Mm.

Right? Like, every way you cut the data historically, in good times and bad times and bull markets and bear markets, you always have, like, these periods of volatility where, you know, stocks do go down.

Like, that's the, that's the catch here with stocks usually go up, is that they go down a lot often.

So yeah, of course I'm nervous, especially [laughs] when you, when you're at, at peaks.

I mean, of course the data will also tell you that the, you know, 12-month returns after all-time highs actually tend to be higher than when you're at lows.

But yeah, of course I'm nervous.

I mean, that...

[laughs]

Yeah.

But, like, if we're talking about a new era, a future era where it's like maybe software, I mean, doesn't go away but becomes a little less relevant in the context of how the global economy works, then yeah, maybe you start to see these sort of, um, things that begin to look like outliers that might actually become a trend in the future.

Um, but that's not to say that this stuff won't correct again.

But, um, uh, I think you bring up a really good point though about how, um, these companies have record high, uh, earnings and maybe even for the rest of the year they're gonna have, uh, extremely high earnings and earnings growth.

Um, this is actually not about software, but it reminds me of what we're talking about with, like, the other Mag 7 names.

The hyperscalers that are, um, investing all this money, uh, in these data centers and all this stuff and, and, um, while today they're minting insane amounts of earnings and insane amounts of earnings growth-The valuations on a lot of the Mag 7 names have been, you know, shrinking for, for months.

And that's not because of earnings that they're earning today and this year, it's because of what people are worried about, you know, in five or 10 years from now when all these investments come back in the form of depreciation expenses and stuff that starts to collapse, um, you know, the profitability of these companies.

They announced some layoffs? Well, they have a new CEO coming in.

You, like me, were a liberal arts major, and now you're out there speaking directly to the long-term investor.

Yeah, well, I sort of backed into this on accident.

And even financial markets and investing, it was all kind of an accident.

I graduated from school in 2004, so right in that valley between the dot-com bubble and the financial crisis.

But this was the upswing, right? And there was work out there.

I didn't have a great plan for what I wanted to do, but I spoke to some recruiters and headhunters.

And fast forward, I got a job as a contractor for Paul Weiss.

I don't even know if there's a Business Week print issue, but take us back to you and ticker.

Yeah.

And Mike Wilson is at Morgan Stanley.

He's the s- uh, chief US equity strategist at Morgan Stanley.

You know, he's part of this group this year that is coming out and saying, "We know, you know, a 21, 22 forward PE on the S&P 500 is way higher than the historical average." And historically everyone says, "Well, you know, we're gonna...

This is too high.

Uh, there's a r- this is a headwind.

We expect this to come down to maybe 21, 20, maybe even 18.

It's 26 times.

Get over it.

... and peop- people are gonna fight all day long on Twitter about, like, oh, well, this is like, you know, giving, uh, gifts to an autocrat and all, all these things.

And like, well, okay, you know, there's a, you can have that discussion.

But like, just as a straight investor who needs to see that the companies that they perfor- that they invest in, they need to operate and execute.

And you know, what better way to execute in the world when you get the, the person who's basically running the world, uh, on your side?

Okay.

So over 85% of the employment growth over the last 85 years is from technology-driven creation, new positions.

So the story being that, you know, in the process of emerging technology destroying all these jobs and, you know, creating this nightmare for the workforce, it also figures out a way to create all these new opportunities for people.

It just tells you that we're creatures of habit and that, I don't know, the market might just have to keep this relentless bid on and keep pushing higher if we keep doing the same thing.

Yeah, and I was thumbing through your survey results, and I think it's a good mix of how investors feel about the state of the markets.

And it's probably, to the credit of you guys at Investopedia, you guys did a really great job of educating investors, right? Something I like to sometimes joke, actually I don't joke this, I mean this really seriously, but I consider myself an optimist long-term and a cautious optimist short-term.

You can have both of those emotions and feelings, but maybe it differs based off of your time horizon.

You know, as a long term investor with, you know, long term financial goals and a strategic investment plan, you know, you stay long, you know, certain positions or index funds or whatever, according to your investment plan.

But it's okay to be a little cautious short term because that's what the history tells us.

You know, in the long trajectory of the market going up, there's a lot of volatility in the short term.

And, most of the time that pays off let's start here let's look at the stocks that we asked our readers if you could buy and hold today for the next 10 years which would you choose and that list looks very similar but you see a big berkshire hathaway name up there even without the warren buffett premium but nvidia is everybody's favorite stock and it's kind of become almost like a value play in some in some ways because every time that stock dips 10 15 investors rush in and buy it up and it's biggest company in the stock market and it's only getting bigger this this list surprise you at

stock market has a long history of demonstrating resilience in the face of major geopolitical risk events." Explain that.

Yeah, I mean, every couple of years or every couple of months, I think you and I or you and your clients and me and my readers have the same kind of discussion.

Some conflict breaks out.

Volatility comes to the markets.

What are we supposed to do? And of course, as a human being, this is very scary.

As someone who cares about or has friends and family connected to those events, it's really distressing.

And then you put your investor hat on and think about, what does history tell us here? Now, obviously, every event is going to be slightly different.

Is that realistic in the modern age of advanced automation, new technologies, artificial intelligence and robotics? Are we really going to fill factories with workers or are we going to be filling new U.S.-based factories with a whole bunch of robots?

But Even in the short term, how would you use this information from the short term to the long term?

Yeah, well, I think part of the problem is when we think about valuations, we spend too much time obsessing over the price, right? You know, again, when we're talking about stuff like the price-earnings ratio, there's two components here.

There's the price and the earnings.

So maybe there is something we should be thinking about when it comes to earnings.

And...

You know, the other historical trend there is that earnings tend to trend higher.

And when you look at analysts' forecasts for earnings in not just this year, but 2026 and 2027 and 2028, further down the road, it's a line going up to the right.

And all of this leads to an interesting topic you brought up to us, which is Most of these mega cap names have pivoted and sometimes strongly and sometimes multiple times over the years from their original businesses.