Finance Knuggets

Dec 05, 2025

Subject: 💥 Investing Research and Market Update + Analysis [December 3, 2025]

Dear subscriber,

In this detailed issue, we cover:

U.S. housing market faces a serious price correction worse than 2008.

Federal Reserve injects $13.5 billion into banks, ending quantitative tightening.

Black Friday sales were strong, but consumer behavior shows fewer items purchased at higher prices – signaling a shift towards quality.

Precious metals shine: Gold outperforms S&P 500 over 30 years, silver hits new all-time highs.

Four compelling stock picks to consider: Meta Platforms ($META), American Express ($AXP), Grab Holdings ($GRAB), and Dycom Industries ($DY).

Economic outlook indicates continued expansion despite mixed sentiment.

Market sentiment currently shows extreme fear, which historically signals buying opportunities.

Fed expected to cut rates in December, driving sector rotation towards rate-sensitive stocks.

Key investment themes:

Market & Economic Update: December often brings a seasonal rally; December gains in the S&P 500 have a 72% probability historically. Rate cuts likely to boost real estate, utilities, and dividend stocks.

Consumer Behavior Shift: Consumers are buying fewer but higher-quality items, similar to post-2008 patterns. This favors premium brands and high-quality stocks.

Precious Metals Opportunity: Silver’s price is surging due to industrial demand and supply constraints, with silver ETFs and mining stocks recommended as strategic allocations.

Federal Reserve Moves: With the end of quantitative tightening and liquidity injections, cash becomes less attractive, shifts toward assets like stocks and commodities are prudent.

Stock Picks & Analysis:

Dycom Industries: Fiber optic network installer positioned to benefit from AI data demands. Current forward P/E of 45.

Grab Holdings: Southeast Asia super-app turning profitable, trading at a 29% discount to fair value.

Meta Platforms: Dip due to increased AI spending is an opportunity; strong revenue growth and AI exposure.

American Express: Closed-loop payment network with resilient and stable revenue streams, favored by Warren Buffett.

Economic & Market Sentiment: Fear & Greed Index at an extreme low (24), AAII bearish sentiment high (~43%), but economic indicators show expansion, suggesting contrarian buying opportunities.

Recommended Actions:

Review and rebalance your portfolio to increase exposure to quality, rate-sensitive, and premium brands.

Consider adding precious metals exposure, especially silver, at 2-5% allocation.

Prepare to act on potential market dips in January for select stock opportunities.

Monitor upcoming Federal Reserve decisions and their market impacts.

For in-depth analysis, research links, and position sizing strategies, continue reading in our full report.

Subject: Need to Know: Strategist Predicts an ‘Optimism Shakeout’ in Early 2026

Summary:

Warren Pies, successful strategist at 3Fourteen Research, forecasts:

The S&P 500 will continue bullish momentum into early 2026 but expects an ‘optimism shakeout’ correction in H1 2026 to temper inflated sentiment.

He downplays overvaluation concerns, citing rising profit margins in mature tech companies as justification for a higher market multiple.

Predicts the market leadership will not shift away from tech but will broaden to include higher-quality, large-cap non-tech stocks like Walmart, Costco, and McKesson, where AI adoption is rising.

AI breakthroughs outside tech—particularly healthcare and pharmaceuticals—will fuel future enterprise growth.

Advises investors not to be overly focused on valuation fears, noting structural changes in market composition.

Key insights:

Fed rate cuts and a dovish stance expected to support economic optimism.

Economic recovery remains uneven, favoring wealthier Americans.

Markets could reach S&P 500 levels above 8,000 in the next 15-18 months under his assumptions.

Cautions a correction similar, though probably less severe, than last year’s will occur, shaking out excess optimism.

The report underscores the importance of understanding sector rotation and emerging AI adoption trends for 2026.

Subject: Axios Pro Rata: VC Fund Economics & Warner Bros Discovery Takeover Update

Highlights:

VC fund management fees remain centered around 2% with carried interest around 20%, though top-tier funds command higher carry rates (up to 30%) and fees (up to 2.5%).

Smaller funds spend a higher percentage of capital on operating expenses compared to large funds.

Private equity general partners typically have larger capital commitments (“skin in the game”) than VC fund managers.

Paramount Skydance increases breakup fee offer for Warner Bros Discovery to $5B, signaling confidence in completing acquisition despite regulatory concerns.

Potential outcomes for Warner Bros Discovery include a split or sale, with competitors Comcast and Netflix still in the race.

Numerous venture capital funding rounds detailed, including major investments in AI and biotech startups.

Private equity acquisitions and SPAC IPOs also covered.

This briefing offers a comprehensive snapshot of recent deal activities and trends in venture capital, private equity, and mergers & acquisitions.

Subject: Money Stuff: Private Equity Continuation Fund Conflicts & Blockchain Banks

Key takeaways:

Private equity sponsors increasingly use continuation funds to buy portfolio companies from older funds, creating potential conflicts of interest over valuation and performance fees.

Such transactions may allow sponsors to reset carry thresholds benefiting themselves but possibly disadvantaging limited partners.

A recent court case involves the Abu Dhabi Investment Council suing EMG over a conflicted continuation fund deal to buy Ascent Resources at a reduced price, highlighting fiduciary duty concerns and valuation discrepancies between old and new investors.

Amazon delivery service providers have formed a secretive collective (“DEFT”) to negotiate better pay and conditions, raising complex antitrust questions since participants are independent contractors.

N3XT launched as the first US “narrow bank” using blockchain technology, offering fully reserved deposits backed 1:1 by cash or Treasuries, enabling 24/7 programmable B2B payments but without traditional lending.

Discussion on Trump accounts initiative led by the US Treasury aiming to onboard millions into brokerage accounts seeded with $1,000, with firms competing for administrative roles.

Commentary on crypto’s decline as the premier retail gambling venue, with competition increasing from zero-day options, leveraged ETFs, and prediction markets.

PDT Partners hedge fund offices designed as escape rooms to entice employee interaction and puzzle-solving as part of creative workplace culture.

Miscellaneous news including Meta’s metaverse spending cuts, hedge fund AI tools launch, and luxury apartment market surge.

The newsletter offers a nuanced look at evolving private equity practices, fintech innovations, labor organizing in gig economy, and trends reshaping financial markets.

Please contact me if you need further synthesis or specific insights on any content above.

Stay Well!

summy