The above saying emphasizes the distinction between reported profits, which can be kneaded/ engineered/ fudged, while actual cash flow, is more tangible and harder to manipulate. It reflects a company's real financial health. Three charts from Apollo Global Management related to the Magnificent 7 illustrate the point (click to enlarge).
Mag 7 Profit Margins
Since OpenAI debuted ChatGPT on November 30, 2022, the technology sector has been on a historic AI-driven rally, with the NASDAQ-100 Index gaining over 145% (through June 5, 2026). But within tech, the Magnificent 7 (Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia, and Tesla) has generated even more eyeing popping returns, as a group gaining 379% (assume an equal-weighted basket that is not rebalanced). These seven stocks have a collective market capitalization of $23.8 trillion, approximately 35.2% of the entire S&P 500 market cap.
But since the start of 2025, five of the seven stocks in the Magnificent 7 have started to fade. After gaining 106% in 2023 and 79% in 2024, the above Magnificent 7 basket rose a 'modest' 26% in 2025 and is up just 3% YTD. Only Alphabet and Nvidia are outperforming the S&P 500 over the past 17 months, 5 days. In fact, Meta, Microsoft, and Tesla are barely holding on, either flat or actually negative since 2024, as shown below.
For the past few months, Wall Street has been fretting about artificial intelligence--the force behind the powerful three-year rally in stocks. Since OpenAI launched ChatGPT on November 30, 2022, the NASDAQ Composite had rallied more than 106% on the promise of huge productivity gains for businesses. But lately, financial analysts had begun to worry about the impact AI could have on the business models of Software-as-a-Service ("SaaS") companies that make up nearly a third of the U.S. stock market. These fears spiked in early February when Anthropic released a legal GenAI tool that could "do document reviews, flag risk, and even compliance work." AI went from being revolutionary for businesses to being an existential threat for many of them. Through March 6, the S&P 500 Software Industry Index is now down over 30% from its peak.
Anthropic didn't stop there. A few days ago, it released a white paper mapping out which jobs AI could potentially replace. And it's not pretty...particularly for college educated white-color workers. The radar chart below (click to enlarge) shows what % of jobs in a particular industry can be done by AI (blue shade) versus what is % is actually done by AI currently (red shade).
Source: Anthropic. Massenkoff and McCrory (March 5, 2026)
What Anthropic is predicting is that AI will soon take over nearly all the jobs in management, finance, computer science, engineering, life sciences, legal, and office administration! Conversely, AI will not really touch traditional blue-collar work: farming, construction, plumbing, food & serving, security, driving (Waymo?). That begs the question is a $300,000 college education really worth it in tomorrow's job market? Perhaps?
But, as usual, it is South Park that manages to capture the zeitgeist and provide some wonderful insights about where technology is taking society. Enjoy.
The stock market has been roaring since OpenAI introduced ChatGPT in November 2022. AI-mania has powered the S&P 500 to gains of more than 20% annually over the past three years. But something decidedly less hi-tech has performed even better: beef. The CME Cattle Feeder Index, which tracks the price of steers sold in the U.S., has gained 21.5% annually over the same period. The outperformance is even bigger over 5 years. Business is good for cattle ranchers and livestock speculators!
Such gains may not be a surprise to most Americans, who consume a lot of beef (83 lbs per capita per annum). And many don't like it! Newspapers and television have screamed about runaway beefs prices. According to the St. Louis Fed, ground beef prices touched $6.63/lb in August 2025, up from an average of $4.23/lb pre-pandemic. Yes, while the latest 'bull' market in stocks started in late 2022, the literal bull market took off after the pandemic. Per the WSJ, cattlemen are now making a record profit of "more than $700 per animal, up from $2 five years ago."
And it comes down to basic supply and demand. Ranchers across U.S. had started selling off their herd several years ago as chronic drought, costs, and debt pressured the business. Losses peaked during Covid-19 when many meat processors and restaurants shutdown, backing up livestock inventory and driving down cattle prices. While beef demand is strong, many ranchers have held back from increasing the size of their herds. As a result, U.S. cattle inventory totaled ~87 million as of January 1, 2025, the lowest since 1951. Back then, the U.S. population was 153 million; today it's 343 million. You do the math.
As shown above (and below), the U.S. cattle industry began herd liquidation in 2019 when inventory reached 95 million head. According to Beef Magazine, liquidating inventories is one phase of the cattle cycle that typically extends for 10-12 years with "expanding and contracting cattle numbers driven by changes in producer profitability and worsened by drought." While strong prices suggest "there are incentives (for ranchers) to begin rebuilding (their stock)...signals for expansion remain muted at this point." The WSJ article noted many ranchers are looking to pay off longstanding debt and upgrade equipment with their profits rather than growing their herd; they are also wary of inflation that makes livestock feed more expensive.
Industry analysts are unsure how long this 'bull' market will last, but it appears the livestock trade still has some ways to go. Tyson Foods and JBS, two of the world's largest meat companies, estimate cattle supplies could edge up in 2027 or 2028. Beef Magazine feels "structural constraints, input costs, and financial considerations will likely delay a rapid recovery in beef cow numbers." Moreover, they estimate that the herd rebuild this cycle "will be slower than the last rebuild that began in 2014...(which) is likely to mean relatively tight supplies and support for cattle prices for the next few years." So, the trade for 2026 is to still be bullish on beef!
Last week (on December 12), Time magazine named the 'Architects of AI' as its Person of the Year ("POY"). It's an annual tradition going back to 1928, when the magazine's editors select the person(s) "who wielded the most influence in the previous 12 months." Of course, Time is not the publication it once was; it currently has a weekly circulation of around 1 million, down from a peak of 4.1 million in 2003. But Time's POY cover still attracts significant attention. This year was no different, with thousands of news outlets covering the announcement (just ask Gemini!).
This year's selection was about the group of people who are responsible for developing and bringing the transformative technology of AI to the world (or so they want you to believe). The cover, shown above, has the CEOs of leading tech companies in the AI landscape sitting on a steal beam high above midtown Manhattan replicating the classic 'Lunch atop a Skyscraper' photograph from the 1930s. Left to right, it features: Mark Zuckerberg (Meta), Lisa Su (AMD), Elon Musk (xAI), Jensen Huang (Nvidia), Sam Altman (OpenAI), Demis Hassabis (DeepMind, owned by Google), Dario Amodei (Anthropic), and Fei-Fei Li (Stanford). The picture has a deeper symbolism that we'll get to later. But one thing is for certain, since OpenAI debuted ChatGPT in November 30, 2022, the stock market has been on a tear. The tech-heavy NASDAQ has rallied 102% over the past three years largely on the promise of AI. So now, investors are fretting Time may have just jinxed this stock market rally with its 2025 pick. Call it the magazine-cover curse, but as Jim Bianco of Bianco Research noted in an X Post: Time's POY choice has a history of being "an excellent contrarian indicator." Yikes!
The premise behind the indicator is that when a magazine finally devotes its cover to a person, company, or theme, said subject or topic is usually past its peak. This idea was invented by Paul Macrae Montgomery and consisted of three primary rules:
1. The magazine must be mainstream--not a business/economics/finance publication that routinely features emerging capital market trends.
2. The cover subject is a widely talked about or experienced concept/theme.
3. There must have been significant asset-price gains leading up to the cover.
Check, check, and check (Time, AI, and a sustained AI-fueled stock market rally)! So, is it time to sell Big Tech? Maybe, but before we do let's look at how well this indicator actually performs. Brent Donnelly, President of Spectra Markets, a financial media and analytics company, has done empirical work on the magazine cover indicator construct, including that of Time's POY edition. There have been 98 such covers since 1928 and Donnelly identified eight prior occasions when a corporate head, CEO, or industry was honored and where there was identifiable stock performance to track. E.g., in 2010 Mark Zuckerberg was selected Person of the Year, but Facebook (as Meta was then known) was still a private company. Below is Donnelly's list of Time's chosen corporations, CEOs, and specific industries and associated stock performance prior to and after being featured (click to enlarge):
What Spectra's analysis shows is that 87% of the time companies lost value in the 12 months after being 'honored' with the POY recognition. And 75% of the time they kept losing value even after 24 months. Andy Grove (and Intel) was the exception back in 1997 (oh but how the company's fortunes have changed today). While the results appear to validate the magazine cover curse, they are based on a very small sample size. Can we say these results are statistically significant?
To find out, we defined our null hypothesis (H0) as: The average return of stocks featured on Time is not statistically different from the average return of the S&P 500 (the market benchmark) and tested it to see if we could reject the H0. The results are detailed in the table below (click to enlarge).
Back to Spectra Market's table and the Time magazine cover. Brent Donnelly provides important context to Chrysler and RCA's POY selections in 1928 and 1929, respectively. In the late 1920s automobiles were a transformative technology that helped propelled markets higher (sound familiar?) and RCA was "at the center of that tech bubble that led to the Crash of 1929." (During the 1920s, RCA stock rose in price 200-fold, one of the largest increases in the history of the stock market--it would go onto lose 98% of its market value by 1932.)
Oh, and that famous Lunch atop a Skyscraper photo that the Time POY cover recreates...it was taken on September 20, 1932, on a steel beam of...the RCA Building!
If AI is the future, then Nvidia is surely taking us there. The chip giant, the third biggest company in the world by market capitalization, is up 228% the past twelve months ending April 5, 2024. That's trully impressive. However, there's something decidedly much, much older doing even better--chocolates! The S&P GSCI Cocoa TR Index is up 277% over the same period! Weak crop yields in West Africa due to the effects of El Nino weather patterns are an important driver of the commodity's price surge. Countries such as Ivory Coast, Ghana, Nigeria, and Cameroon are responsible for over 70% of the world's cocoa output. On top of climate factors, political instability, poor governmental policies, and thin margins in these countries have deterred investments in new plantations for years, accentuating the supply/demand imbalance. The result has translated into soaring retail chocolate prices. The cost of chocolate prices in U.S. stores increased 11.6% in 2023, about three times higher than CPI (3.4%). Research has long shown chocolate contains compounds, such as phenylethylamine and tryptophan, that lifts moods and produces feelings of happiness. So, if cocoa prices continue to rise, it could make the world a less happy place!
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