Generated by All in One SEO v5.0.0.1, this is an llms.txt file, used by LLMs to index the site. # Validex Global Investing Invest at the Inflection Point of Accelerating Growth ## Sitemaps - [XML Sitemap](https://validex.co/sitemap.xml): Contains all public & indexable URLs for this website. ## Posts - [News](https://validex.co/insights/) - [Mark's Musings: Are Zombie Companies Eating your Market Share?](https://validex.co/are-zombie-companies-eating-your-market-share/) - Zombies are a problem, just not in the way you thought. In a report from the International Monetary Fund, the authors discuss the rise in zombie companies around the globe post-COVID — companies characterized by long-term unprofitability, high relative leverage ratios, and negative sales growth. While it’s not surprising that pumping massive amounts of “emergency” - [Have We Finally Tamed the Beast of Inflation?](https://validex.co/have-we-finally-tamed-the-beast-of-inflation/) - Finally, some good news Tuesday on the inflation front that investors may be able to rely upon. May’s Consumer Price Index increased by 0.1% on a monthly basis and 4% over the last year, the lowest annual rate since March 2021. Core CPI (excluding food and energy) rose 0.4% monthly and 5.3% annually. As an aside, - [Conviction Is Not A Trade](https://validex.co/conviction-is-not-a-trade/) - About three weeks ago, markets watched a historic unwind. The manager was directionally right. He didn’t survive being right. That distinction is the whole post. Leopold Aschenbrenner launched a hedge fund called Situational Awareness in 2024 on mathematical brilliance and an OpenAI pedigree. Performance was remarkable, until it wasn’t. Six days after asking investors for fresh - [Always Approaching, Never Arriving](https://validex.co/always-approaching-never-arriving/) - On July 16, a Chinese company called Moonshot released a new artificial-intelligence model named Kimi K3. Two things about it rattled the market. It was very good, near the top of the field, close enough to the best American models that the difference no longer looked meaningful. And it was cheap, offered at a fraction of - [The Price Was Never the Point](https://validex.co/the-price-was-never-the-point/) - As of late last year, the market has had an index for the price of intelligence. The SDLLMTK Index tracks the going rate for large language model tokens, and lately it has fallen, down about 20% from its late-May peak.1 The AI trade had lost one of its key signals. That verdict assumes the token - [The Collapsing Cost of Intelligence](https://validex.co/the-collapsing-cost-of-intelligence/) - Until recently, the usage rule in artificial intelligence was simple. The best models cost the most, and the most expensive were the scarcest. If you wanted to look cutting-edge, you paid up and left the cost-benefit question for later. Silicon Valley coined a word for it: “tokenmaxxing,” and it applied at the individual and the - [Capability Accelerates, Investors Extrapolate, Payoff Lags](https://validex.co/capability-accelerates-investors-extrapolate-payoff-lags/) - Every few months a new release clears a benchmark that was supposed to be years away. The models are improving on a curve almost nobody predicted, and the market makes the obvious leap: that same curve will carry productivity and financial results, across a wide range of businesses, and will happen very soon. That leap - [Lulled to Sleep](https://validex.co/lulled-to-sleep/) - On Friday, SpaceX is expected to complete the largest initial public offering in history, raising on the order of $75 billion in a single listing1 , roughly 2.5x the previous record2 . It does not arrive alone. It is the leading edge of a massive wave: the other giants of the private era, the names every allocator - [The Physics of Solving Durable Bottlenecks](https://validex.co/the-physics-of-solving-durable-bottlenecks/) - Last month, Cerebras Systems went public, largely on the idea that it had finally solved one of computing’s oldest problems: the bottleneck that forces data to shuttle between memory and the processor — what engineers call the von Neumann constraint. By placing memory directly alongside compute on a single piece of silicon, the design sidesteps the - [Pent-Up Drag](https://validex.co/pent-up-drag/) - Aggregate S&P 500 earnings are unusually strong. The Mag 7 prints are doing the heaviest lifting, but breadth has improved, and the headline number has surprised positively for several quarters running. Most strategists are revising 2026 expectations higher. The market is focused on the wrong thing. Not because the numbers are wrong — the numbers - [Seats Were Always A Proxy](https://validex.co/seats-were-always-a-proxy/) - When Snowflake leaned into consumption pricing, the market hammered it. Every legacy SaaS metric deteriorated during the transition, and the thesis was declared broken. It turned out to be one of the most insightful pricing decisions in modern enterprise software. Data consumption was never going to decline. Consumption pricing captured every increment of it. Analysts - [Efficiency Masquerading as Inflection ](https://validex.co/efficiency-masquerading-as-inflection/) - Nursing was supposed to be the safe profession in an AI world. Hands-on, empathetic, credentialed, performed in person at the bedside of human beings in their most vulnerable moments. If you wanted to design a job no algorithm could touch, you’d design this one. A Yahoo! News piece this week made clear we should retire that assumption1. Apps like ShiftMed, CareRev, and Clipboard - [Racing on Noise ](https://validex.co/racing-on-noise/) - Wall Street is selling retail investors a story. The story is that quant strategies once reserved for institutional desks — factor tilts, direct indexing, tax-loss harvesting, real-time optimization — are now democratized. Available to anyone with a modest brokerage balance. The machinery of a hedge fund desk, in your pocket. Some of it is genuinely useful. Tax efficiency - [Apple's Intel Moment](https://validex.co/apples-intel-moment/) - The strategy was sound. Its perfection is the trap. Back in my July 2025 blog post, titled Apple’s AI Crisis: When Fortresses Become Prisons, I warned the walls had begun to confine what they were built to protect. Just a few days ago, the general stepped down while the walls stood under siege from a force that redefines warfare. The catalyst arrived. The - [Capturing Pent-Up Alpha](https://validex.co/capturing-pent-up-alpha/) - Being right in the market is not the hard part. The hard part is staying right long enough to get paid for it. Every serious fundamental investor knows this feeling. You’ve done the work. The thesis is sound. And then the market spends the next six months telling you that you’re wrong — not because - [The Tail That Ate the Base Case](https://validex.co/the-tail-that-ate-the-base-case/) - Some of the most credentialed economists and market strategists on Wall Street are letting their accumulated frustration drive their conclusions. Not hacks. Not partisans. People who built careers on rigorous analysis — now letting their feelings corrupt their conclusions, torturing data until it confesses. This is not a political statement — and to be fair, - [The Peak Margin Canard](https://validex.co/the-peak-margin-canard/) - There’s a phrase that gets thrown around Wall Street whenever a great growth company dares to invest in its own future: “Peak margins. Story over. Nothing else to see here.” It’s a comfortable conclusion. Read what’s visible, react to what’s measurable, call it a thesis. The problem is that the real answers aren’t on the - [The Power of Inference: How New Benchmarking Helps Further Reveal NVIDIA's AI Inflection](https://validex.co/the-power-of-inference-how-new-benchmarking-helps-further-reveal-nvidias-ai-inflection/) - Inference is the process of getting answers from AI models. It represents the next great battleground in AI infrastructure. While training gets the headlines, inference is where the real-world value gets created. Every ChatGPT response, every AI-generated image, every automated decision requires inference compute. Launched October 2024, InferenceMAX by SemiAnalysis is an open-source, continuously updated benchmarking framework that measures - [The Layoff Lie](https://validex.co/the-layoff-lie/) - Last week, Jack Dorsey announced Block would cut nearly half its workforce. In one move. Overnight. The market cheered loudly. Cue the doomsday headlines. But before you accept the narrative that AI is eating the workforce whole, let’s ask a more honest question: what’s actually happening here? Remember When Workers Had All the - [The Market Has Spoken and it's Long the Real World](https://validex.co/the-market-has-spoken-and-its-long-the-real-world/) - The Market Has Spoken and it’s Long the Real World The market is telling us something and it’s not subtle. Over the past twelve months, gold has outperformed bitcoin. Industrials have outperformed software. And Meta — the company that literally renamed itself after a virtual world — just slashed its metaverse budget after burning - [History's Greatest Short Squeeze and the Family Feud Behind it](https://validex.co/historys-greatest-short-squeeze-and-the-family-feud-behind-it/) - In October 2008, while the world was fixated on collapsing banks, something unbelievable happened in a corner of the German auto market. For a brief, surreal moment, Volkswagen—a carmaker many hedge funds considered a safe short—became the most valuable company on earth. Worth more than ExxonMobil, Apple, and Microsoft combined. This wasn’t a bubble. - [Beyond the Binary](https://validex.co/beyond-the-binary/) - For those worried about a bubble in AI stocks, the next level play is to “sell out of the NVDA ecosystem and buy into the GOOGL ecosystem”. The world loves a binary framework, especially Wall Street. Cut through the noise, make a simple, can’t-lose, directional bet based upon a believable thesis. And, in the short - [Can't Win for Trying: The SaaS Dilemma](https://validex.co/cant-win-for-trying-the-saas-dilemma/) - Software companies are stuck between a rock and a hard place right now. And watching how the market responds is revealing exactly where the opportunity lies. The Problem AI has arrived, and SaaS companies must spend heavily to build AI into their products. If they don’t, their competitive moats erode and they become irrelevant. Simple - [Hey, That's Still My Job! (For Now)](https://validex.co/hey-thats-still-my-job-for-now/) - An update on my previous blog titled: Hey That’s My Job! From Experiential Boom to AI Isolation Prior to COVID-19, it was all about the experiential—travel, restaurants, live shows. The shutdown forced us to turn inward, but this proved temporary. After COVID, experiences returned with a vengeance as stimulus-flush consumers sought human interaction once again. This - [The Hedge Fund Inflection: Why Smaller and Smarter Beats Bigger and Broader](https://validex.co/the-hedge-fund-inflection-why-smaller-and-smarter-beats-bigger-and-broader/) - The hedge fund industry has come full circle. After decades of building complex structures, hiring armies of specialists, and creating elaborate strategies, the real edge has returned to something surprisingly simple: fundamental investing with concentrated conviction. Only now, technology makes it possible at institutional scale. We’re at an inflection point where smaller is actually better. - [DMA Increases Distributions: Inflection Research at Work](https://validex.co/dma-increases-distributions-inflection-research-at-work/) - The Destra Multi-Alternative Fund (NYSE: DMA), for which VGI serves as sub-advisor, announced increased distributions for October and November 2025. The Board approved $0.0925 per share for both months—a vote of confidence in the portfolio’s strategic positioning. Dynamic Alpha in Action This distribution milestone reflects what happens when you put inflection research at the center - [Private Equity: When the Herd Runs, Look Closer](https://validex.co/private-equity-when-the-herd-runs-look-closer/) - The Intelligent Crossover Approach to Today’s Private Market Dislocation McKinsey’s 2025 report reveals private markets fundraising collapsed from $1.7 trillion in 2021 to $1.1 trillion in 2024. That report also notes that Yale’s endowment—the institution that pioneered alternatives investing—is selling $3 billion of its private holdings. When everyone’s running for the exits, our instinct is - [When Politicians Bet Against Their Own Economy: Reading the Inflection Tea Leaves](https://validex.co/when-politicians-bet-against-their-own-economy-reading-the-inflection-tea-leaves/) - When a U.S. Representative puts $215,000 of his own money into a 3x leveraged bet against American small caps, maybe it’s time to stop and listen. Representative Tim Moore’s recent disclosure of his investment in the Small Cap Bear 3x Shares ETF ($TZA) isn’t just another political trading controversy—it’s a case study in inflection recognition - [The Ultimate "Intelligence Test" (That You May Be Failing)](https://validex.co/the-ultimate-intelligence-test-that-you-may-be-failing/) - There’s a word that gets thrown around Wall Street whenever markets dare to go up despite the “smart money” being cautious: complacency. It’s become the ultimate intelligence test—not for measuring market risk, but for determining who’s in the club and who isn’t. If you don’t see complacency everywhere, congratulations, you’re apparently the dumb money. The - [Where's the Inflation? The Dire Predictions That Keep Missing the Mark](https://validex.co/wheres-the-inflation-the-dire-predictions-that-keep-missing-the-mark/) - For months, we’ve been warned that inflation was about to spike. Wall Street economists, Fed officials, and market pundits have been virtually unanimous: brace yourself for the inflation surge. We’re still waiting. CPI data for May came in below expectations—again. That’s four consecutive months of inflation undershooting forecasts, with the year-over-year rate rising modestly to - [All Aboard the PE Express: Private Equity's Next Stop Could Be Your 401(k)](https://validex.co/all-aboard-the-pe-express-private-equitys-next-stop-could-be-your-401k/) - Blue Owl Capital’s announcement this week of a strategic partnership with Voya Financial to bring private equity into 401(k) plans marks another milestone in what’s becoming an unstoppable trend. With Voya’s 9 million retirement plan participants and $630 billion in assets meeting Blue Owl’s private markets expertise, the locomotive of “democratized” alternatives is clearly picking - [Apple's AI Crisis: When Fortresses Become Prisons](https://validex.co/apples-ai-crisis-when-fortresses-become-prisons/) - Perhaps no stock is more divisive among investors—well, except maybe Tesla. Once considered a growth story, Apple is now viewed as a staple. It’s as blue-chip and brand-name as companies come. However, even as growth has declined, the P/E multiple has almost doubled. First, COVID exposed a global supply chain overly dependent on Chinese manufacturing. - [The Momentum Trap: Why Institutional Allocators Are Fleeing Private Equity](https://validex.co/the-momentum-trap-why-institutional-allocators-are-fleeing-private-equity/) - There’s an old saying in investing: “The trend is your friend… until it ends.” Right now, institutional allocators are learning this lesson the hard way as they scramble to reduce their private equity allocations. But here’s the irony—they’re chasing momentum out of PE just as aggressively as they chased it in. The Great Unwind Momentum - [The Living Portfolio: An Introduction to FolioSynthesis and Beyond](https://validex.co/the-living-portfolio-an-introduction-to-foliosynthesis-and-beyond/) - Imagine a world where your best investments don’t just sit in your portfolio—they evolve, transform, and express themselves in new ways as opportunities unfold. A world where owning a great company like NVIDIA isn’t binary—bought or sold—but fluid, dynamic, alive. Where the same core insight flows through different structures like water finding its way through - [Forget Geography, Let Growth Be Your Guide](https://validex.co/forget-geography-let-growth-be-your-guide/) - The case for international diversification isn’t just about risk management—it’s about recognizing growth inflections that others are missing. The investment landscape of 2025 presents a strong case for reconsidering international allocation. While most portfolios remain anchored to the performance patterns of the past decade, there are signs of a potential shift in global market dynamics - [The Four Ps of Investing: From Product to Platform and Back Again](https://validex.co/the-four-ps-of-investing-from-product-to-platform-and-back-again/) - A few weeks ago, I sat through a dozen hedge fund presentations at a capital-raising event. As an allocator, I’ve heard plenty of these over the years—but this time, something felt different. Each manager pitched a product, but what they were really selling was something else entirely: a process, a portfolio, a platform all at - [Velocity, Volatility, and Value: How Accelerating Change Creates Inflection Opportunities](https://validex.co/velocity-volatility-and-value-how-accelerating-change-creates-inflection-opportunities/) - The investment landscape of 2025 presents a fascinating paradox: as market volatility and the velocity of change intensify, the number of potential inflection points multiplies. This relationship—where greater turbulence actually generates more opportunities—forms the cornerstone of how to think about identifying value at the edge of inflection. The Compounding Effect of Velocity and Volatility Today’s - [Why Pessimism Sounds Smarter](https://validex.co/why-pessimism-sounds-smarter/) - Pessimism in financial markets tends to sound more intellectually rigorous. When someone forecasts doom, they appear thoughtful and prudent. Meanwhile, optimistic viewpoints are often dismissed as naive or salesmanship. Consider how the markets reacted earlier this year when DeepSeek unveiled a cheaper, more efficient AI model. Large segments of AI-related trades reeled, with everything from - [Uncertainty Separates the Quick from the Dead](https://validex.co/uncertainty-separates-the-quick-from-the-dead/) - Last week, United Airlines made a fascinating move by publishing two sets of guidance for investors—one assuming normal operations, and another accounting for potential disruptions. In a market that craves certainty, this dual approach might seem unconventional, but it reveals something important about leadership during turbulent times. The Fantasy of “Up and to the Right” - [Investing in CLOs? Focus on Manager Selection and Credit Quality](https://validex.co/investing-in-clos-focus-on-manager-selection-and-credit-quality/) - CLO exposure remains one of the few areas in private markets where the illiquidity premium still offers potential value. However, as returns normalize across the asset class, manager selection and investment process will likely become increasingly important factors in investor outcomes. CLOs in a Nutshell CLOs (Collateralized Loan Obligations) are portfolios of corporate loans packaged into - [Black Clouds, Silver Linings: Playing Offense and Defense](https://validex.co/black-clouds-silver-linings-playing-offense-and-defense/) - I was feeling a little low on Tuesday evening, with every pundit calling for the end of life as we know it over the last 3-4 trading days. Volatility has been breathtaking, both for equities and bonds (more on that below). According to Dow Jones Market Data, for the S&P 500 Index, it was the - [Using VIX as a Strategic Compass: A Thoughtful Investment Process](https://validex.co/using-vix-as-a-strategic-compass-a-thoughtful-investment-process/) - With the VIX surging to 60 yesterday—a level seen only a handful of times in market history—investors are understandably seeking perspective on what such extreme readings may mean and how they might respond. This rare event offers an opportunity to examine how different volatility environments can potentially shape investment strategy. The VIX index is often - [Finding the Silver Lining Behind the Dark Cloud of Tariffs](https://validex.co/finding-the-silver-lining-behind-the-dark-cloud-of-tariffs/) - It was John Milton who wrote: “Was I deceived, or did a sable cloud / Turn forth her silver lining on the night?” Yes, we didn’t think it was possible for the Trump administration to exceed the markets’ negative expectations for “Liberation Day,” but they did – always an overachiever! The confusing, layered tariffs announced - [Trade Wars & Tariffs: Breaking Through the Noise](https://validex.co/trade-wars-tariffs-breaking-through-the-noise/) - Have you noticed how suddenly everyone’s an expert in the Smoot-Hawley Trade Act of the 1930s? It’s fascinating to watch. Let me cut through the noise and get to what actually matters for us as investors. First, two critical points: The world today is infinitely more complex than in the 1930s Never make investment decisions - [The Credit Illusion: Separating Fact from Fiction in Alternative Credit](https://validex.co/the-credit-illusion-separating-fact-from-fiction-in-alternative-credit/) - If you’ve followed VGI for any amount of time, you know we don’t waste words. Our CIO, Mark Scalzo was a recent guest on the Destra Capital Credit Events Podcast and he got straight to the point.* Being an investor in Credit, we know it is often dismissed as a dull, yield-chasing game. But that’s - [US Exceptionalism? Time to Ditch the Training Wheels.](https://validex.co/us-exceptionalism-time-to-ditch-the-training-wheels/) - It started with DeepSeek unveiling a cheaper, more efficient AI model. As a result, large segments of AI-related trades reeled, with everything from chip companies to data center REITs, utilities, and their downstream suppliers hit hard—no doubt exacerbated by the sharp run-up in these stocks prior to this development. This led to an interesting shift - [Bubbles, Private Investing & Crypto, Oh My!](https://validex.co/bubbles-private-investing-crypto-oh-my/) - Earlier this month, I was intrigued by a CNBC interview with Cliff Asness, founder of AQR. AQR is generally known as a quantitative “value” shop, although Asness challenged this notion by describing the firm as a “non-traditional value investor.” In the interview, he pointed out that most value investors focus primarily on the U.S. market - [We've Changed Our Name to Validex Global Investing](https://validex.co/weve-changed-our-name-to-validex/) - Validus Growth Investors Announces Name Change to Validex Global Investing, Embracing Innovation and Investment at Emergent Points of Inflection Signifying a new era in innovative, alpha-focused investing, Validus Growth Investors rebrands as Validex Global Investing San Diego, CA — Dec 5th, 2024 — Validex Global Investing, formerly doing business as Validus Global Investing (Validex), is - [Industrial Real Estate Outlook: A Potential Turning Point for Investors](https://validex.co/industrial-real-estate-outlook-a-potential-turning-point-for-investors/) - The industrial real estate market finds itself in a cautious holding pattern as the surge in supply, fueled by the pandemic, continues to be absorbed. However, several trends indicate growing momentum: strong ecommerce performance, onshoring, steady retail sales, and modernization efforts in warehouses. These factors are driving optimism for the U.S. industrial real estate sector. - [Want Better Access to Private Markets? Platform Technology holds the Key.](https://validex.co/want-better-access-to-private-markets-platform-technology-holds-the-key/) - In the arcane world of private market investing, a new generation of platform technology is making it easier for wealth investors to organize, illustrate and understand any portfolio—regardless of the type of investment and where it is traded. Through machine learning and modern design, platforms like Copia Wealth Studios (see disclosure below) are making wealth - [Hey, that's my job!](https://validex.co/hey-thats-my-job/) - AI is in the in the early innings of being applied to mainstream businesses, creating operating efficiencies and transforming tech spend along the way. As a result, AI-fueled implementations will drive productivity levels back to long-term averages after the anemic pace of a post-GFC (Great Financial Crisis) world. Despite most traditional thinking that productivity gains - [The Big Head Fake?](https://validex.co/the-big-head-fake/) - Investors have been waiting for months, even years, to “pivot” to away from “big tech”, especially the MAG7. And perhaps with good reason. Going into the third quarter of 2024, the strong performance of cap-weighted indexes, like the S&P 500 Index, was dominated by these companies, specifically Nvidia. Like others, we agreed that this lack - [Where's My Moat?](https://validex.co/wheres-my-moat/) - Wow, that took a while. From consumers’ perspective, there was favorable news on Thursday morning as CPI declined by 0.1% in June to a rolling 12-month rate of 3.0%.* As they say, the trend is your friend, and we have now seen three solid months of tame inflation readings which bodes well for a September - [Expanding Cracks in the Ice](https://validex.co/expanding-cracks-in-the-ice/) - As we were releasing our blog on Friday, we received new consumer sentiment information from the latest University of Michigan survey that we referenced in our discussion. It was more bad news – like the sounds coming off the Khumbu Icefall as the sun rises over Everest. The Consumer Sentiment Index fell to 65.6 in - [Ice Melts from the Edges](https://validex.co/ice-melts-from-the-edges/) - Yesterday, we had an interesting day in terms of new economic and monetary data points. For the second month in a row, Consumer Price Index (“CPI”) came in below expectations, flat month over month vs a 0.1% expectation with cooling in services and housing — finally. This seems to suggest that the “spike” we saw - [Crossing-Over to a Hybrid Structure](https://validex.co/crossing-over-to-a-hybrid-structure/) - A new partnership between Capital Group and KKR will launch a series of (so-called) hybrid funds investing in both public and private debt securities. These are vehicles intentionally set up this way, rather than those adding public or private exposure to an existing strategy for tactical or financial engineering purposes – First, when a private - [Contrarian Comfort at the Milken Institute](https://validex.co/contrarian-comfort-at-the-milken-institute/) - Last week, at the Milken Institute, we had lunch with one of the most prominent hedge fund managers of our time. It was a wide-ranging discussion that covered a host of topics including upcoming new product introductions. Mostly though, we were taken by the similarities in our philosophy and approach. Here’s our takeaway… Diversification is - [Dividends Without Growth are a Roller-Coaster of Empty Promises](https://validex.co/dividends-without-growth-are-a-roller-coaster-of-empty-promises/) - No matter how long the track record, don’t fall into the trap of overvaluing a dividend for its own sake, especially if there is no future earnings growth behind it. Investors have always loved dividend payers. Many studies have championed the stability and consistently implied by companies that pay a solid dividend. Further, many also - [Risk, Volatility and Diversification](https://validex.co/risk-volatility-and-diversification/) - Came across this video of Warren Buffet and Charlie Munger discussing diversification. In a nutshell, “diversification, as practice, generally makes very little sense for anyone that knows what they’re doing”. This brought to mind our post titled, The 60/40 portfolio is dead, long live the 60/40 portfolio. It’s a great reminder to: Fundamentals matter — - [Are we looking at a market top for equities? What's your plan?](https://validex.co/are-we-looking-at-a-market-top-for-equities-whats-your-plan/) - Consider that, through Friday, April 12, 2024, the S&P 500 Index (SPX) is up roughly 8%. This comes on the heels of a fantastic 26% year for the SPX in 2023. And, before the recent upswing started in October, the SPX had essentially been flat, treading water for almost two years (up 1.4% from 9/30/21 - [Are CLOs Right for Your Portfolio?](https://validex.co/are-clos-right-for-your-portfolio/) - Are CLOs Right For Your Portfolio? During 2023, the Credit Suisse Leveraged Loan Total Return Index (CSLLI) was up 13.0% on a total return basis–according to Bloomberg. This was during a banking crisis, when commercial real estate office buildings were under pressure, and interest rate uncertainty weighed heavy on investors’ collective minds. At the end - [Captive Data Sets: The Global Economy's “New Oil”](https://validex.co/captive-data-sets-the-global-economys-new-oil/) - In combination with semiconductor chips, captive data sets are now the global economy’s “new oil.” And software companies that sell subscriptions or targeted advertising are suddenly recognizing the potential to create additional revenue streams from allowing third-party models to utilize their vast data caches. What’s not clear is whether or not the use of these - [Green Shoots in Industrial Real Estate](https://validex.co/green-shoots-in-industrial-real-estate/) - While the industrial real estate market continues to soften, there are green shoots driven by rent growth, decreasing supply, and increased market demand. The softening described in our Q2 2023 Industrial Real Estate update continued through the second half of the year with industrial transaction volume decreasing 44% to $89.2 billion. This was not unexpected - [Big Tech's Energy Needs vs Climate Agenda](https://validex.co/big-techs-energy-needs-vs-climate-agenda/) - Generally, big tech has been very supportive of climate change initiatives around the world. Many tech companies have increasingly sought to utilize renewable energy sources, some even co-locating near the ultimate source (even Niagara Falls!), to power their growing energy needs. But is that loyalty about to be tested? Two important themes—blockchain/crypto and AI–are increasingly - [Our Take on the Latest ESG Controversy](https://validex.co/our-take-on-the-latest-esg-controversy/) - If you are following the news about ESG these days, there is no shortage of controversy about the subject. As money managers, we follow the numbers and like most things that become popularized and politicalized, there are good and bad aspects of any idea that achieves full-scale adoption. According to a recent editorial by the - [How Will Mexico Play its Economic Winning Hand?](https://validex.co/will-us-mexico-nearshoring-disproportionately-benefit-the-chinese/) - While the US still dominates total dollars of foreign direct investment (“FDI”) into Mexico, China is Mexico’s fastest growing source of new FDI. This is a high stakes game that not only has the potential to crowd out investments from US companies, but also to put a strain on US-Mexico relations already complicated by the - [Snowballs and the Chinese Market Meltdown](https://validex.co/snowballs-and-the-chinese-market-meltdown/) - From the midst of a Chinese market meltdown in January, a new villain has emerged – “SNOWBALLS”! According to Bloomberg, snowballs are structured derivatives sold in China which are tied to the performance of an underlying index — offering to pay investors bond-like coupons and return principal as long as that index stays within a - [Say Goodbye to Pricing Power and Hello Purchasing Power](https://validex.co/say-goodbye-to-pricing-power-and-hello-purchasing-power/) - The ubiquitous pricing power of many companies throughout COVID and beyond is finally coming to an end. In the Fed’s January Beige Book (Federal Reserve Board Publication), there were indications that continued price increases were being met with resistance across the country: National – “Districts also noted that increased consumer price sensitivity had forced retailers - [The Walgreens’ Debacle: Dog Catches Car](https://validex.co/the-walgreens-debacle-dog-catches-car/) - Late last week, investors got a surprise when Walgreens Boots Alliance (TKR: WBA) announced that it would be slashing its dividend by 50%. Perhaps this news should not have been so surprising because, immediately prior to the cut, the dividend yield was a colossal 7.5% — nose bleed territory for a run-of-the-mill operating company. In - [Vertical Operating Systems: The Ultimate Point of Growth Inflection in 2024](https://validex.co/vertical-operating-systems-the-ultimate-point-of-growth-inflection-in-2024/) - Vertical operating systems are some of the most interesting early stage investment opportunities in 2024. According to the folks at Andreessen, a vertical operating system is the “single source of truth and the base layer for company-wide ecosystems of tools”. As investors in emergent points of growth inflection, we like companies that have the potential - [AI Progress is a Poor Excuse for Seizing the Intellectual Property of Others](https://validex.co/ai-progress-is-a-poor-excuse-for-seizing-the-intellectual-property-of-others/) - It was interesting to read that the New York Times was suing Open AI and Microsoft for copyright infringement (NY Times sues OpenAI, Microsoft for infringing copyrighted works | Reuters). While there have been other copyright-type challenges to generative AI, this is probably the most significant one to date; and perhaps most importantly, because it - [Tesla's Not So Typical Recall](https://validex.co/teslas-not-so-typical-recall/) - We were interested to see Tesla stock drop intraday on December 13th with the announcement of a two million car recall of Tesla vehicles – largely its entire existing fleet. Especially, having recently written an article on electric vehicles about how some of Tesla’s advantages relative to its competition titled, Trouble in EV Land? It - [Are Structured Notes Right for Your Portfolio?](https://validex.co/are-structured-notes-right-for-your-portfolio/) - More and more, structured notes are finding their way into traditional portfolios as a way to augment traditional stock and bond allocations. Typically their objective is to generate non-correlated income, enhancing equity upside and/or protecting equity downside. In this podcast, our CIO, Mark Scalzo, and our host, John Dean, speak to Chris Mee from InspereX - [Private Credit: The New Cool Kid on the Block](https://validex.co/private-credit-the-new-cool-kid-on-the-block/) - You could say private credit has become the cool kid on the block with all the attention these days in the financial news. If you are not familiar with the private credit asset class, this article from Barron’s gives a good description. In a nutshell private credit makes direct loans with floating interest rates, typically - [Trouble in EV Land? It Depends on Your Strategy.](https://validex.co/trouble-in-ev-land-it-depends-on-your-strategy/) - Recently, and seemingly out of nowhere, the markets have turned sour on EVs. Remember all the auto makers stumbling over each other to be the first to promise an all-electric future and show their reduced carbon footprint bona fides? The bandwagon included Volvo, Mercedes, Jaguar, Cadillac, Rolls Royce, Alfa Romeo , among others, committing to - [That old bugaboo – deflation is back, at least in theory.](https://validex.co/that-old-bugaboo-deflation-is-back-at-least-in-theory/) - If you listen to Fed talk, inflation is still the biggest problem this economy faces. If you listen to the markets – not so much. Last week, we noticed several references to deflation that caught our attention. Wait, what? What happened to disinflation, did we just skip over that phase? While some pundits have been - [Disruptive Embrace](https://validex.co/disruptive-embrace/) - There is so much talk about disruption these days and typically it has to do with innovation. A new company or product hits the market and displaces existing market leaders — and even eliminates entire industries over time. The 12 original components selected by Charles Dow to make up his original Dow Jones Industrial - [Out of the Frying Pan, Into the Fire](https://validex.co/out-of-the-frying-pan-into-the-fire/) - We’ve recently seen what’s being called “frying pan” charts entering the economic lexicon. The “handle” of the pan being on the left prior to 2008 and the “pan” being on the right side post financial crisis (with a little additional dip during COVID). Of course, this pattern has been obvious for years, but doesn’t seem - [Does the Way Small Businesses Feel Matter? Probably.](https://validex.co/does-the-way-small-businesses-feel-matter-probably/) - The recent NFIB Small Business Optimism Index (the “SBO Index”) from July revealed some interesting information. The index is part of a survey of small business economic trends from members of the National Federation of Independent Business (“NFIB”), implemented monthly since 1986. It’s a composite of ten components and is meant to provide an indication - [Market Breadth, or Another Head Fake?](https://validex.co/market-breadth-or-another-head-fake/) - Over the past couple days, market breadth has been impressive, with the S&P 500 Equal Weighted Index up 3.3% vs. the S&P 500 Index up 2.1% vs. the Magnificent Seven up 1.6% (AAPL, AMZN, GOOGL, META, MSFT, NVDA, TSLA). Could the M7’s reign be coming to an end? Two days does not a trend make. - [Are Robots Coming for Portfolio Managers? ](https://validex.co/are-robots-coming-for-portfolio-managers/) - Two Saturdays ago, a Barron’s article addressed the use of artificial intelligence in managing investment portfolios and how soon human portfolio managers would be replaced. Given our role in the world – as PMs — you might not be surprised that the headline caught our attention. However, the article went on to discuss how disappointing - [What Dirty Rooms Tell Us About Future Hotel Margins](https://validex.co/what-dirty-rooms-tell-us-about-future-hotel-margins/) - Hotel rooms are dirtier than ever, and many hotel operators are milking it for everything it’s worth. We were struck by a recent Fortune article (Dirty hotel rooms: Business traveler checks in and out for one-night stays in same room) detailing the challenges of accessing basic services that we apparently took for granted pre-COVID. Individual - [Navigating in Times of Crisis](https://validex.co/navigating-in-times-of-crisis/) - On Saturday, October 6th, we awoke to a true point of inflection as result of the horrible attack on Israel and the reality of war in the Middle East. Obviously, much like the ongoing war in Ukraine, this is very concerning and heart-breaking for all involved, especially innocent civilians. When global conflicts arise, investors are - [Pricing Power is not Infinite](https://validex.co/pricing-power-is-not-infinite/) - In difficult market environments, Consumer Staple (CS) stocks are assumed by most investors to be a safe haven. They are considered part of a group of “defensive sectors” due to the consistency of the underlying business regardless of the economic environment and they include Healthcare and Utilities, to name a few. This is why CS - [Do Venture Convertibles Make Sense in Your Portfolio?](https://validex.co/do-venture-convertibles-make-sense-in-your-portfolio/) - Venture investors willing to deploy capital in these uncertain markets may find opportunity in the convertible note space.Since May 2022, the venture capital market has largely slowed down in terms of the number of deals and the amount invested, largely driven by huge multiple (think valuation) contraction. According to Crunchbase, “global venture funding measured at - [International Shark Attacks Domestic Portfolio](https://validex.co/international-shark-attacks-domestic-portfolio/) - Last week our CIO, Mark Scalzo, answered the question, Why Global?? In his post, he pointed out five compelling reasons this might be a good time to think about your asset allocation to non-US stocks. They include: De-Globalization Cost of Capital Relative Value Reversion to the Mean USD Under Attack Since we heard what Mark - [ No Turning Back – Nearshoring is Here to Stay ](https://validex.co/no-turning-back-nearshoring-is-here-to-stay/) - For the first time since 2003 the US is importing more from Mexico than China based upon a 12-month moving average, according to B of A Global Research. Investment Advisory Services are offered through Validus Growth Investors, LLC (“Validus”), an SEC Registered Investment Adviser. No offer is made to buy or sell any security or investment product. - [Why Global?](https://validex.co/why-global/) - Why is global equity exposure important? Here’s why… • De-Globalization. Globalization homogenized returns – for countries, for companies. De-globalization means the “country risk” becomes very important. As we all know, there are big differences in political and legal systems, economic and monetary philosophy, demographics, and cultural norms across the globe (to name a few). As - [VGI Named to PSN Top Gun Q2 23](https://validex.co/vgi-named-to-psn-top-gun-q2-23/) - Validus Growth Investors Named to PSN Top Guns List of Best Performing Strategies for Q2 2023 Quarterly PSN Top Guns List published by Zephyr identifies best-in-class separate accounts, managed accounts, and managed ETF strategies San Diego, CA—September 5, 2023—Validus Growth Investors announced today it has been named to the celebrated PSN Top Guns List of - [Secular Growth is the Best Kind of Value](https://validex.co/secular-growth-is-the-best-kind-of-value/) - As we scour the investment landscape for inflections – meaningful signals that presage a future that is more dynamic than the past for markets, asset classes and companies – we often encounter companies whose businesses are “secular” in nature. In the investing world, the word “secular” is more often used to describe market conditions, good - [Industrial Real Estate Update Q2 2023 – No Zero-Sum Games](https://validex.co/industrial-real-estate-update-q2-2023-no-zero-sum-games/) - In a recent article the Wall Street Journal discussed the state of industrial real estate in Southern California, traditionally an outperforming geographic sector. The article hit on some interesting, but not new, trends: Vacancy rates for warehouses (industrial real estate) increased to 3.8%, reflecting net new warehouse space coming on-line in excess of warehouse space - [Is Mexico the Next China and is this the Right Time to Invest?](https://validex.co/is-mexico-the-next-china-and-is-this-the-right-time-to-invest/) - They call it “nearshoring” or “reshoring” and it could represent attractive investment returns for the next decade and beyond. According to Bank of America economists led by Carlos Capistran, “nearshoring represents Mexico’s best growth opportunity for the next 10 years and it is already occurring. Mexico’s manufacturing sector is booming. It has grown more than - [What is Inflection and is Mexico Experiencing One?](https://validex.co/what-is-inflection-and-is-mexico-experiencing-one/) - Our CIO, Mark Scalzo, recently participated in a fire-side chat along with Rafael Fernandez de Castro, Ph.D., and others at the Longley Capital Summit hosted by University California San Diego (UCSD). The subject was inflection—specifically, as it relates to the recent surge in companies moving their offshore resources closer to home. Here’s a blog our - [VG Global Growth Celebrates its 10th Birthday and Number One Status](https://validex.co/vg-global-growth-celebrates-its-10th-birthday-and-number-one-status/) - It was ten years ago we launched VG Global Growth. And what a way to celebrate–with a number one peer ranking according to PSN! * According to Forbes, “The great bull market of 2013 lived up to its name on New Year’s Eve, with the Dow, Nasdaq and S&P 500 closing in the green across - [Early Adopter – A page from the playbook of some of the biggest and the best?](https://validex.co/early-adopter-a-page-from-the-playbook-of-some-of-the-biggest-and-the-best/) - It’s one thing to copy or borrow (some might say steal) someone else’s IP. in fact, many “creators” would argue that generative AI does exactly that (see Sarah Silverman sues Meta, OpenAI for copyright infringement | Reuters). However, it’s a whole other ball game to successfully execute a business strategy and dominate a market. Back - [ Inflection and the Search for Alpha (Podcast)](https://validex.co/inflection-and-the-search-for-alpha-podcast/) - How do you find the next big investment idea? Or better yet, how do you know when to invest in a big idea that you may have initially missed out on? In our latest Growth Podcast, Mark and Zach talk about finding emerging points of growth inflection that have the potential to add alpha to - [The Forever CEO – a Good Thing?](https://validex.co/the-forever-ceo-a-good-thing/) - According to a recent Barron’s article that cites an about-to-be-released study by Equilar, the average tenure for S&P 500 CEOs between 2013 and 2022 was down only slightly from 7.6 years to 7.2 years. That small change glosses over the real story – the impact of the long-term CEO which skews the averages higher. Looking at the - [When Passive Investing is Active](https://validex.co/when-passive-investing-is-active/) - When one invests in an index, it is often assumed to be a passive strategy. Well diversified means to gain broad exposure to the market. But too often, people make investments they do not understand, or would ever even want—if they knew what they were investing in. Earlier this quarter, in an article titled Top - [Are Data Centers AI Winners or Losers?](https://validex.co/are-data-centers-ai-winners-or-losers/) - CNBC recently posted an article indicating that a data center stock is a potential ‘under-the-radar’ artificial intelligence (“AI”) investment opportunity. The premise of the argument is simple: increased compute needs from the adoption of AI will drive demand for datacenters, which house & provide the compute necessary for AI applications. But are simple stories enough - [Artificial Intelligence (“AI”) Will Change the World. Who Benefits?](https://validex.co/artificial-intelligence-ai-will-change-the-world-who-benefits/) - It’s hard to ignore the rally in Nvidia (NVDA) after reporting revenue and earnings that were well above expectations and, more importantly, raised fiscal 2Q guidance to $11.0 billion (+/- 2%) vs. analysts’ estimates of $7.2 billion. The stock promptly added $184 billion to its market capitalization, finishing shy of the trillion-dollar club ($939 billion). - [Top Heavy Performance](https://validex.co/top-heavy-performance/) - It’s fair to say that markets have behaved unusually since the start of 2023, in the face of: Mounting irrefutable data that an economic slowdown, or maybe even a full-blown recession, is taking hold; Increasing signs that consumers are pulling back and having to make difficult choices, at best, or completely tapped out, at worst; - [The Bright Spot in Commercial Real Estate Right Now](https://validex.co/the-bright-spot-in-commercial-real-estate-right-now/) - With all the recent worries about defaults and higher interest rates leading to lower valuations in commercial real estate, investors may wonder if it is worth considering the asset class in the current environment. However, commercial real estate is a broad definition with many asset classes including office, multifamily, industrial, retail, healthcare, hospitality, etc. We - [Are Small Caps an Attractive Hunting Ground?](https://validex.co/are-small-caps-an-attractive-hunting-ground/) - There is a relative valuation discount in small caps that may create a target rich environment for investors searching for opportunities in individual companies. Earnings season is getting into full swing this week. Let’s take a brief look at how small cap equities have performed fundamentally and how the group’s valuation currently stands. Per Bloomberg, - [International Equities – Re-Evaluating Our View](https://validex.co/international-equities-re-evaluating-our-view/) - Since we last wrote about international equities in early December of 2022, the asset class has outperformed domestic equities though the pure calendar quarter numbers show the two allocations to be performing close to each other, according to Bloomberg. Have the reasons to consider investing in international equities changed? In our 12/6/22 blog, we - [Goodbye to easy money and automatic up-rounds](https://validex.co/goodbye-to-easy-money-and-automatic-up-rounds/) - The days of easy money and automatic up-rounds seem to be over – at least for the foreseeable future. Already reeling from a valuation reset that started in 2022, the industry faced another unexpected blow to its ecosystem with the demise of Silicon Valley Bank, and to a lesser extent, the weakening of First Republic. - [Mark Scalzo Discusses 'Direct Listing,' Alternatives, and More](https://validex.co/mark-scalzo-discusses-direct-listing-alternatives-and-more/) - The Destra Multi-Alternative Fund (“DMA” or the “Fund”) started as a closed-end (non-listed) interval fund over 10 years ago to provide non-correlated income and a diversified exposure to alternatives for investors. After years of transformation, the Fund’s multi-strategy alternative approach (“MASS”) has created one of the most unique portfolios in the listed closed-end fund world - [Crossover Hedge Funds, Friend or Foe?](https://validex.co/crossover-hedge-funds-friend-or-foe/) - A crossover fund allows a single investment to pursue both the illiquidity premium and the market premium–two premiums considered to have a low correlation. And, as we all know, low correlation helps to reduce volatility, in terms of standard deviation of returns. According to this article we found written by Mark Anson back in 2001, - [Validus Growth Investors Named to PSN Top Guns List of Best Performing Strategies for Q4 2022](https://validex.co/validus-growth-investors-named-to-psn-top-guns-list-of-best-performing-strategies-for-q4-2022/) - Quarterly PSN Top Guns List published by Zephyr identifies best-in-class separate accounts, managed accounts, and managed ETF strategies San Diego, California—February 21, 2023— Validus Growth Investors (VG) announced today it has been named to the celebrated PSN Top Guns List of best performing separate accounts, managed accounts, and managed ETF strategies for Q4 2022. The - [Culling the Herd: SIVB, SI](https://validex.co/culling-the-herd-sivb-si/) - Markets faced a new challenge last week – the specter of bank collapses, knocking the Fed off the top of the list in terms of market concerns. Well, sort of. Many would argue that the Fed’s actions exacerbated flaws that could have self-corrected if the pace of hikes hadn’t been so accelerated. For almost a - [Structured Notes: An Asymmetrical Portfolio Diversifier](https://validex.co/structured-notes-an-asymmetrical-portfolio-diversifier/) - A structured note (“SN” or “note”) is a debt obligation that also contains an embedded derivative component that adjusts the security’s risk-return profile. Generally, in whole or in part, part of the performance of a structured note is dependent on the performance of an underlier – mostly indexes, a combination of indexes, and sometimes individual baskets of stocks. Simplistically, - [Tough Sledding for Monopolistic Behavior](https://validex.co/tough-sledding-for-monopolistic-behavior/) - Times of uncertainty surrounding the widespread adoption of technological innovation are tough sledding for companies used to controlling the playing field through their monopolistic behavior. The recent ChatGPT phenomenon, the poster child for so-called generative artificial intelligence (“AI”), brought on by the willingness of its parent, OpenAI, to unleash unmastered technology into the world in - [Not So Scary After All](https://validex.co/not-so-scary-after-all/) - After a series of meetings and press conferences where the Fed seemed intent on stifling any optimism in the market to demonstrate its commitment to crushing inflation, the Fed took a breath on Wednesday. Not officially – in fact, the Fed raised the Fed Funds rate 0.25% to 4.50-4.75% and indicated that further rate increases - [Why is Growth Hard?](https://validex.co/why-is-growth-hard/) - Nobody knows better than you how hard it is to start and grow a business. Sure, there are those times when things are easy. But even during the “easy times”, you remember how hard you worked to get where you are today. The good news is, once we’ve experienced some success, we have a repeatable - [Rewarding mediocrity: A participation trophy for investing](https://validex.co/rewarding-mediocrity-a-participation-trophy-for-investing/) - Investors are chasing consistently average businesses, ostensibly for “safety”, with the idea that if you don’t expect much, you won’t be disappointed. Take AMD1 vs. Intel for example Advanced Micro Devices, Inc. (AMD) has been outperforming for the last 5 years under the leadership of Lisa Su – growing at an accelerated pace and continuing to gain market share on its competitors… trading at an estimated Forward Price/Earnings Ratio (P/E) of 28.3x. - [To ESG, or not to ESG, that is the question !](https://validex.co/to-esg-or-not-to-esg-that-is-the-question/) - ESG. Seems like a good idea. Well-meaning. But what really is ESG? Environmental Social Governance (ESG) strategies can be defined and implemented in so many ways that even the SEC is showing increasing concern about the lack of consistency and general confusion that ESG is creating across the industry. - [Stop Winging it and Convert More Referrals with a Strategic Narrative](https://validex.co/stop-winging-it-and-convert-more-referrals-with-a-strategic-narrative/) - You wouldn’t take on a new client without understanding their financial situation; you wouldn’t recommend an investment without doing your due diligence; and you definitely wouldn’t build a portfolio without understanding underlying risks. Everything you do requires a certain level of preparation and planning, and so does how you tell your story. Believe it - [High Yield Can Mean Caution… or High Opportunity](https://validex.co/high-yield-can-mean-caution-or-high-opportunity/) - High yields can certainly mean opportunity, given the right circumstances. How can an investor tell the difference? Details matter. - [The First Pillar: Buyer Behavior Matters](https://validex.co/the-first-pillar-buyer-behavior-matters/) - Buyer Behavior is one of the “Pillars” of our investment process. There is a greater informational value when insiders buy their stock than when they sell. - [Finally, a Worrisome Yield Curve Inversion?](https://validex.co/finally-a-worrisome-yield-curve-inversion/) - Last week, we had two brief yield curve inversions that potentially matter. The 2-year treasury briefly yielded more than the 10-year treasury. Usually, investors demand more yield for committing their capital for longer periods, so the curve slopes from lower left to higher right on the chart. Why would anyone demand less return for lending - [Beyond meat - The lure of the TAM](https://validex.co/beyond-meat-the-lure-of-tam-2/) - Remember the excitement surrounding the Beyond Meat IPO? The BYND IPO was priced at $25.00/share on May 1st, 2019, and closed up 163% to $65.75/share on the first day. It hit a high of $243.90/share several months later, on July 26th, trading at 63.1x Next Year’s Sales (a). For some perspective, at the time — - [Validus Exits Long Game](https://validex.co/validus-exits-long-game/) - After two rounds as a minority investor (March 21 and August 21), we have successfully exited Long Game through a strategic acquisition by Truist Financial Corporation’s (NYC:TFC) . Our initial attraction to the award-winning gamified finance mobile app was its potential to change the way people save, learn and engage with their finances. The inflection - [Validus Adds Clear Street to its Private Equity Portfolio with a Series B Investment.](https://validex.co/validus-adds-clear-street-to-its-private-equity-portfolio-with-a-series-b-investment/) - Validus recently added Clear Street as a top 5 holding in our private equity portfolio. But more than being just an investor, Validus utilizes Clear Street’s trading platform every day, which makes our participation in this $165 million series B funding round even more meaningful. It’s one thing to recognize a technology that has the - [INTRODUCING THE INFLECTION FIVE™ PORTFOLIO](https://validex.co/introducing-the-inflection-five-portfolio/) - Download Now The Inflection Five Portfolio was created to satisfy the requests of financial advisors to provide our best growth ideas, understanding they would need to add some kind of risk mitigation strategy based on a client’s investment profile. We do the research and curate our best growth ideas unfettered by any risk parameters, and - [This is a Good Time To Consider Alternatives](https://validex.co/this-is-a-good-time-consider-alternatives/) - There’s lots of uncertainty in traditional asset classes these days. Roaring inflation seems to be stubborn and persistent, with the Fed serving as a detractor rather than a facilitator. Most wonder if the looming recession will produce a quick, “V-shaped” resolution or if it will have a much longer effect. The bigger question is: Is - [Is the Market Crying Wolf on Long-Term Inflation?](https://validex.co/is-the-market-crying-wolf-on-long-term-inflation/) - Will the coordinated chorus of warnings about inflation being stubbornly high suggest that a more rapid decline than the market expects? Could this be a point of meaningful inflection? Lately, we are hearing overwhelming chatter about the “stickiness” of inflation by pundits. This, after many months of conviction that inflation was “transitory.” Either way, when - [DMA Quarterly Fund Review -- An Alternative to Traditional Alternatives](https://validex.co/dma-quarterly-fund-review-an-alternative-to-traditional-alternatives/) - Are you looking for alternatives to provide diversification during this period of downward movement in stocks and bonds? Listen to Mark, on a special webinar about the current state of the alternatives market, and his broader perspective on where we go from here. Find out why we like to think of the Destra Multi Alternative - [Housing Markets and Liquidity](https://validex.co/housing-markets-and-liquidity/) - Remember in 2006/2007 when the market consensus was that anyone could refinance because housing always went up? Similar situation now, except instead of relying on financing to drive prices, people are relying on the price appreciation since March 2020 to plan their ‘savings’ in real estate. Long story short, prices are inflecting downward. Financial conditions - [Are You Ready for the Carbon Markets?](https://validex.co/are-you-ready-for-the-carbon-markets/) - Global carbon markets are a nascent and growing asset class with structural tailwinds that are experiencing some growing pains. That aside, it is a legitimate asset class that touches multiple points of inflection, one of which would be what we call a ‘behavioral trend.’ This is evident in increased individual and institutional focus on addressing - [Crypto Anyone?](https://validex.co/crypto-anyone/) - When it comes to cryptocurrencies, we often get asked: What do we think of it specifically and the crypto world in general? Is this a legitimate asset class? Is it investable? While we are not experts, we contend that it is still too early to have a meaningful portfolio allocation for most investors. - [Mark Scalzo discusses ‘direct listing,’ alternatives and a massive discount](https://validex.co/mark-scalzo-discusses-direct-listing-alternatives-and-a-massive-discount/) - Check out this interview Mark did about the outlook for alternative investing and the process we use to manage the Destra Multi Alternative Fund (DMA). Mark also talks about how we became one of the few new listings on the NYSE in 2022, and the different factors that led to a discount much bigger than - [The 60/40 Portfolio is Dead, Long Live the 60/40 Portfolio!](https://validex.co/the-60-40-portfolio-is-dead-long-live-the-60-40-portfolio/) - For the past 40 years, many would say the traditional 60/40 portfolio has ruled as the King Exemplar of asset allocation. Since the 1980s, investors have had a sort of “set-it-and-forget-it” approach to getting attractive risk-adjusted returns–with a total return similar to the S&P 500 but with a lower risk profile. Not anymore, according to - [Understanding The VIX](https://validex.co/understanding-the-vix/) - Ever think about how experts talk about a market metric to people who really don’t understand what they are saying? Take the VIX for example. If you’ve been investing for the past 20 years, you might have learned about the VIX when it was first introduced in 2004 by the Chicago Board of Options Exchange - [Mark’s Musings: 10.28.22](https://validex.co/five-things-friday/) - Here’s some light reading to wrap up your week. Enjoy! U.S. firms developing a new generation of small nuclear power plants to help cut carbon emissions have a big problem: only one company sells the fuel they need, and it’s Russian. [Ungated Content] An increase in PE firms selling companies to each other—otherwise known as - [Mark’s Musings: 11.9.22](https://validex.co/marks-musings/) - The Productivity Head-Fake Turns out the Atlanta Fed’s measure CPI based on component “stickiness – the sticky price index sorts the components of the consumer price index (CPI) into either flexible or sticky (slow to change) categories based on the frequency of their price adjustment.” The sticky-price consumer price index (CPI) increased by 8.5% (annualized) - [Is Now the Time for Small Cap -- finally?](https://validex.co/is-now-the-time-for-small-cap-finally/) - If you’re a financial pro, you know small caps are typically one of the first asset classes out of a recession. In fact, it is small caps are one of the “first in, first out” (FIFO). Clearly, small cap has underperformed through 9/30 this year. Small cap has underperformed for the last 10 yrs (Russell 2000 vs. - [Mark's Musings: 11.16.22](https://validex.co/marks-musings-11-16-22/) - Here Come the Electrified Semi Trucks. Where are we going to get the power? Could broad-based inflation really turn negative in 2023? While we are skeptical of comparing today’s economic circumstances to prior periods as a rationale (in whole or in part) for implementing an investment thesis, we think there is something to this argument. - [Rare Earths: Will China Play its Trump Card?](https://validex.co/the-rare-earths-trade/) - Despite the recent “detente” suggested by commentators and affirmed by the markets in the wake of a three-hour meeting between US President Biden and Chinese President Xi Jinping, we are skeptical of Chinese sincerity and confident in Washington’s gullibility (regardless of party in the White House). We have yet to see any retaliation from the - [Is it Time for International Stocks to Shine?](https://validex.co/is-it-time-for-international-stocks-to-shine/) - PSN just gave our International Strategy 5 stars. But that’s not the point of this article. Because, if you’ve been investing for the past 10 years, you know international equities have not been the most rewarding asset class to hold–compared to domestic equities. Not to mention the headwinds caused by a strong dollar. So, why bother with - [Validus Growth Investors Named to PSN Top Guns List of Best Performing Strategies for Q3 2022](https://validex.co/validus-growth-investors-named-to-psn-top-guns-list-of-best-performing-strategies-for-q3-2022/) - Quarterly PSN Top Guns List published by Zephyr identifies best-in-class separate accounts, managed accounts, and managed ETF strategies San Diego, California—December 07, 2022— Validus Growth Investors, LLC, announced today it has been named to the celebrated PSN Top Guns List of best performing separate accounts, managed accounts, and managed ETF strategies for Q3 2022. The - [Mark's Musings: 12.8.22](https://validex.co/marks-musings-12-8-22/) - Trouble in Real Estate Land? Amazon continues to push the envelope of efficiency within its warehouses. As labor gets more expensive and workers demand higher wages, more benefits, and even (gasp) unionization, the quest to fully automate its fulfillment process has reached a fever pitch. Yet, despite many years of effort and billions of dollars - [Is inflation no longer the Bogeyman?](https://validex.co/is-inflation-no-longer-the-bogeyman/) - The Fed seems relentless and immovable – raising rates another 50 bps yesterday and 4.25% in cumulative raises for the year. A month or two ago this “deceleration” would have been welcome news as expectations were for another 75 bps increase. Today, not so much. Chairman Powell’s tough talk and hawkish stance now seems somewhat - [An Inch Deep and a Mile Wide: The Perfect Tool for Those Unwilling to Do the Work](https://validex.co/an-inch-deep-and-a-mile-wide-the-perfect-tool-for-those-unwilling-to-do-the-work/) - Everybody is talking about AI and its latest star, ChatGPT, an artificial intelligence chatbot that utilizes information available across the internet to provide conversational answers to specific questions. And, I would have to agree, it’s entirely mind-blowing and completely scary at the same time. When I asked ChatGPT to “write a poem for me about - [Growth Investing Podcast #1](https://validex.co/growth-investing-podcast-1/) - How can the VIX be used as an indicator to make investment decisions? In this first episode of our new podcast, Validus CIO Mark Scalzo and CEO Jerry Murphey talked with our Host, John Dean, about the VIX and how it can be used as an indicator of whether to take certain actions. This Podcast - [Investing in a Secular Bull and Bear Market](https://validex.co/investing-in-a-secular-bull-and-bear-market/) - 1999 definitely felt like the end of a secular bull market as the world feverishly prepared for impending doom of Y2K. The secular bear market that followed would see the tech bubble and a housing crisis wreak havoc on investment accounts everywhere and take nearly a decade for many portfolios to fully recover. These were ## Pages - [Validex Global Investing](https://validex.co/) - Conviction Is Not A Trade Mark Scalzo • August 20, 2026 About three weeks ago, markets watched a historic unwind. The manager was directionally right. He didn’t survive being right. That distinction is Read More » Always Approaching, Never Arriving Mark Scalzo • July 24, 2026 On July 16, a Chinese company called Moonshot released - [About](https://validex.co/about-validus/) - Validex Global Investing is an innovative asset management firm, specializing in asymmetric risk-reward strategies, that seeks to prioritize high growth through the identification and validation of emergent points of inflection as they unfold. With a focus on rigorous research and disciplined risk management, Validex aims to empower clients to embrace the future with confidence, combining - [Contact Us](https://validex.co/contact/) - Start Growing Today email: info@validex.cophone: (858) 410-1410 Office Location 2211 Michelson Drive, Suite 900, Irvine, CA 92612 - [Zach Leeds](https://validex.co/zach-leeds/) - Zach Leeds PARTNER, VP RESEARCH & ASSISTANT PM Linkedin Flaticon-email-2 The Momentum Trap: Why Institutional Allocators Are Fleeing Private Equity Zach Leeds • June 24, 2025 There’s an old saying in investing: “The trend is your friend… until it ends.” Right now, institutional allocators are learning this lesson Read More » Investing in CLOs? Focus - [Investing](https://validex.co/investing/) - Validus Invests at the Inflection Point of Accelerating Growth For Investors who seek Long-Term Growth in Private and Public Companies. - [Social Media Disclosures](https://validex.co/social-media-disclosures/) - Social Media Disclosures Validex is not responsible for content posted by third parties. Validex and third parties acting on its behalf, reserve the right, to the extent permitted under applicable law, to process, retain and monitor all electronic communications (including personally identifiable information). By sending direct messages and/or posting comments, you consent to such processing, - [Mark Scalzo](https://validex.co/mark-scalzo/) - Mark Scalzo Managing partner & cio Linkedin Flaticon-email-2 Conviction Is Not A Trade Mark Scalzo • August 20, 2026 About three weeks ago, markets watched a historic unwind. The manager was directionally right. He didn’t survive being right. That distinction is Read More » Always Approaching, Never Arriving Mark Scalzo • July 24, 2026 On - [Celia Murphey](https://validex.co/celia-murphey/) - Celia Murphey CCO Linkedin Flaticon-email-2 Celia has 20+ years’ experience in human resources and compliance. Celia’s work at Validex has been profoundly enriched through her interest in serving individuals with disabilities. This includes board seats with Albertina Kerr, FACT Oregon, and work with the National Association for the Dually Diagnosed (NADD). Prior to Validex, Celia - [Jerry Murphey](https://validex.co/jerry-murphey/) - Jerry Murphey Partner & CEO Linkedin Flaticon-email-2 History’s Greatest Short Squeeze and the Family Feud Behind it Jerry Murphey • December 16, 2025 In October 2008, while the world was fixated on collapsing banks, something unbelievable happened in a corner of the German auto market. Read More » DMA Increases Distributions: Inflection Research at Work - [PSN Disclosures](https://validex.co/psn-disclosures/) - PSN Disclosures PSN Enterprise [Zephyr] is a product of Informa Investment Solutions, Inc. PSN is an investment manager database and is a division of Informa Investment Solutions, Inc. PSN is its robust historical database of nearly 40 Years of Data Including Net and Gross-of-Fee Returns. For more details on the methodology behind the PSN Top Guns Rankings - [Privacy Policy](https://validex.co/privacy-policy/) - Privacy Policy Validus Growth Investors is committed to protecting the privacy and security of your personal information. This Privacy Policy describes how we collect, use, and disclose your information when you visit our website or use our financial services. Information We Collect We may collect the following types of information when you visit our - [Products](https://validex.co/products/) - Investments delivered in different strategies and structures Because the institutions, advisors and high-net-worth clients we serve have different portfolio needs, we offer a variety of investment strategies in different structures. Global Growth CLOSED-END FUND ✓ SMA ✓ MANAGED MODEL U.S All Cap Growth CLOSED-END FUND ✓ SMA ✓ MANAGED MODEL Rising Dividend CLOSED-END FUND ✓ - [Thank You](https://validex.co/thank-you/) - Your subscription has been set up successfully. - [Login](https://validex.co/login/) ## Landing Pages - [Strategy session sign up](https://validex.co/strategy-session-sign-up/) - Last name* Email address* Save my spot Thank you for registering! ✉️We'll send you a reminder in the days leading up to the strategy session. ## Footer Builder - [Footer](https://validex.co/footer/footer/) - Home Investing About Contact Client Login About Investing ADV FORM CRS Contact Us Privacy Policy © Copyright Validus Investment Advisors The information contained in this website is for informational purposes only and should not be construed as personalized investment advice or recommendations. This website does not contain any solicitation to buy or sell particular securities ## Header Builder - [Header - Main](https://validex.co/gva_header/header-main/) - Investing About Contact Us - [Header1](https://validex.co/gva_header/elementor-3121/) - Investing About Contact Us ## Portfolios - [Luxury Art House](https://validex.co/portfolio/luxury-art-house/) - Clients Domal D. Williamson Services Website Design Keyword Development, UX, UI Live Preview L Lorem ipsum dolor sit amet, consectetur adipisicing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in - [Luxury House Interior](https://validex.co/portfolio/luxury-house-interior/) - Clients Domal D. Williamson Services Website Design Keyword Development, UX, UI Live Preview L Lorem ipsum dolor sit amet, consectetur adipisicing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in - [Minimalist Art House](https://validex.co/portfolio/minimalist-art-house/) - Clients Domal D. Williamson Services Website Design Keyword Development, UX, UI Live Preview L Lorem ipsum dolor sit amet, consectetur adipisicing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in - [White Luxury Villa](https://validex.co/portfolio/white-luxury-villa/) - Clients Domal D. Williamson Services Website Design Keyword Development, UX, UI Live Preview L Lorem ipsum dolor sit amet, consectetur adipisicing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in - [Luxury Interior](https://validex.co/portfolio/luxury-interior/) - Clients Domal D. Williamson Services Website Design Keyword Development, UX, UI Live Preview L Lorem ipsum dolor sit amet, consectetur adipisicing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in - [Private House](https://validex.co/portfolio/private-house/) - Clients Domal D. Williamson Services Website Design Keyword Development, UX, UI Live Preview L Lorem ipsum dolor sit amet, consectetur adipisicing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in - [Family Appartment](https://validex.co/portfolio/family-appartment/) - Clients Domal D. Williamson Services Website Design Keyword Development, UX, UI Live Preview L Lorem ipsum dolor sit amet, consectetur adipisicing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in - [Modern Villa](https://validex.co/portfolio/modern-villa/) - Clients Domal D. Williamson Services Website Design Keyword Development, UX, UI Live Preview L Lorem ipsum dolor sit amet, consectetur adipisicing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in ## Categories - [General](https://validex.co/category/general/) - [Outsized Investment](https://validex.co/category/outsized-investment-cycle/) - How significant must the opportunity be for management to sacrifice near-term results for future revenue and earnings acceleration? Courage, brilliance, or desperation? ## Categories - [Architecture](https://validex.co/category-portfolio/architecture/) - [Decor](https://validex.co/category-portfolio/decor/) - [Furniture](https://validex.co/category-portfolio/furniture/) - [Interior](https://validex.co/category-portfolio/interior/)