Lessons from TKer's 9 most popular posts 💯
Plus a charted review of the macro crosscurrents 🔀
🗓️TKer will be off next Sunday, March 1. The free weekly newsletter will return on Sunday, Mar. 8!
📈The stock market climbed last week, with the S&P 500 rising 1.1% to end at 6,909.51. The index is now down 1.0% from its Jan. 27 closing high of 6,978.60 and up 0.9% year-to-date. For more on the stock market, read: 2026 could be crappy for the stock market, and that would be normal 📉
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I pay attention to see which of my past newsletters attract a lot of engagement long after they’re published. In fact, it’s one of my key measures of success. They’re the posts I frequently link back to. They’re the ones readers revisit on their own. They’re the ones people find by searching Google or asking chatbots related questions.
These newsletters feature data and insights that have evergreen value. It’s the most relevant stuff to long-term investors. This is why I tell new subscribers — and subscribers who don’t open every newsletter — that they’re never behind. If there was something you might’ve missed, I’ll likely reference it and link to it in the future.
With that in mind, I point you to the “Most Popular” posts on TKer. A lot of it is slanted toward more recent posts, reflecting the fact that TKer’s audience continues to grow. But there are also some older gems worth revisiting.
9) Why I’m not losing sleep as the U.S. stock market underperforms the rest of the world 🌎
Over both short- and long-term periods, there will inevitably be investment strategies that outperform my own. So as someone who is heavily allocated to the U.S. stock market, I have definitely noticed the recent outperformance of non-U.S. stock markets.
But as a long-term investor, what matters to me is that my portfolio is progressing toward my long-term strategic goals, not how it’s doing relative to my neighbors’. And being overweight U.S. stocks has served me well since I started investing many years ago, and I remain confident it will continue to serve me well as I inch toward retirement.
To be clear, I’m not suggesting that you shouldn’t invest in non-U.S. stocks. And there’s also nothing wrong with making thoughtful tweaks to your long-term strategy every once in a while. Every investor has unique goals, and achieving those goals means taking different kinds of risks.
8) TKer’s 4th year reminded us what drives the stock market 📈🎂
Every anniversary of TKer’s launch, I reflect on a “truth” that helps us understand what the stock market did over the past 12 months.
TKer’s fourth year was marked by all sorts of troubling market catalysts, from trade wars to interest rate volatility to geopolitical risk events. Yet the stock market staged a double-digit rally during the period.
Why? One word: Earnings.
7) One of the most misunderstood moments in stock market cycles ⏱️
Sometimes, the stock market and the economy go in opposite directions. But that’s not necessarily a contradiction.
Remember: The stock market is a reflection of expectations for the future. In other words, economic conditions may be terrible today. But if people increasingly believe things will be better down the road, stock prices are likely to move higher.
6) 4 different ways of looking at the exact same economy 🪖👒🎩🧢
For some people, the economy is about money. For others, it’s about happiness.
There are also those who’ll spin economic narratives to align with their biases or advance their personal interests.
For stock market investors, the economy matters to the degree it relates to earnings growth.
5) The unluckiest market timer I know made another poorly timed trade 🤦🏻♂️
Outside of my regular periodic contributions to my retirement accounts, I don’t trade a lot. That’s probably a good thing. Because whenever I’ve had extra money to put to work, I’ve typically made lump-sum purchases in what’s often proven to be near-term market tops.
Of course, that’s a risk I know I’m taking. And fortunately, my time horizon has continued to be very long. And despite sharp short-term losses, all of those trades eventually turn significantly profitable.
4) A high P/E is not a stock market sell signal ⚠️
Valuation metrics, like the price-to-earnings (P/E) ratio, have historically provided a decent signal for how prices will perform over very long periods (e.g., 10 years).
But as TKer Stock Market Truth No. 6 reminds us: Valuations offer almost no signal as to what prices will do in the coming year. In fact, if you perform regression analysis on the two variables, the line of best fit yields an R-squared that’s close to zero. That’s a fancy way of saying that a P/E ratio alone will effectively tell you nothing about what prices will do in the next year.
3) A very long-term chart of U.S. stock prices usually going up 📈
Most long-term charts of the stock market confirm that prices, collectively, have usually gone up. It’s what happens when you have a capitalist system populated by entrepreneurs and innovators who are supplying a growing pool of consumers, who endlessly demand that goods and services be better, cheaper, and faster.
A chart from BofA reminds us that all of this has been true for over 200 years.
2) Every macro layoffs discussion should start with this key metric 📊
Few news headlines are as unsettling as those mentioning anecdotes about layoffs. And when the outgoing employees are in buzzy industries like tech or finance, those headlines get a lot of attention.
However, it’s important to remember that layoffs are a feature of well-functioning economies that may actually be booming. In fact, U.S. employers laid off nearly 2 million people a month during expansionary periods. While that number is certainly large, it also amounts to about 1% of total employment.
And keep in mind that employers are usually hiring multiples of that number, meaning most laid-off workers often find new jobs relatively quickly.
1) 10 truths about the stock market
This is TKer’s very first post. It drew on 15 years of experience researching and writing about the stock market. As I approach 20 years in this industry, these truths continue to be the foundation for my work.
Taken together, the “10 truths” remind investors that some developments matter more than others, and the long road to building wealth in the stock market comes with a lot of volatility.
If you’re interested in browsing more of TKer’s past newsletters, head to TKer’s archives! You can also scroll through the top posts here!
TKer also has a terrific search function. Just navigate to the 🔍 in the upper right corner of the website and enter some keywords.
🎲🎰 See me in Las Vegas!
I’ll be leading a breakout session at The MoneyShow TradersExpo in Las Vegas. The conference runs from Feb. 23 to 25. Sign up here!
Review of the macro crosscurrents 🔀
There were several notable data points and macroeconomic developments since our last review:
🛍️ Consumer spending ticks higher. According to BEA data, personal consumption expenditures increased 0.4% month-over-month in December to a record annual rate of $21.47 trillion.
Adjusted for inflation, real personal consumption expenditures also climbed to an all-time high.
Why does consumer spending continue to rise? Read: Household finances are both ‘worse’ and ‘good’ 🌦️
💳 Card spending data is holding up. From JPMorgan: “As of 13 Feb 2026, our Chase Consumer Card spending data (unadjusted) was 6.0% above the same day last year. Based on the Chase Consumer Card data through 13 Feb 2026, our estimate of the US Census January control measure of retail sales m/m is 0.27%.“
From BofA: “Total card spending per HH was up 4.4% y/y in the week ending Feb 14, according to BAC aggregated credit & debit card data. In the week ending Feb 14, spending growth rose the most y/y in furniture, HI & electronics since the previous week. Spending around Valentine’s Day and President’s Day weekend was robust relative to last year.“
Consumer spending data has looked a lot better than consumer sentiment readings. For more on this contradiction, read: We’re taking that vacation whether we like it or not 🛫 and Household finances are both ‘worse’ and ‘good’ 🌦️
👎 Consumer vibes are in the dumps. According to the University of Michigan’s Surveys of Consumers, sentiment ticked higher in February, but overall remains low: “All index components posted insignificant movements this month; overall, consumers do not perceive any material differences in the economy from last month. About 46% of consumers spontaneously mentioned high prices eroding their personal finances; readings have exceeded 40% for seven months in a row. Sentiment is about 13% below a year ago and 21% below January 2025.”
Relatively weak consumer sentiment readings appear to contradict relatively strong consumer spending data. For more on this contradiction, read: What consumers do > what consumers say 🙊
🏭 Business investment activity rises. Orders for nondefense capital goods excluding aircraft — a.k.a. core capex or business investment — increased 0.6% to a record-high $78.998 billion in December.
Core capex orders are a leading indicator, meaning they foretell economic activity down the road.
🛠️ Industrial activity picked up. Industrial production activity in January increased 0.7% from prior month levels. Manufacturing output rose 0.6% compared to the prior month.
🎈 Inflation could be cooler. The personal consumption expenditures (PCE) price index in December was up 2.9% from a year ago. The core PCE price index — the Federal Reserve’s preferred measure of inflation — was up 3.0% during the month, up from November’s 2.8% rate. It remains above the Fed’s 2% target.
On a month-over-month basis, the core PCE price index was up 0.36%. If you annualized the rolling three-month and six-month figures — a reflection of the near-term trend in prices — the core PCE price index was up 3.1% and 2.9%, respectively.
For more on inflation, read: If you hate inflation, then you’ll love stocks 🎈
👎 Recent job private job growth has been lackluster. According to payroll processor ADP, private U.S. employers added 10,500 jobs in the four weeks ending Jan. 31.
For more on what the private data providers are saying about jobs, read: The unofficial jobs data is unambiguously discouraging 💼 and The crummy labor market is yielding a ‘tenure dividend’ for corporations 💰
💼 New unemployment insurance claims tick lower, total ongoing claims rise. Initial claims for unemployment benefits declined to 206,000 during the week ending Feb. 14, down from 229,000 the week prior. This metric remains at levels historically associated with economic growth.
Insured unemployment, which captures those who continue to claim unemployment benefits, rose to 1.869 million during the week ending Feb. 7.
For more on the labor market, read: The next couple of years for the job market could be tough 🫤
⛽️ Gas prices remain relatively low. From AAA: “The national average for a gallon of regular gasoline dropped slightly from the previous week to $2.92. Pump prices are expected to start their seasonal climb soon, as spring approaches and summer-blend gasoline production begins. Tensions between the U.S. and Iran are another factor that could drive up crude oil prices. Right now, gas prices are the lowest they’ve been for this time of year since 2021.”
For more on energy prices, read: Higher oil prices meant something different in the past 🛢️
🏠 Mortgage rates tick lower. According to Freddie Mac, the average 30-year fixed-rate mortgage declined to 6.01%, down from 6.09% last week: “Mortgage rates dropped again this week, now down to their lowest level since September of 2022. This lower rate environment is not only improving affordability for prospective homebuyers, it’s also strengthening the financial position of homeowners. Over the past year, refinance application activity has more than doubled, enabling many recent buyers to reduce their annual mortgage payments by thousands of dollars.”
As of Q3, there were 148.3 million housing units in the U.S., of which 86.9 million were owner-occupied and about 40% were mortgage-free. Of those carrying mortgage debt, almost all have fixed-rate mortgages, and most of those mortgages have rates that were locked in before rates surged from 2021 lows. All of this is to say: Most homeowners are not particularly sensitive to the small weekly movements in home prices or mortgage rates.
For more on mortgages and home prices, read: Why home prices and rents are creating all sorts of confusion about inflation 😖
🏘️ New home sales tick lower. Sales of newly built homes declined 1.7% in December to an annualized rate of 745,000 units.
Monthly new home sales figures come with a wide margin of error. For more on this, read: Mathematical context can totally change the story 🧮
🏠 Homebuilder sentiment declines. From the NAHB: “Builders reduced their expectations for future sales as buyers report affordability challenges, which is contributing to declining consumer confidence for the overall economy. While the majority of builders continue to deploy buyer incentives, including price cuts, many prospective buyers remain on the sidelines. Although demand for new construction has weakened, remodeling demand has remained solid given a lack of household mobility.”
🔨 New home construction starts rose. Housing starts increased 6.2% in December to an annualized rate of 1.40 million units, according to the Census Bureau. Building permits rose 4.3% to an annualized rate of 1.45 million units.
😬 This is the stuff pros are worried about. From BofA’s February Global Fund Manager Survey: “Asked about the biggest tail risk for markets, FMS investors said an 'AI bubble' (25%), followed by 'inflation' (20%), and ‘disorderly rise in bond yields’ (17%).”
Here’s how the biggest “tail risk” has evolved over the years.
For more on risks, read: Three observations about uncertainty in the markets 😟 and Two times when uncertainty seemed low and confidence was high 🌈
🐢 GDP growth cooled in Q4. U.S. GDP grew at a 1.4% rate in Q4, down from 4.4% in Q3. Personal consumption led growth, more than offsetting the drag from government output.
Because the GDP calculation includes several quirks, economists often point to “real final sales to private domestic purchasers” to gain a better understanding of the economy's underlying health. Sometimes referred to as “core” GDP, this metric excludes net exports, inventory adjustments, and government spending. That metric grew at a 2.4% rate in Q4.
For more on how GDP relates to the economy, read: You call this a recession? 🤨 and The already mislabeled ‘recession’ of 2022 didn’t happen, new data shows 🤦🏻♂️
📈 Near-term GDP growth estimates are tracking positively. The Atlanta Fed’s GDPNow model sees real GDP growth rising at a 3.1% rate in Q1.
For more on GDP and the economy, read: It’s too ambiguous to just say ‘the economy’ 🤦🏻♂️ and Economic data can often be both ‘worse’ and ‘good’ 🌦️
Putting it all together 📋
Earnings look bullish: The long-term outlook for the stock market remains favorable, bolstered by expectations for years of earnings growth. And earnings are the most important driver of stock prices.
Demand is positive: Demand for goods and services remains positive, supported by healthy consumer and business balance sheets. Job creation, although cooling, appears to be modestly positive, and the Federal Reserve — having resolved the inflation crisis — shifted its focus toward supporting the labor market.
But growth is cooling: While the economy remains healthy, growth has normalized from much hotter levels earlier in the cycle. The economy is less “coiled” these days as major tailwinds like excess job openings and core capex orders have faded. It has become harder to argue that growth is destiny.
Actions speak louder than words: We are in an odd period, given that the hard economic data decoupled from the soft sentiment-oriented data. Consumer and business sentiment has been relatively poor, even as tangible consumer and business activity continues to grow and trend at record levels. From an investor’s perspective, what matters is that the hard economic data continues to hold up.
Stocks are not the economy: There’s a case to be made that the U.S. stock market could outperform the U.S. economy in the near term, thanks largely to positive operating leverage. Since the pandemic, companies have aggressively adjusted their cost structures. This came with strategic layoffs and investment in new equipment, including hardware powered by AI. These moves are resulting in positive operating leverage, which means a modest amount of sales growth — in the cooling economy — is translating to robust earnings growth.
Mind the ever-present risks: Of course, we should not get complacent. There will always be risks to worry about, such as U.S. political uncertainty, geopolitical turmoil, energy price volatility, and cyber attacks. There are also the dreaded unknowns. Any of these risks can flare up and spark short-term volatility in the markets.
Investing is never a smooth ride: There’s also the harsh reality that economic recessions and bear markets are developments that all long-term investors should expect as they build wealth in the markets. Always keep your stock market seat belts fastened.
Think long-term: For now, there’s no reason to believe there’ll be a challenge that the economy and the markets won’t overcome. The long game remains undefeated, and it’s a streak that long-term investors can expect to continue.
For more on how the macro story is evolving, check out the previous review of the macro crosscurrents. »
Key insights about the stock market 📈
Here’s a roundup of some of TKer’s most talked-about paid and free newsletters about the stock market. All of the headlines are hyperlinked to the archived pieces.
10 truths about the stock market 📈
The stock market can be an intimidating place: It’s real money on the line, there’s an overwhelming amount of information, and people have lost fortunes in it very quickly. But it’s also a place where thoughtful investors have long accumulated a lot of wealth. The primary difference between those two outlooks is related to misconceptions about the stock market that can lead people to make poor investment decisions.
The makeup of the S&P 500 is constantly changing 🔀
Passive investing is a concept usually associated with buying and holding a fund that tracks an index. And no passive investment strategy has attracted as much attention as buying an S&P 500 index fund. However, the S&P 500 — an index of 500 of the largest U.S. companies — is anything but a static set of 500 stocks.
The key driver of stock prices: Earnings💰
For investors, anything you can ever learn about a company matters only if it also tells you something about earnings. That’s because long-term moves in a stock can ultimately be explained by the underlying company’s earnings, expectations for earnings, and uncertainty about those expectations for earnings. Over time, the relationship between stock prices and earnings has a very tight statistical relationship.
Stomach-churning stock market sell-offs are normal🎢
Investors should always be mentally prepared for some big sell-offs in the stock market. It’s part of the deal when you invest in an asset class that is sensitive to the constant flow of good and bad news. Since 1950, the S&P 500 has seen an average annual max drawdown (i.e., the biggest intra-year sell-off) of 14%.
How the stock market performed around recessions 📉📈
Every recession in history was different. And the range of stock performance around them varied greatly. There are two things worth noting. First, recessions have always been accompanied by a significant drawdown in stock prices. Second, the stock market bottomed and inflected upward long before recessions ended.
In the stock market, time pays ⏳
Since 1928, the S&P 500 has generated a positive total return more than 89% of the time over all five-year periods. Those are pretty good odds. When you extend the timeframe to 20 years, you’ll see that there’s never been a period where the S&P 500 didn’t generate a positive return.
What a strong dollar means for stocks 👑
While a strong dollar may be great news for Americans vacationing abroad and U.S. businesses importing goods from overseas, it’s a headwind for multinational U.S.-based corporations doing business in non-U.S. markets.
Stanley Druckenmiller's No. 1 piece of advice for novice investors 🧐
…you don't want to buy them when earnings are great, because what are they doing when their earnings are great? They go out and expand capacity. Three or four years later, there's overcapacity and they're losing money. What about when they're losing money? Well, then they’ve stopped building capacity. So three or four years later, capacity will have shrunk and their profit margins will be way up. So, you always have to sort of imagine the world the way it's going to be in 18 to 24 months as opposed to now. If you buy it now, you're buying into every single fad every single moment. Whereas if you envision the future, you're trying to imagine how that might be reflected differently in security prices.
Peter Lynch made a remarkably prescient market observation in 1994 🎯
Some event will come out of left field, and the market will go down, or the market will go up. Volatility will occur. Markets will continue to have these ups and downs. … Basic corporate profits have grown about 8% a year historically. So, corporate profits double about every nine years. The stock market ought to double about every nine years… The next 500 points, the next 600 points — I don’t know which way they’ll go… They’ll double again in eight or nine years after that. Because profits go up 8% a year, and stocks will follow. That's all there is to it.
Warren Buffett's 'fourth law of motion' 📉
Long ago, Sir Isaac Newton gave us three laws of motion, which were the work of genius. But Sir Isaac’s talents didn’t extend to investing: He lost a bundle in the South Sea Bubble, explaining later, “I can calculate the movement of the stars, but not the madness of men.” If he had not been traumatized by this loss, Sir Isaac might well have gone on to discover the Fourth Law of Motion: For investors as a whole, returns decrease as motion increases.
Most pros can’t beat the market 🥊
According to S&P Dow Jones Indices (SPDJI), 65% of U.S. large-cap equity fund managers underperformed the S&P 500 in 2024. As you stretch the time horizon, the numbers get even more dismal. Over three years, 85% underperformed. Over 10 years, 90% underperformed. And over 20 years, 92% underperformed. This 2023 performance follows 14 consecutive years in which the majority of fund managers in this category have lagged the index.
Proof that 'past performance is no guarantee of future results' 📊
Even if you are a fund manager who generated industry-leading returns in one year, history says it’s an almost insurmountable task to stay on top consistently in subsequent years. According to S&P Dow Jones Indices, just 4.21% of all U.S. equity funds in the top half of performance during the first year were able to remain in the top during the four subsequent years. Only 2.42% of U.S. large-cap funds remained in the top half
SPDJI’s report also considered fund performance relative to their benchmarks over the past three years. Of 738 U.S. large-cap equity funds tracked by SPDJI, 50.68% beat the S&P 500 in 2022. Just 5.08% beat the S&P in the two years ending 2023. And only 2.14% of the funds beat the index over the three years ending in 2024.
The odds are stacked against stock pickers 🎲
Picking stocks in an attempt to beat market averages is an incredibly challenging and sometimes money-losing effort. Most professional stock pickers aren’t able to do this consistently. One of the reasons for this is that most stocks don’t deliver above-average returns. According to S&P Dow Jones Indices, only 19% of the stocks in the S&P 500 outperformed the average stock’s return from 2001 to 2025. Over this period, the average return on an S&P 500 stock was 452%, while the median stock rose by just 59%.
