2026年1月随笔杂谈

Today's podcast is my monthly ramblings for January 2026. These are the ramblings of a madman, so please see the full disclaimer at the end of the podcast. The ramblings today cover 5 different things: the state of the markets; the response to my Weird Markets podcast, or my theory of weird markets; investments that make me want to slap people; some quick thoughts on power laws in the markets and some pushback I've been thinking about; and something I think I've changed my mind on recently.

Vices are one thing I've changed my mind on. I'm going to talk about that change and how I think it could show some tail risk in different segments of the market.

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All right. Hello and welcome to the yet another value podcast. I'm your host Andrew Walker. With me today, I'm excited to have myself. Man, I almost forgot the intro and I was laughing at myself. I'm excited to have myself.

It is time for those of you who've been following the podcast for the past 2 years to hear my monthly random ramblings, where I hop on and ramble for 20 or 30 minutes about 3, 4, or 5 things happening in the markets or that I've been thinking about. They're just the ramblings of an increasingly madman. That brings me nicely to my next point: these are the ramblings of an increasingly madman, so nothing on this podcast is investing advice. I don't think I'm talking about any specific stocks today, but please feel free to see our legal disclaimer at the end of the podcast.

I started writing these and then I was just so excited to get this going, and I want to hit the gym at some point today, so I just put them on paper and haven't fully thought them through. But here are my 5 things. I want to talk about the state of the markets real quick. I want to talk about my response to the Weird Markets podcast that I did, for which I thank everyone who has given me feedback. I've gotten so much feedback and continue to get great feedback.

I want to talk about investments that make me want to slap some of my friends in the face. Then I want to give some quick thoughts on power laws in the markets and things that people change their minds on. So, with all that out of the way, let's dive in.

The first thing I want to talk about is the state of the markets. I'm recording this on January 22, 2026. Maybe it'll be lost in the footnote of history. Maybe it'll be the start of World War II. Who knows?

This week was marked by what happened at the end of last week, during Friday after-market hours. Trump really started going on and on about his threats to Greenland, saying he was going to tariff every country that was sending troops up to Greenland. I don't know the geopolitics, but he was going to tariff a whole bunch of U.S. allies because they weren't going to hand over Greenland.

That happened on Friday. On Tuesday, the market kind of opened down. I think it closed 1.5% down. It wasn't even that. By Wednesday, the market was ripping up as Trump backed off. Today, as I'm recording this close to the market close, the stock markets have just been on a face-ripping rally so far this month.

Aside from that one-day Greenland dip, the Russell is probably up 8%, 9%, maybe 10% on the month. The S&P is probably up 3%. I can pull that up and talk about it, but we're just in this face-ripping rally. I look at the Munger series, the Buffett series, all this sort of stuff. They really try to say, “Be fearful when others are greedy and greedy when others are fearful.”

I do feel like things are pretty stretched. I think it's kind of time when you want to be getting defensive. I'm getting some gray hairs on my head. I know that when things are euphoric is right before things can get weird.

The other thing I want to say is that, over the past year, there's been the TACO trade—the Trump Always Chickens Out trade. We had that in a big way with the tariffs in April, and we've had all sorts of things. I think that would extend to Greenland right now.

He literally threatens, “Hey, I'm going to use force. We're going to take Greenland,” which I think would be the start of World War II and certainly the end of the NATO alliance. I don't know if countries are going to war over us sending troops to Greenland or not. I have no clue. I'm not trying to play geopolitical strategist.

I would just say that when the TACO trade is the most popular bet, that's something to think about. I was texting with a friend over the weekend who said, “Markets are going to crash on Monday on this Greenland stuff.” I believe his term was, “There's no off-ramp.”

I was telling him, “Look, I think it's terrible, and markets were down, but I don't think anybody can say that down 1% is a crash.” Based on my feed and the strategy I see, everyone is betting on TACO. Everyone is betting that Trump chickens out. I get it, but where I'm trying to drive with this is that, at some point, you write a check and there is no taking it back.

I don't know when that point is, but you can get yourself into such hot water or do something so crazy that there's just no taking it back. Whether you actually send troops to Venezuela and things go crazy, or whatever it is, you can do that. A lot of these situations have you say something, then at some point try to reverse it. Maybe you can reverse it, but everybody's already changed their strategy.

Here's a good example: you say something crazy. You say, “We're going to take Greenland,” and 2 days later the response is terrible and the markets go crazy, so you say, “Never mind, we're not going to take Greenland.” But at some point, the damage is already going to be done.

The U.S. brand is going to suffer so much. People are going to actually follow through on dumping U.S. Treasuries. People are going to say, “We can't trust U.S. Treasuries.” You see this in emerging markets. It happens.

I guess what I'm saying is that I'm a little bit—I'm quite cautious on the markets right now. It just seems like everything's ripping to new highs. It's harder to find value. It's really low-quality stuff that's ripping and driving this market.

I would say I'm quite cautious on the geopolitical situation. I think this TACO trade that everybody is making—the moment it happens, the market goes from 100 to 98 when you say “Greenland,” and then it goes to 105 when you say, “We're not doing Greenland.” It's weird. You can drive the market even higher when you say, “Hey, we're not going to do this crazy thing.”

But at some point, there's going to be some crazy thing and it's not going to be walk-backable. Even if you can actually walk back the action, the damage to the brand and the damage to the sales are going to be done.

I'm starting to worry we're going to get there. When that happens, it's not that the market is down 3%; the market is down 20%. You have a geopolitical event, you have a financial crisis—something weird is going to happen. I'm worried we're getting there because these things are just getting so effing crazy.

Maybe—and look, maybe I'm making too much of it—but it does seem weird that you would have geopolitical headlines about taking Greenland by force. It's just so crazy, and then to give it up for kind of nothing. Okay, that was a true rambling on the state of the markets, but that's kind of how I feel.

I do think—and, again, I've got the gray hairs on my head—it feels tough when everything's ripping up and you're saying, "Hey, these are low-quality stocks that are ripping. Everything's ripping." What's the thing that happened with crypto? Everyone's getting rich but you. I've been through it enough times to know that you want to be on the other side and have the cash, because the washout comes at some point.

I'm not saying the market's going to crash or anything, but there's a lot of low-quality stuff that's just ripping nonstop. Okay, let's go to my second thing in response to weird markets. For those of you who didn't hear it, I did a podcast a week or 2 ago. It was what I called my "Working Theory of Weird Markets."

The crux of it is this: AI compute—the markets are getting so competitive. The AIs are getting so good. Traditional valuation mechanisms and traditional ways of winning are getting competed away, right? The only way to generate alpha going forward is going to be increasingly on the weirder and weirder side.

I got such great feedback and such great responses, so thank you to everyone who listened. Thank you to everyone who gave responses. I'm still working on the full post. There'll be a full text post at some point. It's hard to compile all those thoughts, just throwing them out on your own.

I just wanted to talk about a few things that people said in response that I thought maybe missed the mark, or that I thought were interesting but wanted to run through. All right, the 2 most common refrains were, "Hey, you know, if you bought the market in April 2025, at the absolute bottom of the Trump trade, markets are up 30% since then. How can you say markets are weird? How can you say you can't generate alpha?"

My response to that is easy, guys: you're literally describing the movement of the indices. You are describing beta. If the market goes up from now until the end of the year, whether it goes up 4% or 40%, that is beta. That is not alpha. Your pocketbook probably feels a lot better if it goes up 40% versus 4%, but that is beta.

Alpha would be, "Hey, I could see where this was going. I knew to short the market on March 1st. I need to cover the short on April 7th, and then reverse the short and go max long on April 7th, at the absolute bottom of the tariff trade." That would be alpha, right? That would be macro alpha. That would be trading it. There are other things you can point to, but just saying, "Hey, the market's gone up a heck of a lot in a short period of time" is absolutely not alpha. That's beta.

On a similar vein, a lot of the people who responded would say something along the lines of, "Hey, what about Facebook at the end of 2022, when it traded for $100 per share and Jim Cramer was crying on TV? What about JPMorgan in the spring of 2023, when it was trading for, I think, 8 or 9 times price-to-earnings?"

Those are more interesting, right? We're now talking about individual stocks, and individual stocks that have generated a heck of a lot of alpha versus the overall market. But, again, if you're going and cherry-picking a past example, that is not to say there couldn't have been alpha in the stock. You can't just cherry-pick a past example and say, "Hey, this stock worked out well."

You have to be able to say, "There was a systematic reason for the mispricing." If you were an active manager at the time and you loaded the boat on those, then yes, you generated alpha. But, again, just being able to cherry-pick one example—even if an investment manager did that—I don't think speaks to systematic mispricing in the markets. That's more what I was driving toward.

There is the single-stock piece of it, but I just think going and saying, "Hey, if you bought NVIDIA in early 2023, you did great," yes, that is true, but that does not speak to alpha. Maybe you were taking on crazy risks that you don't know about. We're living in the world where AI boomed. What if there was another world where ChatGPT came out in the summer of 2023, or late 2022, or whenever, and it was a complete bust?

What if you bought NVIDIA saying, "Hey, AI is here," and it turned out to be the metaverse all over again, right? People were really hyped about the metaverse for a while, and nobody ended up using it. There are other worlds to consider. Just because we're living in this world where NVIDIA did great, I don't know if that's the case. What if AI had been 3 years too soon?

Speaking of AI, the other feedback I got was that a lot of my weird-market theory rested on AI getting so good and the quant models getting so good that the competition is so high. For individual investors, it's increasingly hard to use fundamental models and say, "Hey, this is trading at 8 times price-to-earnings," and expect to generate alpha. I just don't think there's alpha there.

I got several people who said, "Hey, Andrew, you forget we can use AI, too, so we can generate alpha using AI." I think that's false. If you'll let me step into a sports metaphor, I'll tell you why.

Think about golf clubs and golf. Do you know why drivers are called woods? Drivers and other clubs used to be made out of big wooden heads. Now they're made out of graphite and carbon. They're so strong and so light, but they're still called woods.

You can't say, "Would me playing with modern woods be better than me playing with woods from 50 years ago?" Absolutely. I'm a terrible golfer, but I'm going to hit the ball farther and straighter, or whatever. But it is not alpha, because everyone else plays with modern woods.

It's similar to tennis rackets. You think about the pictures in the 1950s of people playing with little, tiny wooden rackets versus today, with the modern strings and everything. Yes, it's an advantage to have a modern racket versus an old racket, but everyone plays with a modern racket. So there is no edge to having the modern racket because everyone's playing with it.

That's where I'm going with AI, right? You can't say, "Hey, Andrew, individual investors can use AI, too." That is true, but there is no edge to something that everyone can use. AI as a tool cannot generate alpha.

Now, there can be an edge. I think I've used this analogy before: sometimes a specific tool amplifies or detracts from a talent. Maybe there is an edge where you're saying, "Hey, this specific individual investor is really good at reading management body language but really bad at the fundamentals, and there's another investor who's really bad at reading management body language but really good at the fundamentals."

Twenty years ago, the latter investor—who was good at fundamentals and bad at body language—might have had a big edge over the investor who was good at body language and bad at fundamentals, right? But today, if the fundamentals are getting neutralized by AI, the latter investor might be increasingly obsolete, whereas the body-language investor's skill set might actually be getting amplified by AI, which can make up for his weaker skills.

I guess where I'm driving is this: AI as a tool cannot generate alpha. You cannot say, "Hey, Andrew, everyone can use AI, so I can generate alpha." No, it's a tool. If you wanted to have a discussion about whether AI amplifies or detracts from the skills of specific investors, that's an interesting discussion to have. But I don't think it really affects or impacts my weird-market thesis, unless we wanted to start saying there are certain unique investors whom it makes better.

Yeah, I think I'm going to wrap it up there. Those are the 2 main points I wanted to hit. Again, it's still an evolving theory. I'd encourage you to go listen to that podcast. I'd love to get feedback on it. I'm still working on a big, big post on it that I'll probably post sometime in February, because writing is hard. Turns out writing is hard. Who knew?

Let me go to my third thing, and this is what I was laughing about when I said it: these are investments that make me want to slap people. I've literally never hit someone in my life, so I'm not actually saying I'm going to go physically slap someone.

It is mid- to late January right now, and I'm getting investor letters all the time. I get investor letters from friends, and I get investor letters from investors I know somewhat. Sometimes it's thanks to having a slightly larger-than-normal public presence. Sometimes I get investor letters from people I have no clue about.

I read a lot of these investor letters. Sometimes I'll read an investor letter and the person will be like, "Hey, I spent 8 years working at Coca-Cola, and then I ran a consumer packaged-goods company for a private equity firm for another 5 years. Then I launched the fund."

Four of my top 5 holdings are emerging consumer packaged-goods company 1, emerging consumer packaged-goods company 2, emerging consumer packaged-goods company 3, and emerging consumer packaged-goods company 4. My 5th holding is an oil company drilling for oil off the coast of Africa.

Obviously, that's an extreme example, but I think every investor—and I'm trying to be better at this—has a skill set and an edge. When I read these types of letters, I just want to go to that fund manager and be like, “Hey, man, you obviously have a skill set. You obviously have an edge—maybe not alpha—but you obviously have skill in this one specific area. Why do you feel the need to go outside and do this thing where you not only have no edge, but I think you might have negative edge?” Again, in my example, you're domestically CPG-focused and you're going into an emerging oil company. I think you're probably the sucker at the table.

I say that because it's a rambling, but it's also something I'm trying to hold myself to a little bit more, too. I look at a lot of companies, and I think in the past I've gotten in trouble when I've tried to use someone else's skill set and layer it onto mine, or someone else's thesis and layer it onto mine. I see a lot of people with unbelievable theses where they've done unbelievable due diligence. But when I've stretched, I guess—when you invest in something that somebody else has done great diligence on—one of the issues can be that you do confirmatory diligence rather than your own thinking and your own diligence. My history has been that when I've stepped outside of what I think is my core skill set—now, maybe I'm using the benefit of hindsight to say that was core and that wasn't—when I've stepped outside of my core skill set and invested in something where I think somebody's done great work, I'm excited, and my research and my thinking go more toward confirming what they're saying versus actually thinking through it, those have generally been my worst losses.

So this is rambling, but I guess what I'm trying to say is, if you see me investing in something and you're like, “Hey, that's not Andrew's core skill set,” you can call me out. One thing I'm trying to be better at when I'm talking to my friends—and it can be a little awkward—is being like, “Hey, man, you're buying an emerging offshore oil company. Is that really your skill set?” If that is your skill set, awesome. But for a lot of my friends, I don't think that's their skill set, and I'd rather they spend the time and the focus and get the returns. I can't tell you how many letters I read where it's like, “Hey, we were up 2% this year. The market was up 10%. Our core longs were up 8%, or our core longs were up 20%, except for this one thing where we stepped outside our skis and it was down 30%, and it canceled out all the great things.”

Then you go read their letter the year before and they'll say, “Hey, the market was up 15%, we're up 6%, our core longs were up 30%, but this one thing was down 40% and it canceled out all the returns.” I'd be like, “Dude, for 4 years in a row, your biggest loser has been this offshore oil company. It seems like you're maybe even doubling down on it over time.” At some point, let's just say, “Hey, let's go swing at what we're really good at.”

All right, so that's investments that make me want to slap people. Quick talk on power laws. I've said it on this podcast before. It's gotten increasingly popular for people to talk about, and there's a statistic that looks something like this: over the past 50 years, 40 stocks have driven the vast majority of stock market returns. I think it's really interesting, and it's a statistic that compounder bros used to love. But I want to spend some more time thinking about this because one thing that strikes me is, say you're Walmart. You're the largest company in the index, and for the next 20 years, your stock does 4% per year.

That's a terrible, terrible return—barely more than inflation, probably less than bonds are yielding these days. That's an awful return. But if you were the largest company in the index and you did that 4% per year for 20 years, you're actually still going to account for a decent chunk of the index's return. Versus, say, you're in the S&P 500 and you're the 480th-largest company. You get added in year 1, and in year 1 your stock goes up 20%, and then you announce a deal to get acquired for a huge premium—a 75% premium. Your stock basically doubles that year.

In a 20-year time horizon, you're going to account for literally 0% of the index's return, right? You're way less than that company that went up 4% per year for 20 years, but your stock obviously did much better. So, anyway, that's something I've been thinking about. I'm seeing a lot of the power-law quotes where it's basically what compounders say: you find the best company, you hold it for 20 years, and that's true. That would be great and very tax-efficient.

If you bought Walmart in 1970, if you bought Berkshire in 1970, if you bought Nvidia in 2000, if you bought Nathan's Famous 20 years ago—Nathan's Famous is one that I was involved in briefly that just yesterday announced the buyout, and the buyout premium was probably disappointing—the stock has been a home run because it was a franchise royalty stream. They paid out dividends, grew a little bit, and it was a great business. So, yes, there are power laws, but I wonder if they're getting a little overstated in their importance.

All right, last thing. Again, just random rambling, so I'm just going to jump right to it. I mentioned, I believe it was last month in my random ramblings, the things people change their mind on. One thing that I've been thinking about people changing their mind on that I think is also an interesting tail risk—and I might have mentioned this a few times—is vices, which is one area where I've really changed my mind.

I've got a pretty strong libertarian streak. People should be able to do what they want to do, I would say. If you'd asked the younger me, with a fuller head of hair and less gray, 10 years ago, I'd have said, “Yeah, basically all vices should be legal, and people should be able to make their own decisions.” Now, 12-year-olds shouldn't be allowed to get access to whatever drug you're talking about, so probably some age limits are appropriate. But once people are of legal age and can make rational decisions, they should make their own decisions and go their own way, and everybody should be left to their own devices. I've always believed that, but I will tell you, I'm no longer sure that's the case.

I'll point to 2 specific places. Cannabis is increasingly being legalized. It might come off the federal list of controlled substances at some point. I was always a fan: “Hey, if alcohol is legal across the country, why shouldn't cannabis be legal across the country?” I still kind of believe that, but I would also say, look, the cannabis that people were smoking at Woodstock in the 1970s—it would get you high, I'm sure. I can't say I've smoked cannabis from the 1970s; I don't know. But the stuff today is so potent, so strong, and so engineered, I don't know. It's the same thing with gambling.

I always thought gambling should be legal, and then people could decide if they wanted to go gamble or not. I still kind of believe that. But when you look at DraftKings and online gambling, and even freaking gaming—and I'm specifically thinking of free-to-play gaming, like the Candy Crush stuff—these things are so finely tuned to addict you and get you to keep playing, all that sort of stuff. Having it on your phone, it makes me start to think, “Hey, maybe it's not good for society. Maybe it's not good for people.”

I understand that goes against a libertarian streak, but maybe it's just like, hey, it's a libertarian thing, but humans weren't designed to process cannabis this strong. It's unnatural. We weren't designed to be able to resist the lure of the phone, particularly when it's gaming. I'm thinking about sports betting, right? It was cool when you could drive to a casino and say, “Hey, I want to bet 20 bucks on the Yankees to win today's game,” or whatever. That's awesome.

But when it's on your phone and you can do it in a heartbeat without even thinking about it, and you can do it not just on the Yankees to win, but you can bet on the next ball or the next strike or all this sort of stuff, you can do it without a thought and burn serious amounts of money without even thinking about it. That, I guess, is taking away people's checks and inhibitions just because it's on your phone and it's so fast. Versus, if it's in a casino, you have to decide you want to go to the casino, you have to drive there, you have to get the cash out, all that sort of stuff.

I increasingly wonder if there should be—though the libertarian in me hates to say it—some state-imposed limits on all of these things. They're so engineered; humans just weren't designed for them, and society would be better off if there were some limitations on them. If I were dictator for a day, I'd probably say, “Hey, gaming is legal everywhere, but online gaming is not.”

Hey, cannabis is legal everywhere, but you can't make it so strong that you get 500 hits of the old stuff in one thing. And I think alcohol probably falls into this, right? I can't say I'm insanely familiar with specific alcohol limits, but we do beer and wine. Beer and wine have specific alcohol contents, and you can sell beer and wine in specific places.

Then liquor has specific alcohol contents. It's much stronger, and you need a different license to sell that, and you can sell that in different places. Maybe that's a small step, but those were the 2 things I was just thinking of: these are things I've changed my mind on.

And to bring it to investing, you know, I do wonder about DraftKings, prediction markets, and all those things. DraftKings got hit a little bit over the past few months as prediction markets rose, but Robinhood would probably fall into this bucket as well. I do wonder if you're investing in them and you'll make a return—and you'll probably make a little bit of alpha from it—but some of that alpha that you capture investing in them over the next 5 to 10 years, assuming that there is alpha, is actually paying you for the tail risk of, "Hey, Andrew is right."

Not even that Andrew is right, but there is some risk that a government at some point comes and says, "Hey, we need to change this." For DraftKings, it doesn't have to mean banning all sports betting. If you ban parlays, DraftKings makes all their money on parlays, which are where you combine bets. You don't just bet the Yankees to win; you bet the Yankees to win and score more than 5 runs or something.

Those are insanely profitable for the books, and they're very popular among the youths and some of my friends, because you can do these parlays and bet $10 to win $1,000 or $10 to win $1 million. The book takes a huge cut from them. I wonder if there's going to be some crackdown on parlays, and if there were, that would take away their most profitable revenue source. I think it would be good for society.

For Robinhood, there could be some crackdown on zero-day trading. Does trading zero-day options really create economic value? Probably not. I know right now it seems like the markets are going the other way. It seems like every market wants to go to a 24/7 model. I think that's actually a really bad idea, but we can talk about that another time.

It seems like it's going to be that everyone can trade anything, all the time, whenever they want. The libertarian in me says, "Great, that's awesome." The market-structure person in me says, "Hey, maybe this isn't good for society." And I wonder if there's a risk at some point that, if we had a stock market crash, lots of rules and regulations would come along and say, "Hey, let's limit the trading. Let's limit—and, by the way, let's take away the zero-day trading options."

I don't think it's impossible. All right, I've rambled enough. This has been a lot of fun. As always, these are just my ramblings. I'm not saying any of these are lifelong core convictions of mine. I'm always happy to talk. Always happy to chat. Hit me up in the show notes. Hit me up over email. Whatever it is, I'm always happy to chat about this. Always happy to chat about how to improve the podcast, how to do anything. So, I'm here if you want to talk. Look, thanks so much. See the disclaimers at the end. It is January 22nd. We've got some great podcast coming up in the near future, too. I will mention that. Looking forward to chatting with you then. A quick disclaimer. Nothing on this podcast should be considered investment advice. Guests or the hosts may have positions in any of the stocks mentioned during this podcast. Please do your own work and consult a financial adviser. Thanks.