Published July 21, 2026

At a Glance

• SpaceX's IPO was this summer's most talked-about offering. OpenAI and Anthropic have both confidentially filed for public offerings. Additional marquee IPOs may be coming.
• An exciting company and an attractively priced stock are two different questions, and only one is something you control.
• Four questions worth asking before you buy an IPO — this one or the next one.

Few investments attract more attention than the initial public offering of a well-known private company.

SpaceX provided the latest example. The company priced its June IPO at $135 per share, and demand was intense. The stock rose sharply after trading began and then experienced a meaningful pullback, falling below the offering price by late July.

That early volatility is not a verdict on SpaceX's long-term prospects. It is a reminder that the price an investor pays matters. Investors who received shares at the offering price began in a materially different position from those who bought after public trading opened and the initial excitement had already lifted the stock.

OpenAI and Anthropic may create the next wave of IPO attention. Anthropic announced that it confidentially submitted a draft registration statement to the SEC in June, and OpenAI has reportedly done the same. Neither company has established an offering price or timetable. That uncertainty has not stopped investors from imagining what an allocation might be worth.

An Exciting Company and an Attractive Stock Are Different Questions

A company may have an extraordinary product, a large market and an impressive management team. Its stock can still disappoint if investors pay a price that already assumes years of exceptional growth.

This is particularly relevant for companies associated with transformative technologies. Investors are not merely evaluating the business as it exists today. They are paying for expectations about market share, future profitability and opportunities that may take years to develop.

The question is not simply whether SpaceX, OpenAI or Anthropic could become much larger businesses. It is how much of that possible success is already reflected in the price.

The First-Day Gain May Not Be Your Gain

IPO headlines often focus on the difference between the offering price and the first day's closing price. That can create the impression that the gain was broadly available.

It usually was not.

The offering-price return belongs to the investors who actually received an allocation. The most sought-after IPOs may be heavily oversubscribed, leaving investors with only a small allocation or none at all. Everyone else must decide whether to buy after trading begins, when the initial increase may already be reflected in the market price.

That distinction does not make an IPO allocation automatically attractive or a post-IPO purchase automatically unattractive. It means they are different decisions and should be evaluated separately.

The Historical Record Calls for Restraint

Some newly public companies become exceptional long-term investments. The challenge is identifying them in advance and paying a price that leaves room for the business to exceed expectations.

Research compiled by University of Florida professor Jay Ritter documents both the substantial average first-day gains associated with U.S. IPOs and their less impressive longer-term record. Studies have repeatedly found that IPOs as a group have tended to lag comparable public companies after their first day of trading.

The evidence does not tell us that every IPO will disappoint. It tells us that excitement, familiarity and a large first-day increase have not historically improved the odds for investors buying afterward.

Investing and Speculating Serve Different Purposes

Long-term investing begins with a financial objective. The portfolio is built around the investor's time horizon, cash-flow needs and ability to withstand market declines. Success should not depend on one company, one technology or one forecast being correct.

Speculation begins with a particular outcome: a company dominates a new industry, a technology develops as expected or other investors agree to pay a much higher price in the future.

There is nothing inherently wrong with making a speculative investment. Some investors can comfortably reserve a small portion of their assets for opportunities they find compelling. The important part is labeling the position correctly and sizing it so that a disappointing result would not alter the financial plan.

Four Questions to Ask Before Buying an IPO

1. Am I receiving the offering price or buying after trading begins? The potential return and downside can be very different once the first-day demand is reflected in the price.
2. What future does the valuation already assume? A compelling story is not enough. The company must eventually produce results that justify the price being paid.
3. Is this part of my investment strategy or a speculative position? A speculative holding should be deliberately sized rather than quietly allowed to become a core position.
4. What would happen if the stock declined by 50%? If that decline would affect spending plans, retirement security or the ability to stay disciplined, the position is probably too large.

You Do Not Have to Be First

Fear of missing out creates urgency. Investors can feel as though the opportunity will disappear if they do not buy immediately.

For a company capable of compounding its value over decades, the first day should not be the only opportunity. Waiting allows investors to review public financial statements, observe management's execution and see how the stock trades once the initial scarcity and excitement begin to normalize—and if you decide it is worth owning.

SpaceX's post-IPO volatility provided a useful reminder. OpenAI and Anthropic may provide the next one. The objective is not to avoid every new offering. It is to make sure that excitement does not replace valuation, diversification and position-size discipline.

There will always be another highly anticipated IPO. Your financial plan should not depend on correctly predicting which one reaches orbit.

Published July 7, 2026

At a Glance

• The market's best quarter since 2020. US large-cap stocks gained 14.9% in Q2 and finished the first half up 9.6% — powered by corporate earnings on pace to grow roughly 24% in 2026, not by the headlines.
• But the price of admission is rising. Stocks trade near 20 times next year's earnings (long-run average: about 17), and the ten largest companies make up roughly 40% of the index. The next correction will come — and no one can tell you when.
• History says: expect it, don't fear it. Since 1950, declines of 20% or more have arrived about every four and a half years, averaging over 30% — and every one has so far proven temporary. Your plan was built with exactly these episodes in mind.

I’m happy to report on the continued progress of our clients’ long-term plans through what has been a very eventful first half of 2026.

When I say “progress,” I don’t simply mean that account values rose — although they did. Even in stretches when markets decline, the things that matter most to long-term investors — the growing earnings and dividends of the companies we own, and steady movement toward the goals in your plan — can keep advancing. That distinction matters more right now than it usually does, for reasons I’ll explain below.

As always, I’ll start with the principles that guide everything we do, then turn to the half-year just past.

First, the principles that don’t change

• We are goal-focused and plan-driven. We invest over years and decades to fund the goals that matter to you and your family — retirement, education, legacy — not to outguess the market’s next move.
• The order of operations never changes: first we define your goals, then we build a plan for reaching them, and only then do we construct a portfolio suited to that plan.
• Unless your goals change, there’s no reason to change the plan. And if the plan stays in place, so — broadly speaking — does the portfolio.
• We don’t react to current events — economic, political, or geopolitical. Experience teaches that the economy can’t be consistently forecast, and the markets can’t be consistently timed.
• Because markets can’t be timed, we stay invested through “good” markets and “bad.” That is the price of admission for capturing the market’s full long-term return.

What just happened

There has rarely been a more eventful six-month stretch than the one just past. Consider the list: a major war in the Middle East, severe disruption in energy prices, stubborn inflation, the sudden threat of higher rather than lower interest rates, stock valuations near historic highs, extreme concentration in the broad market averages, a collapse in Bitcoin and the precious metals — and, by far, the biggest initial public offering in history, built around spacecraft, of all things. Did I leave anything out?

How would anyone go about making rational investment policy out of that maelstrom? The answer — as I suspect is intuitive to you by now — is that one doesn’t, because one can’t. And that is exactly why, at times like these, we can step back and almost welcome the chaos, for one compelling reason: it has nothing to do with us. We have your goals, your plan, and a portfolio aligned as closely with both as we know how to make it. Nothing on that list of headlines changes any of the three. (The SpaceX IPO — and IPO investing generally — deserves its own discussion; watch for a dedicated post later this month.)

Through all of it, the S&P 500 gained 14.9% in the second quarter — its best quarter since 2020 — and finished the first half up 9.6%, or 10.2% including dividends.

Meanwhile, those of us who see ourselves as long-term owners of and lenders to consistently superior businesses — as distinctly opposed to traders in “the stock market” — can only marvel at what those businesses have been doing. Their earnings have soared and are continuing to grow, with analysts currently estimating S&P 500 earnings growth of roughly 24% for 2026. Their profit margins are at all-time highs. And they keep raising their dividends, even as they invest in more innovation and the growth of their businesses. Over the long run, earnings — not news cycles — are what drive stock prices.

A word about froth

Even so, soaring earnings are only half of any investment story. The other half is the price investors pay for them — and that's where a word of caution is in order. The S&P 500 currently trades at roughly 20 times its expected earnings for the coming year — well above its long-run average of about 17 — and the ten largest companies now make up roughly 40% of the entire index, a level of concentration exceeding even the 2000 tech-bubble peak.

Add speculative enthusiasm running hot — from legalized gambling to prediction markets to trillion-dollar IPO dreams — and it is entirely reasonable to ask whether a meaningful market decline could be coming.

The honest answer is yes — this emotion-driven market can significantly, even savagely, correct at any moment. And if history is any guide, it will, probably when the consensus is least expecting it. What neither I nor anyone else can tell you is when. But history offers useful perspective.

The S&P 500 began 1950 at a level of 17. Today it stands near 7,500. Along the way, by one careful count, there have been 17 separate declines of at least 20% — roughly one every four and a half years — with the average decline exceeding 30%. Every one of them has, so far, proven temporary: the long advance eventually resumed and carried the market to new highs.

I draw two lessons from that record. First, significant declines are not a sign that something is broken. They are a normal, recurring feature of the very market that produced those extraordinary long-term returns — and a decline that washes out speculative excess can even leave the market’s advance on firmer footing. Second, because we know our ability to time such a decline is nil, we plan to ride it out, as we always have. Your financial plan was built with exactly these episodes in mind.

This is also where portfolio discipline earns its keep. In practice, we are very broadly diversified equity and fixed income investors, and we rebalance periodically — systematically trimming our exposure to richly valued areas of the market so we can increase our ownership in out-of-favor (and perhaps more reasonably valued) ones. It will not have escaped your notice that this is the opposite of what most investors do, especially at times like this: chasing the sectors that have already appreciated the most, in the apparent belief that they can only go up even more.

Closing thoughts

None of this is a prediction. Markets may keep climbing; they may correct next month. Our approach doesn’t depend on knowing which. It depends on your goals, your plan, and a portfolio aligned with both.

I’m here to respond to any and all questions and concerns you may have — about the markets, your plan, or anything in between. Thank you, as always, for the trust you place in TAGStone Capital. It is a privilege, and indeed a joy, to serve you.

At a Glance

• Buffett’s career reinforces a timeless lesson: successful investing depends more on discipline and temperament than predicting markets.
• Market bubbles and downturns are inevitable. Long-term investors who resist fear and hype are better positioned to stay on course.
• Time is the most powerful force in investing. Starting early and staying invested are key to building wealth across generations.

On December 31, 2025, legendary investor Warren Buffett retired as CEO of Berkshire Hathaway at age 95. Berkshire Hathaway compounded shareholder capital at approximately 20% annually for over six decades—one of the most remarkable investment records ever achieved. Buffett’s retirement marks the end of one of the greatest investing careers. Yet, the principles that guided him remain just as relevant today for families aiming to grow and preserve wealth across generations.

Sixty years ago, Buffett took over Berkshire Hathaway, a struggling New England textile company, and turned it into a powerhouse that operates everything from insurance firms to household names like Duracell batteries. Along the way, he earned the nickname “Oracle of Omaha” for carefully selecting undervalued companies and holding onto them for the long term—a strategy that has worked well for him. Today, he is the sixth richest person in the world, with a net worth around $154 billion.

Throughout his career, Buffett has shared some of his success secrets, often through his well-known—and often humorous—shareholder letters. Below are some of our favorite insights that continue to guide investors of all kinds.

Navigating Fear and Greed

Investing is carried out by people, and people are emotional. As a result, human behavior heavily influences market movements. Fear and greed can cause investors to jump in and out of the market en masse, often to their own detriment.

Buffett illustrated this idea well when he wrote:

“Occasional outbreaks of those two super-contagious diseases, fear and greed, will forever occur in the investment community…We never try to anticipate the arrival or departure of either disease. Our goal is more modest: we simply attempt to be fearful when others are greedy and to be greedy only when others are fearful.”

Buffett warns us to be cautious when investors are “greedy,” as this can push prices to levels that are not sustainable—sometimes leading to a crash.

Conversely, when investors are fearful, they might miss out on significant opportunities to buy bargains during a market downturn.

The key to successful investing is managing emotional impulses. Buffett has said: “The most important quality for an investor is temperament, not intellect. You need a temperament that neither derives great pleasure from being with the crowd or against the crowd.”

This is one of the reasons we build portfolios that can weather market volatility before it happens, rather than reacting emotionally once it does.

Bursting Bubbles

During market bubbles—such as the Dot Com bubble of the late 1990s or the housing boom leading up to the 2008 crash—prices rise rapidly beyond their true value, fueled by speculation and hype.

Even investors who were initially skeptical may give in to the temptation to join in, entering the market when prices are excessively inflated and due for a crash.

Buffett summarizes this well when he said:

“Bubbles blown large enough inevitably pop. And then the old proverb is confirmed once again: ‘What the wise man does in the beginning, the fool does in the end.’”

Buffett has also said, “It’s only when the tide goes out that you learn who’s been swimming naked.” Indeed, when a booming market turns south, you don’t want to be the one who has taken on too much risk and ends up scrambling to get out.

Playing the Long Game

You’ve probably heard us say that investing is a long-term venture. This is also one of Buffett’s core principles: “Our favorite holding period is forever.” He has additionally stated, “Only buy something that you’d be perfectly happy to hold if the market shut down for 10 years.”

The evidence is clear: over the long term, the stock market has traditionally moved higher. For families building multi-generational wealth, committing to long-term holding periods is the best way to navigate the inevitable short-term market fluctuations that accompany the overall upward trend.

Starting Early

 Unsurprisingly, there's a lot of overlap between aphorisms about planting trees and investing. Both require planning and an early start to ensure you reap their benefits.

As Buffett once said:

“Someone’s sitting in the shade today because someone planted a tree a long time ago.”

Similarly, a well-crafted investment plan needs attention and nurturing, supported by disciplined approaches like dollar-cost averaging—the practice of regularly investing a fixed amount regardless of market conditions—and periodic rebalancing. But mostly, wealth and trees simply need time to grow.

In this sense, Buffett’s “secrets” of success have never truly been secrets. They are just simple truths that all investors can follow: stay calm when others panic, resist the hype, invest regularly, and think long term. Even with these principles, it’s not always easy to stay the course—especially when markets become turbulent.

These principles continue to guide how we think about managing wealth for the families we serve. Please reach out when you have questions about the markets and how they affect your long-term plan.

It has been nearly three years since the arrival of OpenAI’s ChatGPT-3.5, marking generative AI’s watershed moment. Suddenly, algorithms could produce text, computer code and images comparable to human output—and an AI investment boom was underway. Fast-forward to today, when the investment news is filled with comparisons to the dot-com bubble of the late 1990s and questions about whether the boom may soon turn to bust.

As in the late 1990s, a transformational technology has sparked enormous enthusiasm and aggressive capital expenditures (capex). For 2025, big tech spending clocks in at an estimated $400 billion. Building the infrastructure required to support this technology is expected to cost $3 trillion through 2028. Some worry that the technology ultimately will not provide enough value to justify the investment. OpenAI, for instance, is planning a $500 billion data center project, even though the company will generate only $13 billion in revenue in 2025.

Yet there are important differences between 2025 and 2000. Unlike the speculative companies of the dot-com era, today’s biggest public technology firms are highly profitable and funding capex out of substantial cash flows. And while valuations are elevated, they’re not at the extremes seen in 2000. The S&P 500 Information Technology Index recently traded around 30 times forward earnings, well below the dot-com era peak of 55.

Should You Worry About a Bubble?

Reasonable arguments exist on both sides of the bubble debate. But long-term investors don’t need to pick a side. Correctly identifying a bubble is extraordinarily difficult—and it’s unnecessary.

Your job is not to figure out whether a particular market is moving too far, too fast. It’s to invest in a way that gives you the best chance to reach your long-term goals. The key to that task is to build and maintain a portfolio that can keep you on track toward those objectives across many different market environments, including both booms and busts. That means diversifying across asset classes, sectors, company sizes and geographies.

Diversification to Balance Risk and Potential Reward

Many investors assume their stock holdings are well diversified if they track the S&P 500. However, the so-called “Magnificent Seven”—seven of the index’s largest technology companies—now account for roughly 35% of the index. Those same companies account for about 30% of all capex in the S&P 500, a large share of which is AI-related. In other words, mirroring the S&P 500 means you’re betting a significant chunk of your future on AI-driven growth. If the boom hits a speed bump, you might be over-exposed to the downside.

That doesn’t mean avoiding innovation or transformative technologies. It means being deliberate about how much of a portfolio’s future is tied to a single narrative. Diversification can help limit the risk of this type of concentration.

In practice, diversification is not about owning everything equally. It’s about continually assessing where capital is becoming crowded, where expectations are extreme, and where future returns may be more resilient. The dot-com bust offers a useful case study of the ways small-cap and international equity allocations can help reduce the impact when large growth stocks decline.

The dot-com bubble burst in March 2000, sending large growth stocks into a freefall. Over the five years through March 2005, the Russell Top 200—the market’s 200 largest stocks by market capitalization—lost more than 25%.[1] Meanwhile, the Russell 2000 index of small caps did almost exactly the opposite, gaining about 23%[2] over the same time period. International stocks also outperformed, beating U.S. stocks between 2000 and the 2008 financial crisis. The upshot: Investors with diversified portfolios had a very different, less turbulent experience than investors who concentrated on the stocks that dominated the indexes at the end of the 1990s. Spreading their investments around may have supported their account balances during the first half of the 2000s, possibly leaving them with more assets to benefit from subsequent gains.

Long-Term Investors Don’t Need to Predict Bubbles to Manage Risk Intelligently

We’re not predicting that history will repeat itself. No one knows what the future holds. The point is that market leadership can change, sometimes abruptly, and a diversified portfolio is designed to adapt to those changes. With a diversified portfolio that’s built around your goals, you don’t have to predict when or why such shifts will occur.

Bubbles are clear only in hindsight. Diversification, on the other hand, works in real time. And it remains one of the most effective tools you have to navigate uncertainty. As the new year begins, periods like this are often a useful time to revisit portfolio structure, concentration, and assumptions—not to make bold bets, but to ensure your capital is positioned thoughtfully for whatever comes next.

[1] Cumulative return calculated from -5.73% annualized return for the five years through March 2005.

[2] Cumulative return calculated from 4.30% annualized return for the five years through March 2005.