Is It Different This Time?

I have just entered my 55th year in the investment business. I love it now as much as, or even more than, ever; I am remarkably lucky. Naturally, I have seen tremendous changes over the years, especially now with the AI boom. In this newsletter, I will address the question on many investors’ minds: IS IT DIFFERENT THIS TIME? Investment fundamentals have not changed over the years; what has changed is the sheer number of major corporations experiencing dramatic price reactions, both positive and negative, to earnings news.  

Certainly, the 2026 reactions have been more pronounced than those of the past five years. Both surprise earnings gains and disappointing results are now met with outsized daily price swings. I have witnessed these types of reactions before, but they feel more concentrated now than ever. What does not change are the fundamentals and the disciplined approach we bring to every market environment.  

The basis of investing, one that every successful investment advisor must keep in mind, is a long-term approach. As Warren Buffet famously put it, “the stock market is a device for transferring money from the impatient to the patient.”  

Fear and Greed  

Wall Street has long been shaped by investors swinging between excessive fear and excessive greed. Successful investing requires patience, discipline, and emotional control. In the words of John Templeton, “the four most dangerous words in investing are, ‘THIS TIME IT’S DIFFERENT.’”
  

Value and Obtaining Value
  

Most shoppers see a sale as a chance to earn value for their dollar — items on sale fly off the shelves. Benjamin Graham captured the investing parallel well: "the intelligent investor is a realist who sells to optimists and buys from pessimists.”
  

Understanding Market Psychology
  

Simply put, most major swings I have witnessed in my career occurred when many optimists became overly optimistic or pessimists overly pessimistic. As Peter Lynch said, “the trick is not to learn to trust your gut, but rather to discipline yourself to ignore it.”
  

We All Make Mistakes  

It isn’t avoiding mistakes that lead to successful investment results; it’s managing them. George Soros says, “it’s not whether you’re right or wrong, but how much money you make when you’re right and how much you lose when you’re wrong.”  

At BBPWM, we find it helpful to follow Wall Street projections for the S&P 500, but only as a guide. In our annual January newsletter, we listed projections for the year ahead. As 2026 progressed, what has changed? One of the most bullish outlooks for the rest of the year comes from a research expert I have worked with for many years, Ed Yardeni. His firm, Yardeni Research, recently raised its year-end S&P 500 target from an initial 8,100 up to 8,250. For reference, the S&P 500 is currently trading around 7,350. The rationale behind these ultra-bullish views centers on what many strategists deem Phase 2 of the AI buildout. I believe the major AI-driven transformation of large companies is already underway, and that AI will meaningfully reduce operating costs across many sectors of the economy. This should translate into higher earnings per share and productivity gains for many blue-chip companies, ultimately strengthening industries over the long run.  

Not every firm shares the same outlook. Bank of America has maintained a more cautious year-end target of 7,100, citing concerns that today's market valuations leave less room for disappointing earnings results. As aforementioned, disappointments have been met with sharp price reactions this year.  

Our investment approach continues to balance downside protection with upside potential. We believe the coming years will bring continued growth in corporate earnings, and we aim to capture that upside by seizing opportunities as they arise. Active management allows us to stay invested for the long term, where patience is typically rewarded. Diversification across asset classes remains critical, and a steady focus on fundamentals continues to guide how we navigate risk.  

Finally, I would like to personally thank each and every one of our clients for the trust you have placed in us over these many years.  

I am humbled that many families have remained clients for multiple generations. In fact, one of our recent interns was the great-grandson of one of my very first clients. Moments like that remind me that our work is about far more than investments. It's about relationships, trust, and helping families pursue their financial goals across generations.  

As our nation celebrates its 250th anniversary, I remain optimistic about America's future, the resilience of our economy, and the opportunities that disciplined, long-term investing can continue to provide.  

I wish you and your families a happy, healthy Fourth of July.