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Both indices were slightly up this week and I found two concepts that I wanted to discuss in the brief market commentary. I also share the articles of the week and the news of the week, including some highlights from Rosebank’s (you can read an article about the company here) most recent earnings.
Without further ado, let’s get on with it.
I’m back and articles of the week
After a week of resting and recharging the batteries…I’m back! I published one article this week: the seventh edition of On The Radar.
I profile three very interesting businesses that I am currently looking further into:
An unknown engineering business with growth capped by supply rather than demand
An aerospace aftermarket business with a very interesting and controversial model
A very interesting set-up in a business with a balance sheet “problem”
If you are looking for some fresh ideas, you can check out all the seven editions of on the radar (22 companies profiled) here.
Without further ado, let’s see what the markets did this week.
Market Overview
Both indices were slightly up this week, with the SPY outpacing the gains of the QQQ:
I would like to briefly discuss two topics in today’s NOTW. The first one is the concept of the random walk. Something that has become abundantly clear to me over the past few years is that valuation doesn’t matter one bit over the short to medium term. When I looked at my portfolio at the beginning of 2026, I made an effort to try to guess which stocks would go on to perform better. I naturally went for those that enjoyed the most appealing valuation multiples, but here’s what happened.
My best performing stocks YTD have been (I’m only counting those that I have owned for since 01/01/2026)…
Deere & Company +49%
ASML Holding +49%
Texas Instruments +46%
BBB Foods +45% (counting this one since I owned it since January)
Maybe with the exception of ASML, I wouldn’t in my wildest dreams would’ve thought these would be the companies carrying my portfolio. I know there’s a lot more to valuation than the reported multiple, but here’s the EV/EBITDA multiples these companies were trading at to start the year:
Keysight Technologies 28x
Deere & Company 16x
ASML Holding 25x
Texas Instruments 21x
BBB Foods 65x
I could go on to explain why some of these multiples are not normalized, but the conclusion would hold: valuation multiples are a terrible leading indicator of performance over the next 12-24 months. My good friend WTCM shared the following on X this week:
I agree with it entirely and my view has been shaped by my experiences, which might be anecdotal, but they are experiences nonetheless. I would argue that valuation always matters over the long term, it’s just that one never knows when it’ll start to matter! If anything, momentum seems to be a much better leading indicator than valuation in the current market.
The other topic I wanted to talk about is a concept that I’ve decided to coin as “holding bias” (it 100% has another name, but I decided to coin it with that one). This week I published the following about Adobe’s CEO succession:
The post got many replies claiming that “I wouldn’t be saying this should the stock be at ATHs.” While I definitely agree with the notion that we are most likely inclined to overthink the bad news when a stock is doing poorly, I believe that these comments portray that some people get too emotionally attached to their holdings. It’s fine to hold something while not agreeing with everything management does or not believing that everything is perfect.
Adobe may well play out brilliantly as an investment over the long term, but the great performance will not be due to the great CEO succession the company has done, but rather IN SPITE of it. If one actually believes that Adobe has handled the CEO transition well…they should try to ask themselves whether maybe they are too emotionally attached to their position.
On the other side of the spectrum we have Constellation Software whose founder and president (Mark Leonard) had to retire due to health reasons. The company quickly appointed Mark Miller to the position, a 30-year CSI veteran who came on board with the company’s first acquisition and decided to take a $1 salary (just like Mark Leonard’s). The succession events of Adobe and Constellation are night and day, which doesn’t mean that it’ll be a relevant thing when looking at these businesses in 5-10 years. Now, we should call things by their name.
The industry map was mixed this week:
The fear and greed index retraced considerably and entered fear territory:
