I'm a Big Fan of the Moves These Investment Legends Have Been Making

"With the broad market starting to get just a bit more expensive, while the retail crowd digests a less-than-bullish report issued by Apollo, which suggests that the S&P 500 could be looking at 0% returns for the next decade, it certainly seems like it's time to think differently about how to put new money to work, especially as the AI revolution looks to enter more of a monetization phase."

"While I do think that the transformative technology could prove any sort of "lost decade" kinds of projections wrong, especially as mega AI IPOs like SpaceX, OpenAI, Anthropic, and more look to touch down on the public markets at some point over the next year or so, investors should always be mindful of the price of admission into the market as well as certain types of stocks."

"Any way you look at it, there's more than one big institution that's taming its return appetite for the decade ahead. And while I certainly wouldn't take drastic action on a prediction that may very well be underpricing the capabilities of AI and its ability to drive corporate earnings through the roof, I do think that staying the course and ensuring diversification are as important as ever, even though an investor in DRAM or NAND would probably want to go all-in on that red-hot corner of tech at the moment!"

"The great Li Lu, who was a friend of the late Charlie Munger, runs a concentrated portfolio over at Himalaya. The man only made one buy in the fourth quarter, and that was buying shares of footwear firm Crocs ( NASDAQ:CROX | CROX Price Prediction), a deep-value play that proved quite well-timed. The other move was a sell. But it is worth noting that Li Lu's fund didn't do anything in the quarter prior (Q3)."

The broad market is becoming more expensive while retail investors digest a less-than-bullish outlook suggesting flat returns for the next decade. Investors are encouraged to think differently about deploying new capital, especially as AI moves toward monetization. The possibility of a “lost decade” is questioned given AI’s potential to drive corporate earnings, including upcoming mega AI IPOs. Even so, investors should consider the price of admission and the types of stocks they hold. Some large institutions are reportedly tempering return expectations for the decade ahead. A value investor example is provided: Li Lu runs a concentrated portfolio, making only one buy in a quarter and one sell, with a prior quarter showing no activity.

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