Markets in 2025 started with a tariff tantrum that recovered and rallied the rest of the year. International markets shrugged off the tantrum quicker, rallied, and outpaced the US by a wide margin.

In addition, there was an AI Bubble, comparisons to the Dotcom Bubble, the return of SPACs, Bitcoin holding companies, private market funds for the masses, single stock levered ETFs, and more. A smorgasbord of speculative investments was introduced this year. Not unlike in 2020 and 2021. It didn’t turn out well then (It was brutal). Will this time be different? Time will tell.

With that, let’s get to the charts. Here’s how things started.

And how it’s ending.

Quotes for the Week

Before I came down to Wall Street in 1914 the future of the stock market had already been forecast — once for all — in the famous dictum of J.P. Morgan the elder: “It will fluctuate.” It is a safe prediction for me to make that, in future years as in the past, common stocks will advance too far and decline too far, and that investors, like speculators — and institutions, like individuals — will have their periods of enchantment and disenchantment with equities. — Ben Graham (source)

When disagreement and controversy exist, prices move slowly because buyers and sellers roughly offset each other. When, on the other hand, a consensus exists, prices move rapidly, because buyers can find no one to buy at current levels (and vice versa with sellers on the way down). — Peter Bernstein (source)

Quote for the Week

Understanding that we do not know the future is such a simple statement, but it’s so important. Investors do better where risk management is a conscious part of the process. Maximizing return is a strategy that makes sense only in very specific circumstances. In general, survival is the only road to riches. Let me say that again: Survival is the only road to riches. You should try to maximize return only if losses would not threaten your survival and if you have a compelling future need for the extra gains you might earn.

The riskiest moment is when you’re right. That’s when you’re in the most trouble, because you tend to overstay the good decisions. So, in many ways, it’s better not to be so right. That’s what diversification is for. It’s an explicit recognition of ignorance. And I view diversification not only as a survival strategy but as an aggressive strategy, because the next windfall might come from a surprising place. I want to make sure I’m exposed to it. Somebody once said that if you’re comfortable with everything you own, you’re not diversified…

Can you manage yourself in a bubble, and can you manage yourself on the other side? It’s very easy to say yes when you haven’t been there. But it’s very hot in that oven. And can you save your ego, as well as your wealth? I think I might have just said something important. Your wealth is like your children — the primary link between your present and the future. You should try to think about it in the same way. You want your children to have freedom but you also want them to be good people who can take care of themselves. You don’t want to blow it, because you don’t get a second chance. When you invest, it’s not your wealth today, but it’s your future that you’re really managing. — Peter Bernstein (source)

Quote for the Week

It is my memory that virtually every bull market has had its equivalent of an America Online and a Yahoo. Some of my nominees for historical Internet equivalents will probably shock those of you under 50 years of age. Believe it or not, the Yahoo and AOL of the mid-1950s were Superior Oil and Amerada Petroleum. The Magellan Fund of the day was a fund called One William Street managed by Lehman Brothers. Its phenomenal record in the 1950s rested largely on the fact that it had over 15% of its portfolio in Amerada Petroleum. The same phenomenon was seen again a decade later with Dreyfus Fund and its oversized commitment to Polaroid. The list goes on. In the 1960-61 bull market the darlings of the moment were in financial services. The stocks that you absolutely had to own were Kansas City Life, U.S. Life, Hugh W. Long and Hamilton Management. It’s hard to believe that mutual fund management stocks were really hot stocks 40 years ago…

1968 brought us the wildest IPO market I’ve ever seen until just lately. The darlings of the moment, of course, were the fast food companies. The stocks you absolutely had to own were Kentucky Fried Chicken and Denny’s. If you want to check out something close to a high water mark in foolishness, go back and look at Minnie Pearl’s Fried Chicken. The company went public on the basis of having sold thousands of franchises. It achieved a market value of about $400 million before quietly going out of business having actually having built only two or three chicken stands. On we go to the two tier market of 1972 where there were lots of stock you absolutely had to own, but the list included such notables as Avon and Polaroid that 27 years later are nowhere near their highs of 1972.

My point in all this is that the market is screwy most of the time. Today it is particularly screwy. — Robert Kirby 1999 (source)