- Quality long-short rose about 6% while equal-weighted S&P 500 fell nearly 4% since mid-August; earnings-revision spread reached 10 percentage points, yet forward P/E is 1.02x historical median.
- Higher rates, dollar strength, and energy costs have made financial conditions tightest since 2022, favoring profitable companies that can defend margins and cash flow.
- Wilson sees the three-month correction shifting from infrastructure to AI adopters, not ending the cycle; if Powell recognizes market tightening, rate-sensitive stocks could rebound, and he views the period as a chance to add risk.
- Weak early earnings reactions and elevated expectations are a caveat: 2026's projected 33% EPS growth includes substantial private-AI valuation gains, while 2027 growth is expected to broaden toward the S&P 493.
Investment pitches
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