time, the companies building them are signing financial commitments that stretch far beyond the next election cycle. Those two facts are on a collision course, and the collision is the real story behind the market’s nervousness.

Let me address them below…

Historically, the S&P 500 has delivered an average gain of 15.5% in the 12 months following a midterm election that resulted in a Republican President facing a Democratic-controlled Congress.

This is not an unusual political outcome, and history suggests that markets can perform well even under a divided government.

Next, the AI Builout and voters.

The election results have raised significant concerns about the outlook for technology stocks, particularly regarding AI-related capital expenditure (capex), with data centre expansion being a key area of focus.

It is important to remember that this capex spending eventually flows through the technology ecosystem and translates into corporate revenues and earnings. Any slowdown in spending, therefore, could have a knock-on effect on earnings growth across the sector.

The House and Senate alone cannot halt the data centre expansion. Much of the decision-making authority rests with state governors and local authorities, which have significant influence over permitting, zoning, land use and infrastructure approvals.

This is why Democrat Gina Hinojosa’s election as Texas Governor has implications for markets, particularly given Texas’s importance to the US data centre industry. That said, she cannot unilaterally stop the expansion, and it remains unclear whether doing so is even her intention.

It is also worth noting that outgoing Republican Governor Greg Abbott had already introduced a moratorium on new data centres. The key question, therefore, is whether the incoming administration will maintain, modify or reverse the existing restrictions, and what that could mean for the pace of AI infrastructure investment in Texas.

Why voters oppose datacenters?

The national polling points the same way. Gallup found 71% of Americans opposed to a data center near them, according to reporting from Pluribus News. A Reuters/Ipsos poll in June found 57% opposed, including two-thirds of Democrats and half of Republicans.

The stated reasons are mundane. Electricity bills, water use, noise, land, and the small number of permanent jobs a finished facility creates come up again and again. In a UMBC poll of Maryland likely voters, 80% expected a negative effect on household electricity costs.

One finding suggests the opposition is conditional rather than absolute. In a May Embold Research poll, the share of voters expecting higher power prices fell from 73% to 46% when the hypothetical data center generated part of its own power from on-site renewables. People may be objecting less to the buildings than to the idea of paying for the grid they require.

Growing opposition to data centres does not necessarily mean the buildout will come to an end. However, it could make expansion considerably more expensive. Even delays can translate into higher costs, while many AI companies are already committed to long-term contracts that may be difficult or costly to exit.

AI CAPEX is indeed rising

The concern is that this is no longer a small corner of the economy or financial markets.

AI infrastructure investment has become a massive component of corporate capital expenditure, with significant implications for technology earnings, valuations and the broader market. The sheer scale of this investment makes any slowdown or disruption potentially consequential.

Including SpaceX, combined capex looks like this:

• 2025: $432 billion (+73% y/y)

• 2026: $879 billion (+103%)

• 2027: $1.41 trillion (+60%), about 4.0% of GDP

• 2028: $1.53 trillion (+9%)

The worry about AI CAPEX spending translating into actual earnings should be more concerning that voters.

Concluding

The mid-terms results may not change the AI buildup much because:

• The votes are local. Each measure covers one town or county. If one place says no, developers can build somewhere else or overseas.

• A delay is not a stop. Economists quoted by CBS say moratoriums may delay construction but won’t torpedo AI capital spending. Projects take longer, but the money still gets spent.

• Much of the spending is already locked in. Carson says many AI firms are locked into long-term contracts they can’t get out of. Reuters also reported that capacity under construction was up 48% nationally.

• Voters’ main worry can be fixed. People mostly fear higher electricity bills. If data centers pay for the grid or generate their own power, much of the opposition could fade.

  So the likely outcome is a slower and more expensive buildout, not a stopped one.

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Disclaimer:

All information here is for educational purposes only. This is not financial advice. Please do your own research and speak with a licensed advisor before making any investment decisions. Past performance is not indicative of future returns. How we invest may not suit your investment goals and risk management profile.

Zee here. Time of the month again, to share our monthly update on our portfolio. You can read last month’s portfolio update here.

Public Portfolio Update: October 2026

YTD (1st Jan 2026 to 28th Oct 2026) performance: +27.05%

MTD (1st Oct 2026 to 28th Oct 2026) performance: +1.52%

Cash left uninvested: 0%

Our Portfolio Review:

(1) Market was rather volatile due to the AI sell-offs from sector rotation and investors concern about the large spending on AI CAPEX.

(2) We took partial profits early in the month and re-entered when the markets went down during October 16th into our watchlist of good ETFs and stocks.

Disclaimer:

All information here is for educational purposes only. This is not financial advice. Please do your own research and speak with a licensed advisor before making any investment decisions. Past performance is not indicative of future returns. How we invest may not suit your investment goals and risk management profile.

Dear Investor.

Zee here. Ever opened a stock chart and spot a blank space between two candles, as if the price skipped a step. That’s a gap, and it’s one of the quickest ways to see that sentiment changed overnight.

In this issue, we’ll break down what gap ups and gap downs are, why they happen, and how to read them without overthinking it.

What is a candlestick gap?

A candlestick chart normally flows smoothly: one candle ends, the next begins roughly where the last one left off. A gap happens when the next candle opens at a noticeably different price from where the previous one closed, leaving an empty space on the chart where no trading took place.

Think of it like a staircase with a missing step. The price didn’t walk through the in-between levels; it jumped over them.

Gaps mostly show up on daily charts, because markets close overnight. A lot can happen between the closing bell and the next morning’s open.

Gap up: the price jumps higher

A gap up happens when today’s opening price is above yesterday’s high (or at least well above yesterday’s close). On the chart, you see an empty space above the previous candle.

What it usually means: buyers are more eager than sellers. Something overnight made people want the stock badly enough to pay a higher price right from the open.

Example with illustration below: Stock ABC closes at $50 on Monday. After the close, the company announces earnings that beat expectations. On Tuesday morning, ABC opens at $55. Nobody traded between $50 and $55, so a gap appears on the chart. Optimism took over before the market even opened.

Gap down: the price drops lower

A gap down is the mirror image. Today’s open is below yesterday’s low (or well below yesterday’s close), leaving an empty space below the previous candle.

What it usually means: sellers are in control. Bad news or fear hit overnight, and people rushed to sell at whatever price they could get.

Example with illustration below: Stock XYZ closes at $80 on Thursday. Overnight, the company lowers its sales forecast. On Friday it opens at $72. The $72 to $80 zone is now an empty gap, a visual scar from the sudden drop in confidence.

Why do gaps happen?

Gaps appear when the balance between buyers and sellers shifts while the market is closed. Common triggers include:

• Earnings reports (the most common cause)

• Company news, such as a new product, a lawsuit, a merger or a leadership change

• Economic data or central bank decisions

• Global events or big moves in overseas markets

• Analyst upgrades or downgrades

The bigger the surprise, the bigger the gap.

Not all gaps are equal: four types

Traders often group gaps into four kinds. You don’t need to memorize them, but knowing the idea helps.

Will the gap get filled?

You’ll often hear traders say “gaps always get filled.” A gap fill means the price eventually travels back and trades through the empty space.

It’s a popular saying, but it’s not a rule. Small gaps without news often do get filled. Big gaps driven by real, lasting news (like a major earnings beat) can stay open for months or even years. Treat gap-filling as a possibility, not a promise.

What to look at alongside a gap

A gap on its own is just a clue. These details help you read it better:

• Volume. A gap on heavy volume shows strong conviction. A gap on light volume is easier to fade.

• The news behind it. A gap caused by real change (earnings, a new contract) tends to hold better than one caused by rumor or hype.

• Where it happens. A gap out of a long base is more interesting than a gap after a massive run-up.

• What happens next. If price holds above a gap up (or below a gap down) instead of immediately reversing, the move has more credibility.

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Quick cheat sheet

Disclaimer:

All information here is for educational purposes only. This is not financial advice. Please do your own research and speak with a licensed advisor before making any investment decisions. Past performance is not indicative of future returns. How we invest may not suit your investment goals and risk management profile.

Dear Investors.

Zee here. Few headlines unsettle a new investor like this combination: the Federal Reserve raises interest rates, Treasury yields jump, and stocks fall, all in the same week.

In September 2026 that is exactly what happened, with the 10-year Treasury yield crossing 5% while the S&P 500 slid. Several students have asked what these numbers mean, whether they’re the same thing, and whether you should do anything about them.

So I decided to write a simple guide to answer these questions in plain English. You’ll learn what the Fed funds rate, the 10-year yield and the 30-year yield each measure, who controls them, how they influence one another, and why rising yields tend to put pressure on the S&P 500.

1. What’s happening right now

On September 16, 2026, the Federal Reserve raised its benchmark rate by 0.25 percentage points, to a range of 3.75%–4.00%. It was the Fed’s first increase since 2023.

Around the same time, the 10-year Treasury yield climbed above 5%, its highest level since 2007, and the 30-year yield rose to roughly 5.4%–5.5%, a level not seen since the mid-2000s. Reports at the time linked the move to hot inflation data and higher oil prices.

2. The three players explained

The Fed funds rate is the interest rate banks charge each other for overnight loans. The Federal Reserve sets a target range for it 8x a year. It is the Fed’s main steering wheel: raise it to cool inflation, cut it to support growth and jobs. It influences credit card rates, savings account rates, and short-term business loans fairly directly.

The 10-year Treasury yield is the annual return you earn if you lend money to the US government for 10 years and hold to maturity. It is the most-watched interest rate in the world. Mortgage rates, corporate bond rates and stock valuations all take cues from it.

The 30-year Treasury yield is the same idea, but you lend for 30 years. It reflects what investors expect for inflation, growth and government borrowing over a generation.

One rule to memorize: bond prices and bond yields move in opposite directions. If investors rush to sell bonds, prices fall and yields rise.

If they rush to buy, prices rise and yields fall.

When you read “yields surged,” it means bond prices dropped.

3. The relationship between the 3

Here is the key insight that surprises most beginners: the Fed controls only the short end. It sets the overnight rate directly. The 10-year and 30-year yields are set by the market, meaning millions of buyers and sellers deciding what those bonds are worth.

The Fed still influences long yields, mainly through expectations:

• If investors think the Fed will keep rates high for a long time, longer-term yields tend to rise, because they can earn more by waiting.

• If investors think the Fed will cut soon (for example, because the economy is weakening), long yields tend to fall.

• If the Fed seems soft on inflation, long-term investors demand extra yield as protection, and long yields can rise even if the Fed hasn’t moved.

They also respond to forces the Fed doesn’t control, including inflation expectations, oil prices, how much debt the government is issuing, and what other countries’ central banks are doing.

This is why long yields sometimes move before the Fed does. In September 2026, the bond market had effectively raised long-term rates weeks before the Fed raised the overnight rate. Think of the Fed as the thermostat in one room, and the bond market as the weather outside.

4. How Fed rate changes feed into the 10-year and 30-year yields

A Fed rate change moves the 10-year and 30-year yields through three routes: what it says about future short-term rates, how surprising it is, and what it signals about inflation.

Why the link is not 1-to-1

The Fed moves one rate. Long yields respond to many other forces: oil prices, government borrowing, global bond markets and growth expectations. Two examples show how loose the link can be:

• September 2025: the Fed cut rates for the first time in nine months, yet the 10-year yield ended the week higher (4.07% to 4.13%), as the market focused on a slowing job market and the pace of future cuts.

• Late 2024: the Fed cut rates by a full percentage point over three meetings, while the 10-year yield rose by roughly a full percentage point, as investors worried about inflation and heavy government borrowing.

Quick reference: what usually happens

A useful pattern: when the Fed hikes, short-term yields tend to rise faster than long-term ones, so the gap between them narrows.

5. Compare and contrast

What the 10-year and 30-year have in common: both are “long-term” rates set by the market, both are considered very safe because they’re backed by the US government, and both usually move in the same direction on a given day.

How they differ: the 30-year is more sensitive to price swings. Because your money is locked up three times as long, a small change in yield causes a much bigger change in the bond’s price. That is why long-term bond funds can drop sharply when yields spike. Reports in late September 2026 noted a popular 20+ year Treasury ETF falling nearly 2% in a single day while yields jumped.

The gap between them also tells a story. Normally, longer bonds pay more than shorter ones, to reward you for waiting. When short-term yields rise faster than long-term yields, the gap narrows or flips (an “inverted” curve), which has historically been a warning sign of slowing growth.

6. How rising rates and yields affect stocks

There are three main channels.

7. What this means for the S&P 500

The S&P 500 is an index of 500 of the largest US companies, so it’s a good proxy for “the US stock market.” It tends to react to rates in two phases.

The short-term reaction is often negative. Around the September 2026 hike, the S&P 500 fell to its lowest level since late July at one point, and the Dow dropped more than 600 points on decision day. Days later, stocks fell again as yields jumped further after hawkish Fed comments.

The longer-term picture is more mixed. Rising rates don’t automatically mean falling stocks. What matters is why rates are rising:

• Rates rise because the economy and profits are strong. Stocks can handle this, because earnings growth offsets the higher discount rate. Analysts in late September pointed to strong expected profit growth for S&P 500 companies as a cushion.

• Rates rise because of an inflation scare while growth weakens. This is the tougher combination for stocks, because profits shrink at the same time as the discount rate climbs.

Another key point: how fast and how far matters more than the first move. A small, gradual set of hikes is very different from the rapid-fire hikes of 2022. Markets were pricing in more possible hikes after the September decision, which is a big part of why investors stayed nervous.

8. Practical takeaways for investors

1. Don’t panic over one headline. Short-term reactions to Fed decisions are noisy and often reverse within days or weeks.

2. Understand what you own. If you hold long-term bond funds, a rise in yields means falling prices in the short run, though you earn higher income going forward. If you hold growth-heavy stock funds, expect more turbulence when yields rise.

3. Higher yields are not all bad news. New savings, CDs, money market funds and new bonds pay more, which is good for savers and for investors buying bonds today.

4. Match your investments to your time horizon. Money you need within a few years generally shouldn’t ride on stock-market swings, while money for decades away can usually tolerate them.

5. Diversify. A mix of stocks and bonds, across sectors, helps you avoid being hurt by any one rate scenario.

6. Watch the right signals. Pay attention to inflation reports, the Fed’s statements and projections, and where the 10-year yield is heading. A sustained climb in the 10-year yield is one of the best early warnings that stock valuations are under pressure.

The bottom line

The Fed controls the overnight rate. The market controls the 10-year and 30-year yields, with the Fed’s actions and words as one big influence among many.

When those yields rise, stocks face competition from safer bonds and a harsher valuation math, so the S&P 500 often wobbles, especially its growth-heavy parts.

But the reason for rising rates, and whether company profits keep growing, usually matter more than the rates themselves.

Disclaimer:

All information here is for educational purposes only. This is not financial advice. Please do your own research and speak with a licensed advisor before making any investment decisions. Past performance is not indicative of future returns. How we invest may not suit your investment goals and risk management profile.

Dear Investors.

Zee here. Meta’s stock had its best month in almost four years in September 2026, and the main reason is a new AI product called Muse.

Meta paid $14.3 billion for half of a data labelling startup, hired its founder, and nine months later shipped Muse, the model that replaced Llama.

The shares have cooled a little since, and investors are now waiting for the next earnings report to see whether the excitement turns into real money.

What is Muse?

Muse is Meta’s newest big product. Most chatbots only answer questions, but Muse is a personal AI agent that does things for you. Meta says it can send an email, book travel, open a browser, fill out forms, negotiate on a person’s behalf and complete a checkout, and that it keeps working after the app is closed. It runs in the background, even while you sleep.

Muse launched on September 8. It can be used through its own app or directly inside WhatsApp. It is rolling out in the United States only, on iOS, Android and the web.

It’s free to start, and paid tiers run $20 and $100 a month for heavier users. Meta has said that user information won’t be incorporated into its advertising infrastructure, so the money is meant to come from subscriptions and transaction fees rather than ads.

How Muse is built, and why that matters

An AI agent that can spend your money has to be safe. Meta’s approach assumes the AI itself can be tricked, so it built a fence around it:

• Muse works inside a sealed cloud computer (the “Muse Secure VM”). A separate Sentinel agent monitors what Muse does and controls what can reach the internet.

• Your passwords and card details are kept outside the AI’s reach. Meta says Muse “has no visibility into people’s passwords or payment methods,” and asks before it buys.

• Later this year, Meta plans a Confidential VM, encrypting the entire virtual machine with a key controlled only by the user.

Muse also has three ways to complete a task:

1. Built-in connectors to apps like Gmail or Shopify. These are fast and reliable.

2. Self-built connectors, where a service offers a public API (a way for programs to talk to each other).

3. Browsing like a person, clicking through a website. This is slower, but it works almost anywhere.

Why did the share price rise?

1. Muse was a hit

Within days of release, Muse surpassed OpenAI’s ChatGPT in download rankings on Apple’s iOS platform. One analyst, Evercore’s Mark Mahaney, projects Muse could reach 100 million users within six to 12 months.

2. Eased the biggest worry about Meta

Meta is spending enormous sums on AI, with 2026 spending guided to $130 billion to $145 billion. Investors kept asking what they would get in return. Muse gave them something concrete to point to. The successful launch has eased investor concerns over whether Meta can generate returns from its multibillion-dollar spending on artificial intelligence.

3. A string of follow-up news

Meta struck partnerships with Instacart owner Maplebear and travel platform Expedia, and unveiled the compact Muse Charm device.

At its Connect conference, Zuckerberg called Muse a “centerpiece” of the company’s strategy. Meta also showed “Muse for Small Business” agent technology, moving to expand its consumer hit into the enterprise market.

The bottom line

Meta’s rally is a bet that its huge AI spending will pay off, and Muse is the first real evidence. The risks are heavy spending, thin cash flow, legal costs, pushback from retailers like Amazon and high expectations. Earnings on October 28 are the next big test.

Disclaimer:

All information here is for educational purposes only. This is not financial advice. Please do your own research and speak with a licensed advisor before making any investment decisions. Past performance is not indicative of future returns. How we invest may not suit your investment goals and risk management profile.

Dear Investors.

Zee here. Most people know Amazon as the place a parcel comes from.

Last quarter, the parcels were the smaller half of the story.

Amazon reported results on Thursday, 30 July 2026, and the numbers were the strongest the company has posted in years. Revenue crossed $200 billion in a single quarter for the first time. Operating profit rose 43%. The cloud division grew at its fastest rate in four and a half years. The stock jumped roughly 10% in after hours trading.

And in the same set of accounts, free cash flow was negative.

That combination is the whole story. Amazon is now two things at once: a highly profitable business, and a business spending faster than it earns in order to build something bigger. Whether that is exciting or worrying depends entirely on how long you plan to hold it.

WHAT DOES AMAZON ACTUALLY SELL?

Before the numbers, a quick reminder of how the company makes money. Amazon is not one business. It is roughly five, sitting under one roof.

1. Online retail. The part everyone sees. Amazon buys products, holds them in warehouses, and sells them. This produces enormous revenue and thin margins, the same economics as any retailer.

2. Third party marketplace. Other sellers list on Amazon and pay a commission, plus fees for storage and delivery. Amazon takes a cut without owning the inventory. Higher margin, less risk.

3. Subscriptions. Prime memberships, plus video, music, and audiobooks. Predictable recurring revenue, and it makes customers shop more often.

4. Advertising. Sellers pay to appear higher in search results on Amazon’s own site. This is quietly one of the most profitable things the company does, because the traffic already exists.

5. Amazon Web Services (AWS). Renting out computing power, storage, and now artificial intelligence infrastructure to other companies. AWS is around a fifth of revenue but the majority of profit.

Retail brings people in. AWS and advertising pay the bills. That is the model in one line.

1. REVENUE CROSSED USD$200 BILLION IN A SINGLE QUARTER FOR THE FIRST TIME

Quarterly revenue came in at $200.6 billion, up 20% from $167.7 billion a year earlier. Operating income rose 43% to $27.5 billion.

The detail that matters more than the headline: profit grew roughly twice as fast as revenue. That is operating leverage. It means the extra dollar of sales is costing Amazon less to produce than it used to, which is what you want to see in a business that has already spent a decade building out its warehouses and delivery network.

North American sales rose 16% to $116.2 billion. International sales rose 15% to $42.2 billion. Both segments grew, which has not always been the case.

One caution on the next quarter. Amazon guided for revenue of $197 billion to $202 billion for Q3, below what analysts were hoping for. Management explained that Prime Day was moved into June this year instead of July, which pulled sales into Q2 and leaves a gap in Q3.

Strip that timing effect out and the company said growth would have been meaningfully higher. This is a calendar artefact, not a demand problem, but it is the kind of thing that moves a share price for a week.

2. AWS IS THE ENGINE, AND IT JUST SPED UP

AWS revenue rose about 37% to $42.2 billion, its fastest growth in 18 quarters. Analysts had expected around 31%.

Three numbers underneath that are worth more than the growth rate itself:

• Operating margin of 39.4%. For every dollar of cloud revenue, roughly forty cents is operating profit. AWS produced $16.6 billion of operating income in the quarter, up from $10.2 billion a year ago.

• A backlog of around $496 billion. This is contracted future revenue that customers have already committed to. Backlog is one of the most useful things a long term investor can look at, because it tells you what has been sold but not yet delivered.

• AI and custom chip businesses each above a $25 billion annual run rate. Amazon designs its own chips (the Trainium and Graviton families) rather than buying everything from Nvidia. That gives it some control over cost.

CEO Andy Jassy told investors he now believes AWS can eventually become a business measured in the hundreds of billions of dollars annually, and possibly far beyond that.

Treat management ambition as ambition, not forecast. But the backlog gives that claim more support than it would have had a year ago.

3. THE HEADLINE PROFIT IS NOT WHAT IT LOOKS LIKE

This is the one most people will miss.

Reported net income was $62.6 billion, or $5.75 per share, against $18.2 billion a year earlier. Read quickly, that looks like profit more than tripled.

It did not. Around $53.4 billion of that was non operating pre tax income, largely a revaluation gain on Amazon’s stake in the AI company Anthropic. In plain terms, an investment Amazon holds was marked up in value on paper. No cash changed hands. Nothing was sold.

Strip it out and adjusted earnings were about $1.97 per share, against roughly $1.82 expected. Still a beat. Still a good quarter. But a very different number from $5.75.

The lesson generalizes well beyond Amazon. When a reported profit figure jumps by a multiple in one quarter, the first question is always the same: did the operating business do this, or did an accounting entry do this? Paper gains can reverse just as quickly as they appear.

4. THE SPENDING IS ENORMOUS, AND FREE CASH FLOW HAS GONE NEGATIVE

Amazon raised its 2026 capital spending plan to roughly $220 billion, up from about $200 billion, blaming higher memory chip prices. Capital expenditure in the quarter alone was $54.2 billion, against $32.1 billion a year earlier.

The consequence shows up in cash. Free cash flow, which is what remains after a company pays its operating costs and builds its data centres and warehouses, swung to an outflow of about $7.6 billion over the trailing twelve months, from an inflow of $18.2 billion the year before. Amazon has also announced plans to raise around $25 billion through a bond sale.

Two ways to read this, and both are legitimate.

The optimistic reading: this is what AWS looked like in its early years. Heavy upfront spending on infrastructure that later became one of the most profitable businesses in the world. Jassy has said that even at $220 billion, Amazon still cannot serve all the demand it sees, and that demand already visible for 2028 is unusually strong.

The cautious reading: capital spending is a promise, and demand is a forecast. Data centres depreciate. If AI demand slows before the assets are paid off, the depreciation stays and the revenue does not.

What tipped the market toward the optimistic reading this time was simple. Cloud revenue accelerated faster than the spending did. That is the test to keep applying each quarter.

5. THE BUSINESSES NOBODY PRICES IN YET: ADS AND SATELLITES

Advertising grew 26% to $19.8 billion in the quarter. That is a business roughly half the size of AWS, growing quickly, attached to almost no incremental cost. Amazon knows what you searched for and what you bought. That data is why the ads work.

Amazon Leo, the satellite internet business formerly called Project Kuiper, is the long shot. Around 396 satellites are in orbit, well short of the 1,618 the FCC licence originally required by 30 July 2026, and Amazon has asked for an extension. In April the company agreed to acquire satellite operator Globalstar for about $11.6 billion, a deal expected to close in 2027. In late July it filed with the FCC for a separate network of more than 5,100 satellites to beam service directly to phones, targeted for early 2028 if approved.

Leo is years from mattering to the income statement and is competing with a rival that started far earlier and is far larger. For now, treat it as an option, not an asset. It costs money today and may be worth something later.

Bottomline

Three questions are worth carrying into the next set of results:

1. Is AWS revenue still growing faster than capital spending? That is the single ratio that decides whether the buildout was disciplined or expensive.

2. When does free cash flow turn positive again? Negative free cash flow is acceptable while assets are being built. It is not acceptable indefinitely.

3. How much of reported profit came from the operating business? Paper gains flatter earnings on the way up and hurt them on the way down.

Disclaimer:

All information here is for educational purposes only. This is not financial advice. Please do your own research and speak with a licensed advisor before making any investment decisions. Past performance is not indicative of future returns. How we invest may not suit your investment goals and risk management profile.

Zee here. Time of the month again, to share our monthly update on our portfolio. You can read last month’s portfolio update here.

Public Portfolio Update: September 2026

YTD (1st Jan 2026 to 23rd Sept 2026) performance: +29.00%

MTD (1st Aug 2026 to 23rd Sept 2026) performance: +5.59%

Cash left uninvested: 0%

Our Portfolio Review:

Markets bounced back to near all-time high, after the US provided certainty on rate hikes.

On September 16, 2026, the US Federal Reserve raised its benchmark interest rate by a quarter point (0.25%), taking it from 3.50%–3.75% up to 3.75%–4.00%. This was notable because it was the Fed’s first rate hike since 2023, before that, the Fed had spent 2024–2025 cutting rates. It was also the first big decision under new Fed Chair Kevin Warsh, and the vote was unanimous.

Why they hiked: Inflation has stayed stubbornly above the Fed’s 2% target (current at 3.4%), partly driven by energy/oil prices, while the job market has held up fine. When inflation won’t cool down on its own and the economy isn’t weak, the Fed’s usual tool is to raise rates to slow borrowing and spending.

What a rate hike means in plain terms:

• The Fed doesn’t set stock prices directly, it sets the cost of borrowing money for banks, which ripples out to mortgages, credit cards, auto loans, and business loans.

• Higher rates = borrowing gets more expensive = companies and consumers tend to spend/invest less = economic growth cools.

• Higher rates also make “safe” investments like savings accounts, fixed deposits and bonds pay more, which can make stocks look relatively less attractive by comparison.

Disclaimer:

All information here is for educational purposes only. This is not financial advice. Please do your own research and speak with a licensed advisor before making any investment decisions. Past performance is not indicative of future returns. How we invest may not suit your investment goals and risk management profile.

Dear Investors.

Zee here. Nike is one of the most recognizable brands on the planet, and its business model is simple to describe even if running it is not. The company designs, markets, and sells athletic footwear, apparel, and equipment, and it makes money through two main channels: wholesale, where it sells to retail partners like Foot Locker, Dick’s Sporting Goods, and JD Sports, and direct-to-consumer (DTC), where it sells straight to shoppers through its own stores, app, and website.

For years, wholesale was the backbone of the business. Then, starting in 2020, Nike tried to shift the balance toward DTC and that shift is now a textbook example of how even a reasonable strategy can go sideways when a company misjudges perception and misreads its own data.

Here’s what happened, why it matters, and what investors can take from it.

The Strategy: A Reasonable Bet

Nike’s former CEO, John Donahoe, who led the company from January 2020 to October 2024, recently spoke candidly about where his tenure went off track. His starting logic was sound. Shoppers increasingly expect to buy however is most convenient for them, whether that’s online or in a store, and the old distinction between the two is fading.

On top of that, a brand that sells mostly through other retailers doesn’t actually know who its customers are, and that’s a real competitive weakness when rivals can build personalized relationships directly with shoppers.

To fix this, Nike leaned hard into building its own digital ecosystem: Nike membership accounts, its own app and website, and data-sharing partnerships with major retail partners.

On paper, this looked like smart, modern brand-building.

Where It Broke Down

1. Perception outpaced reality.

Even though Nike kept investing in its retail relationships behind the scenes, the DTC push got branded publicly as “Donahoe’s direct-to-consumer strategy.” Wholesale partners took that as a signal that Nike was deprioritizing them, regardless of what was actually being said in private meetings. That perception alone was enough to push some retail partners toward Nike’s competitors, who happily took the open shelf space.

2. The company started managing to its own scoreboard with unintended consequences.

This is the more interesting failure for investors to understand. Nike was internally tracking digital sales growth and DTC growth as key performance metrics. Naturally, the organization began optimizing to hit those numbers, including holding back scarce, in-demand inventory from wholesale partners so it would show up as sales on Nike’s own digital channels instead.

That made online growth numbers look strong, but it wasn’t really reflecting new consumer demand. It was supply being redirected to flatter the metric.

Donahoe himself has said he wasn’t fully aware this was happening in real time, the incentive structure he built was quietly reshaping company behavior beneath him.

The Bigger Lesson

The core takeaway goes beyond retail: whatever a company chooses to measure, the organization will find ways to optimize toward, sometimes in ways leadership never intended and can’t easily see from the top. Donahoe’s own reflection is that any time you push a company hard in one strategic direction, you need active checks in place to catch overcorrection, rather than assuming good intentions will keep things balanced.

For investors, that’s the real signal to watch in any company: not just the headline strategy, but the internal metrics driving it, and whether management has guardrails to catch metrics being gamed, and even unintentionally.

Where Things Stand Now

Nike’s current CEO, Elliott Hill, has been credited with rebalancing the relationship between DTC and wholesale.

The company’s challenge going forward isn’t choosing one channel over the other, it’s avoiding a new overcorrection, where “digital” becomes viewed as the problem rather than a tool that needs disciplined use.

Disclaimer:

All information here is for educational purposes only. This is not financial advice. Please do your own research and speak with a licensed advisor before making any investment decisions. Past performance is not indicative of future returns. How we invest may not suit your investment goals and risk management profile.

Dear Investor.

Zee here. Many of my students ask a version of the same question: with US debt levels climbing and markets swinging on every policy headline, should they really keep all their equity exposure in US stocks?

It's a fair concern.

The S&P 500 has delivered exceptional returns over the past decade, but that performance has come with a growing reliance on a handful of mega-cap names and a market trading at historically rich valuations, all while the US fiscal picture raises real long-term questions.

In Today’s article, we will take a closer look at international dividend and growth ETFs, and where they might fit alongside a core S&P 500 holding for investors looking to spread that risk.

This week, we welcome back our guest writer and investment analyst and our school’s mentee, Aaron. For those who dont know him, Aaron is a keen analyst who explores the global economy through the lens of human behavior and philosophy. He wishes to help readers understand market movements and make better investment decisions.

Introduction

A few weeks ago, I was asked for advice to invest some of my relative’s money after her endowment plan had matured.

The US stock market i.e. S&P500 was top of my mind as it has consistently outperformed the rest of the global stock markets, 12 out of 16 years since 2009 (global financial crisis).

However last year, international equities outperformed the US stock market by nearly 15%. This was mainly due to hostile US tariff policies, a weaker dollar, and aggressive interest rate cuts in some countries and regions. In the value investing community, this outperformance can also be viewed as capital rotation from growth into value.

My conviction in the S&P500 wavered and I wondered if international equities will continue to outperform the US in the next few years.

Let’s take a closer look.

An international overview

International equities represent nearly 40% of total global stock market capitalization. Broadly categorized into developed markets (e.g. Japan, UK, Germany, Australia) and emerging markets (e.g. China, India, Korea), international equities provide access to global industry leaders, regional economic growth drivers, and distinct market dynamics.

Developed markets are typically tilted toward sectors like financials, industrials, and healthcare. Emerging markets, by contrast, are more tech-heavy, with IT being the largest sector driven largely by semiconductor companies in Taiwan and South Korea. Financials come in second, and the rest like consumer discretionary and industrials trail behind.

The case for diversification

Investors tend to have recency bias and favor recent events or trends over historic ones. Due to the US’ outperformance since 2009, investors may be allocated overwhelmingly to US equities. However history has shown that market leadership tends to rotate over multi-year cycles.

A prime example is the US “Lost Decade” (2000–2007). Following the tech bubble crash of 2000 and the 2008–2009 global financial crisis, the S&P500 delivered a negative annualized return of -1.7%.

An investor who deployed 100% of his capital into a U.S. large-cap portfolio would have experienced a decade of zero net capital gains. In contrast, international markets thrived during this period with an annualized return of 6.1%.

For a short period back in the 1980s, the MSCI EAFE, which tracks large and mid-cap equities across 21 developed market countries excluding US and Canada, outperformed the MSCI US by almost 300% in just over six years. See table below.

This was driven primarily by an explosive economic boom in Japan, which grew to make up roughly 60% of the EAFE index. The Japan bubble eventually burst in 1990 and the EAFE lagged behind the US subsequently till today.

The JP Morgan chart below does a great job of visualizing the length of outperformance over time. The relative performance of indexes wax and wane, with the last 15 years being an incredible period of outperformance by US equities.

Why International Dividend Yields Are Higher

International indexes generally offer higher dividend yields of between 3.0% to 4.5%, compared to US indexes yielding around 1.2%–1.5%.

This is because international indexes lean more towards mature sectors such as financials, energy, utilities, and consumer staples. These capital-intensive, mature industries naturally distribute higher cash flow via dividends.

Whereas the US index e.g. S&P500, is highly focused on growth sectors like tech which allocate cash to drive sales, marketing and R&D. US companies also tend to prioritize share buybacks over dividends, which fellow writer Zee has comprehensively explained why the US doesn’t do dividends anymore.

Now let’s compare several International ETFs - dividend focused vs growth oriented, against the Vanguard S&P500 ETF (VOO).

Non-U.S. investors looking to avoid the standard 30% U.S. dividend withholding tax can look to UCITS ETFs domiciled in Ireland. Due to the US-Ireland Tax Treaty, Irish-domiciled UCITS ETFs pay a reduced 15% withholding tax on US dividends. For non-US holdings inside the ETF, localized tax treaties apply.

Do note that the expense ratio for UCITS ETFs are generally higher ~0.12% – 0.29% because of higher operational cost and smaller fund sizes.

Choosing an Accumulating (Acc) fund structure automatically reinvests dividends inside the fund, while Distributing (Dist) funds pay out yield directly.

Withholding tax still applies within an Accumulating fund structure, tax is deducted from dividends before being reinvested into the fund.

Is the US index expected to outperform International indexes?

S&P500 Growth Fundamentals

On fundamentals alone, there’s little sign of US exceptionalism fading. Return on equity has climbed back above 20%, EPS growth is running in the high teens, and revenue growth remains solidly positive, all pointing to a corporate sector that continues to compound earnings efficiently.

Dividend growth, while more modest at around 5.5%, reflects the S&P500’s structural preference for reinvestment and buybacks over payouts, not weakness in underlying cash generation. If anything, these metrics suggest the operational engine behind US outperformance is still intact.

S&P500 Valuation

Most recent point on each chart is a live estimate based on current price and latest reported earnings/sales. Data current as of Aug 2026.

Valuation seems to be the main driving force behind the outperformance of S&P500 compared to International indexes. It has continued to rise since 2013 and until recently were at, or near, their all-time highs.

This creates a tension: strong fundamentals argue the US deserves a premium, but a premium this large leaves less room for error and a smaller margin of safety if growth merely meets expectations rather than beats them.

Is International diversification worth it?

Overall this is not a question of “US or International”, but rather a question of balance. The S&P500’s fundamentals remain genuinely strong, and elevated valuations alone haven’t historically been a reliable timing signal; expensive markets can stay expensive for years, as we saw for most of the last decade.

But valuation does matter over longer horizons, and history shows that periods of extreme outperformance eventually mean-revert.

Keeping the bulk of the portfolio in a low-cost US index fund like VOO to stay invested in the fundamentals-driven growth story, while carving out a meaningful international portion, split between a broad ex-US growth ETF like VXUS and a dividend-focused option like SCHY or VYMI for the income tilt.

This isn’t a call that the International index will beat the US from here; nobody can know that with any confidence.

Disclaimer: All information here is for educational purposes only. This is not financial advice. Please do your own research and speak with a licensed advisor before making any investment decisions. Past performance is not indicative of future returns. How we invest may not suit your investment goals and risk management profile.

Dear Investors.

Zee here. I get asked this a lot: Is trading more better or worst? So I am gonna address this once for all.

My answer: Let me answer with a Meme

Most people assume investing rewards effort. Spend more hours in front of the charts, read more headlines, check your portfolio more often, surely that translates into better returns?

The data says otherwise. In investing, there’s a concept worth knowing: Return on Effort. It measures how much benefit you actually get for the time and energy you put in. And for most individual investors, that return curve bends the wrong way, the more you touch, the worse you tend to do.

Now Imagine two people starting out as investors on the same day, with the same amount of money.

The first sets an alarm before the market opens, watches every price tick, reads a dozen news alerts, and trades in and out of stocks throughout the day, chasing every swing. The second sets up a simple, diversified portfolio, automates a monthly contribution, and closes the laptop, checking in maybe twice a year.

10 years later, the second investor is very likely to be ahead. Not despite doing less, but because of it.

Here’s why, and what to do instead.

The Day Trading Trap

Day trading: buying and selling stocks within the same day, often multiple times a day, looks exciting. It promises fast profits for people willing to put in the hours watching screens and charts.

The numbers tell a different story.

Across large academic studies from markets in Brazil, Taiwan, and Europe, roughly 70% to 97% of day traders lose money, and only about 1% to 3% manage to stay consistently profitable over three or more years.

A well-known study of the Brazilian futures market tracked thousands of day traders and found that fewer than 1 in 100 were reliably profitable over time, most gave up their gains, and their capital, within months.

Why does something that demands so much effort produce such poor results? A few consistent patterns show up in the research:

• Overtrading. Frequent buying and selling racks up fees and taxes that quietly eat into returns.

• Poor risk management. New traders tend to hold on to losing positions too long and sell winning ones too early, the opposite of what works.

• Emotional decision-making. Fear and excitement, not analysis, end up driving many trades.

• Competing against professionals. Day traders are often trading against institutions with faster data, more capital, and algorithms built specifically to profit from short-term price swings.

In short, day trading asks for maximum effort and, for the vast majority of people, delivers negative returns.

It’s a near-perfect example of low, even negative Return on Effort.

Why Doing Less Often Works Better

Now compare that to long-term investing: buying a diversified set of investments, like a low-cost index fund tracking the S&P 500 and holding it for years, largely leaving it alone.

Historically, the US stock market has delivered average annual returns in the range of 9% to 10% before inflation over long stretches of time, despite containing plenty of scary drops along the way.

You don’t need to predict the next earnings report or read a single chart pattern to earn something close to that return.

You mostly need to stay invested and avoid interfering.

This is the heart of Return on Effort: a long-term investor who checks their portfolio a few times a year and consistently buys through market ups and downs will, on average, outperform a day trader who spends 40 hours a week glued to a screen.

Less effort, better outcome.

Why This Feels Counterintuitive

It’s natural to think that more work should produce more reward, that’s true in most careers. But markets don’t work like a job where hours in equal results out.

Prices already reflect a staggering amount of publicly available information, digested instantly by professional investors and algorithms.

An individual trying to out-analyze the market on any given day is competing against that machinery, not against a level playing field.

Meanwhile, the single biggest driver of long-term returns isn’t cleverness, it’s time in the market, compounding quietly in the background. Effort doesn’t accelerate compounding.

Patience does.

Real Examples: What the S&P 500 Actually Shows

It’s one thing to say “long-term investing works.” It’s more convincing to see it play out with real numbers.

#Example 1: The 2008 crash and recovery.

In 2008, the S&P 500 fell about 38% in a single year — one of the worst years in its history. Anyone who sold near the bottom locked in devastating losses.

But investors who held on saw the index rebound roughly 23% in 2009 alone, and it continued climbing from there.

A lump sum invested right before the crash took about five years to fully recover, painful, but not permanent, for those who stayed put.

#Example 2: The 20-year and 30-year averages.

Looking at the 20-year stretch from 2006 through 2025 — a period that includes the 2008 financial crisis — the S&P 500 still averaged about 11% per year. Stretch that out to 30 years (1996–2025), covering the dot-com bust, the 2008 crash, and the 2020 pandemic crash, and the average annual return comes to roughly 10.4%. Sitting through multiple “worst crash in a generation” headlines still produced a strong long-run average — simply because the good years outweighed the bad ones over time.

#Example 3: The danger of missing just a handful of days.

This is perhaps the most striking data point for anyone tempted to jump in and out of the market. J.P. Morgan Asset Management studied a $10,000 investment in the S&P 500 from 2005 through 2024. Staying fully invested the entire time turned that $10,000 into roughly $71,750 (a 10.4% annualized return).

But an investor who missed just the 10 single best days in the market during those 20 years, perhaps by moving to cash during scary headlines, ended up with only about $32,900, roughly half as much.

Miss the 60 best days, and the investment would have actually lost money. The catch: many of the market’s best days land within days of its worst ones, so trying to dodge the downturns often means missing the rebounds too.

#Example 4: The “average investor” gap.

Research firm Dalbar has tracked how actual retail investors perform compared to simply holding the S&P 500 index.

Over a 20-year period, the index returned about 7.2% annualized, while the average equity fund investor earned only about 5.29%, a gap caused largely by buying and selling at the wrong times.

Other long-running studies have found the gap to be even wider, with some estimating that the average investor captures well under half of the market’s actual return, purely due to behavior.

Put together, these examples tell a consistent story: the market has rewarded people who stayed invested through downturns far more than it has rewarded people who tried to dodge them.

Managing Yourself Matters More Than Managing Your Portfolio

If skill and effort aren’t the main ingredients, what is? Largely, it’s behavior:

• Resisting the urge to react to every dip or rally

• Sticking to a plan instead of chasing whatever is trending

• Automating good habits, like regular contributions, so willpower isn’t required every month

• Accepting “good enough” returns instead of chasing exceptional ones

Behavioral finance research consistently finds that investors who trade the least, and panic the least during downturns, tend to earn returns closest to what the market actually delivers.

The investors who underperform are usually the ones who do too much, buying high out of excitement, selling low out of fear.

Finding Your Own Return on Effort

None of this means all effort is wasted. Some activities genuinely pay off:

• Setting up a diversified core and boost portfolio that matches your goals and risk tolerance

• Finding fundamentally good stock, and then give it time to grow (like a plant)

• Automating contributions so you invest consistently (i.e. DCA)

• Reviewing your portfolio plan 1x or 2x a year — not once or twice a day

Beyond that, additional hours spent watching markets tend to produce diminishing, and often negative, returns.

The best approach is the one that fits your time, temperament, and lifestyle, not the one that demands the most hours.

If checking prices daily makes you anxious or tempts you to tinker, that’s a signal to simplify, not to work harder.

Sometimes, the highest Return on Effort in investing comes from barely investing any effort at all.

Disclaimer: All information here is for educational purposes only. This is not financial advice. Please do your own research and speak with a licensed advisor before making any investment decisions. Past performance is not indicative of future returns. How we invest may not suit your investment goals and risk management profile.

Dear Investor,

Zee here. Time of the month again, to share our monthly update on our portfolio. You can read last month’s portfolio update here.

I’ll be resuming updates on the main portfolio only in our monthly updates going forward, as this portfolio better reflects the strategies we teach in class.

I’ll share updates on the other portfolio only when we reach major milestones. The next milestone: US$1 million.

What a volatile month it has been for the markets — with the ongoing Iran–US war, renewed inflation fears, and rising unemployment adding to the uncertainty. More on all of this below.

We also had a really busy month, hence the delay in this post, culminating in our 1st Annual Meetup with our students on Thursday.

It was incredibly encouraging to hear how many of our students are not only beating the markets, but also making positive meaningful changes in their lives through investing. We’re especially proud of those whose portfolios have bounced back into profitability after suffering significant losses before joining our school. Seeing their progress really reminded Howie and me why we started doing this in the first place.

Public Portfolio Update: August 2026

YTD (1st Jan 2026 to 28th Aug 2026) performance: +24.41%

MTD (1st Aug 2026 to 28th Aug 2026) performance: +8.65%

Cash left uninvested: 0%

Our Portfolio Review:

(I) Markets recovered after July’s down month, as always, long term the market values fundamentals.

(II) Despite the market volatility and the S&P500 hitting new highs, Market fundamentals still growing stronger. Our theory is if the companies are doing fundamentally well, a big stock market crash would be unlikely.

(III) 2 market indicators I watch to determine health of S&P 500 companies:
>S&P 500 profit margins hitting record 16.9% in Q2 2026

>S&P 500 profit margins are increasing

Disclaimer:

All information here is for educational purposes only. This is not financial advice. Please do your own research and speak with a licensed advisor before making any investment decisions. Past performance is not indicative of future returns. How we invest may not suit your investment goals and risk management profile.

Dear Investor.

Zee here. Chances are you've used a Microsoft product today without even thinking about it: Windows on your laptop, Excel at work, maybe Xbox on the couch tonight.

But the Microsoft sitting in your portfolio is a very different company than the one that used to just sell software in a box. Today it's one of the biggest bets in the market on whether artificial intelligence will actually pay off.

Microsoft just closed out its fiscal year with another earnings beat, a cloud business that crossed $100 billion for the first time, and a spending plan for 2027 that has some investors nervous.

What Does Microsoft Actually Do?

Microsoft now makes money in three main ways:

1. Productivity and Business Processes — Office, Microsoft 365, Teams, LinkedIn, and Dynamics (business software). This is the reliable, subscription-based cash cow.

2. Intelligent Cloud — Azure (cloud computing), enterprise services, and GitHub. This is the growth engine, and increasingly, the AI engine.

3. More Personal Computing — Windows, Surface devices, Xbox, and Bing/search advertising. This is the smallest and slowest-growing piece today.

The business model is simple to understand even if the technology isn’t: Microsoft sells subscriptions and cloud capacity to millions of businesses and consumers, which produces steady, recurring revenue and lately, it’s pouring an enormous amount of that cash into building AI infrastructure, betting that AI becomes the next decade’s growth driver the way cloud computing was for the last one.

With that context in mind, here are five things happening at Microsoft right now that matter for investors.

1. Earnings Keep Beating Expectations

Microsoft just closed out its fiscal 2026 with its fourth-quarter results, and once again it topped what Wall Street was expecting.

Revenue came in at $90.01 billion, up almost 18% from a year earlier, while adjusted profit per share of $4.74 beat estimates of around $4.24.

Net income rose to $35.77 billion, up from $27.23 billion a year prior. This marks roughly the fifth straight quarter of beating analyst expectations, a streak that’s helped cement Microsoft’s reputation as one of the more dependable large-cap earners in tech.

Consistent beats suggest the underlying business, subscriptions, cloud, and now AI services is executing well, even as the company spends aggressively.

2. Azure Cloud Crossed $100 Billion and Keeps Accelerating

Azure, Microsoft’s cloud computing platform, had its biggest year yet: full-year revenue topped $100 billion for the first time, growing 41%, while the most recent quarter alone saw Azure grow around 40-43%.

That makes Azure larger than Google’s cloud business, though it still trails Amazon Web Services in size.

Azure is the primary lens through which investors judge whether Microsoft’s massive AI spending is paying off. As long as Azure keeps accelerating, Wall Street tends to give Microsoft the benefit of the doubt on its spending. If that growth rate ever slows meaningfully, expect a much rougher reaction from the stock.

3. Capital Spending Is Exploding

Here’s the number causing the most debate right now: Microsoft is guiding for roughly $255–260 billion in capital expenditures for fiscal 2027, up from about $190 billion in calendar 2026, a jump of roughly 35%. This money is going toward data centers, chips, and the physical infrastructure needed to run AI workloads at scale.

Despite the beat, Microsoft shares have actually been under pressure for much of 2026, down around 19% to 29% from record highs at various points this year, as investors weigh whether this spending will pay off fast enough. Gross margins have also narrowed to their lowest level since 2022, largely due to rising depreciation costs from all that new infrastructure. Free cash flow fell 23% in the most recent quarter as a result.

This is the central tension in the MSFT investment story right now.

Bulls see necessary investment to capture a massive AI market; skeptics worry the company is spending faster than it can prove a return.

Watch how Azure’s growth rate compares to the pace of capex growth, if cloud revenue growth keeps outrunning spending growth, that’s a good sign the investment is paying off.

4. Copilot (Microsoft’s AI Assistant) Is Gaining Real Commercial Traction

Microsoft’s AI push isn’t just about cloud infrastructure, it’s also about selling AI directly to customers through Copilot, its AI assistant embedded across Office, Windows, and other products.

The company disclosed more than 30 million paid seats for Microsoft 365 Copilot, up from over 20 million just a few months earlier, with hundreds of enterprise customers buying high-end bundles.

Separately, GitHub Copilot (the coding assistant) now has around 50 million users, and Microsoft’s overall AI business is running at an annualized revenue rate of roughly $37 billion, up 123% year-over-year.

This is the “proof” investors are looking for that AI spending translates into products people will actually pay for, not just infrastructure that sits idle. Seat growth and usage numbers like these are becoming as closely watched as Azure’s growth rate.

5. The Anthropic Investment Is Already Paying Off and New AI Products Are Rolling Out

Microsoft’s investment in AI lab Anthropic contributed a $3.2 billion gain to its most recent quarterly results, a reminder that Microsoft’s AI strategy extends beyond OpenAI to a broader portfolio of AI partnerships and investments.

On the product side, Microsoft also unveiled “Project Perception,” a new AI-powered cybersecurity initiative, as part of its push to embed AI capabilities across its enterprise offerings, while its Xbox gaming division took an impairment charge, a reminder that not every part of the business is thriving equally.

Microsoft’s strategy isn’t a single bet on one AI partner, it’s a diversified set of investments, products, and partnerships. That diversification can reduce risk, but it also means investors need to track performance across several moving pieces rather than one simple headline number.

The Bottom Line

Microsoft remains one of the most closely watched stocks in the market precisely because it sits at the center of the AI investment debate: strong, recurring core revenue funding an enormous, expensive bet on the future.

The next few quarters will likely hinge on one question, does Azure’s growth and Copilot’s adoption keep outpacing the eye-watering capital spending, or does the gap start to worry investors more than it already has?

Disclaimer: All information here is for educational purposes only. This is not financial advice. Please do your own research and speak with a licensed advisor before making any investment decisions. Past performance is not indicative of future returns. How we invest may not suit your investment goals and risk management profile.

Dear Investors.

Zee here. If you've ever wondered what makes a defense contractor "recession-proof," Lockheed Martin's latest earnings report is a good place to start.

The world's largest defense company just posted double-digit sales growth, a record $230 billion backlog, and guidance upgrades across the board and the stock rallied on the news.

Defense investing isn't comfortable for everyone, and it shouldn't be. But my job here is to read what's actually happening in the numbers, not what I wish were happening.

Today, we break down what Lockheed does and why I think this trend still has room to run.

What Does Lockheed Martin Actually Do?

Before diving into the numbers, it helps to know what you’re actually investing in. Lockheed Martin (NYSE: LMT) is the largest defense contractor in the world.

It designs, builds, and services fighter jets (like the F-35), missiles and missile defense systems, helicopters, satellites, and other military technology , mostly for the U.S. government, but also for allied nations abroad.

Its business model is fairly simple, even if the hardware is not: Lockheed signs long-term contracts with governments, often worth billions of dollars and spanning years or even decades. This gives the company unusually predictable, recurring revenue compared to most industrial companies.

Its four main segments are Aeronautics (jets), Missiles and Fire Control, Rotary and Mission Systems (helicopters and undersea systems), and Space. Because defense spending tends to be sticky, governments don’t cancel military programs on a whim. Lockheed is often viewed as a “defensive” stock in both senses of the word.

1. Sales Jumped 11% to Just Over $20 Billion

Lockheed’s second-quarter revenue came in at $20.1 billion, up from $18.2 billion a year earlier.

Growth was broad-based, with higher volumes across nearly every segment, including a ramp-up in missile production and stronger performance in its jet and helicopter businesses.

2. Profits Look Like They Exploded — But Read the Fine Print

Net earnings jumped to $1.8 billion (or $7.94 per share), compared to just $342 million ($1.46 per share) a year ago.

That’s a dramatic swing, but it’s worth understanding why: last year’s quarter was dragged down by $1.6 billion in one-time program losses tied to a classified Aeronautics contract and two troubled helicopter programs.

This year didn’t repeat those losses, which flatters the comparison. That said, there was also genuine underlying growth, particularly from higher F-35 production and missile programs.

3. Full-Year Guidance Just Got Raised

Lockheed now expects full-year sales of roughly $79.75 billion to $81.75 billion, up from its previous range.

It also raised its earnings-per-share guidance and now expects free cash flow above $7 billion for the year. Raising guidance mid-year is generally a signal that management is confident the momentum will hold.

4. The Backlog Hit an All-Time Record: $230 Billion

This might be the single most important number in the report.

Lockheed’s order backlog, essentially the pipeline of future work it’s already been contracted to deliver, climbed to a record $230 billion, boosted by $65 billion in new orders this quarter, including a $35 billion THAAD missile defense contract.

A backlog this size gives investors real visibility into revenue years down the road, which is part of why defense stocks are prized for stability.

5. The Stock Popped More Than 5%, and Lockheed Is Also Expanding

Shares jumped over 5% to around $541 following the report. On top of the earnings beat, Lockheed is also in the process of acquiring Ultra Maritime for $3.45 billion, a deal that would bulk up its undersea and anti-submarine warfare capabilities.

That acquisition is still pending regulatory approval and isn’t yet baked into the company’s guidance.

The Bottom Line

Some investors called defense a winner sector the moment this conflict restarted, and this quarter is a good example of why. War is horrible, and I never celebrate that. But as an investor, my job is to read what’s actually happening in the financials, not what I wish were happening.

Governments generally don’t cut defense budgets in the middle of a live conflict, and Lockheed’s record backlog is strong evidence that demand isn’t disappearing next quarter.

With much of the U.S. missile arsenal reportedly depleted during the conflict, I’d expect a meaningful restocking cycle once things settle and that’s a tailwind that could extend well beyond this earnings report.

Disclaimer: All information here is for educational purposes only. This is not financial advice. Please do your own research and speak with a licensed advisor before making any investment decisions. Past performance is not indicative of future returns. How we invest may not suit your investment goals and risk management profile.

Dear Investors.

Zee here. Recently, I chance upon a few articles about how starting to invest at Age 50 can yield you a comfortable $1million sum by the time you retire at Age 65.

This is very interesting for the school, as we have a good number of pre-retirees students.

The pitch: you’re 50, you’ve got $50,000 saved, and you feel like the ship has sailed. But invest $2,500 a month into broad market ETFs for 15 years at 8% annual returns, and by 65, right when your pension payouts kick in, you’d have more than $1 million (excluding your pension).

It’s an appealing story. It’s also the kind of claim I’ve learned to be suspicious of, because “just invest and it 10x’s by retirement” is exactly the pitch that’s easiest to dress up with real-sounding numbers.

So instead of taking it at face value, I decided to actually run the math and check the return figures against the data, using a Future Value Calculator.

(I) Period (Meaning: No. of years): 65yo - 50yo= 15years

(II) Starting Amount: $50,000

(III) Interest rate (Meaning: Investment Gains per Year): 8% per year

(IV) Periodic Deposit (Meaning: How much money are you putting in per year): $2500 per month X 12 months= $30,000 per year

First, does the $1 million math actually work?

Yes, the math actually works. So that number holds up. It’s not a rounding trick, it’s just what compounding does over 15 years when you’re contributing $30,000 a year on top of a $50,000 base.

Nothing about this requires a hot stock pick or lucky timing. It’s arithmetic and long term compounding on good stocks or ETFs.

Second, are those “actual” return numbers real?

This is where I got more skeptical, because “10-year annualized return” is a number that swings a lot depending on the exact start and end date you pick. So I checked each one against current fund performance data.

S&P 500 (SPY/VOO) at 14.5% — This checks out. Multiple sources put the S&P 500’s rolling 10-year annualized total return (with dividends reinvested) somewhere in the 14–15% range as of late 2025 into 2026, driven largely by the post-2020 recovery and the AI-fueled run in mega-cap tech. So this figure is accurate and not cherry-picked.

Nasdaq-100 (QQQ) at 19.5% — Also roughly accurate, though it depends on exactly which day you measure from. I found the 10-year CAGR ending in 2025 cited at 18.6% from one source, and north of 20% from another measured a few months later in 2026. 19.5% sits right in the middle of that range, a fair, if optimistic, pick rather than an outlier.

Consumer Staples (XLP) at 8% — This is the sobering one. XLP’s 10-year total-return CAGR checks in right around 8% depending on the source — essentially identical to the “conservative” 8% baseline the post uses in its opening example. That’s not a coincidence; consumer staples (think Walmart, Coca-Cola, Procter & Gamble) is a defensive, low-growth sector by design.

Dow Jones Industrial Average (DIA) at 13% — This one holds up too. DIA’s 10-year annualized total return (dividends reinvested) has been quoted in the 12.4–13.5% range across sources, which is a bit behind the S&P 500 over this specific stretch since the Dow is more concentrated in older industrial and financial names and has less mega-cap tech exposure.

I plug in the same numbers but with the investment gains of index ETFs.

I re-ran the same compounding formula using each of those verified rates instead of 8%, and yes, the numbers in the post are consistent with the math:

• At 14.5% (S&P 500): roughly $2.0 million

• At 19.5% (Nasdaq-100): roughly $3.55 million

• At 8% (Consumer Staples / XLP): roughly $1.03 million — basically the same as the original conservative baseline.

• At 13% (Dow Jones / DOW): roughly $1.72 million.

Why this actually works?

It’s worth pausing on why the math produces such a big number, because it’s not magic — it’s three ordinary forces stacking on top of each other.

• Compounding needs time more than it needs a big starting number. Of that ~$1.03 million at 8%, less than a fifth comes from the original $50,000 growing on its own. The bulk of it comes from 15 years of new contributions compounding alongside it. That’s the real insight hiding in this post: starting at 50 isn’t too late, because 15 years is still enough runway for compounding to do most of the heavy lifting, you don’t need 30 years, you need enough years.

• Monthly contributions compound too, not just the lump sum. Each $2,500 deposited gets its own clock running from the day it lands. Money invested in year one has 15 years to grow; money invested in year 14 only has one. But because the contributions are so much larger in total ($450,000 over 15 years) than the starting balance, even the “late” dollars add up fast.

• The higher return numbers aren’t invented — they reflect a real decade. The 2016–2025 stretch happened to include a strong post-pandemic recovery and an AI-driven boom in mega-cap tech, which is why QQQ’s 10-year numbers look so good right now.

So the honest version of “why this is true” is: it’s true because compounding rewards time invested, not luck, and the historical numbers are real, but the further the assumed return climbs above a conservative baseline, the more the plan’s success depends on the next 15 years resembling an unusually good 10-year stretch that already happened.

But here’s what the post doesn’t tell you

Everything above checks out on paper, which is exactly why I want to flag what’s missing, because a technically-accurate chart can still tell a misleading story if you don’t read the fine print.

• A single 10-year return is a snapshot, not a promise. These figures depend heavily on the exact start and end dates chosen. Shift the window back two or three years, say, to include 2022’s brutal drawdown more heavily, or exclude the 2023–2025 AI rally, and the Nasdaq-100 and cybersecurity numbers look meaningfully different. QQQ has had 10-year stretches with annualized returns as low as ~10%, and even a negative stretch exists somewhere in its history depending on the window.

• Volatility is the part the chart doesn’t show. QQQ dropped over 32% in 2022 alone. A 15-year plan that assumes steady 19.5% compounding ignores that these funds can and will have years where they lose a quarter of their value. Whether someone can stomach that at 50, with retirement approaching, is a real question the post skips entirely.

• Concentration risk is real. Both QQQ and CIBR are far less diversified than a broad market fund, QQQ is heavily weighted toward a handful of mega-cap tech names, and CIBR is a single-sector bet. “Broad market ETF” in the opening example and “Nasdaq-100 / cybersecurity ETF” in the punchline aren’t really the same category of risk, even though the post presents them as a natural upgrade path.

• Past performance really isn’t a guarantee, and the post says so in passing but then leans on those same numbers to make the emotional case (”time in the market beats timing the market”). Both things can be true at once: the historical numbers are accurate, and they’re still not a reliable forecast.

So, what should you actually do with this?

Here’s the part I don’t want to get lost under all the fact-checking: the core claim is true. 50 is not too late.

15 years is still real time, and the math above isn’t a sales trick, it’s what happens when you combine a modest starting balance, consistent contributions, and a diversified fund that grows with the broader market.

The biggest risk in a post like this was never the numbers. It was reading it, nodding, and then closing the tab and doing nothing, which is the one move guaranteed to make none of this math apply to you.

So if you’re 50, or 45, or honestly any age, and you’ve been telling yourself you’ve missed your window:

• Work out your own numbers. Plug your actual savings and a monthly amount you can commit to into a compound interest calculator and see what 10 or 15 years actually looks like for you.

• Pick the boring fund, not the exciting one. A broad, low-cost market ETF is a reasonable place to start. Chasing last decade’s best-performing sector fund because of a chart like this one is exactly the trap the numbers above warn against.

• Automate the contribution. The plan above only works if the $2,500 (or whatever your number is) actually goes in every single month, market conditions and headlines aside. Set it up so it happens without you having to decide again each time.

• Start this week, not “when things settle down.” Every month you wait is a month that doesn’t get to compound. The version of this plan that starts today will always beat a better-timed version that starts six months from now.

You don’t need to predict the next hot stock.

You need fifteen years, a simple plan, and to actually start it.

Disclaimer:

All information here is for educational purposes only. This is not financial advice. Please do your own research and speak with a licensed advisor before making any investment decisions. Past performance is not indicative of future returns. How we invest may not suit your investment goals and risk management profile.

Dear Investor,

Zee here. If you’ve invested in both the US and Singapore markets, you’ve probably noticed the difference in mindset. Buy a US stock and you’re often betting on where the company will be in 10 years. Buy a Singapore stock and you’re often just waiting for the next dividend payout.

This isn’t a coincidence. It comes down to a simple question every company has to answer: what do we do with our spare cash?

The answer looks very different depending on how big your home market is, and that’s the real story behind why Singapore is largely a dividend market and the US is largely a growth market.

Singapore: Smaller Market Size, Limited Room to Grow

Here’s the thing about growing a business: it isn’t limitless. Every company eventually hits a point where it simply doesn’t need more capital to keep operating. Past that point, throwing more money at the business doesn’t widen its competitive edge or win it more customers. It just sits there.

Take Vicom, Singapore’s dominant vehicle inspection operator. It’s essentially a regulated monopoly: every vehicle on Singapore’s roads needs a yearly inspection, and the number of vehicles is capped by government quota. There’s a natural ceiling here.

Building ten more inspection centres wouldn’t create more customers, because the customer pool is fixed by policy. Neither would expanding Vicom to overseas markets be possible. As such, Vicom’s capital needs are steady and predictable, year in and year out.

So what happens to all the extra cash Vicom generates? Since ploughing it back into more inspection centres makes no sense, the next best move is to return it to shareholders, either through buybacks (of shares) or dividends.

This points to a broader investing principle: a company exists to create value for its shareholders, one way or another. When there’s genuinely nowhere useful for extra cash to go, reinvesting it anyway doesn’t build value; it just drags down returns. Sending it back to shareholders through dividends is often the smarter, more disciplined choice.

There’s also a market-psychology angle here. Cash sitting on a balance sheet doesn’t always get full credit from investors, because it comes with question marks: how long will management sit on it, will it eventually be deployed well, or might it get wasted on a bad deal?

A company that just piles up cash without a plan tends to make investors nervous, not confident.

Dividends solve this by removing the guesswork. When a company commits to paying out cash regularly, it forces management to stay disciplined: no hoarding cash for no reason, and no temptation to chase questionable projects just because the money is sitting there.

In a market as small as Singapore’s, with limited runway for expansion, this dividend discipline becomes the default way companies create value.

The US: A Market Focused on Growth

The US tells a very different story, and even dividend investing’s biggest believers are starting to admit it.

There’s an old joke among income investors that alcohol stocks are the perfect dividend play: recession or boom, people drink either way. So when Diageo (the company behind Johnnie Walker and Guinness) cut its dividend earlier this year, it turned heads.

Prominent Dividend Investor Todd Wenning, who wrote a book on dividend investing and once ran a newsletter dedicated to it, pointed out that a Diageo dividend cut would have been unimaginable just five years ago. Coming from him, that’s a notable admission.

Wenning argues the ground has shifted under dividend investing in 4 ways.

#1 The “safe” dividend payers aren’t so safe anymore.

The consumer giants that used to anchor dividend portfolios are under real pressure: from store-brand competitors, influencer-driven marketing, and even weight-loss drugs changing how much people eat and drink.

Long-time Dividend Aristocrats like Coca-Cola, Colgate-Palmolive, J.M. Smucker, and Clorox, companies with 25-plus years of consecutive dividend increases, have all seen their dividend growth slow down.

The problem is that many of these companies already pay out 75% or more of their profits as dividends, leaving little room to redirect cash toward fighting off disruption. And because cutting a dividend would spook investors and get a stock dropped from dividend-focused funds, boards often keep paying out even when reinvesting would serve the business better.

One telltale sign: some companies (Colgate-Palmolive, Sysco, Stanley Black & Decker among them) have raised their dividend by a single cent just to technically keep their streak alive, a signal, in Wenning’s view, that management is quietly worried.

#2 Buybacks have taken over as the preferred tool.

Companies have only been free to buy back their own shares at scale since an SEC rule change in 1982. Given that the average S&P 500 board member today is around 59 years old (meaning they were teenagers when that rule was introduced), most current leadership has never really operated in a dividend-first world.

Buybacks are more flexible than dividends and more tax-efficient for investors holding shares in taxable accounts. If you are investing from outside the US, your dividends are generally subject to a flat 30% withholding tax.

It’s telling that for most of the last decade, the S&P 500’s buyback yield has outpaced its dividend yield.

Our guest writer Aaron found this:

Direct Performance Impact: In 2025, S&P 500 companies bought back roughly $1.0 trillion worth of their own shares. On an overall S&P 500 market capitalization of around $50–$57 trillion, this translates to a Buyback Yield of ~1.8% to 2.0%.

Dilution Offset: Companies issue significant stock for executive compensation and employee stock plans. After accounting for this dilution, net share count reduction for the S&P 500 typically adds only 1.0% to 1.5% to annual EPS growth.

2025 S&P return: 17.9%, share buybacks contribute approximately 6-8% to it.

#3 The index is getting younger, and young companies don’t do dividends.

The average age of a company in the S&P 500 has dropped sharply: from 57 years back in the 1950s to just 15 years today.

Older dividend stalwarts like Campbell’s, Macy’s, Xerox, and Harley-Davidson have exited the index over the past decade, replaced by newer companies built in a completely different era, one where reinvesting for growth, not paying dividends, is the norm.

#4 Analyzing cashflow

Wenning’s takeaway is to stop picking stocks based on their dividend history and instead look at how a company handles all of its cash flow.

Is the buyback program actually shrinking the number of shares outstanding, or just offsetting new shares issued to employees?

Is the balance sheet strong enough to adapt if the business needs to pivot?

And if a company is steadily buying back a few percent of its shares every year, you can effectively create your own “dividend” by selling that same small percentage of your holdings each year.

The Bottom Line

Both approaches make sense once you understand the environment they come from.

Singapore is a small, mature market. Many of its biggest listed companies, like Vicom, operate in spaces with a natural ceiling on growth, often due to regulation or a limited domestic population.

Once a company hits that ceiling, sending cash back to shareholders isn’t a lack of ambition; it’s simply the most rational thing to do with money that has nowhere better to go.

The US is a different animal entirely: a vast, competitive market where companies and entire industries are constantly being challenged, replaced, and reinvented. In that environment, cash is fuel for staying relevant, and companies increasingly prefer buybacks over dividends because they’re more flexible when the future is uncertain.

Neither approach is “better” in isolation; they’re just answers to different questions, shaped by the size and dynamism of the markets these companies operate in.

Understanding this can help you set the right expectations: if you’re investing in Singapore, income is often the reward.

If you’re investing in the US, the reward tends to come from growth, and increasingly, from buybacks rather than dividend cheques.

Disclaimer:

All information here is for educational purposes only. This is not financial advice. Please do your own research and speak with a licensed advisor before making any investment decisions. Past performance is not indicative of future returns. How we invest may not suit your investment goals and risk management profile.

Dear Investor,

Zee here. Time of the month again, to share our monthly update on our portfolio. You can read last month’s portfolio update here.

This month, I wanted to reveal that I have grew the portfolio size to 1 Million SGD. Truth is, I started in October 2023 with 2 separate accounts, and have been investing 2 accounts with different investing strategies.

Account 1

This is the account, which I have been showing monthly on this newsletter.

In Summary, account grew from USD 111,356.04 to USD 398,465.36

• Time period: 2 years and 295 days (4 Oct 2023 → 26 July 2026 inclusive)

• Total gain: +257.86%

• Annualized return: ≈ +67.1% per year

Account 2

A separate account, started during the same time but deploying different strategies.

In Summary, account grew from USD 138,643.25 to USD 426,013.82

• Time period: 2 years and 295 days (5 Oct 2023 → 26 July 2026 inclusive)

• Total gain: +207.27%

• Annualized return: ≈ 49.1% per year

Note: Gains should have been an additional +USD40,000 more, as this amount was withdrawn in January 2026 to buy a 2nd hand car for my parents. Incorporating this, the account would have an Annualized return: ≈ 53.97% per year

Adding Account 1 + Account 2

USD 398,465.36 + USD 466,013.82= USD 864,479.18

USD 864,479.18 X1.29 (prevailing exchange rate on 26th July 2026)= SGD 1,115,740.05

So there you have it, proof in the pudding, hitting 1 Mil SGD from purely investing is possible.

You might be wondering what happened before 5th Oct 2023? I was using TD Ameritrade and had to switch to IBKR due TD changing the rules to accept only Accredited Investors (i.e. rich retail investors).

Unfortunately, I did not keep the TD results but on excel sheet, these are the rough data I kept:

Account 1
Started 1st January 2020: 35,000 USD
Ended 4th October 2023: 111,356.04 USD

Annualized return: ≈ 36.1% per year

Account 2
Started 1st Jan 2022: 100,000 USD
Ended 5th October 2023: 138,643.25 USD

Annualized return: ≈ 20.4% per year

And now to the usual portfolio updates…

Public Portfolio Update: July 2026

YTD performance: +13.57%

MTD performance: -8.96%

Cash left uninvested: 0%

Our Portfolio Review:

(I) Markets fell, despite July being a bullish month. But this is fine for me, as the stocks and ETFs, held in this portfolio are solid ones.

(II) Market fundamentals still growing strong.

Disclaimer:
All information here is for educational purposes only. This is not financial advice. Please do your own research and speak with a licensed advisor before making any investment decisions. Past performance is not indicative of future returns. How we invest may not suit your investment goals and risk management profile.

Zee here. This fundamentally-strong company was discovered by one of my student, TS.

If you still picture The New York Times as a company that prints newspapers and hopes people buy them at the newsstand, it’s time for an update.

Today’s NYT is closer to a digital subscription business, think Netflix, but for news, games, recipes, and sports, that happens to have started with a print product back in 1851.

That shift matters for investors because it changes how the company makes money, what risks it faces, and why its stock moves the way it does.

What Does The New York Times Actually Do?

The New York Times Company (ticker: NYT on the NYSE) is best known for its journalism, but its business today rests on three main pillars:

• Digital subscriptions — This is the engine of the company. People pay a monthly fee not just for news, but for a bundle that includes Games (like Wordle and Connections), Cooking, The Athletic (sports), and audio products. Bundling keeps people subscribed even on days they don’t read the news.

• Advertising — Both print and digital ads, though digital advertising is growing much faster and now matters more to the bottom line.

• Licensing and other revenue — This includes things like content licensing deals, including newer agreements around AI companies using its articles (more on that below).

The strategic bet the company has made is simple: shrink reliance on print and advertising, and grow a large base of paying digital subscribers who stick around for years.

So far, that bet has been paying off.

1. Subscribers Just Crossed a Big Milestone: 13 Million and Climbing

In its most recent quarter, the company added roughly 310,000 net new digital-only subscribers, pushing its total subscriber base past 13 million for the first time. Of that, about 12.5 million are digital-only subscribers, with the rest still on print.

Why this matters: subscriber growth is the single number Wall Street watches most closely for NYT, because recurring subscription revenue is more predictable and valuable than one-off ad sales. Management has said it’s aiming for 15 million subscribers, so this quarter’s growth keeps that goal within reach.

2. Revenue and Profit Both Beat Expectations By a Wide Margin

Total revenue grew 12% year-over-year to $712.2 million, beating what analysts had forecast. More striking was the profit growth: operating profit jumped over 50%, and adjusted earnings per share came in at $0.61, well above the roughly $0.47–$0.48 Wall Street expected.

Why this matters: it’s one thing to add subscribers, it’s another to do it profitably. This quarter showed the company growing its revenue and expanding its profit margins at the same time, which is the combination investors like to see. The stock jumped in the days following the announcement.

3. Digital Advertising Is Suddenly a Bigger Growth Story Than Expected

Digital advertising revenue jumped nearly 32% in the latest quarter, notably faster than subscription growth. This comes as many other publishers have struggled with declining ad dollars.

Why this matters: for years, digital advertising was the weak link for news publishers, losing ground to tech giants like Google and Meta. NYT bucking that trend suggests its scale, plus newer products like Games and The Athletic, are attracting advertisers who want to reach an engaged, upscale audience.

4. A Legal Battle With OpenAI Is Heating Up and Getting Expensive

NYT has been suing OpenAI and Microsoft since 2023 over claims they used its articles without permission to train ChatGPT. This week, NYT and a group of other publishers asked a federal court to sanction OpenAI, accusing it of misleading the court about whether it could search its own systems for evidence — and of deleting relevant data.

The company has already spent more than $28 million fighting AI companies in court, including a separate lawsuit against Perplexity.

Why this matters: this isn’t just legal noise. The outcome could set a precedent for whether AI companies need to pay news publishers to train on their content, which could become a meaningful new revenue stream (through licensing deals) or a costly, drawn-out distraction, depending on how it plays out.

NYT has already signed at least one AI licensing deal (with Amazon), showing it’s trying to profit from AI rather than just fight it.

5. The Balance Sheet Is Strong, and Cash Is Going Back to Shareholders

The company ended the quarter with $1.1 billion in cash and no debt, and generated $81.5 million in free cash flow in just three months. Over the trailing twelve months, free cash flow reached over half a billion dollars, supporting both a dividend and share buybacks.

Why this matters: a company with no debt and a growing cash pile has flexibility — to invest in new products, weather a slow ad market, absorb legal costs, or return money to shareholders. That’s a comforting sign for anyone worried about the media industry’s broader struggles.

The Bottom Line

The New York Times has quietly transformed itself from a newspaper company into a diversified digital subscription business and the latest results suggest that transformation is working financially.

The biggest wildcard ahead isn’t subscriber growth, which looks healthy, but how the AI copyright fight with OpenAI resolves, since it could shape both the company’s legal costs and a brand-new revenue opportunity in AI licensing.

Disclaimer: All information here is for educational purposes only. This is not financial advice. Please do your own research and speak with a licensed advisor before making any investment decisions. Past performance is not indicative of future returns. How we invest may not suit your investment goals and risk management profile.

Zee here. I visited Tokyo Disneyland once and the experience blew my mind, especially the Beauty and the Beast ride.

Disney is one of those companies almost everyone has an opinion about but far fewer people actually understand as a stock. Is it a movie studio? A theme park operator? A streaming service? A cruise line?

The honest answer is: all of the above, and that mix is exactly what makes Disney interesting and occasionally confusing for investors.

This year alone, Disney has swapped CEOs for the first time in years, beaten Wall Street’s earnings expectations, and watched its stock slide anyway.

What Disney Actually Does and How It Makes Money?

Before diving into the news, it helps to understand Disney’s business model. Disney runs four main segments:

1. Entertainment – This includes movie studios (Pixar, Marvel, Lucasfilm, Disney Animation), broadcast/cable TV (ABC), and streaming (Disney+, Hulu). Money comes from box office ticket sales, licensing, advertising, and subscriber fees.

2. Sports – Primarily ESPN, including ESPN+ and the recently launched standalone ESPN streaming app. Revenue comes from cable carriage fees, advertising, and subscriptions.

3. Experiences – Theme parks (Disneyland, Disney World, international parks), resorts, cruise ships, and consumer products (toys, merchandise). This is Disney’s cash cow, generating money through ticket sales, hotel stays, food, merchandise, and cruise fares.

4. Direct-to-Consumer/Streaming – Increasingly folded into how Disney reports Entertainment, this is the Disney+/Hulu subscription business, which for years lost money as Disney built it up to compete with Netflix.

In short: Disney makes money by turning stories and characters into experiences people pay for, whether that’s a movie ticket, a streaming subscription, a theme park pass, or a stateroom on a cruise ship. Investors watching Disney are really watching how well these four very different businesses perform together.

1. Disney Has a New CEO for the First Time in Years

After nearly two decades on and off at the helm, Bob Iger officially handed the CEO role to Josh D’Amaro in March 2026. D’Amaro spent years running Disney’s parks, cruises, and consumer products business, the very unit that’s been carrying the company’s profits lately.

Disney’s board, chaired by James Gorman, faced pressure to execute a strong succession plan after the rocky handoff to Bob Chapek in 2020. This time, the transition has been notably smooth, and D’Amaro has signaled continuity rather than a dramatic shift in strategy, including doubling down on Disney+ as the company’s central digital hub.

2. Streaming Is Turning a Corner

For years, Disney+ was a money pit as the company spent heavily to compete with Netflix. That’s changing.

In its most recent quarter, Disney’s earnings per share and revenue both beat Wall Street forecasts, driven by strong performance in its streaming and experiences segments. The company is investing heavily in streaming and is approaching profitability there.

Profitable streaming has been the missing piece of Disney’s turnaround story. If it keeps improving, it removes a major drag on overall earnings.

3. Theme Parks and Cruises Keep Expanding but Cautiously

Disney is investing to grow its global footprint, including plans to expand the cruise line fleet from 8 ships currently to 13 ships by 2031. The experiences division reported 7% year-over-year growth in its latest quarter. That said, growth in park attendance has been more modest lately, and management is watching guest spending closely as travel costs shift.

Experiences remains Disney’s biggest profit engine. A bigger cruise fleet means more capacity to grow revenue for years, but it’s a multi-year bet, not an instant payoff.

4. The Stock Has Lagged Even Though the Business Looks Solid

Disney shares fell 13% through the first half of 2026 despite the company making strong moves. Disney is also facing intense scrutiny and regulatory pressure from the FCC, and at least one analyst cut its price target due to increased competition from Comcast’s Universal theme parks.

A stock price and a business’s underlying health don’t always move together. Investors will want to watch whether regulatory issues and competitive pressure are temporary headwinds or signs of a longer-term challenge.

5. Content Is Still a Wildcard

The successful release of Toy Story 5 has given Disney a boost heading into the summer season, and overall the company expects adjusted earnings-per-share growth of 12% for fiscal 2026.

Upcoming releases, including a live-action Moana adaptation, will test whether Disney’s studio can keep delivering hits.

Blockbuster movies still ripple across the whole business, driving streaming views, park attendance, and merchandise sales. A hit (or a miss) at the box office matters more for Disney than for a typical media company because of this “flywheel” effect.

The Bottom Line

Disney’s story right now is one of quiet progress overshadowed by stock market skepticism: new leadership, improving streaming profits, an expanding cruise business, and box office momentum all set against a falling share price and real regulatory and competitive pressures.

For investors, the key question isn’t whether Disney’s businesses are working (many signs say they are), but whether the market will start reflecting that progress in the stock price, and how soon.

Disclaimer:

All information here is for educational purposes only. This is not financial advice. Please do your own research and speak with a licensed advisor before making any investment decisions. Past performance is not indicative of future returns. How we invest may not suit your investment goals and risk management profile.

Dear Investors.

Zee here. Every four years, the world stops for football. But while billions of fans are glued to their screens watching goals, saves, and penalty drama, a quieter game is playing out in the stock market.

The FIFA World Cup 2026 is the biggest edition ever, 48 teams, 104 matches, spread across 16 cities in the US, Canada, and Mexico. FIFA estimates it could add nearly US$41 billion to global GDP and support over 800,000 jobs worldwide. Whether those numbers hold up in reality is another story, but one thing is clear: certain companies are already feeling the buzz.

As fans pour into stadiums and living rooms around the world, some publicly traded companies are quietly benefiting from all the excitement.

Here are 4 areas worth watching.

#1 Sportswear: Adidas Is Wearing the Crown

When it comes to World Cup kit deals, Adidas has come out on top this year, outfitting 14 national teams including crowd favorites Argentina, Germany, Spain, and Mexico.

That’s more teams than both Nike (12) and Puma (11).

More teams means more jerseys flying off the shelves. And Adidas has another edge, it has supplied the official match ball for every World Cup since 1970.

Investors have noticed: Adidas shares jumped around 19% in the month leading up to the tournament, while Nike and Puma barely moved.

That said, one big tournament doesn’t fix everything. The broader sportswear industry is still dealing with too much unsold stock and cooling demand in China.

We’ll get a clearer picture when Adidas reports earnings in late July.

#2 Hotels and Travel: Bigger Hype Than Bookings?

Millions of fans travelling across three countries should be a goldmine for hotels and travel platforms. Airbnb launched special incentives for hosts in all 16 host cities, and major hotel chains like Marriott, Hyatt, and Hilton have been flagged as potential winners.

But here’s the surprise: actual bookings in some US host cities have come in below expectations. High ticket prices, visa complications, and the complexity of a multi-country tournament have kept some travelers away. One major New York hotel reportedly cut its tournament rates significantly just to fill rooms.

So the travel story isn’t as straightforward as it sounds. Stocks may be pricing in optimism that hasn’t fully shown up in real demand yet.

#3 Food, Drinks & Consumer Brands: The Sponsors Cashing In

Behind every World Cup is a long list of official sponsors quietly raking it in. Coca-Cola, Budweiser (AB InBev), McDonald’s, and Visa are among the biggest names attached to FIFA 2026, and for good reason. A tournament watched by an estimated five billion people worldwide is one of the most powerful marketing platforms on earth.

For consumer brands, World Cup sponsorships aren’t just about logo placement. They drive limited-edition product launches, co-branded campaigns, and a measurable lift in brand awareness across multiple markets simultaneously. AB InBev, for instance, has historically reported sales spikes in markets where popular teams advance deep into the tournament.

The risk? If a sponsoring brand’s home-market team exits early or if the tournament faces controversy, the expensive sponsorship can turn into an awkward association rather than a feel-good moment.

#4 Broadcasting & Streaming: The Battle for Eyeballs

With 104 matches across three countries, the World Cup 2026 is a broadcaster’s dream. In the US, Fox Sports holds the English-language rights while Telemundo covers Spanish-language viewers and both are expected to pull in record advertising revenue from brands desperate to reach a global audience.

But the more interesting story is streaming. Platforms like Peacock, Fubo, and even YouTube TV are aggressively competing to be where fans watch. More eyeballs mean higher ad rates, bigger subscription numbers, and a chance to lock in long-term viewers.

The catch? Broadcasting rights cost a fortune, and turning that into profit depends entirely on how many people actually tune in. Early viewership numbers from the group stages will be closely watched, not just by fans, but by media investors too.

The Bottom Line

The World Cup creates real, if temporary, tailwinds for certain companies. Sportswear brands, hospitality businesses, and betting platforms all have something to gain. But “World Cup boost” doesn’t automatically mean “strong long-term investment.”

The smartest approach?

Look past the hype, check the actual numbers when they come in, and remember that a stock rising on tournament excitement can just as quickly fall when the final is over.

Disclaimer:
All information here is for educational purposes only. This is not financial advice. Please do your own research and speak with a licensed advisor before making any investment decisions. Past performance is not indicative of future returns. How we invest may not suit your investment goals and risk management profile.

Dear Investor,

Zee here. Time of the month again, to share our monthly update on our portfolio. You can read last month’s portfolio update here.

Public Portfolio Update: June 2026

YTD performance: +20.57%

MTD performance: +3.97%

Cash left uninvested: 10%

Our Portfolio Review:

(I) June is usually a flat (slow or no growth) month, but there was 2 pull-back, which we re-entered our positions. See chart by EquityClock

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(II) Lesson learnt: we missed out on some of the May 2026 gains as our indicators showed an over-heated market, but that is fine, 1 bird in hand is better than 2 in the bushes.

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