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Hi friend 👋
Let me ask you a question.
What’s the best way to compound wealth predictably?
We will start with the popular opinion in today’s market.
18-year-old TikTok Influencers say: “Quality investing is dead.”
They tell you the advice in Graham’s Intelligent Investor is outdated
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And they confidently suggest, “If you want to get rich, just follow the trend.”
Right?
After all, high-quality stocks are trading at all-time lows.
Whereas low-quality stocks are trading at very lofty premiums.
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Indeed, these are challenging times for quality investors.
It’s only natural to worry about your investments.
However, before you make any drastic decisions, please hear me out.
You may not know it yet.
But the low valuations in quality stocks are a big opportunity for rational investors.
Especially if you know how to take advantage of this.
Most investors are chasing momentum stocks right now.
They’re buying shares in companies they know nothing about.
They’ll eventually have regrets. But I don’t want that for you.
That’s why I’m writing this exclusive update.
I’m going to share a mental model for going through times like this.
You see, I was in Omaha for the 2026 Berkshire AGM.
This is the fourth year in a row that I’ve gone.
It’s like a yearly pilgrimage.
During the meeting, Warren Buffett said something you may agree with.
This headline summarizes it perfectly:
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The keyword here is GAMBLING.
Speculative behavior is now worse than ever before.
For most investors, business fundamentals don’t matter anymore.
Just look at the SpaceX IPO.
Herd instinct tells you to focus on the short-term movement of stock prices.
It encourages you to ignore dangerous risk factors in a company’s annual report.
And it makes you think there’s nothing wrong with embracing the greater fool theory.
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Who cares if a company can’t pay off its debt?
Just follow the trend and buy if the stock is going up and up.
This is the gambling trap Warren Buffett warned us about.
In times like this, stock prices disconnect from business fundamentals.
That’s why you see shares of mediocre companies hitting new highs every month.
You could easily do what everyone else is doing if it pleases you.
However, if your goal is to significantly outperform the market in the long run…
Here’s something to consider:
High-quality stocks might be having a hard time right now.
But in the long run?
They significantly outperform the market: