Sam Ro
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Stock Market, U.S. Economy, Investing
Award-winning writer of @TKerLLC, the newsletter about how the stock market usually goes up. 36k+ subs. Long-term optimist. Short-term cautious optimist.
Articles by Sam Ro
Some quick thoughts on Anthropic, mega IPOs, and ‘existential risks to humanity’ 🤖
Anthropic filed its S-1, or prospectus, with the SEC on Monday. The AI developer behind Claude has not yet set the price for its initial public offering (IPO). But expectations have aligned on a valuation of $1.5 trillion to $2 trillion. According to the filing, Anthropic generated $16.3 billion in revenue in the first half of 2026, up from $1.2 billion last year. But the company remains unprofitable, with an operating loss of $693 million and a net loss of $80.7 billion during the period.
5 Myths And Misunderstandings About Investing In The Stock Market
Much of what we know about the stock market comes from a mix of theory and empirical evidence. For example, the idea that earnings drive stock prices is supported by the view that a business’s value is tied to how much money it makes. And decades of market data show that stock prices and earnings have exhibited a tight correlation. There are also ideas that make intuitive sense, but the evidence supporting them is shoddy.
5 myths and misunderstandings about investing in the stock market š¤·š»āāļø
Much of what we know about the stock market comes from a mix of theory and empirical evidence. For example, the idea that earnings drive stock prices is supported by the view that a businessās value is tied to how much money it makes. And decades of market data show that stock prices and earnings have exhibited a tight correlation. There are also ideas that make intuitive sense, but the evidence supporting them is shoddy.
The 1987 and 2020 stock market stats that continue to surprise me 🤯
I wasn’t aware of what was happening on Black Monday, October 19, 1987. I was 5 years old then. But the more I learn about the stock market, the more I think about how I might’ve behaved if I’d had money on the line. And I still struggle to imagine a realistic scenario where I would’ve traded that period in a way that would’ve left me better off than simply holding or dollar-cost averaging through the ups and downs.
You Could Be Right About Valuations But Wrong About Prices
Five years ago, on October 14, I launched TKer, the newsletter that tells the story of how the stock market usually goes up. That first year was highlighted by a bear market as the Federal Reserve went to war against inflation. The S&P 500 fell 19%. Year two brought an impressive stock market rebound. It began two days after the current bull market started. That year, the S&P ended up 21% higher despite lingering uncertainty. Year three extended the rally, with the S&P surging an incredible 35%.
The Stock Market Is Not The Economy
Sure, the stock market is more like the economy than it’s like… a banana. But in the context of a nuanced discussion of finance and macroeconomics, the stock market is not the economy. Ritholtz Wealth Management’s Ben Carlson shared this helpful visual on Tuesday’s Animal Spirits podcast. The chart, published by JPMorgan Asset Management, shows a sector breakdown of GDP, employment, and the S&P 500 (which covers 80% of the U.S. stock market).
The stock market ≠ the economy ✋
Sure, the stock market is more like the economy than it’s like… a banana. But in the context of a nuanced discussion of finance and macroeconomics, the stock market is not the economy. Ritholtz Wealth Management’s Ben Carlson shared this helpful visual on Tuesday’s Animal Spirits podcast. The chart, published by JPMorgan Asset Management, shows a sector breakdown of GDP, employment, and the S&P 500 (which covers 80% of the U.S. stock market).
A bear-case scenario for the long-term, diversified stock market investor š
Nobody likes to see the price of a stock they own go down. But some of the most encouraging stock market stats involve what happens when things go wrong. After Berkshire Hathaway announced Warren Buffettās retirement, Meb Faber shared this mind-blowing stat. āIf Berkshire declined 99% today on the news of Buffettās retirement, Berkshire would still have outperformed the S&P 500 since 1965,ā Faber wrote.
Fortunately, it’s not all bad news 📰
Interest rates have been rising this year. The 10-year Treasury yield hit a 24-year high this week. The average 30-year mortgage rate recently crossed above 7%. Energy prices have also trended higher. The average price of a gallon of gasoline is at record levels for this time of year. Inflation got hot enough that the Federal Reserve recently hiked its benchmark short-term interest rate in an effort to rein in prices.
Hyperscalers: Yes, AI Capex Costs Will Eventually Come Home to Roost
Is the massive and growing investment in AI infrastructure worth it? It’s a loaded question that yields different answers — depending on who you ask. But investors should remember that big investments don’t hit income statements all at once during a single reporting period, advises Sam Ro, editor of Tker.co. One of the sloppier answers to the AI infrastructure question goes something like this: “Every quarter, mega-cap tech companies announce new huge investments in AI.
Is The Massive And Growing Investment In AI Infrastructure Worth It?
Is the massive and growing investment in AI infrastructure worth it? It’s a loaded question that yields different answers — depending on who you ask. One of the sloppier answers I often hear goes something like this: "Every quarter, mega-cap tech companies announce new huge investments in AI.
The AI earnings headwind and accounting headache that’s set to intensify 🌬️
Is the massive and growing investment in AI infrastructure worth it? It’s a loaded question that yields different answers — depending on who you ask. One of the sloppier answers I often hear goes something like this: “Every quarter, mega-cap tech companies announce new huge investments in AI.
'Exposure Therapy’ For Investors
The stock market falls almost every other day. Often, you’ll see the market slide a percent or two in a given week. Sometimes, those modest declines turn into 5% pullbacks. Occasionally, those pullbacks will morph into a 10% correction. And suddenly you’re rattled, and you’re once again wondering if this is the beginning of a bear market or market crash. After all, all of history’s worst downturns by definition started as 10% declines.
A timely stock market lesson from the 1960s ๐
The world has changed in many ways over the years. This includes the makeup of the stock market and the macro environment in which its underlying companies operate. One thing that hasnโt changed is the principle that stocks are tied to fundamentals. More specifically, earnings drive stock prices. That helps explain why the stock market is up this year, despite a heated geopolitical backdrop. And history offers plenty of examples of this dynamic.
‘Exposure therapy’ for investors 🕷️
The stock market falls almost every other day. Often, you’ll see the market slide a percent or two in a given week. Sometimes, those modest declines turn into 5% pullbacks. Occasionally, those pullbacks will morph into a 10% correction. And suddenly you’re rattled, and you’re once again wondering if this is the beginning of a bear market or market crash. After all, all of history’s worst downturns by definition started as 10% declines.
Earnings: Should You Worry About Q3 Estimate Hikes?
Ahead of quarterly earnings season, analysts have typically revised their earnings estimates lower. But what if analysts flip the script and raise earnings estimates? Should investors be concerned? Are the odds higher that quarterly results fall short of upwardly revised estimates? I’m hearing that question more often as analysts raise estimates ahead of Q3 earnings season (which kicks off in mid-October).
Most stock-picking pros have been underperforming this year's rollercoaster ride higher 🫤
It remains tough to generate stock market returns that beat (or outperform) a passively managed fund tracking the S&P 500. According to new data from S&P Dow Jones Indices (SPDJI), just a third of U.S. large-cap equity fund managers outperformed the S&P 500’s 10% gain in the first half of 2026.
Earnings: Should You Worry About Q3 Estimate Hikes?
Ahead of quarterly earnings season, analysts have typically revised their earnings estimates lower. But what if analysts flip the script and raise earnings estimates? Should investors be concerned? Here’s my take, advises Sam Ro, editor of Tker.co. Are the odds higher that quarterly results fall short of upwardly revised estimates? I’m hearing that question more often as analysts raise estimates ahead of Q3 earnings season (which kicks off in mid-October).
Is A Higher Earnings Bar Really Harder To Clear?
Ahead of quarterly earnings season, analysts have typically revised their earnings estimates lower. Why does that happen? The theory goes something like this: Analysts initially publish estimates that are a bit rosy, which is consistent with the fact that most stock ratings are "buy." As the quarter progresses, reality almost always feels less robust as economic data, industry reports, and management comments trickle in. Perhaps executives are even guiding analysts in a way that lowers the bar.
Is a higher earnings bar really harder to clear? š
Ahead of quarterly earnings season, analysts have typically revised their earnings estimates lower. Why does that happen? The theory goes something like this: Analysts initially publish estimates that are a bit rosy, which is consistent with the fact that most stock ratings are ābuy.ā As the quarter progresses, reality almost always feels less robust as economic data, industry reports, and management comments trickle in. Perhaps executives are even guiding analysts in a way that lowers the bar.
Why the interest rate ‘bark’ has been worse than its ‘bite’ 🐶
Broadly speaking, rising long-term interest rates are a headwind for borrowers, including most households, businesses, and governments. So then why hasn’t this year’s interest rate rally led to job cuts, weaker spending, and disappointing earnings? Why is the S&P 500 down less than 3% from its all-time high?
The first question to ask when someone tells you where stocks are headed 🙋🏻♂️
Things are a bit quiet today with U.S. stock markets closed for the Labor Day holiday. If you’re looking for something to pass the time, check out 12 stock market charts that caught my attention 📊📈 and 24 quick thoughts on the markets and the economy 📋. I also recommend reading Liz Ann Sonders’ compilation of investing quotes, which she reshared last week. One of the older quotes on her list explains simply why long-term investors sometimes make costly mistakes in the short-term.
12 stock market charts that caught my attention ūüďäūüďą
All things considered, it‚Äôs been a pretty good year for the stock market. Year to date, the S&P 500 is up over 11%. Meanwhile, the index has experienced an intra-year max drawdown of 9%, below the historical average of 14%. In other words, we‚Äôd have to get a pretty ugly market sell-off in the next four months for 2026 to go down as an average year ‚ÄĒ which is certainly possible and why investors should always keep their stock market seat belts fastened.
Is it bad when economic data gets revised down?π€
Economic data is crucial because it informs decisions about policy, business, and investing. Unfortunately, much of the economic data we get regularly is based on surveys, which means it comes with a margin of error. And even after itβs published, the data is often revised as more information comes in. For example, the July new home sales report showed sales fell 10.5% during the month.
A note on the equity risk premium with help from TKer's newsletter archive ๐
Long-term interest rates have been on the rise. The yield on the 30-year Treasury bond just hit its highest level since 2007. When interest rates climb to multi-year highs, it means youโll soon hear more market pundits pontificate about the equity risk premium (ERP), which can be roughly defined as the additional return investors expect from stocks relative to bonds.
24 quick thoughts on the markets and the economy š
The economy is doing pretty well, earnings growth is great, and the stock market just set new all-time highs. In recent weeks and months, much of the major news weāve gotten has been consistent with ongoing market narratives, which weāve covered in this yearās free and paid newsletters. But I know weāre all busy, and most of us arenāt able to read through every newsletter.
24 Quick Thoughts On The Markets And Economy
The economy is doing pretty well, earnings growth is great, and the stock market just set new all-time highs. In recent weeks and months, much of the major news we’ve gotten has been consistent with ongoing market narratives, which we’ve covered in this year’s free and paid newsletters. But I know we’re all busy, and most of us aren’t able to read through every newsletter.
The stock market may already be adjusting to a future with slower earnings growth π€
Earnings have been growing at a blistering pace. But it seems unlikely to last. According to FactSet, analysts expect the S&P 500βs 2026 earnings to reflect 30% growth from last year. This helps explain why the index is up 14% since the beginning of the year, following last yearβs 16% rally and 2024βs 23% surge. Some people are worried about what could happen to stocks if and when the earnings growth rate cools.
Stock Market Bubbles: What to Remember as Warnings Pile Up
Words and phrases can help us communicate with each other quickly and efficiently. But for some important matters, a single word or phrase can be a little too imprecise and ambiguous. Take the word “bubble,” writes Sam Ro, editor of Tker.co. This can be a big problem when discussing the markets and the economy, where language sometimes has multiple meanings.
Seek More Context When You Hear These Popular Words And Phrases About Markets
Words and phrases can help us communicate with each other quickly and efficiently. But for some important matters, a single word or phrase can be a little too imprecise and ambiguous, leading some to make incorrect assumptions about what’s being said. This can be a big problem when discussing the markets and the economy, where language sometimes has multiple meanings.
Seek more context when you hear these popular words and phrases about markets Original
For most of my life, I didn't think too much more than that. That was until November 2021, when Morgan Stanley strategists published a 12-month target for the S&P 500 that implied a 6% decline. It was the call that prompted financial media to label Morgan Stanley strategist Mike Wilson a market bear. And to his credit, he got the market's direction right. But is expecting a 6% decline within a year really bearish?
Seek more context when you hear these popular words and phrases about markets đ
Words and phrases can help us communicate with each other quickly and efficiently. But for some important matters, a single word or phrase can be a little too imprecise and ambiguous, leading some to make incorrect assumptions about whatâs being said. This can be a big problem when discussing the markets and the economy, where language sometimes has multiple meanings.
The No. 1 reason why I look forward to earnings season ๐
People have mixed feelings about quarterly earnings reporting. On the one hand, quarterly reports provide fresh financial information and management commentary that help existing and prospective investors make decisions about buying or selling shares of a company.
Aswath Damodaran's 3 Brilliant Quotes On The Challenge Of Valuing Companies
In a podcast taped in June, Sparkline Capital’s Kai Wu spoke with NYU Professor Aswath Damodaran about SpaceX and how to value such a company. At the time, Damodaran, aka "The Dean of Valuation," had concluded that SpaceX was worth about $1.3 trillion, significantly below the $1.77 trillion valuation set at its IPO. (As of Friday, SpaceX was worth about $1.4 trillion.) While they focused on SpaceX, I thought Damodaran had some great quotes that spoke to the challenges of valuing any company.
3 brilliant quotes on the challenge of valuing companies
A version of this article was previously published on TKer.co. In a podcast taped in June, Sparkline Capital's Kai Wu spoke with NYU Professor Aswath Damodaran about SpaceX and how to value such a company. At the time, Damodaran, aka "The Dean of Valuation," had concluded that SpaceX was worth about $1.3 trillion, significantly below the $1.77 trillion valuation set at its IPO. (As of Friday, SpaceX was worth about $1.4 trillion.) The conversation is interesting and wonky.
3 brilliant quotes on the challenge of valuing companies đ§
In a podcast taped in June, Sparkline Capitalâs Kai Wu spoke with NYU Professor Aswath Damodaran about SpaceX and how to value such a company. At the time, Damodaran, aka âThe Dean of Valuation,â had concluded that SpaceX was worth about $1.3 trillion, significantly below the $1.77 trillion valuation set at its IPO. (As of Friday, SpaceX was worth about $1.4 trillion.) The conversation is interesting and wonky.
3 brilliant quotes on the challenge of valuing companies Original
And by the way, when's the last time you heard about an interest rate or stock market forecaster nailing it year in and year out? But to Damodaran's point, analysts aiming to derive the value of a company have no other choice but to make a ton of assumptions, many of which are likely to miss the mark by a wide margin. Wu's podcast is called "The Intangible Economy." Damodaran leaned into the wordplay. "Do you know what the biggest intangible is?" he asked.
Profit margins are still going up π
Not only are profit margins high, but theyβre rising. According to FactSet, the S&P 500βs net profit margin is on track to rise to 15.7% in Q2, the highest level since FactSet started tracking the metric in 2009. The S&P 500βs net profit margin is at a record high.
4 Cynical Things I Think Are Arguably Bullish For Stocks
I’ve earned a reputation for being an optimist because I often say that the stock market usually goes up. But just because I think the stock market is likely to trend higher in the long run doesn’t mean that I think everything is sunshine and rainbows. There are some things I think that are arguably cynical that, for better or worse, are things that I’d argue are bullish for stocks. I think we consume and waste too much Some of us are better at responsible spending.
4 sorta cynical things I think that are arguably bullish for stocksš
Iāve earned a reputation for being an optimist because I often say that the stock market usually goes up. But just because I think the stock market is likely to trend higher in the long run doesnāt mean that I think everything is sunshine and rainbows. There are some things I think that are arguably cynical that, for better or worse, are things that Iād argue are bullish for stocks. Some of us are better at responsible spending. Some of us canāt afford to be wasteful.
A sneak preview of Wall Street's outlook for stocks in 2027 ๐ญ
Iโm not a big fan of one-year price targets for the S&P 500. It is extremely challenging to predict short-term market movements with accuracy. This is reflected in the fact that forecasters frequently revise their targets as the year unfolds. However, these targets tell us something about Wall Street sentiment. And the research supporting these forecasts can be very interesting. Most Wall Street firms publish their official annual forecasts for the stock market in November and early December.
Known Worries And Unknown Unknowns - State Street SPDR S&P 500 ETF Trust (ARCA:SPY), Vanguard S&P 500 ETF
There are two main types of risk. There are well-known risks that are at least somewhat priced into the markets. They are the lingering fears that are covered regularly in the news and surfaced in surveys. As long as new developments related to these risks aren’t much worse than what’s in the range of likely outcomes, markets can handle bad news relatively well. With that in mind, let’s talk about some risks.
Known worries and unknown unknowns š¬
There are two main types of risk. There are well-known risks that are at least somewhat priced into the markets. They are the lingering fears that are covered regularly in the news and surfaced in surveys. As long as new developments related to these risks arenāt much worse than whatās in the range of likely outcomes, markets can handle bad news relatively well. And there are risks that are not well known, not widely discussed, and not priced into the markets.
A brief 9-point guide to how everything affects earnings 📋
There’s a lot of news out there all the time. Some of that news can affect the earnings of publicly traded companies. Sometimes it’s clear how. Other times, not so much. For investors, it’s important to understand how news affects earnings — because earnings and expectations for earnings growth are the most important long-term drivers of stock prices. (I’ve explained this in TKer Truth No. 5.)1 But this is not easy to do. So, I’m here to help.
Is It Easier To Become A Stock Picker In A Stock Picker's Market?
A few charts I saw recently had me thinking about the challenge of trading individual stocks to generate above-average returns. The first chart came from Citadel’s Scott Rubner. It shows the correlations among S&P 500 stocks, basically the degree to which stocks move together. A high correlation suggests stocks are largely moving in tandem, whereas a low correlation means they are moving independently. Rubner’s data shows that correlations have fallen to their lowest level in at least 15 years.
Is it easier to become a stock picker in a stock picker's market? Original
A version of this article was originally published on TKer.co. A few charts I saw recently had me thinking about the challenge of trading individual stocks to generate above-average returns. The first chart came from Citadel's Scott Rubner. It shows the correlations among S&P 500 stocks, basically the degree to which stocks move together. A high correlation suggests stocks are largely moving in tandem, whereas a low correlation means they are moving independently.
Is it easier to become a stock picker in a stock picker's market?šµ
A few charts I saw recently had me thinking about the challenge of trading individual stocks to generate above-average returns. The first chart came from Citadelās Scott Rubner. It shows the correlations among S&P 500 stocks, basically the degree to which stocks move together. A high correlation suggests stocks are largely moving in tandem, whereas a low correlation means they are moving independently. Rubnerās data shows that correlations have fallen to their lowest level in at least 15 years.
3 ways the U.S. stock market is and isn't like the rest of the world🌎
In markets, you can make many assumptions that seem reasonable but actually miss the mark. For example, before I knew much about the global stock market, I thought investing in a country’s stock market meant you were investing in its economy. This is far from precise. I guessed the U.S. stock market was the largest, but I also thought other countries’ markets weren’t far behind. I couldn’t have been more wrong.
The first half of 2026 confirmed a valuable stock market lesson π€
The S&P 500 gained an impressive 9.6% in the first half of 2026. Meanwhile, the Magnificent 7 β Nvidia, Apple, Alphabet, Microsoft, Amazon, Meta Platforms, and Tesla β were collectively in the red during this period. If you havenβt already, youβre gonna see a lot of charts circulating that look like the one below from Deutsche Bankβs Jim Reid. The Magnificent 7 have lagged as the rest of the market has moved higher.
Burying Your Head In The Sand Works For Some Investors, But It's Not The Best Advice
As a result, it’s somewhat popular to say that people should ignore jarring headlines in the context of their investment portfolios. On that matter, here’s what Joe Weisenthal asked me on Bloomberg’s Odd Lots podcast during a panel discussion about the AI’s threat to the economy as we know it: His question cuts to advice that some investors have found helpful.
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