This is a comment i gave from other post asking about Pepsi valuation.

=================================

Here is a simple way that you can DIY in future:

Step1, get the adjusted or normalised EPS of PEPSI

Step 2, get the forecast next 5 year annualised growth rate of the EPS

https://www.zacks.com/stock/quote/PEP/detailed-earning-estimates?icid=quote-stock_overview-quote_nav_tracking-zcom-left_subnav_quote_navbar-detailed_earning_estimates

From Zacks, i see that the EPS (Adjusted) TTM of PEP is around 8.36 and the next 5 years growth rate is 5.10% a year.

I do think however, that the analysts could be a bit too bullish, especially when the last three year average growth was only 3% a year. ( https://www.morningstar.com/stocks/xnas/pep/key-metrics ).

So perhaps i shoudl put the range of growth as between 3 to 5%

Step 3, get the average 5 year P/E ratio. If you want a range, you can use the current and the average 5 year ratio or 5 year and 10 year average.

I like to use morningstar for this. From the website, i note that the current P/E is 16.46 while the last 5 year average has been 25.44.

PEPSI IRR valuation	Slow 3% growth	Analyst Consensus 5%
Adjusted EPS	8.36	8.36
A. EPS in 5 years time	9.69	10.67
B. Future Price if average P/E stays at 16.46	159.5	175.62
C.The annual return if you buy PEP today	4.85%	6.88%
D. The Total Returns including dividends	9.52%	11.55%

A. calculation (Adj EPS x (1+Growth%)^(5) eg. 8.36 * (1.03)^5 = 9.69

b. Calculation (EPS in 5 years x 16.46) eg. 9.69 x 16.46 = 159.5

c. If you were to buy PEP at today's price of 125.89, the rate of return you can expect a year (before dividends) is ( Future / current price of 125.89 ) 1/5 -1, eg. ( 159.5 / 125.89) ^(1/5) -1 =0.0484 or 4.84%

d. If you were to add the dividend yield of 4.67%, eg. 4.85%+4.67% = 9.52%

-----

You can probably repeat this on a scenario if the P/E in 5 years time is not the same as today's 16.46 but reverts to the 5 year average of 25.44. You will get a higher rate of return.

(TLDR: actually bullish for Amazon and Google, bearish for Shopify)

Meta’s AI Agent for Consumers Has Arrived. Alphabet and Amazon Should Watch Out.
By Kit Norton

https://www.barrons.com/articles/ai-meta-muse-alphabet-amazon-shopify-e86632f1?st=nMLdwb&reflink=article\_copyURL\_share

Updated Sept 09, 2026 2:28 pm EDT / Original Sept 09, 2026 11:01 am EDT

Key Points

- Meta Platforms announces Muse, a personal artificial-intelligence agent designed to automate tasks like online shopping and scheduling.

- Morgan Stanley analyst Brian Nowak says Meta could win a large piece of an estimated $30 trillion consumer AI agent total addressable market.

- Meta stock is the best-performing component in the S&P 500 for the trading session.

It was long rumored, long expected, and it has finally arrived. Meta Platforms on Tuesday announced its personal artificial-intelligence agent, called Muse. Wall Street sees the Facebook parent in pole position to dominate the AI online shopping space.

The agent will automate a variety of tasks for users, including shopping online, planning travel, purchasing tickets, scheduling appointments, managing calendars, and sending emails and messages.

“Meta thinks personal superintelligence will be one of the most transformative technologies of a lifetime,” Meta said in a blog post announcing the new AI tool. “Muse is a first step: an agent that takes on more of the work so people can focus on what matters to them.”

Morgan Stanley analyst Brian Nowak on Wednesday wrote that Meta could “win” a substantial piece of the estimated $30 trillion consumer AI agent total addressable market.

Meta stock advanced 6.1% to $651.05 and was one of the best-performing components in the S&P 500for the trading session. Shares had fallen 7% this year as of the closing bell on Tuesday.

Wall Street in recent months had started to take notice of how AI will change the way consumers conduct online shopping.

Rosenblatt Securities in August wrote that Alphabet,Amazon.com, and Xometry were best positioned to come out on top when the dust settles. It isn’t surprising that Alphabet and Amazon would be considered key players in the emerging AI shopping landscape since they have amassed proprietary data and conduct high-margin operations to fund AI investment.

In late July, Rothschild & Co Redburn in late July noted that a Meta consumer AI agent could be an existential threat to the likes of Shopify. Now with the launch of Muse, that threat may be here.

Morgan Stanley believes that consumer AI agent tools will become integral to digital advertising, e-commerce, online travel, autonomous driving, restaurant delivery, logistics, and wearable technology. And Nowak argues that Meta currently has the upper hand as it can integrate Muse with Facebook, Instagram, Messenger, and Whatsapp data.

“This combined with the integration of other monetizable apps and personalized datasets (including Gmail) could give Meta an edge to create a more personalized agent with new monetizable behaviors. The entry price of the product…free…is also a notable advantage that comes with scale,” the analyst wrote.

But Meta isn’t guaranteed anything in the consumer AI agent space.

“We have seen META launch products before that didn’t live up to expectations (FB Shopping, the Metaverse, MetaAI, etc) and think the market will need signal on adoption and monetizable behavior to re-rate shares…which is what we will focus on from here,” Nowak wrote. He has an Overweight rating and a $775 price target on Meta stock.

So, while Meta might be in pole position, the company needs to keep on eye on its rear-view mirror.

( tldr: While Google is getting alot of news, this company has a 4T market cap and is seeing its sales accelerate. Now it is Changing how it reports cloud/ai to investors.)

This subtle Microsoft change could be a big win for investors

The tech giant is altering how it reports the performance of different business categories in a way that analysts say will make it easier to gauge AI and Azure momentum

https://www.marketwatch.com/story/this-subtle-microsoft-change-could-be-a-big-win-for-investors-bfacfb17

By Hannah Pedone

Sept. 3, 2026, 4:37 p.m. ET

Microsoft is changing its reporting structure and metrics, according to an SEC filing.

Key Points

Microsoft is changing its financial reporting structure to report under two segments: Agents and Infra, and Devices and Consumer.

The new structure will explicitly report Microsoft’s Azure cloud-computing business, which analysts say will increase transparency for investors.

Microsoft shares rose nearly 3% on Thursday following the announcement.

Life is getting a bit easier for investors trying to gauge how Microsoft’s business is benefiting from artificial intelligence.

In light of the company’s focus on AI, Microsoft is changing up the way it reports its different business segments, according to an investor presentation deck filed with the Securities and Exchange Commission on Wednesday.

Microsoft will now report using two segments: One will be named Agents and Infra, and the other will be called Devices and Consumer. Previously, the company had three segments: Productivity and Business Processes, Intelligent Cloud, and More Personal Computing.

The change is more than just a reshuffling of line items. Through the new structure, which officially goes into play with the company’s next earnings report, Microsoft’s Azure cloud-computing business will be more “explicitly reported,” according to Bernstein analyst Mark Moerdler. That “makes sense given the size of the business and its criticality to the company and their customers,” he said.

StoneX analyst Yi Fu Lee told MarketWatch that the new disclosure framework is “long overdue” and aligns better with how the company is operating in the AI era.

“Investors have long wanted greater transparency around Azure, and the new format takes a meaningful step in that direction,” Lee said.
Moerdler believes that Microsoft’s new reporting structure will help investors parse the performance of the Azure cloud business in an even “cleaner” way than what the company’s major competitors do when they bundle professional services and other offerings into their cloud segments.

The new Azure breakout “should help with clarity on this key part of the business,” Moerdler noted.
To be sure, Microsoft’s new reporting structure won’t directly break out how much business comes from Azure’s AI efforts. But Moerdler said he and his team “understand why it is difficult to break the number out” unless Microsoft were to only capture Azure revenue opportunity tied to graphics processing units.

The Bernstein analyst also highlighted that the Azure growth rate will slow slightly as Microsoft moves GitHub Cloud out of the Azure reporting structure and into the Microsoft Commercial Cloud category instead.

“There’s no question AI represents a profound shift in both technology and business,” Microsoft CEO Satya Nadella wrote in the presentation deck. “It is changing what we build and how we operate, and it is blurring the boundaries between our products and reshaping our business models.

“To reflect this and provide increased transparency to investors, we are updating our financial reporting to mirror how the business is operating, how we allocate resources and where we are headed,” he added.

StoneX’s Lee sees Microsoft “organizing around what it believes are the primary value-creation layers of the AI technology,” rather than “managing the business through legacy product-based silos.”

The change comes after Microsoft previously altered its reporting categories in late 2024.
Shares of Microsoft rose 2.7% on Thursday.

Campbell’s Slashes Dividend and Looks to Cut Costs as Performance Remains ‘Unacceptable’
By Mackenzie Tatananni

https://www.barrons.com/articles/campbells-earnings-dividend-cut-stock-price-ec1bf75f

Sept 03, 2026 8:58 am EDT

Campbell’s cut its quarterly dividend to 25 cents a share, marking a 36% reduction to its previous dividend of 36 cents. (PHOTOGRAPH BY JUSTIN SULLIVAN/GETTY IMAGES)
Key Points

- Campbell’s cuts its quarterly dividend by 36% to 25 cents a share to protect the company’s health amid weak consumer spending.

- The company has closed plants and laid off workers as part of a cost-cutting program aimed at saving $500 million by fiscal 2030.

- Campbell’s expects net sales to fall between 2% and 4% for the current fiscal year, which is below analysts’ expectations.

Campbell’s, arguably one of America’s most iconic soup brands, isn’t performing where it needs to be, according to its chief executive. It’s a reality underscored by the company’s latest quarterly earnings.

The soup and snack maker on Thursday slashed its quarterly dividend to 25 cents a share, marking a 36% decrease from 39 cents. The move came as part of a larger effort to safeguard the company’s health as weak consumer spending continues to weigh on its results.

Campbell’s added that it has closed plants and laid off workers to protect margins, part of a sweeping cost-cutting program aimed at saving $500 million by fiscal 2030.

“Our results remain unacceptable,” CEO Mick Beekhuizen said on Thursday. “Our performance is not where it needs to be, and we are taking decisive action to improve it.”

Campbell’s is “addressing reality head-on” by intensifying its focus on the consumer, sharpening its execution, and adjusting prices in certain categories to reflect changes in commodity costs, Beekhuizen added.

The company posted adjusted earnings of 39 cents a share in its fiscal fourth quarter, in line with analysts’ expectations. Sales fell 8% to $2.1 billion, also in line with forecasts, while organic sales ticked down 1%. Across product lines, sales within its snacks division sank 12%, while the same metric fell 4% in its meals and beverages unit.

Management’s outlook for the current fiscal year doesn’t suggest any meaningful improvement. Campbell’s expects net sales to fall between 2% and 4% for the period. Analysts were expecting a drop of less than 1%. The company also is targeting adjusted earnings of $1.65 to $1.80 a share, below analysts’ calls for $1.86 a share at the midpoint of the range.

Campbell’s, like other snack makers, has faced a softening in consumer demand as shoppers grapple with elevated inflation. However, the company has been particularly hard-hit after raising prices in recent years to protect margins, driving lower-income consumers toward cheaper value brands and store-label products.

The dividend cut appears to be “an effort to accelerate debt paydown,” William Blair analyst David Shanko said Thursday. Despite this, he views the conservative guidance and commentary from management as “a reset in expectations that may be viewed more positively for the stock going forward, consistent with the actions of similar food companies in recent months.”

Shares fell 6.4% to $22.26 in premarket trading Thursday. Futures tracking the benchmark S&P 500 rose slightly.

(TLDR: one can choose to be depressed over something that he can’t change or he can try and look around the corner)

In the past week, there has been several articles on this hot and wet weather phenomena that is coming, this affects tropical countries most, and likely effect will be hotter temp and wreak wet and flooding as as dry and drought in all the wrong places.

So, if we are gonna be miserable due to an extended El Niño effect, let’s discuss about its impact.

Let me get the ball rolling:

1. In the USA, there will be less hurricane, by about half, so less payout for damages by Insurers, such as Berkshire Hathaway. ($BRK.b)

2. There is a higher chance that Corn and Soy yield will be more favourable. And this will be a net positive for egg producer Cal-Maine. ($calm)

3. Ice Cream. Seems obvious but perhaps Magnum ice cream (MICC)is a good choice either that or Hatsun Agro listed on the Bombay stock exchange. (When Wall’s ice cream retreated during the Magnum spin off, Arun ice cream moved into many neighbourhoods here in Asia).

Globally, El Niño will affect rice production and India will be forced to curb exports of rice. This will lead to rice inflation around the world. Rice is a direct component of cpi in Asia and developing countries. USA and Europe will be not be affected. The stocks Rice exporters in India will be hit, Thailand will benefit in the short term but they will have their own export ban as well.

(TLDR: comparison between the 1901 frenzy and the present day prediction market)

What a 125-Year-Old Bull Market Says About Today’s Trading Craze

Trading apps have replaced bucket shops, but Wall Street abounds with eerie parallels to 1901

By Jason Zweig
Aug. 28, 2026 at 9:00 am ET

https://www.wsj.com/finance/investing/what-a-125-year-old-bull-market-says-about-todays-trading-craze-59ee249e

Illustration of a bull weathervane, with the numbers 1901 and 2026 on the directionals.
ALEX NABAUM FOR WSJ
Is this seemingly unstoppable stock market starting to feel like 1999, when technology stocks went vertical on a wave of speculation? To me, it feels more like 1901.

No, I wasn’t around back then. But a look 125 years back in time shows that it was a remarkably similar period, with lessons for today. Gambling fever can burn longer and hotter than most people think—and then end faster than anyone can imagine. Those who refuse to play pay a high price in short-term opportunity cost, but win in the long run.

Some of the similarities are uncanny.

In 2026, fast trading is almost the norm, with more than 3 million daily trades in S&P 500 index option contracts that expire the same day. In 1901, the turnover rate on the New York Stock Exchange hit 319%, with the entire market capitalization effectively changing hands every 16 weeks—a velocity of trading that wouldn’t be exceeded for more than a century.

In 2026, prediction markets are all the rage, with traders betting on the short-term outcome of just about anything imaginable. In 1901, bucket shops were the hottest outlet for speculation, with people betting on whether the next tick in U.S. Leather or American Cotton Oil stock would be up or down.

In 2026, leveraged exchange-traded funds are booming, enabling traders to double or triple the daily returns on stocks or indexes. In 1901, speculators trading on margin, or borrowed money, eagerly leveraged their bets 10-fold or more. (Today, with perpetual futures, some people might even be able to leverage up to 100 to 1.)

The first lesson of 1901 is that speculative fever is hard to compartmentalize. Gambling in one area of your financial life tends to infect the rest.

The journalist and author Edwin Lefèvre—who later became famous for the book “Reminiscences of a Stock Operator”—published a collection of short fiction in 1901 called “Wall Street Stories.”

Intoxicated by “the wine of gambling,” one of Lefèvre’s characters no longer sees any difference between trading “50,000 shares of a stock” or betting “$50,000 on the turn of a card.” He even offers “to wager a fortune that he could guess which of two flies that had [landed] on a table would be the first to fly away.”

Have we progressed in 125 years? Nowadays, prediction markets let you bet on what bitcoin’s price will be 15 minutes from now or whether a football broadcaster will say the words “tush push” during the Super Bowl.

Then, as now, companies that inflamed the public’s urge to gamble cloaked themselves in the righteous robes of “democratization.”

One of the nation’s biggest bucket shops, the aptly named Haight & Freese, claimed that its annual “Guide to Investors” was “for the benefit of the million[sic] of busy people” who were seeking “a fair chance of securing a portion of the immense profits [from] the rapidly accumulating number and value of exchange securities.”

Yet bucket shops had nothing to do with investing, even though they shrewdly called their customers “investors.” All you could do was bet on a binary outcome: whether the next trade in a given stock would be up or down.

That made people feel they were participating in the capital markets—especially because they could trade with as little as $10 and leverage it, sometimes 30-fold or more. Brokerage firms at the New York Stock Exchange rarely accepted orders for less than 100 shares (which could run into the thousands of dollars) and generally had much tighter limits on margin.

Today’s prediction markets and trading apps pack a similar package into your phone.

The danger then, as now: Once speculation feels fun, it becomes potentially addictive. And that almost always ends in heartburn or heartache.

At the turn of the 20th century, a waiter made $100,000 (millions of dollars in today’s money) trading Brooklyn Rapid Transit Co. stock, noted a history of the NYSE in 1905—a profit, the writer wryly added, “which Wall Street took back at a later date.”

But the longer the good times roll, the more remote the day of reckoning feels. In 1901, the economy was booming. Financiers, led by J.P. Morgan, rolled up entire industries into “combinations” meant to limit competition, minimize price-cutting and maximize appeal to investors. Investors went ga-ga over industrial agglomerations for tin, oil, electric utilities, flour, furniture, copper, pottery, leather, borax, oatmeal, even coffins.

In 1901, U.S. Steel became the first billion-dollar company. It created the same sort of excitement among investors as SpaceX did in 2026 when it became the first initial public offering with a valuation of more than $1 trillion.

After rising 19% in 1900, the stock market rose another 20% in 1901 and 5% in 1902. Following a stumble in 1903, stocks soared again, returning 69% in the next three years.

Then, finally, came the devastating Panic of 1907, when the market crashed 30%, losing 10% in October alone.

Trust companies, the original “shadow banks,” had loaned buckets of money to risky businesses, real-estate speculators and stock traders. Bank runs ensued as depositors feared that dodgy trusts would go bust. It was one of the worst financial disasters in American history, leading to the creation of the Federal Reserve.

I’m not saying you should sell everything and sit out this bull market. But remember this: The few people who had remained calm and remote from the frenzy of the early 1900s emerged stronger.

Hetty Green, perhaps the first and among the greatest of all long-term investors, had lived stubbornly by her motto: “Never speculate in Wall Street.” In 1908 she recalled: “When the crash came I had money, and I was one of the very few who really had it. The others had their ‘securities’ and their ‘values.’ I had the cash, and they had to come to me.”

Attached is a DCF template that i used to value the hyperscalers.I am just sharing it here in case anyone wants to experiment with it.

https://docs.google.com/spreadsheets/d/1oexuOkRTpnQCPWyQDTiE-Z2OEihBfci6FLysPJIysR4/edit?usp=sharing

Please read the notes in the Google Sheet tab. I have listed down the assumptions:

Notes on the valuation 

Purpose: i try to have a standard template across MSFT, META and GOOGL 

And i try to keep the number of moving parts small. 

And as new information come online, i will modify the assumptions

The thing about valuation, almost nobody will agree with me on the assumptions. So do change it yourself as you see fit. 

Areas of contention: WACC, Terminal Growth rate vs Terminal multiple, composition of debt etc

High level assumptions 

1. The duration of abnormal growth is 10 years. All three companies exhibit evidence of a moat, each have strong competitive advantage for many years. Normally for tech companies, i would use a 5 year duration, however for MSFT-META-GOOGL i think they are in a a strong position to do really well and i use a 10 year duration. 
2. The discount rate is 9% and terminal growth is 3%
3. Formula of Free Cash Flow FCFF = NOPAT + D&A – CAPEX – Δ Net WC
4. We assume the following to be stable unless specified differently:

EBIT margin 
Capex / Revenue  Unless FADE 
Tax Rate 

1. Long live assets vs Short lived assets

 

For MSFT, it is suggested that ⅔ are short lived assets depreciated over 6 years 
For META and GOOGLE, 75% is the ratio for short lived assets
For META, they specified 5.5 years but i round it to 6 as with Google
For long lived assets they depreciate over 15 to 25 years. 

Specific Tabs

For each company there are 4 valuation tabs drawing the assumptions off the assumption tabs

FLAT means that 1 dollar of capex generate a fix amount of revenue. This means that capex/revenue is quite fixed. Management does not seek to optimise efficiency. This is the opposite of the Tab labelled “FADE” where there are efficiency implied. For example Capex/Sales could start at 45.5% and overtime, due to efficiency, capex fades to 25% of sales in 10 years. 

There are two additional tabs, one is FLAT Escalating, and FADE escalating. In theory, over the long term at the terminal stage, Capex = D&A you a bit like maintenance capex. However, it is suggested that some companies with continue to outspend capex over D&A over the long term even in the terminal stage. 

I thought i would include all 4 tabs for each company, because depending on the company, management discipline, and CFO’s ability to manage finance, you can use the appropriate tabs. 

For example, MSFT’s CFO is famous for being very disciplined and executing on her plans. It is likely that MSFT Capex behavior will fall under the “FADE” tab, where capex/sales will fade from 45.5 to 25%. 

As for Google, my wager is that the company will “fade” as well since they have their own TPU and will continue to improve the efficiencies but I think they will be very hypercompetitive and try and outspend in order to win, hence i believe “Fade Escalation” is more appropriate. 

As for Meta, they have demonstrated that they like to overspend like a drunken sailor, just looked at how they spent 100bn in Reality Labs since 2020. So even though they do not have a cloud business for business customers, i think MZ will continue to spend on capex. I think the most appropriate tab is “FLAT escalation” 

In terms of the formula between no escalation and escalation, the calculation is different. 

In terms of Revenue growth rates, i purposely did not choose a wildly high growth rate, i looked at the past years growth, the next 5 years expected growth rates, the log liner analysis etc. And i just used my judgement. ShaunSheep went through my assumptions and felt that my year 10 target revenue growth rates are too pessimistic. I am sticking to my guns, that if i guide conservatively and the valuation numbers are still higher than the current share price then perhaps the company is undervalued. 

The biggest issue i faced was calculating debt. Where possible i took a conservative calculator of bonds, finance leases and operating leases. I used AI to check for me on the nos. 

( well this post is not written by Ai obviously, I am just being cheeky)

What are some issues with using Ai for research?

Here are my top three peeves:

(1) Agents have problems remembering things if your session is too long. You have better memory than Agents. The AI agents don’t flag that they can’t remember, they just make some assumptions, which means that you need to check their work.

Example, my very long session spanned across this whole week (pinned and revisited multiple times). The agent was initially very enthusiastic but it kept forgetting how to calculate the total debt (of a company) that we had agreed upon days earlier and kept giving me the old data and I had to keep reminding it.

(2) Claude isn’t that great at scouring the news yet. Like when a stock dropped for no-reason and I asked the agent if anything significant happened during the 24hours or this past week. It gave me a “nothing happened” reply, however when I asked Meta, it was able to quickly tell me there was a strike at a plant. So while Gemini and Meta aren’t exactly “CFA certified” unlike Claude, Claude isn’t that good at being aware of what’s going on.

(3) Like people, Ai agents have issues with working in ranges. Eg. If under one assumption, the fair value is A and under another, the value is B. It will attempt to figure out which one assumption is correct and then provide you with the “correct” answer. But sometimes, especially when it comes to the future, things aren’t really known, so it is better to say that the range of fair value is from A-B depending on how management reacts or how the business will turn out.

Etc. if Claude can’t access the 8-k from the Edgar database, it may conclude that the data isn’t filed yet in Edgar yet instead of it being blocked by Edgar.

Well I am aware that these problems will eventually be fixed, maybe that is AGi or maybe that is where the outsides Capex from the hyperscalers are going to.

What are your pet peeves besides reading long posts which are obviously written by Ai but the OP insists that Ai was used for “grammar” only ?

—-

Bonus question: do your agents have names and personalities? Lucy Diamonds is like one of my aunties, absent minded but nice, not the sharpest pencil around. Bruce DD is the Ai agent that nobody uses but is surprising quite spritely. Shaun the electric Sheep is the smartest agent but probably gives the same answer to everyone. And now lags in its responses because everyone is using it.

No paywall.

Following his death, Luo's family reportedly asked for compensation because the incident happened at Xiao's business.

They also threatened to place the body outside the card room if she did not pay, according to her son.

Xiao suffered discomfort, insomnia, and a loss of appetite as a result of the incident, her son added. The business also had to be closed temporarily.

What a 1980s Client and 3 Shares of Berkshire Hathaway Taught This Merrill Veteran About Value

https://www.barrons.com/advisor/articles/berkshire-hathaway-investing-buffett-lessons-0d4dde7a

By James Patrick Rooney

Aug 27, 2026 4:33 pm EDT

“Bull markets are born on pessimism, grow on skepticism, mature on optimism, and die on euphoria.” —John Templeton

In my 34 years as a broker and wealth advisor at Merrill Lynch in the Palm Beach market, and in nearly a decade as a retired market observer, I have yet to find a better encapsulation of how the collective emotional behavior of investors conspires to drive stock market valuations.

Of course, the length of each market stage is unknowable, as is the transitional moment from one to the next, particularly the end of the euphoria—or maximum greed, as I call it—stage. But I’ve seen investors with a heightened awareness of Templeton’s four stages and the willpower and courage to swim against the tide become the biggest market winners.

For me, one stands out. You may have heard of him.

In the mid-1980s, a client stopped by my office at Merrill Lynch in North Palm Beach wanting to buy Christmas gifts for her three grandchildren: one share of stock for each in a company I’d never heard of called Berkshire Hathaway.

Whoopee, break out the Champagne, I thought. (A little snarky, sure, but back then I wasn’t in a position to work pro bono.) I punched in the stock symbol and saw Berkshire Hathaway was trading in the neighborhood of $2,000 per share. I did a double take and asked, “Why would you pay that much for one share of any company?” My client explained that she had grown up in Omaha, Neb., so she knew the company pretty well. “The CEO’s name is Warren Buffett,” she said. “He’s become a bit of a local legend.”

“Cigar butts” and Cherry Coke. The client—I’ll call her Mrs. Omaha—was an unusually thoughtful, measured, and friendly person, so I enjoyed our opportunities to chat, even when she was buying three shares of some overpriced insurance company for her spoiled-rotten grandchildren. She told me that Buffett attended Columbia Business School to study under legendary value investor Benjamin Graham, graduating with a master’s in economics in 1951 and eventually acquiring a nearly bankrupt company in New England’s failing textile industry.

By the time I was sitting with Mrs. Omaha, Buffett had effectively remade Berkshire into a value-oriented holding company with a primary focus on insurance. With the steady cash flowing in from premiums, Buffett bought Midwestern consumer-related businesses he understood (“cigar butts,” Professor Graham called them); took positions in public companies he perceived as long-term compounders, such as Coca-Cola and American Express; and later bought entire companies outright including Geico, Duracell and BNSF Railway. Buffett took no salary, instead paying himself with shares of Berkshire’s stock.

In the five or so years since the company’s 1980 IPO, the stock had risen nearly tenfold from its opening price. Yet this extraordinarily ordinary man lived in the home he grew up in, drove inexpensive American cars, ate at McDonald’s, and drank Coke and Cherry Coke like it was water. Great diet, I thought. This guy won’t be around long. “Don’t you think it might be a little late to buy in now,” I asked Mrs. Omaha. She chuckled and said, “No, Jim, I think the man’s a genius, and he’s only just beginning.”

So I bought three shares of stock in certificate form for Santa to put into the grandchildren’ Christmas stockings. My commission was a few hundred dollars, and that was that. Mrs. Omaha was off to the tennis courts, and I was back to the damn telephone. (If the grandchildren held on to those three shares of stock, they would be worth a total of about $2.3 million today.)

Market winter approaching? Four decades later, we’re in another bull market. Our yo-yo markets have been recording all-time highs of late based on remarkably strong corporate earnings reports, while fluctuating broadly on the daily news flowing (or not flowing) from the Strait of Hormuz.

Going by Templeton’s market-cycle aphorism, it appears we are somewhere between maturing on optimism and dying on euphoria. Think of it as a splendid late fall day when the air is crisp and the colors of the forest’s leaves are most glorious, a clear foreshadowing of the coming winter. Reflecting back to the dot-com boom and bust that marked the turn of the century, while acknowledging the vast upgrade in the quality of today’s leading tech companies, market seers are asking whether we will have an extended fall season or whether the leaves are about to tumble to the ground.

We will all know the answer a couple of years from now. Meanwhile, a majority of investors should consider paring back the equity portfolio here and there while looking to more reasonably valued growth stocks. With the “Buffett Indicator” (U.S. Wilshire 5000 index divided by gross domestic product) standing at a record high valuation, it feels like the right season to be storing away a few acorns and chestnuts, i.e., cash and short-term instruments, to stay safe and well-nourished for the inevitable turn of the season.

As for Warren Buffett, who will turn 96 this weekend, he retains his superior cognitive abilities and is among the richest human beings on the planet. We can only surmise that eating at McDonald’s every day and drinking copious amounts of Cherry Coke is the way to go.

James Patrick Rooney, a retired Merrill first vice president and senior wealth management advisor.
James Patrick Rooney, a retired Merrill first vice president and senior wealth management advisor.
James Patrick Rooney is a 34-year wealth management veteran and retired Merrill first vice president and senior wealth management advisor. His memoir, “For the Love of Money: Four Dizzying Decades Riding the Merrill Lynch Bull” will be published in September.

Editor’s note: Guest commentaries like this one are written by authors outside the Barron’s Advisor newsroom. They reflect the perspective and opinions of the authors.

Key Points

- Quantum computing companies are expanding in Asia amid growing competition from China and geopolitical tensions.

- China is prioritizing quantum technology through its latest Five-Year Plan and a cybersecurity action plan to achieve technological leadership.

- Countries like Singapore, Japan and South Korea are investing heavily in quantum ecosystems and partnering with global tech firms.

Quote from article:

Singapore has emerged as a key player since presenting its National Quantum Strategy in 2024. The country has committed $37 billion through 2030 to fuel critical technology sectors, with Prime Minister Lawrence Wong positioning quantum as a central pillar of the nation’s future.

The momentum goes both ways, as domestic companies take their innovations to the global stage. Horizon Quantum went public through a blank-check merger in March and operates as a play on software, developing compilers and tools to bridge classical code to quantum hardware.

“The government made a decision to invest in quantum technologies back in 2007,” CEO Joe Fitzsimons said in an interview with Barron’s. “So there’s a good ecosystem and there’s certainly a lot of top-down support for quantum computing in Singapore. You see it across different government agencies, too.”

Fitzsimons, formerly a professor at the Singapore University of Technology and Design, moved to the country in 2010 to establish a research group. “There are a couple of other quantum companies in Singapore, but on the compute side, we’re probably the most mature,” he said. “You also have companies like Speqtral that are in quantum communications, operating satellites.”

Freshly public Quantinuum is also expanding its footprint in Singapore, selecting the country as the first location outside the U.S. to host its Helios quantum computer. The company’s ties to the national government have only deepened since establishing roots in 2025 through a strategic partnership with Singapore’s National Quantum Office.

“If you look at where the business is, it isn’t just the U.S.—we sell worldwide,” CEO Rajeeb Hazra toldBarron’s. “Look at Japan, look at Singapore, look at Qatar, look at the U.K. These are all center points of vibrant quantum ecosystems.”

——-end quote

The World’s Craziest Stock Market Has Turned Into a Fright Ride

A slow-motion collapse in South Korea’s Kospi index erased $2.5 trillion in market value, burning investors who bet on the AI boom

https://www.wsj.com/finance/stocks/stock-market-crash-south-korea-ai-ccb00cba

Dealers working at the Hana Bank in Seoul during one of the days the Kospi was falling last month. JEON HEON-KYUN/EPA/SHUTTERSTOCK
By Jiyoung Sohn, Sooyoung Rhee and Jack Pitcher

Aug. 24, 2026 at 9:00 pm ET

SEOUL—South Korea had the world’s hottest stock market for most of the past year, powered by the artificial intelligence boom. Then it crashed.

Yoon Jae-Yi, a 30-year-old English teacher, lost $19,000. She has since cut her living expenses—fewer taxi rides, less travel. Skipping meals, she tells herself, doubles as a diet.

South Korea, which introduced Squid Game and K-Pop, now hosts the world’s craziest stock market, showcasing a stomach-churning volatility not seen in major markets in years. The benchmark Kospi index more than tripled in value, driven by faith in the AI boom. Two South Korean companies, memory-chip makers Samsung Electronics and SK Hynix, soared to trillion-dollar valuations and became the twin forces pushing record market gains.

Then the Kospi plummeted around 40% over six weeks in June and July, burning hundreds of thousands of investors—a sober warning to those betting big on the AI industry. The roller-coaster ride has continued: The Kospi has since rebounded about 20% from its low.
“The volatility is just too severe. This isn’t sound investing. It’s a gambling table, a casino,” said 68-year-old Jung Eui-jung, who heads the Korea Stockholders’ Alliance, a group representing the country’s roughly 14 million individual investors.

The Kospi’s six-week collapse erased roughly $2.5 trillion in market value. The pain fell hardest on South Korea’s individual investors, who account for 60% to 70% of the Kospi’s daily trading volume. They are known as ants—weak individually but capable of collective power—and fed the market with a deep faith in Samsung and SK Hynix, companies that dominate production of two leading types of memory chips to help train and operate AI systems.

The market fall was preceded by the introduction in May of South Korea’s first single-stock leveraged exchange-traded funds, or ETFs. Using financial tools such as debt and derivatives, these ETFs enabled ant investors to double their bets on Samsung and SK Hynix. That meant that if one of the stocks went up 5% in a day, the leveraged ETF would rise by 10%. On the downside, if the stock fell 5%, the ETF would fall 10%.

The ants now blame South Korean President Lee Jae Myung’s administration for loosening regulations to allow such potentially lucrative, high-risk funds. His government has since put in place stricter rules around trading the ETFs with the aim of helping curb market volatility.

A group of individual investors sent mourning wreaths to the country’s National Assembly that carried messages promising revenge at the ballot box, as well as an urgent plea: “Ants being slaughtered—National Assembly, respond.”

The presidential office said the South Korean government has been making an all-out effort to manage the market’s volatility, including through the new trading rules.

The market fallout stretched to the U.S., where bets on South Korean chip stocks likely contributed to July losses of some 67% at Situational Awareness, an AI-focused hedge fund. The hedge fund liquidated most of its public equities portfolio to repay lenders. Situational Awareness had held a large position in the Korea-listed shares of SK Hynix, The Wall Street Journal reported.

Yoon Kyung-min, a 44-year-old sound engineer, said he still can’t believe the financial disaster of the past two months. After quitting his job, he had invested half of his severance pay into semiconductor stocks and saw $7,200 evaporate in a week.

“If my wife finds out, I will be in serious trouble,” said Yoon, who says he confessed only to a bit of bad luck without giving details.

Yoon thought the market “would rise forever,” he said.

Presidential push

President Lee, a self-described ant, talked up his stockholdings on the campaign trail last year and pledged to nearly double the Kospi to a record 5,000 points by 2030.

After becoming president in June 2025, Lee accelerated capital market reforms aimed at propping up share prices. The push coincided with rising global excitement about AI and the prospects for Samsung and SK Hynix. Memory-chip prices grew sharply in the past year, with demand far outstripping supply.

The Kospi was the world’s top-performing stock market in 2025, with a 76% gain. The surge made South Korea the world’s 5th-largest market by market capitalization, moving from 13th place a year earlier and surpassing the U.K. and France. By mid-2026, Samsung and SK Hynix accounted for more than 50% of the exchange’s value.

More ordinary Korean investors joined the frenzy, including stay-at-home mothers, students and retirees cashing in their pensions. Many newcomers became stock-rich almost overnight. Margin loan balances rose by $7.9 billion to $27.1 billion in six months, as more investors tried to boost returns.

The boom drew the attention of U.S. investors. At the start of the memory chip supercycle last year, neither Samsung nor SK Hynix traded on U.S. exchanges. That meant most Americans with domestic brokerage accounts had no way to buy the stocks directly. In May, Interactive Brokers became the first major U.S.-based brokerage to offer direct trading in Korean equities, a spokeswoman said.

Around the same time, a little-known asset manager called Roundhill Investments launched an ETF, known by the ticker DRAM, that focused on memory manufacturers. It offered any American with a major brokerage account access to Samsung and SK Hynix, which together composed almost half the fund’s value.

Within weeks, DRAM became the most successful ETF launch in U.S. history, in terms of attracting new investor money. The record demand surprised the ETF industry, which is dominated by such financial behemoths as BlackRock and Vanguard Group.

Rather than selling through a network of financial advisers, DRAM attracted individuals who heard about the ETF on social media and institutional traders, Roundhill Chief Executive Dave Mazza said in an interview.

Fomo

South Korea rolled out its new leveraged ETFs in May, teeing up the precipitous fall.

ETFs typically act as baskets for various assets, such as stocks in multiple firms. The newer ETFs, however, were designed to hold shares in just a single company and allowed investors to pile on additional leverage that magnified gains or losses.

South Korea had previously allowed leveraged ETFs that tracked multiple firms or the broader Kospi index. Rules intended to shield investors from compounded losses banned single-stock leveraged ETFs.

Supporters of the rule change cited single-stock leveraged ETFs in other major markets, including the U.S., saying they would encourage more investors to trade such ETFs and keep their capital in South Korea.

When the products launched on May 27, demand was so high that the website crashed for days from excessive traffic. By June, the Kospi crossed 9,000 points, more than three times its 2025 level.

Then concerns over the strength of AI demand and encroaching Chinese competition punctured the semiconductor rally. Many individual investors, like Jake Cheong, a 30-year-old accountant in Seoul, got hung out to dry.

Cheong said he had never been big on stocks. He made small investments, mostly in conservative U.S. index funds. In the early stages of the chip rally, he cautioned friends and co-workers, convinced that unquestioned faith in skyrocketing South Korean shares would end in tears when the fall came.

In June, he decided the market surge was too good to pass up as a short-term investment. Cheong scooped up around $21,000 worth of SK Hynix shares, using a significant chunk of his savings. Less than three weeks later, the stock had jumped by 40%, and he cashed out.

SK Hynix planned to list on the Nasdaq via American depositary receipts, a move Cheong believed would help keep the firm’s South Korean-listed shares elevated for longer. He invested $29,000 or so into a leveraged ETF tracking the firm. The added leverage meant that if SK Hynix’s stock fell, Cheong’s losses would be compounded. Then came the crash.

As of Friday, his position has fallen 69% to roughly $9,000.

“My hard rule used to be that when too many people seem to be boasting about their stock gains, we’ve probably hit the peak,” Cheong said. “But FOMO got the better of me.”

‘All a dream’

Lee Ka-young, a 25-year-old software developer, said she lost all the money she made when stocks soared this year.

She started investing in December, when her first paycheck from a new job left her convinced she would never earn enough to buy a home. She seeded a trading account with around $14,000 from her savings and crypto gains. Lee invested all of it into SK Hynix and, later, into single-stock leveraged ETFs.

She started her own Instagram account to document her ride to riches. By May, her account was up more than 58%, and her posts had drawn an average of 4 million views a month.

When the market started to turn, Lee held firm, looking for a rebound.

“I got greedy,” Lee said. “I kept thinking, what if it climbed even higher after I cashed out?”

Her holdings are now worth 5% less than when she started in December. Her investments multiplied so fast—and vanished so quickly—it felt “like it was all a dream,” Lee said.

Some investors shrug off the volatility of what some call the “Rollerkospi.” Jonathan Pines, head of Asia at Federated Hermes, a U.S.-based asset manager, said the firm plays the long game with South Korean memory stocks. Given that elevated earnings in those stocks are expected to hold up for the next two years, he said, investors will eventually recoup most of their initial outlays.

South Korea’s president has suffered political losses in the past two months. Lee’s approval rating fell to 43.3% during that time, the lowest level since he took office in June last year.

Members of the country’s main opposition party have called for inquiries into the ruling party’s handling of the market turmoil. Presidential chief of staff for policy Kim Yong-beom, who once proclaimed that Korea “should be capable of doing what the U.S. stock market does,” faces a criminal complaint filed by an opposition party member alleging he improperly pressured regulators to approve single-stock leveraged products. He denies the allegations.

South Korean regulators recently rolled out a series of emergency measures to rein in volatility. Approval of new single-stock leveraged products has been put on hold, and a mandatory cash deposit required to trade them was tripled to roughly $21,000. Authorities also expanded a mandatory online training course for individual investors that explains the risks and tracks mock investments through hours of trading exercises.

The Kospi 200 volatility index—a gauge of market risk and investor sentiment—fell to 56.76 on Monday from 86.18 on July 30, according to the Korea Exchange.

Jung, the Korea Stockholders’ Alliance head, still wants regulators to delist the single-stock leveraged ETFs and devise rescue measures for individual investors who suffered deep losses.

At a recent legislative debate in Seoul, he called for a moment of silence for South Korean individual investors. “To return to a normal investing environment, the government must not sit back,” he said. “Major surgery is needed.”

Original link: https://www.barrons.com/articles/chipotle-taco-bell-yum-stock-cyclospora-jalapenos-f89f08e5Chipotle and Yum! Look Like Bargains After Food-Safety Selloff

The two chains have been performing strongly, and the scares should have a temporary effect on sales.

By Evie Liu

Follow

Updated Aug 21, 2026, 2:04 pm EDT / Original Aug 20, 2026, 12:50 pm EDT

Key Points

About This Summary

• Chipotle and Yum! Brands have faced stock declines and traffic drops following recent food-safety scares linked to jalapeños and iceberg lettuce.
• Taco Bell visits fell nearly 20% below normal levels in mid-July, while Chipotle traffic dropped 7% on July 17 during the lettuce outbreak.
• Analysts and early data suggest the outbreaks represent temporary supply-chain shocks rather than long-term brand crises for the companies.

Restaurant investors have been reminded twice this summer that a food-safety scare can erase months of gains in a matter of days. Chipotle Mexican Grill was caught up in a salmonella outbreak tied to jalapeños, while Yum! Brands’ Taco Bell was linked to a much larger cyclospora outbreak involving iceberg lettuce.

Both stocks have been punished. Yet the episodes look more like temporary supply-chain shocks than the kind of brand crisis that devastated Chipotle a decade ago. Both companies entered the food-safety scares with improving businesses, and Wall Street remains high on them. That makes Chipotle and Yum! shares interesting at current prices.

To be sure, the recent outbreaks have hurt foot traffic at affected chains. According to Placer.ai, Taco Bell visits were nearly 20% below 2026’s normal levels during the weeks from July 13 to July 26, while Chipotle’s traffic was down 7% from normal levels on July 17—even though the chain wasn’t implicated in the lettuce outbreak.

Investors reacted quickly. Chipotle shares dropped nearly 10% on Aug. 4, when its connection to the jalapeño investigation became public, while Yum! shares lost 8.5% during the week when Taco Bell became the focus of the cyclospora probe. Both stocks have since stayed around those levels.

The selloffs are notable because both companies had just posted strong quarterly results. Chipotle’s revenue rose 9.3% in the second quarter, while comparable sales increased 2.2%. That was an acceleration from 0.5% growth in the first quarter. The company also raised its full-year outlook, although margins slipped because of higher beef, freight, and labor costs.

Yum’s results were stronger still. Taco Bell led the way, with global same-store sales rising 7% and system sales up 9%. KFC posted 2% same-store-sales growth and 6% system-sales growth. Pizza Hut remained the laggard, but Yum! has agreed to sell the business for about $2.7 billion. Yum’s adjusted earnings rose 12% in the second quarter.

Food-safety fears clearly disrupted that momentum, but early evidence suggests the worst of the initial customer pullback may already have passed.

On Yum’s July 30 earnings call, management said Taco Bell’s U.S. same-store sales were down 2% quarter-to-date through July 27, after the food-safety scare sharply weighed on sales in mid-July. Management added that consumer sentiment was improving and sales declines had moderated. Although visits to Taco Bell were still 4.5% below the 2026 average during the week from Aug. 10 to Aug. 16, it is a substantial recovery from the 20% shortfall three weeks earlier, according to Placer.ai.

Chipotle said on its July 29 earnings call that the cyclospora scare had reduced late-July sales trends by two percentage points even though the company isn’t linked to the outbreak. Management hasn’t quantified the impact of the salmonella connection yet. But Placer.ai data suggest that traffic for the week from Aug. 10 to Aug. 16 was actually 2% above the 2026 average.

Investors still remember the scars from Chipotle’s 2015 food-safety crisis. The stock ultimately lost roughly half its value during the prolonged fallout and didn’t surpass its pre-crisis 2015 high until July 2019—nearly four years later. That doesn’t mean the same thing will happen this time.

In 2015, E. coli cases appeared at Chipotle restaurants across numerous states, investigators couldn’t identify the contaminated ingredient, and another norovirus outbreak followed in December. The uncertainty undermined confidence in the chain’s broader food-safety controls, and severely damaged customer perceptions of the chain and sales throughout 2016.

In contrast, the salmonella outbreak appears to be a contained supplier incident rather than a problem unique to Chipotle’s food-handling practices. Regulators have identified an outside supplier and a specific ingredient, and Chipotle replaced the peppers before its connection became national news. That provides a clear endpoint that the 2015 crisis lacked.

Wall Street appears to see the distinction. Of analysts tracked by FactSet, more than 70% rate Chipotle stock as Buy or Overweight, with an average price target of $44, roughly 29% above Wednesday’s close. Yum! has a Hold consensus, but its average target of $175 also implies about 21% upside.

TD Cowen’s Andrew Charles doesn’t see the salmonella episode as a lasting brand problem for Chipotle. “We argue that the small, contained impact and health reports that Chipotle is safe to eat will not dent 2027 average unit volumes,” he wrote in a research note in early August, noting that recent food-safety incidents have proved to have a short-term impact, likely due to consumers’ shortened attention spans on social media.

William Blair analyst Sharon Zackfia also argued the episode doesn’t reflect a breakdown in Chipotle’s health and safety protocols. “History has repeatedly shown that the sales impact of food-borne illness tends to be fleeting for restaurants,” she wrote, emphasizing her confidence in the chain’s other growth drivers such as menu innovation and the relaunch of its rewards program.

For Taco Bell, Charles expects the cyclospora outbreak to drag same-store sales to a 3% year-over-year decline this quarter before they return to 3% growth in the fourth quarter. He has kept the Buy rating for Yum! stock and $180 price target, expecting Taco Bell’s prior momentum to return once the publicity fades.

Food-safety scares are frightening because investors can’t predict them. But for Chipotle and Yum!, their travails appear short-lived, and they offer a buying opportunity for investors.