The chart above, via my guy Chart Kid Matt, is a masterpiece. Stare at it for a second, then I’ll explain it…

You’re back? Okay. What you’re seeing above is a perfect representation of how this year is going so far. The stocks that had advanced the most into the market’s February peak (performance is along the bottom axis) have also just declined the most over the past week (the Y axis on the left hand side).

Let’s take Palantir as an example. By early February, the chase was on. It was the It Girl of the Nasdaq, the name everyone (myself included) was kicking themselves for having missed. The difference is, some people chased it right into the top. Today, it’s in a 30% drawdown and goddamn that happened fast.

The orange line below is Percent Off All Time Highs, the purple line is price.

Is 87 a good price to buy it? Maybe. Was 120? We know now, in hindsight, that it wasn’t. But people did. What compels them to buy stocks that have already gone parabolic? What possesses someone to buy Empire State Building charts?

Greed? Envy? Fear Of Missing Out? Yes, all of those things. When the stock was ripping to 120, 150 seemed like a sure thing, so you can sort of understand it. “If I don’t get in now and it keeps going, I’ll never forgive myself.”

To which I have learned to say, over 25 years in this business, “Give it a minute.”

Giving things a minute doesn’t mean always being right. It does mean missing out on some opportunities. Think of the people who said “give it a minute while Bitcoin was breaking above $60,000 for the first time. Or the people who were giving Nvidia a minute in early 2023 before it 5x’d again. It’s not a silver bullet.

But I have found that giving it a minute has been a far better approach to investing than “fuck it, get me in” over long stretches of time.

The thing about stocks and markets is that they do give you a chance, eventually. Sometimes it’s more than a minute. And often times, when they do come back down to earth, that’s precisely the moment where you’re like “Ah, never mind.” How many people who were dying to be in Palantir as it crossed above 100 said to themselves “forget it, no thanks” as it crossed below 100 a week or so later? Most. Which means they only wanted it because it was winning. Everybody wants to gravitate toward the thing or person or stock or campaign or enterprise that’s seen to be winning.

Elon

Elon looked unstoppable in the month of January. Basically, the optics were such that he’s the new King of America, dictating the tactics to President Trump’s team and running through the US government like a hot knife through butter.

And then he hit resistance. Tesla’s stock price is now in a 50% drawdown from the old highs, a 30% drawdown from the post-election highs and the sales numbers for its vehicles in decline around the world. But he still has his spot in the White House. He’s still calling press conferences from the Oval. He’s still advancing despite the blowback from his DOGE team’s actions and pronouncements. But the momentum is slowing as this resistance builds. The entrenched bureaucracy he’s fighting against is bucking back. He’s not known for giving up but will the support system around him be able to withstand the pressure?

A large contingent of DOGE people just resigned this week, claiming that they were unwilling to help him dismantle essential government services that people need. I’d bet he’ll quickly be able to replace them with opportunists who have no problem doing his bidding whatsoever. It’s a big country with the entire spectrum of individual belief systems and susceptibility to personality cults. Elon’s become the richest man in the world by persevering through resistance every step of the way. Don’t count him out until the Trump inner circle decides he’s more valuable as a scape goat than an operative. Until then, he’s going to continue to wave his chainsaw.

When asked about what congressional Democrats could do about the situation, James Carville told an interviewer that they should “play possum” rather than fight back. Fighting back, he explained, lends itself to continued momentum for the other side. They make memes of the whining and complaining and take these images and video clips as totems justifying the righteousness of their campaign. Liberal Tears are the renewable source of energy fueling the movement. Carville told his colleagues not to play into this.

“The popularity of the Trump administration is already collapsing,” he says. Let it collapse on its own and then pick your moment. This requires patience. It requires giving it a minute. Sun-Tzu said never interrupt your opponent when he is in the middle of making a mistake. Or perhaps it was Napoleon. The historians and quote investigators don’t agree on the saying’s provenance but none would disagree with the meaning of the message itself.

We don’t know if Carville’s assertion, that the Trump administration’s popular support will collapse within a month, is actually right. But if you told me that the just finished CPAC weekend ended up being what traders refer to as a “local top” for awhile, I wouldn’t be surprised. You won’t be able to say for sure until some weeks (and polls) have come and gone. In the meanwhile, giving it a minute to cool off may not be the worst advice to the President’s adversaries. Elon’s adversaries too.

Ups and Downs

I’ve been around long enough to have seen a great many things run their course. Very few things remain in permanent uptrends, in markets or in life. Eventually, ideas hit resistance. People’s careers hit resistance. Friendships fall apart. Partnerships dissolve. Market forces dissipate. Technological advantages are flattened. Brands fall out of favor.

George Orwell wrote about this in an essay shortly after World War II and his polemic contains a quote that applies to a great many things. “Whoever is winning at the moment will always seem to be invincible.” I think about this idea all the time from an investing point of view. It’s a universally valuable idea.

Here’s the full context of the quote:

The world is a complex place and nothing can remain absolutely invincible for long. Because the conditions that contributed to the optics of invincibility are always in flux. The most powerful trends are built on more brittle foundations than one might suspect from only observing them on the surface. But the timing of these things. That’s the tricky part. As Johnny Cash sang, “You can run on for a long time…”

Momentum, if you can keep it

I turned 48 years old yesterday. I did so with all the momentum in the world, career-wise. I have the biggest investing podcast in the business with over 16 million views and downloads last year. I am the CEO of the hottest RIA in America, enjoying explosive levels of organic growth and a mob of advisors outside the door dying to become a part of it. I co-founded Future Proof, the most exciting event in the history of the financial advisory industry. I am a regular cast member on the most popular show on financial television. The people I have brought into these things with me are thriving personally and professionally. They should be - they are a big part of the successes we all enjoy. I haven’t accomplished any of these things by myself and don’t deserve nearly as much credit as I sometimes receive. But this is what it is right now. Momentum, if I can keep it.

It wasn’t always thus. It wasn’t all that long ago that I was a nobody from nowhere for whom nothing was going right. I try to remind myself of this frequently. “Give it a minute, Josh, it can all come to an end.” The growth could slow. The audience could wither. The brand could tire out. You won’t even notice at first. The cracks will be imperceptible. By the time the decline is underway, it could be too late to do much about it.

It’s not paranoia. It’s something else. An awareness.

Are you familiar with the Second Law of Thermodynamics?

Me neither.

But it’s about entropy.

Here’s what it looks like:

When you’re winning, you want what’s on the left. When you’re not, you need what’s on the right. This explains a lot about our politics these days. Those at the bottom of the wealth distribution are, understandably, cheering for chaos and rooting on the disorder.

They’ve given up on attaining a different outcome without it.

Here’s Ben Carlson:

The Wall Street Journal tells us that 50% of the economy is now being driven by the spending of the top ten percent of wealthy households.

And you wonder why people want to not only shake the snow globe but smash it on the floor.

Entropy

It’s a fancy way of saying things fall apart. Disorder and randomness increase until everything hits a breaking point. We are all falling apart, some of us in slow motion and some of us precipitously. Nothing stays the same. No one remains whole.

This should not be read as depressing. Because as some things fall apart others are coming together. Try as you might to keep things the same, to preserve a favorable situation, to maintain a satisfactory status quo, you will find that you cannot resist the entropy forever. You’ll be forced to either adapt to changes or make them yourself to fight it off. It’ll be a mostly losing fight. Your health, your relationships, your status, your beliefs…you’re going to bend or these things will break. Sometimes they’ll break regardless of what you do.

It’s okay. The randomness of it all should give you more comfort than it does anxiety. We need old things to fall apart to make way for the new. Prior trends to subside in order for the next wave to appear. Old friends need to recede to the wings to make room for new friends appearing at center stage. Hardships must arise in order for us to grow. Pressure must be felt to prod us forward toward new and unexpected directions.

The randomness is why I have a job. It’s why trillions of dollars have been flowing toward financial planning firms like mine for the last fifteen years. We bring order to all this randomness in the form of spending and investing plans - plans that are predicated on the need for durability in a world of endless uncertainty. The work that we do is never finished because the system we inhabit is never settled.

The outcomes of all this entropy cannot be predicted in advance. But their inevitability can be. We don’t know what will transpire but I can guarantee you that something will.

Just you wait. It’ll happen.

Give it a minute.