Pop came home smelling like grease and hard work. He cursed New York drivers with creative flourishes that would make Andrew Dice Clay blush. I used to laugh hysterically while my appalled mother prepared our dinner.

But if you’d asked Philosopher-Truck Driver John Ring what he was, he wouldn’t have said “labor.” He’d have said, “A guy who’s doing all right, and whose kid is going to do better.”

He was right. His kid went from a kitchen table in New Jersey to teaching bankers in America, Europe, and Asia. Nobody in DC ensured my destiny. “Da Union” didn’t vote on it. A country that didn’t care who my father was let his son swing for the fences.

So when that Steinbeck quote came across my screen this weekend, the one about “temporarily embarrassed millionaires,” I smiled, as I always do when I see it.

Then I checked it for the first time. Much to my sadness, he was misquoted.

The Quote That Isn’t

In June 1960, Steinbeck published an essay in Esquire called “A Primer on the Thirties.” He was describing the comfortable, middle-aged Communists he’d met during the Depression. They played at revolution the way other people played bridge. He concluded that America had no self-admitted proletarians. He wrote that everyone was a “temporarily embarrassed capitalist.”

Capitalist. Not millionaire.

And while Steinbeck was poking fun at those Communists, he’d also put his finger on something uniquely American: the utter refusal to accept a permanent place on the societal totem pole.

It’s such a shame it’s so frequently misquoted, because, of course, Steinbeck’s original is far superior. (I’m disheartened in the same way every time I think Jefferson sacrificed “private property” for “the pursuit of happiness.” It may not have been literary, but “private property” would have settled the argument for socialism before it started.)

The version of Steinbeck’s quote on your Facebook feed comes from Ronald Wright, a Canadian writer, in a 2004 book called A Short History of Progress. Wright paraphrased Steinbeck from memory, swapped “capitalist” for “millionaire,” and bolted on a line about socialism never taking root. As always, the internet did the rest.

That edit matters because Steinbeck described a people who refused to accept a caste. Wright turned it into a people too dumb to know their place.

I’m with Steinbeck, and so are the numbers.

The Waiting Room

Of course, America doesn’t have a class system.

In a class system, where you’re born is where you die. The door is locked from the inside.

Then what is America? It’s a waiting room.

In a waiting room, you sit for a while, sometimes a long while, and then your name gets called. Or perhaps, as my friend and colleague James Altucher would say, you choose yourself.

Two economists, Mark Rank of Washington University and Thomas Hirschl of Cornell, tested this. They followed 44 years of income data on the same American households, from age 25 to 60.

By age 60, about 70% of Americans had spent at least one year in the top 20% of earners. More than half had spent a year in the top 10%. And one in nine - that’s over 11% of those Americans - had spent at least a year in the top 1%.

One in nine. Not bad. Not bad at all…

Now the other half of the story, the half that makes it a waiting room and not a club. Fewer than 1 in 160 Americans stayed in the top 1% for 10 straight years.

The rich get called in, and then most of them get called back out. The door swings both ways. Perhaps that’s the real problem people have with social mobility.

So my father wasn’t deluded. He was reading the odds correctly.

Is It Still Possible?

But does that door still swing open? That’s the question.

UBS counted 23.6 million American millionaires at the end of 2025. That’s over 40% of the world’s total, in a country with about 4% of its people. The US added 440,000 new ones last year alone. That’s about 1,200 a day.

But UBS also found that median American wealth, the middle guy, fell about 20% after inflation since 2020. The top of the ladder got taller. The bottom rungs got more expensive. That’s the price inflation most people suffer.

And yet. Americans filed over half a million new business applications in August. They’ve done that nearly every month since 2021. People file for an EIN because they think they’re a capitalist whose turn is about to come.

Mises said the consumer is sovereign and the entrepreneur serves him. He never said the entrepreneur had to come from anywhere in particular. Hayek added that no planner can know who the next winner is, which is exactly why the system has to stay open to everyone. The guy who builds the next great American company is in a waiting room right now. We just don’t know who that person is. Yet.

The Virtue in the Joke

Delusional self-confidence, unfounded optimism, or even plain stupidity don’t account for why this belief never dies.

Aquinas defined hope as the desire for a future good that is hard, but possible, to get.

Not easy or guaranteed, but possible. He said hope has two enemies: despair, which says it can’t happen, and presumption, which says it already has.

The “temporarily embarrassed” American sits right between them. He knows he hasn’t made it, but knows he might. “Yet” is a big word. As in “He hasn’t made it yet.” That’s what keeping the faith is all about.

Taleb would call it optionality. A country full of people who think they’re one good idea away from wealth keeps buying cheap options on itself. Most expire worthless, but the few that pay, pay for everything. (As Elon Musk has paid over $10 billion in tax in a single year, this isn’t hyperbole.)

And boy, do the politicians know it!

Whatever party they wear, their coalition is huge and restless. They tax, regulate, and inflate the ladder.

But any leader who tried to padlock the door would lose the only thing that keeps the whole arrangement standing: the belief that the next name called might be yours. The envy pitch has been tried in America for a century. It keeps losing to a guy in a work shirt who thinks he’s doing all right.

Wrap Up

Steinbeck watched the worst decade in American economic history, the Dust Bowl, the bread lines, and the Okies he put in his own novels. He saw a people who still wouldn’t sign the class card. He thought that was the most American thing about them.

He was right then, and the data corroborates his view now. Sure, the door’s price of admission is more expensive than it was, and I’ll keep writing about who made it so. But it still opens, and it still swings both ways.

My father never became a millionaire. He never thought he was one, nor did he care. He just knew the room he was sitting in had a door, and that his kid would walk through it.

He was right about that, too.

One of the dangers in finance is that AI is being used for portfolio management and even to execute specific stock, bond and currency trades.That may produce positive returns initially.

The difficulty is that, as more portfolio managers adopt AI, algorithms trained on overlapping data and built with similar structures could quickly produce herd behavior. This herd behavior could trigger a panic because the algorithms lack human common sense and independent judgment.

Regulators may have to intervene to halt trading until some order can be restored.

In short, AI is the ultimate resonator. In describing the drivers of a potential AI-based market panic, don’t ignore the most powerful component — AI itself can amplify an AI attack.

Many trading and risk management systems used by bankers, brokers and wealth managers have automated or AI functions built into them, whether the user understands them or not.

Most such applications are quite simple and relatively harmless. If a trading system is programmed to detect when a particular stock has dropped 2% in price and warns the user in a soft voice, that’s a kind of automated alert system, but not a dangerous one. It’s up to the human user to decide what to do once the warning is given.

From there, it’s a simple matter to code the system automatically to sell the stock once the 2 percent threshold is hit, without awaiting human instructions. Traders consider such stop-loss features valuable in volatile markets and are relieved not to have to track each stock and make each decision. Systems quickly grow to add new factors, create more complexity, and assume more autonomy.

Some hedge funds are already using AI to make buy and sell decisions without human intervention based on thousands of factors using layered neural networks, deep learning, and millions of pages of training materials. Recent academic research suggests such systems can outperform human analysts and traders.

As such systems proliferate, the danger is that progressively larger percentages of total assets under management are handed over to the robots for pre-programmed trading.

If robots had something like human cognitive diversity even to the point of some robots being more risk averse, trend followers, and still others contrarians, etc. it might be possible to replicate a human-like trading ecosystem in which fear and greed balanced out and a rough equilibrium with bounded volatility could be maintained. This is not the case.

Instead, the input nodes contain mostly the same factors (learned in business schools, economics departments, and Wall Street training programs), edge weights are roughly the same based on regression analysis, the stop-loss limits are the same (as dictated by risk managers using standard tools as ordered by management), and the inputs are identical since we all get the same news at the same time.

Overlapping Strategies

Many training sets overlap, drawing from the same internet pages. Therefore, it should come as no surprise that the outputs are the same. With no top-down coordination and no desire necessarily to achieve this result, all of the robots are singing from the same songbook. The market results can be fearsome.

These and other dangers will emerge at some point. Experts can already describe them in detail. There are documented tests in which frontier models have behaved deceptively or attempted to circumvent safeguards. But that has not stood in the way of the mad dash to launch potentially enormous IPOs for OpenAI and Anthropic in the near future.

One big mistake humans make is to anthropomorphize GPT (and the AI behind it). We start to treat Alexa and Siri and other robots as friends or confidants. We trust them too much. It’s important to realize that there’s no real intelligence behind the facade; it’s all just math.

Along with the overreliance is the fact that these systems are highly error prone. They can perform amazing analytical tasks, but they also make things up (so-called hallucinations) and get some things flat wrong. It’s fine if you’re a subject matter expert yourself and you can spot the errors. It’s more dangerous if the user is not a subject matter expert and is relying on erroneous output to make key decisions.

The Limits of Artificial Intelligence

The worst dangers claimed are to the effect that AI will take over the world and destroy humanity. Fortunately, that’s hyperbole. That won’t happen because superintelligence (or Artificial General Intelligence, AGI) under which humans are to AI what apes are to humans may never be achieved. The AI gurus keep claiming AGI will be achieved and are spending over $1 trillion to prove it, but that money will be wasted.

Computers can’t function at that level. They can find existing knowledge and solve complex problems at lightning speed, but whether they can create new knowledge as humans can remains disputed.

The Law of Conservation of Information in search, developed by my collaborator Bill Dembski and others, argues that AI can redistribute existing information, but it cannot find new information. All AI output comes from existing sources or is smuggled into the model through the query. In my view, only humans can create genuinely new information.

Given these and other problems, it is by no means clear sailing for Anthropic and OpenAI. If their IPOs cannot be launched at the valuations targeted (or if they cannot be launched at all), the reasons may be quite mundane.

These include massive operating losses, negative cash flow and crashing prices for “tokens,” the units of computing power sold by AI companies.

Then there are the mounting legal risks. Lawsuits could arise from harm to other software companies, harm to children and harm to individuals who rely on AI for medical advice, only to suffer serious consequences when that advice proves dangerously flawed.

Another hurdle for the IPOs of Anthropic, OpenAI and other AI aspirants is the competition from China. The Chinese are deploying open-source models, including Kimi, developed by Moonshot AI. This contrasts with the closed, proprietary models favored by leading U.S. AI companies.

China’s Cheap-AI Trap

The Chinese have adopted a clever strategy. They are making their best AI models open source and practically free. That means any company can download the model and run it at prices that can be far cheaper than OpenAI’s offerings. Many corporate technology heads may favor the Chinese models on price alone (and their performance is comparable to the best frontier models from U.S. giants).

But there’s a catch. Downloading open-source model weights does not mean operating them is free. As an enterprise grows, it may face rising infrastructure, support and integration costs, even if those costs remain below U.S. alternatives.

Here’s the hook — any model requires configuration to other systems for interoperability. If Chinese models become deeply embedded in enterprise systems, their developers could gain influence over software ecosystems and operating standards.

It’s like Microsoft from the 1980s onward. In my view, Microsoft software was inferior to UNIX and Macintosh. But Microsoft grew so quickly that the software was locked in at almost every company. You had to keep using successive versions of Windows, all the way to Windows 11, because IT managers did not want to tear down their systems and start over.

Finally, one should consider the leadership of this AI revolution.

Sam Altman’s Empire of Promises

Who is Sam Altman?

We know he’s the CEO of OpenAI, one of the AI giants working on so-called frontier models that push the limits of computer processing power and complex algorithms. That’s an enormously important project that could affect the future of humanity, and he’s in charge of a large part of it. But what do we really know about him?

To begin with, he’s not a scientist or an engineer. He dropped out of college and has no degree. That’s fine; a lot of smart people drop out of college and do quite well in the world. But let’s not assume he has the same technical expertise as the scientists and engineers building the models he promotes.

He’s also not a scholar; he has no peer-reviewed research papers to his credit. That’s OK too. Entrepreneurs may have better things to do than conduct research.

When you peel back the curtain, it turns out that Altman is really just a promoter. In 2005, he started a company called Loopt that failed to gain traction and was sold to another tech company. In 2011, he joined Y Combinator (YC), a highly successful startup investor in hundreds of tech companies. The founder of YC, Paul Graham, later said that Altman was removed as head of YC because of “YC partners’ mistrust.”

Altman went on to co-found OpenAI with Elon Musk and other backers. Peter Thiel was among its early supporters. OpenAI was meant to be a non-profit that would conduct AI research to benefit humanity. Altman pushed it in the direction of a for-profit company earning the distrust of Musk. Musk later sued OpenAI and Altman alleging breach of contract.

So, Altman is a promoter, fundraiser and big talker with a track record of conflicts and alleged broken promises. He’s not the worst person in the world. But it’s not clear he should be in charge of the AI revolution.

On Oct. 8, reports revealed that OpenAI’s annualized revenue was approaching $50 billion, roughly $20 billion below a figure circulated just days earlier. The discrepancy stemmed largely from differences in how AI companies account for sales through cloud partners.

Anthropic and OpenAI are in a race with each other to launch their IPOs. But they’re also in a race with regulators, lawyers and skeptical customers to see if they can even launch the IPOs at all.

Silver is a busted flush. Now comfortably trading under $60, silver waits for today's inflation data. It's expected to be higher than August’s numbers.

The market seems to be trading off the Fed’s expected response, which, if anything, is to increase rates to fight inflation. That’s putting pressure on silver and gold, but silver is suffering more.

If trading continues today the way it started, we will have a new daily downside target of $47. That matches is a long-term monthly downside target as well. Of course, that doesn’t mean silver will hit the target. But that’s the point it will move toward.

For those who don’t play poker, a busted flush isn’t great.

A few readers have written in to ask what I think about Sean’s take. So here’s my reply.

Sean’s been right. He sold his silver miners back around February 9th, when silver was trading at $83 an ounce. It’s $58 today.

He sold, I stayed long.

Throughout 2025, Sean and I were on the same page on silver (and miners). We were bullish.

But we have different time horizons. I plan to hold my silver for at least the next 10 years. I believe it’s going to be a chaotic and inflationary period. And I don’t want to have to worry about timing the market too much.

Plus, most of my precious metals investments are in taxable accounts, or storage facilities. So whenever I sell, I have to pay about 40% capital gains taxes on short-term positions, and 20% on long-term investments (over 1 year). Add in fees and commission on physical silver.

Tax efficiency is critical. If all your positions are in protected retirement accounts, that’s great. But not all of us are in that boat.

In terms of miners, some of my positions are still up 3x from when I bought them in the spring of 2025. I’ve taken about 25% profits, but am still holding the majority of my shares. I want to hold some of these juniors until they become senior miners or are acquired.

Even with today’s oil prices, and the fall in silver prices, miners are printing money.

Everybody’s situation is unique. I like to hold long-term. Sean is an excellent investor and trader, and his system works for him. He utilizes a lot of technical analysis, which isn’t something I use much.

The point is: multiple approaches can work.

Trading vs. Investing

I’ve been clear to readers about what my personal plan is. Hold my silver and other precious metals investments for the next ~10 years. I believe owning PMs and other hard assets is going to be key for wealth preservation going forward.

Long-time readers know we wrote more than a dozen articles about why silver was a strong buy in the $30s.

And in January of this year, when we got up to the $90s, here’s what I wrote in Silver FAQs:

Is it Too Late to Buy?

This is the toughest question.

Let’s take a look at the 1-year silver chart.

What a doozy… Textbook parabolic move.

So lately, when people ask if it’s too late to buy, my answer is probably (for the short-term). I realize that’s not satisfying, but it’s what I see.

Over the long term, you guys know there’s no bigger silver bull than me. Silver is a unique metal, in that it is both industrial and monetary. And demand on both sides is absolutely booming.

But this move just seems like too much, too fast.

So it would be reckless to recommend readers/friends buy here. I suspect we’ll get a better chance to buy silver sometime in the next 5 months.

Silver went on to reach $121 an ounce briefly on January 29th.

Longer-Term: We’re Both Bullish

It’s important to note that Sean doesn’t think silver is a bad long-term investment. He’s simply being patient and waiting to buy the dip on miners.

Here’s another post Sean made on our app’s Daily Feed on October 2nd:

As I wrote yesterday‘s Rude, my price target for silver is somewhere around $56. After a brief rally today, we’ve crashed back down because the markets don’t think Warsh is going to back down.

I think he’s going to wind up hiking in either October or December and the market somewhere is going to break… as a result, the FOMC will start ferociously cutting in 2027.

We are getting very close to wanting to buy back into the silver miners. Again.

So long-term, Sean’s not bearish on silver or silver miners. He’s simply trading the charts as he sees them. And it’s been working, so good for him.

Personally, I take more of a long-term strategy. And both methods can work. It all depends on your preferences. Are you more of a trader, or a long-term investor? Are you investing in taxable accounts, or 401ks and IRAs (tax shelters)?

Inflation Insurance

Jim Rickards’ target for silver is $200 an ounce. He says it could get there next year. I concur. But I don’t really care if it takes until 2028, or even later.

Silver is a huge part of my inflation insurance package. And I expect inflation to remain problematic for many years to come. That will drive demand from investors, which was lacking for much of the past decade.

With silver, of course, we also need to consider industrial demand. Solar panels, electronics, weapons systems, medical applications. All are going strong. Solar panels are an especially bright spot.

The current energy crisis is driving countries around the world to install massive solar panel installations, and each panel contains 4 to 20 grams of silver.

Take a look at the size of China’s largest solar project:

Source: Architecture and Design

It took a mountain of silver to build that. And solar demand isn’t slowing down anytime soon.

Intermission

In summary, silver mania isn’t over. This is the intermission. No investment goes straight up, nor should it.

But that doesn’t mean we have to try to trade it. You can, certainly. But personally, my goal is to hold investments I believe in for many years. It’s what works for me.

If timing the market works for you, that’s fantastic. Just make sure you consider tax implications, and have the experience necessary to trade in and out. Or have someone to guide you, like the top-notch experts we have here at Paradigm.

If you’ve been waiting to buy silver, now is a fine time. We might go a bit lower over the short-term, but my confidence over the next 2-5 years is extremely high.

Silver will hit $100 again, then $200, then $300, and beyond. And I’ll be along for the ride.

Suck it up, Pilgrims. It’s two weeks until Election Day and voting has begun. All across the country, many ballots are already banked, to await their fate on Election Night after the polls close. And as my colleague Jim Rickards has noted, this is a turnout election.

Definitely, many Democrats will vote — and vote hard! — because they despise Trump.

And many Republicans, Independents, and even some old-line Democrats may stay home because Trump… and Congress… and the Supreme Court… and You-Name-It… has disappointed them; they’re angry about the Iran war, blowout spending, fuel and food prices, creeping inflation, immigration, foreign visas and more.

But staying home or casting a protest vote means nothing in politics. In fact, when you don’t vote, you lose twice because your protest pique passes political power to the Hard Left, which will absolutely make America’s problems worse.

Indeed, not-showing-up isn’t really a theory of victory because the thrones of political power never remain vacant. At the end of day – of Election Day – someone always holds the keys to Capitol Hill, as well as governors’ mansions, city-county buildings and courthouses across the land. And it’s just a question of “who” wields power.

For Example, Look at Britain

In July 2024, British voters were (to borrow a phrase) p!ssed off. They rejected a fumbling, bumbling Conservative government. Millions stayed home or voted Labour. Mostly, they meant to punish the Tories, not endorse a radical regime of rule and ruin.

Instead, the stay-homes and protest-voters handed Keir Starmer an enormous parliamentary majority. So now, in Britain, the left pushes higher taxes, open borders, hostility toward Britain’s culture and history, and sweeping economic controls. And if you don’t like it and speak out too loudly, the police will pay you a visit. (Look it up.)

Boatloads of migrants arrive on British Beaches. Credit BBC.

Currently, Britain showcases the danger of a protest election: voters reject one party, then the Hard Left gets in and declares a revolutionary mandate. That, and works overtime to spend, tax, regulate, close industries, import the Third World, and convert temporary popular anger into permanent left-wing policy.

Looking ahead two weeks, America can make the same mistake if Republicans, Independents and moderate Democrats sit this one out. The no-shows will surrender the House to a coalition increasingly guided by the Democratic Socialists of America (DSA); definitely not a bastion of old-fashioned, FDR-, JFK- or LBJ-style liberalism.

In fact, DSA is openly communist. Its manifestos call for abolishing the Senate, expanding government power via the House, packing the Supreme Court, nationalizing all health care, defunding law enforcement, socializing major industries, and… ugh (long story).

The DSA agenda runs so far left that Sen. John Fetterman (D-PA) [full disclosure: I knew him when he was Mayor of Braddock, PA; nice guy] has criticized Bernie Sanders (I-VT) for backing DSA candidates against sitting Democrats. Which is to say that DSA uses the Democrat donkey only to ride through the gates and into power. Vote them in, and they have no plans ever to leave.

France: 45 Years Down the Road to Serfdom

So, Britain offers an immediate warning; but France supplies the long-term case-study. For roughly 45 years, left and hard-left governments expanded spending, taxes, regulation, subsidies and labor controls while promising nearly everything to everyone.

Each step sounded humane in a French sort of way. And every program rewarded politically important beneficiaries. The tax burden always targeted “someone else.” It sounded great until the bills arrived.

France now carries immense, unpayable debt, and chronic, massive deficits. Day-to-day, France is barely solvent. Business formation is negligible. Productive people and capital leave. Housing costs have soared. Industry struggles. Public services are breaking down despite record spending. And lately, rioters roam the streets while historic buildings go up in flames.

Limoges, France: Oct. 17^th, city hall burned by rioters. Credit AFP.

Did French voters consciously choose national decline? Not in so many words; but election cycle after election cycle, they chose politicians who promised more regulation, subsidies and taxes on somebody else. And that’s exactly how the big state grows bigger. Meanwhile, failure rarely kills a government program; in fact, politicians often use failure to justify their next boondoggle.

Just now, the relevance of the U.K. and France to America is that both nations show how unhinged politics eventually wrecks the balance sheet. High taxes reduce returns. Regulation delays important projects. Energy scarcity raises costs. In short, bad policy breaks things.

Zito’s Lesson: Voting is Not Love

Recently, a great writer named Salena Zito wrote about how Gilded Age transformation enriched America while it also left millions of citizens on the outside looking in. Railroads, mills, factories, oilfields and electric power remade the country; but financial panics destroyed banks, businesses, jobs, farms and even entire industrial sectors.

In 1888, Republicans narrowly won control of Congress and treated victory as a massive mandate. They spent heavily and nearly bankrupted the country, which mattered quite a bit in the days before the Federal Reserve could just print so-called “money” to wallpaper the problems.

Voters didn’t like what they saw, and punished Republicans in 1890 with significant losses on Election Day. Then in 1892, Democrats captured Congress and the White House, and went wild in their own ways. So, two years later in 1894, Democrats lost 125 House seats.

Which is to say that voters didn’t fall in love with either party; they just kept evicting whoever failed. And that political pattern continues today. The House changed hands in 2006, 2010, 2018 and 2022. When Americans don’t like what they see, they tend to vote against incumbents; but then they recoil when the winners mistake popular frustration for ideological consent to engage in mega-overreach.

Political scientist Morris Fiorina calls these arrangements “unstable majorities.” Or stated another way, Americans rarely grant mandates; they hire politicians on probation. But a stay-home protest this year carries high risk because the DSA is not your father’s Democrat Party. And DSA won’t govern on probation; it will regard a win as permission to proceed with their crypto-Bolshevik revolution.

Your Portfolio Runs on Power

On the investing front, this election will shape America’s next industrial buildout: mines, mills, factories, aerospace, shipbuilding, electronics, computers, networks and data processing, and much else.

All that buildout requires energy: oil, natural gas, refined fuels, uranium and electricity; plus materials such as copper, steel and innumerable critical metals.

Downstream from rigs, pipelines, mines, mills and refineries, we have artificial intelligence (AI) that intensifies demand. Data centers and AI require transformers, chips, cooling systems, switchgear and miles of wire. The future joins steel with software, copper with semiconductors, and algorithms with megawatts.

Looking ahead, America must build out everything; and if you impede energy and materials, the future of technology slows or stops.

Along these last lines, California shows how a resource-rich economy manufactures scarcity via bad policy. In essence, for many years the (formerly) Golden State has discouraged drilling, closed refineries, tightened regulation and repelled investment.

As I discussed last April, fuel shortages and refining constraints drive California’s ongoing energy crisis. And let’s apply that mindset nationally, because a DSA-driven House would restrict leasing, slow pipelines, obstruct refineries, harass conventional power, block mines and subsidize favored substitutes.

Plus, and as we’ve noted near-countless times in our articles here at paradigm Press, the Green New Scam constrains dependable energy, funds unreliable projects and blames markets when prices rise.

The Investment Danger

America can’t tax, regulate and litigate its way to wealth creation and industrial leadership. A Democrat-DSA victory would bring higher energy costs, slower permits, heavier taxes and more politically directed capital. In short, DSA policy will hit you straight in the investment side of life.

That is, DSA and so-called “Green” policies raise costs for electricity, motor fuels, transport, manufacturing and data-processing. Anti-mining policies constrain copper, uranium and rare earths, the very materials behind the grid, reactors, defense systems and AI. Project delays strand capital and send development elsewhere. Subsidies steer money toward favored technologies instead of durable businesses and paying customers.

All along, China will keep on mining, refining, manufacturing and building its power systems, and I mean that in every sense of the phrase. Contrast China with how America’s energy, pipelines, uranium, copper, nuclear, grid equipment, engineering and data centers form one system. Weaken one link and the whole chain suffers.

Anger Is Not a Portfolio

So, yes… Here we are… Two weeks from Election Day. And Trump has disappointed many voters. Okay… Understood…

But voting isn’t like getting married out of love. And stay-home protests won’t fix what’s wrong in Washington. Sitting this one out only empowers a DSA coalition that is prepared to choke the energy, materials and infrastructure of the U.S. economy; to harm what your investments require to function.

It’s alright to be disappointed, and even cynical (ask me how I know). We all want “better” governance. But c’mon, man… Show-the-hell-up. Don’t protest so hard that you give the keys of power to the lefty-lunatics in the DSA.

That’s all for now. Thank you for subscribing and reading.

On Truth Social, POTUS wrote a lengthy post about Zelensky and the war. Needless to say, he is furious that Ukraine keeps striking Russian oil infrastructure. It’s contributing to higher prices worldwide.

Before the war, Russia was the second-largest diesel exporter. But Ukrainian drones keep blowing up the country’s refineries, tankers, and oil storage.

Here’s an excerpt from Trump’s Truth Social post:

[Zelensky] could have made a better deal two years ago than he can now. His country is in shambles, a large portion of his land is lost, his oceans and seas are gone, and his male population is low, wounded, and/or dead.

Harsh but true. Ukraine is running out of options. Weapons, food, energy, and money are all in short supply. Blackouts in Kiev are common. Zelensky’s thug-squads roam the streets abducting scarce civilians to fill the trenches.

It is likely that 900,000 Ukrainian soldiers have been killed in action so far. Overall the population has fallen from 41 million pre-war to around 28 million today (mostly due to migration).

Zelensky just demanded another $155 billion from the EU, but European governments have problems of their own right now.

However, if Zelensky doesn’t get the money, the country collapses and a new refugee crisis begins. Then Europe ends up paying for it anyway. They are stuck.

The war is not going well for Ukraine. Despite occasional successes, Russia intercepts more than 99% of Ukraine’s long-range drones (provided by the EU). Up to 300 drones are launched for a single successful attack on Russian infrastructure. It’s not sustainable.

It’s going to be a cold and brutal winter in Ukraine. I hope the war ends soon for the sake of its people.

The only positive way to spin this is Trump’s statements give me hope that we can finally repair our relationship with Russia.

A Missed Opportunity

In 2000, Russia tried to join NATO.

A young Vladimir Putin pitched Bill Clinton on the idea, and apparently Slick Willie was initially open to it.

But once President Clinton talked with his “advisors” (bosses), the answer became clear. Nyet. No deal. Putin continued to pursue NATO for a while, but didn’t get anywhere.

If Russia had joined NATO, the world would be a very different place today. For one thing, Putin’s alliance with China would never have been necessary.

But America’s deep state chose another path. And they drove Russia directly into the waiting arms of China.

NATO’s Expansion

When the Soviet Union collapsed in 1991, much of Eastern Europe was thrown into chaos.

Suddenly, 15 new independent countries were born.

America didn’t waste time. Russia could not join NATO. It would be swallowed by it.

The map below shows the expansion of the NATO military alliance. Note how most countries joined in 1990 or later, as the USSR disintegrated.

Since this map was published, Finland and Sweden also joined NATO in 2023 and 2024.

NATO’s goal was simple. Surround Russia, choke it off economically, break the country up into parts from within, and take it over.

In 1999, the great Pat Buchanan wrote:

“By moving NATO onto Russia’s front porch, we have scheduled a twenty-first century confrontation. … America will face a hellish dilemma: risk confrontation with a nuclear-armed Russia determined to recreate its old sphere of influence, or renege on solemn commitments and see NATO collapse.

Offering NATO memberships to Estonia, Latvia, Lithuania, and, as some urge, Ukraine is rashness bordering on madness.”

Buchanan’s prediction came true, of course. The man has an uncanny track record.

The Failed Ukraine Project

Ukraine was to be the cherry on top of NATO’s expansion. The country was to be NATO’s front line of defense (and offense) against Russia.

To this end, Obama’s State Department executed a coup in 2014. The Maidan Revolution, which installed a pro-Western government.

But the plan to expand NATO to Ukraine (and Georgia) has been active for a long time. In 2008, NATO officials stated it plainly at the Bucharest Summit:

“NATO welcomes Ukraine’s and Georgia’s Euro-Atlantic aspirations for membership in NATO. We agreed today that these countries will become members of NATO.”

This was the last straw for Putin. He simply could not allow Ukraine to join NATO, a country just 280 miles from Moscow. That’d be like us letting China build missile silos in Mexico.

By the time Putin invaded, a NATO training center in Ukraine had already trained 45,000 Ukrainian soldiers to alliance specifications.

The war Pat Buchanan predicted happened. It has been a horrible tragedy. Ukraine has probably lost 900,000 soldiers killed in action. Russia has probably lost 190,000. These are my best estimates based on open source analysis. Neither side will confirm anything officially.

So… what now?

A Russo-American Partnership?

Earlier this month, Trump signed an energy deal with Russia. Putin got sanction relief, and we (hopefully) will be getting 300,000 tons of diesel, to start.

Is this the beginning of a new chapter with Russia? I hope so. Throughout history, Russia has proven to be a good ally and a bad enemy.

The country wants a productive relationship with the U.S. And in those rare instances in history where we worked together, amazing things have been accomplished.

The International Space Station is Exhibit A. Neither country could have done it alone, but together we built something truly remarkable.

The ISS. Source: NASA

But powerful forces have consistently spoiled any progress.

Is a breakthrough possible now? I think so. Russia has proven it is not going to be defeated militarily. We’re not going to overthrow Putin, and if we did, someone not as nice would replace him. Reality is setting in.

Interestingly, a trade envoy for Putin, Kirill Dmitriev, posted the following message on X recently:

Source: X

An image of an American Eagle and a Russian bear facing off against the UK and EU? Now that’s provocative. The post got more than a million views, and 6,300 likes.

The screenshot shows an article by James Kunstler on ZeroHedge. It’s an interesting piece about how Russia might make a better ally than the EU or UK.

The article hints that modern Russia is the new Europe. And that modern Europe is the new USSR:

Europe is now tyrannized by the unelected EU commission, much as the old Soviet Union was tyrannized by its politburo. An Orwellian switcheroo has occurred.

Kunstler also points out the mess the UK finds itself in:

And outside the EU - which it voted to exit in 2016 - you have our so-called "mother country," Great Britain (the United Kingdom) committing suicide in the most extravagant way, turning over prime ministers like they were jacks in a game of whist, jailing their own people for impure thoughts, while allowing the wholesale rape of its womenfolk by foreign invaders.

Wow… I don’t agree with everything Kunstler says in his piece, but it’s fascinating food for thought.

The idea of starting a new chapter with Russia is gaining traction. Because it makes all the sense in the world.

But first...

We came to Brazil to take a break, to read and relax, to work on our pre-award winning novel, and to escape the scourge of modern politics for a couple of weeks.

Perhaps we should have looked at the calendar: The very first weekend we arrived, the Brazilians went to the polls for their general elections. On the ballot (we assume): “The future!” “Our children!” “Democracy itself!”

Oh well, we mused, the spectacle of modern politics is usually worth a good chuckle. So we grabbed a beach chair, ordered a stiff caipirinha, and settled in for the show...

As it happens, we were here (also by mistake) for the country’s last general election, back in 2022, when lifelong socialist goon, Luiz Inácio Lula da Silva, nosed out the incumbent (and father of the current contender), Jair Bolsonaro. At the time, there were credible accusations of widespread voter fraud, ballot stuffing, and systemic corruption on both sides... in other words, a presidential election in South America.

Naturally, Bolsonaro Sr. was jailed after his election loss – par for the course in this part of the world. This past weekend’s election pitted Jair’s eldest son, Flavio, against Lula the Undead. Four other members of the Bolsonaro family also ran for election in various other governmental races.

To the shock of absolutely nobody, the long-disgraced legacy media... the pollsters and the insiders... thought leaders and quackademics... the usual list of suspect experts and expert suspects... all lined up behind their man in office, one of the last holdouts against a streak of conservative victories that has been sweeping the continent (more about which in a moment)...

Ah, but wait... what’s this? A wrinkle in the script?

Spring of the Patriarch

Lulu’s comrades-in-arms over at The Guardian reported the surprise results, through misty eyes and gritted teeth...

Flávio Bolsonaro poised to win Brazilian presidency after shock first-round victory.

Flávio Bolsonaro is in pole position to win Brazil’s presidential election, after a far-right tsunami propelled him to a shock first-round victory over the incumbent, Luiz Inácio Lula da Silva, leaving progressive voters reeling.

The 45-year-old rightwing candidate received 56.1m votes to Lula’s 53.8m – 47.03% to 45.16% – meaning the 80-year-old leftwinger has a mountain to climb if he is to bounce back in the second round on 25 October. Never, since the return of democracy to Brazil in 1985, has the first-round runner-up managed to turn the game around and win the second ballot.

Leaving no hyperbole unturned, no cliché untapped, no indolent idiotic idiom untyped, The Guardian bravely sallied forth:

The far-right surge was a triumph – albeit an incomplete one – for the Bolsonaro clan and its 71-year-old patriarch, Jair Bolsonaro.

“Far right”... “tsunamis”... “patriarchs”... one can at least be grateful the authors did not spell “clan” with a “k.”

Meanwhile, actual Brazilian voters seemed comfortable enough declaring their fealty for members of “the disgraced ex-president’s” family. On top of Flavio’s first round win, Jair’s wife, Michelle Bolsonaro, won a seat in the nation’s senate, as did his second son, Carlos. His youngest son, Jair Renan, also won a seat in the lower house. So too did Jair’s brother, Renato.

The Guardian, soldiering on:

Across Latin America’s biggest democracy, key congressional and gubernatorial races were also won by staunch Bolsonaristas including Tarcísio de Freitas, who was re-elected as the governor of São Paulo state, and Sérgio Moro, who was elected governor of the southern state of Paraná. Both men were ministers during Bolsonaro’s 2018-22 government.

Bolsonaro’s Liberal party (PL) will now boast the largest caucus in the senate with 28 of its 81 seats. Combined with the seats of other hard-right parties, that number rises to 43, giving the movement an upper house majority.

Smart Money Moves

Betting markets, whose participants would rather see their political arch-nemesis win than personally lose a dime, have swung hard, too. After having Lula ahead by as much as 67% vs 29% in mid-August (with independent contenders making up the difference), Polymarket now has Bolsonaro at 85% vs 15% to win the presidency.

Regardless of how this country’s elections play out two weeks from now, it’s at least heartening to see the experts maintaining their unblemished record of complete predictive failure. There are still some things you can count on!

More interesting from a geopolitical standpoint, however, is the regional trend. For those keeping count, there have been seven presidential victories for non/anti-socialist candidates on this continent since Argentina’s Javier Milei kicked off something of a South American Liberty Spring with his own win back in November, 2023. A conservative victory here in the continent’s largest democracy would make it eight.

Indeed, it is a remarkable coincidence that, since USAID was effectively dismantled in January of 2025, every presidential election in a major South American country has produced a “right” or “center-right” victory. To wit:

• In April, 2025, Daniel Noboa was reelected in Ecuador...
• In October, 2025, Rodrigo Paz ousted the collectivists in Bolivia...
• In December, 2025, José Antonio Kast defeated woke moron Gabriel Boric in Chile...
• In January, 2026, Abelardo de la Espriella bested the insufferable Petros in Colombia...
• And in June, 2026, Keiko Fujimori prevailed for the conservatives in Peru...

Setting aside Venezuela’s transitional political status (“it’s complicated”), that leaves only the imposing economic powerhouses of Guyana (President Ali), Suriname (President Simons), and Uruguay (President Orsi) on the political left.

If the betting markets are right, and a “far right tsunami” does in fact sweep Brazil, the continent will have gone from majority left/center-left controlled in 2023, right before Milei’s libertarian breakthrough, to overwhelmingly right/center-right controlled in 2026.

Swinging Samba

Notice, too, the share of the continent’s wealth and population that such a drastic transition represents…

In 2023, roughly three-quarters of South America’s population, along with some 60% of the continent’s wealth, was governed by left-leaning governments. In 2026, assuming again that Brazil stays the course a fortnight from now, that will have flipped such that 92% of the population and 95% of the continent’s wealth is controlled by conservative governments.

In barely three years, South America has seen a 162-point swing from left-to-right in terms of population, and a 155-point left-to-right swing in terms of wealth. Non-trivial, in other words.

Unlike the cringeworthy convulsions of the “govern me harder!” horde, currently begging for repackaged socialism in certain pampered zip codes in the over-privileged north, one gets the sense that this End of the World has in mind a brighter future, one filled with free markets, free minds and free people.

Earlier this year, at his annual speech in Davos, Javier Milei warned a stupefied establishment of entrenched elites that, much to their collectivist chagrin, the ideas of liberty were already taking hold...

“The world has begun to awaken,” he said. “The best proof of this is what is happening in the Americas with the rebirth of the ideas of liberty.

“We have a better future ahead of us,” he continued, “but that better future only exists if we return to the roots of the West… returning to the ideas of liberty.”

Editor’s note: Find more of Joel’s writing on his website.

Whether this is the next stage in escalation, or the grand finale remains unclear. But lessons continue to emerge from this conflict, and world powers are beginning to act on them at scale.

Ukrainian long-range drones continue to hammer Russian energy and military sites. Targets up to 1,700 kilometers inside Russia are being hit.

A Ukrainian long-range drone. Source: AP

These strikes are causing serious economic damage to Russia, not to mention the environmental harm. Here’s a screenshot of recent fires at Russia’s Rosneft facility on the Black Sea after Ukrainian drone attacks.

Source: X

Earlier this week, President Trump expressed his anger at Ukrainian President Zelensky, "It's time for Ukraine to get a NEW PRESIDENT!"

Ukraine’s strikes are hammering Russia’s fuel production, and causing shortages worldwide.

On the front lines, short-range drones are now Ukraine’s primary weapon holding back Russian advances. Most of these are small drones with anti-tank RPG warheads attached.

Crude, but highly effective. There are also bomber drones which drop grenades, mortars, and improvised munitions. Interceptor drones roam the skies, looking to foil enemy attacks.

Both sides are using flamethrower drones, which drip molten thermite to melt anti-drone netting and ignite enemy structures.

Meanwhile Russian long-range drones and missiles are increasingly hitting military sites in the capital, Kiev (Kyiv). And across the rest of the country. Glide bombs are devastating the front lines. And Russia is using at least as many short-range drones as Ukraine is.

It is estimated that up to 15,000 drones are being used in Ukraine per day. And that up to 90% of casualties are caused by these terrible little machines.

Traditional maneuver warfare is extremely difficult in these conditions. Advances crawl forward at a snail’s pace.

Tanks and IFVs are increasingly irrelevant on the battlefield. Even artillery, the “God of War”, has become an afterthought.

In just a few short years, this new class of drones have changed warfare forever. The question is: are American defense contractors ready for this new world?

Petraeus’ Warning

Former Army General and CIA Director David Petraeus is out with a new warning about drone warfare. I’m not a fan of the man, but what he says here is true.

“We have not remotely learned all the lessons we should have from the war in Ukraine.

That is the future of war right now. Ukraine is using 10,000 drones a day.

Ninety percent of the casualties on the Russian side are caused by drones. Tanks can’t manoeuvre anymore. They can’t survive. Armored vehicles can’t survive.

And by the way, there’s more coming. Within a year or two, we’re going to see unmanned systems that are not remotely piloted.

In the future, we’re going to see autonomous systems — truly autonomous — that do not require a pilot to remotely operate them.

Then you face drone swarms. And that is something for which we really don’t have a solution.”

Weapons Giants Fall Behind

America’s largest defense contractors, Lockheed Martin (LMT) and Northrop Grumman (NOC), have traditionally focused on gigantic programs. The F-35, naval ships, helicopters, cruise missiles, and big drones costing $30-90 million a piece.

These contractors have been forced to build their supply chains and manufacturing around getting support from specific political districts.

Elon Musk has been especially critical of U.S. defense firms, singling out manned fighter jets like the F-35 as “obsolete in the age of drones.”

Source: X

I’m not sure fighter jets are obsolete just yet. But tanks and other traditional weapons systems do seem to be moving in that direction.

The point is that making cheap disposable “kamikaze” drones at scale is outside the wheelhouse of big defense firms.

Now that the U.S. military wants low-cost attack drones, they are doing something unusual: going to smaller firms in search of innovation.

New Drone Depots

The U.S. military is converting 6 Army depots into drone production facilities across the country. Defense Post:

The McAlester Army Ammunition Plant (MCAAP) in Oklahoma is adapting its munitions production to support modern drone warfare through a new partnership with Perennial Autonomy.

They’re partnering with various private companies to build drone manufacturing capabilities domestically. Beefing up our drone production base is key to modernizing the military.

Especially because the government’s requirements call for doing it without any Chinese parts.

That in itself is a huge challenge, because today China makes about 85% of the world’s commercial and personal drones. China’s supply chains are already incredibly developed, and it will take time to build out our own. The vast majority of Ukrainian and Russian drones used are either Chinese, or built with Chinese motors, batteries, servos, and other parts.

The Drone Dominance Program

It’s been nearly 5 years since the war in Ukraine began, and the disruptive potential of drone warfare became clear.

The U.S. Department of War is now beginning to ramp up drone programs. In Iran we saw the debut of the LUCAS attack drone, based on Iran’s Shahed-136.

Now the American military is looking to build 300,000 attack drones by 2028. That may sound like a lot, but it’s 15 days of supply for Russia and Ukraine.

The Drone Dominance Program (DDP) is a fascinating development. The Department of War is tearing up the old playbook of 10-30 year development cycles and trying something fresh.

Dozens of companies were invited to participate in a series of trials. Various drones are tested for accuracy, speed, resistance to electronic warfare, and other objectives.

And the Department of War has an online leaderboard showing the top performers:

Source: Drone Dominance official site

Note the complete absence of any big defense contractors. The leading performer, Skycutter, is a small private U.K. company with plenty of frontline experience in Ukraine.

We are early in this new age of drone warfare. But it is set to shake up America’s stale defense contracting business. New players are emerging.

The legacy defense giants have been slow to adapt to this reality. They remain focused on cash cow programs.

And for a while, that playbook will work. But the future of warfare looks like it will be dominated by unmanned systems. And the big, slow, expensive drones they make today are clearly not cut out for this new world.

American defense giants have coasted for decades on gold-plated billion-dollar contracts. They have failed to produce effective hypersonic missiles and affordable attack drones. Their reign won’t last forever.

I’ll be watching to see which companies emerge as leaders in this new tech. Many of them are private startups at this point, so aren’t investable (yet).

But disruption is finally coming to the defense industry. It’s about time.

In 2010, he was a compliance officer at HSBC, working out of a back office in New Castle, Delaware. He watched billions move to drug cartels, sanctioned regimes, and terrorist groups. He wrote it up, then escalated it. When the bank sat on its hands, he walked into the FBI.

The result was a $1.92 billion settlement in 2012. By Stern’s math, that was about five weeks of HSBC’s profit. Not one banker was charged, let alone went to prison.

Stern lost his career, savings, and every friend he had in finance. He couldn’t afford a bed, so he slept on a cot in a 300-square-foot apartment and waited tables at P.F. Chang’s.

This week, he wrote an open letter to Treasury Secretary Scott Bessent. It went viral on X, and for good reason.

Fourteen Years Later…

On Tuesday, the US Treasury hit Bank of America with $1.2 billion in penalties. It’s the third largest in the Treasury’s history. The $750 million slice that goes to the Office of the Comptroller of the Currency is the biggest fine that regulator has ever levied.

The bank admitted it willfully violated the Bank Secrecy Act. It failed to report more than $5 billion in suspicious transactions on time. Over $1 billion of that touched what the Treasury calls priority national security risks: Chinese money laundering networks, fraud, and trade-based laundering with a heavy footprint on the southwest border. A separate $11.6 million settlement covered apparent sanctions violations involving Iran, Russia, narcotics, and global terrorism.

Treasury also said the bank failed to fix the problems after it signed a cease-and-desist order in 2024. In plain English, it got caught, promised to clean up, and didn’t.

Bessent said the action sends a clear message that even the biggest institutions aren’t above the law.

And yet, not one individual was charged.

Stern’s reply to the Secretary was polite and brutal: fines aren’t working.

The Twelve-Day Fine

Let’s do the arithmetic Stern did for HSBC.

Bank of America earned $9.1 billion in the second quarter of this year. That works out to about $100 million a day. A $1.2 billion penalty is twelve days of profit.

Twelve days, for five billion in unreported transactions. By Treasury’s own findings, those transactions were executed for people who sell fentanyl to American kids.

The fine comes out of the bank’s capital, which belongs to shareholders like pension funds, index funds, and your 401(k). Nobody who decided the 2024 order could wait pays a dime. On the earnings call next quarter, they’ll be talking about operating leverage.

How the Toll Booth Works

Fines are spread across millions of shareholders. No one feels it. The board doesn’t have to revolt. The regulators got their check and their press release.

Compare that to one executive in handcuffs. That changes the math for every other executive in every other bank, overnight. That’s Stern’s point, and it’s the right one. He says one banker in cuffs would do more than every fine in Treasury’s history combined.

So why does The Swamp keep choosing the toll?

In a word: fear.

In 2013, Attorney General Eric Holder told the Senate that some banks had grown so large that prosecuting them could hurt the economy. He later walked back his comments, but “too big to fail” turned out to be a Frankenstein’s Monster.

And since Bank of America is loaded with $109 billion of unrealized losses from its Treasury bond holdings, that concern is even more acute.

Also remember that a fine is revenue. Treasury booked a tidy $1.2 billion on Tuesday. Like war, prosecution takes years and costs millions. A settlement is a guarantee with a big bow.

Finally, see the incentive for what it is. Each fine justifies a bigger compliance bureaucracy, inside the bank and the agency. Both a bank’s compliance staff and the government’s grow.

Sadly, the fine isn’t the cost of doing business. It is the business. The government sells the pass, and the bank buys it.

Tetzel’s Price List

History tells us the Church learned this the hard way.

In 1517, a Dominican friar named Johann Tetzel toured Germany promoting indulgences. Catholic doctrine held that an indulgence remitted temporal punishment for sins whose guilt had already been forgiven.

It was never supposed to be a license to sin. But Tetzel’s fundraising pitch made spiritual relief sound suspiciously like something you could buy. Part of the proceeds helped finance the rebuilding of St. Peter's Basilica in Rome.

A monk in Wittenberg objected. Luther’s Ninety-Five Theses helped ignite the Protestant Reformation and split Western Christendom.

The Church eventually confronted the abuse. At the Council of Trent, it reaffirmed the doctrine of indulgences but condemned the financial abuses surrounding them. In 1567, Pope Pius V abolished indulgences tied to payments.

DC has learned no such lesson. It still collects the money and leaves the sinners in business.

Indeed, the Treasury’s arrangement is worse. An indulgence was never meant to excuse future sins. A bank fine that leaves the responsible executives untouched encourages the next offense.

And everyone watching learns that consequences are negotiable, as long as you’ve got the money.

The Last Whistleblower

So why did nobody inside Bank of America come forward the way he did?

Stern answered that question: because everyone in American banking knows what happened to him.

That’s the quiet cost of the toll booth. It releases the guilty and publicly punishes the honest. The next honest man shrugs and shuts his mouth.

Credit Where It’s Due

This fine is bigger than any of Bessent’s predecessors managed. The Treasury forced the bank to admit willful violation in writing. That’s more than HSBC ever conceded.

But fines are the limit of what he can do. The Justice Department must prosecute. Stern knows this, which is why his first ask is a referral, not a conviction.

The good news is that Stern’s three fixes are all within reach of this administration:

1. Refer the executives who set the thresholds, not the analyst in the queue.
2. End too big to jail, since a bank can’t be too big to fail and too big to jail at once.
3. Finally, if a bank with America in its name won’t act like America’s bank, review its charter.

These fixes only require a Secretary willing to take down the toll booth.

Wrap Up

Before Stern walked into the FBI building in 2010, he stopped at the Great Seal in the lobby and read the words under it: Justice is the defense of our liberty.

He believed it then. He says he still wants to believe it now.

Don’t take my word for how this works. Take his.

He paid for the privilege with everything he had, and he wrote it down for the man who can change it. Read the letter, then decide for yourself whether Tuesday’s fine was a punishment or a receipt.

A nine-figure bank fine is just a toll. It’ll stop being that when bankers get perp-walked out of their shiny glass towers.

In a world where the average investor holds a stock for 3 minutes, I believe it’s wise to be contrarian here.

Today, we’re going to cover my favorite forever investments. Stocks I plan to hold for the next 10 years or longer.

Without further ado, let’s get started.

Oil & Gas

At its peak back in 1980, the energy sector (oil and gas) made up a whopping 30% of the S&P 500. Today it’s about 3.5%.

I first posted the chart below back in June of 2025. Energy has since moved up to about 3.5%. Still a drop in a bucket.

Source: Tavi Costa

Meanwhile, the Magnificent 7 tech giants make up 35% of the S&P 500. Out of a 500-stock index, just 7 of them make up 35%. And if you combine the top 41 AI companies, it moves up to 49% of the entire index. Talk about concentration risk…

The 3% stat got my attention. And as I dug in, I realized that the world hasn’t invested nearly enough in oil production over recent decades. Large oil discoveries have plummeted by about 60% since the early 2010s, when shale was booming.

There’s a widespread perception that oil is the past, and green energy is the future. This is bogus. Oil demand is still rising, and alternative sources are nowhere near ready to replace it.

Much of the world’s easy oil has already been extracted. Additionally, the green new scam and other ESG mandates have caused many asset managers to quit oil and gas entirely. They call it divesting.

I call it an opportunity.

Oil Picks

No surprise here. My favorite long-term oil stock remains Petrobras (PBR or PBR.A).

Brazil’s Petrobras is the cheapest major oil company in the world, by far. And there is some political risk with the government owning a big chunk of the firm.

But I believe the juicy dividend yield and low price more than make up for the potential downsides. Besides, Brazil is experiencing a stock market boom and if they mess with PBR shareholders, that’s going to end. Additionally, it looks like the country will soon have a conservative/capitalist president.

To be clear, I wouldn’t aggressively buy Petrobras here. It has more than doubled since we first featured it last year, and we’ve been banging the drum on this stock for 18 months.

But if the wars in Iran and Ukraine end, and the price drops, that’ll be an ideal time to pounce. Petrobras can profitably sell oil at $35/barrel. As a bonus, they’re insulated from chaos in the Middle East. In fact, the company benefits from it. They also operate 11 oil refineries.

My plan with this one is simple. Reinvest the dividends and let it grow for decades.

If you’re looking for a safer U.S. oil stock, ExxonMobil (XOM) is also solid. I own that one too.

And if you belong to any of Jim Rickards’ services, keep a close eye on their energy picks. Jim and Dan are on fire lately. These guys understand this sector like few analysts do.

Emerging Markets (EM)

Long-suffering readers are rolling their eyes right now. Emerging markets, again?!

Yes. I enjoy buying growing companies at under 10x earnings, with 5% yields and irreplaceable assets. And the only place you can reliably do that today is EM. The S&P 500 yields a pitifully small 1% today. That’s a giant red flag for me. Too expensive.

I’ve talked enough about Brazil lately (read this if you need to get caught up). So I’ll make the pitch quick. The iShares Brazil ETF (EWZ) is the simplest way to play it. I plan to hold my Brazil positions for years to come, and hopefully longer.

Caveat: if our Brazil picks pull off a 4x in 4 years, it may make sense to take some profits early. Still, I hope to hold some of my Brazilian positions essentially forever (namely PBR and VALE).

My other favorite EM “forever investment” is the Cambria Emerging Shareholder Yield ETF (EYLD). This is a unique “shareholder yield” ETF. It selects companies based on their total shareholder yield, which is a combination of dividends, buybacks, and debt paydowns.

The fund owns 108 companies from across the world, but they are concentrated in Asia. Vietnam, South Korea, Taiwan, and about 16% China. These are mostly industrial companies that don’t even trade in the U.S. So it offers excellent diversification.

I’ve owned this fund for more than 8 years. Even when EM wasn’t doing well, it always generated a nice yield, which I reinvested in more shares. The dividend yield is around 4.3% currently, and the expense ratio is 0.6% per year.

I plan to buy more EYLD in my 401k throughout this year.

Those are my favorite forever investments today. If I add anything else to the list, you’ll be the first to know.

My weapons of choice were trashy penny stocks and 10x leverage.

No, my investing career did not begin in a blaze of glory. But the truth is, almost nobody’s journey does.

For better or worse, mistakes are how we learn.

A Glimmer

Before my writing career, in the early 2000s, I ran a one-man marketing consultancy. My specialty was building Google advertising campaigns for small companies.

It was a nice little business. And I got to know Google’s systems very well. They had a truly revolutionary product, and most people didn’t realize it.

Google IPO’d in 2004 at a split-adjusted price of $2.13 per share. I ended up buying in 2005 at around $5.25 per share.

As the years went on, I bought more Google on dips. I knew this company was going to be a monster, because I worked with their products every day. I fell in love with GOOG.

In the end, I held onto those Google shares for 15 years, selling (too early) in 2020. At one point Google was over 60% of my portfolio. But that was fine, because I knew the company inside and out.

This is what I mean by “marrying” a stock. You buy a company you understand deeply, and add to it on dips. This is the ideal stock market relationship.

Warren Buffett famously said his ideal holding period for an investment is “forever”, and the older I get, the more sense it makes.

Lessons

After those first few years of “investing”, I had to stage an intervention with myself.

I looked at the results from my IRA (long-term) account and compared it to my trading account. The difference was stark.

One was growing steadily, and the other appeared to be some sort of black hole for money.

Truth is, I had no business trading back then. I was in my early 20s and didn’t have the knowledge, patience, or skills required. This is the biggest mistake investors make, especially new ones. Frequent trading by amateurs almost always leads to account implosion.

For the next 7 years, I didn’t trade at all. Only long-term investments. And it worked.

Eventually I started dabbling again with trading, but with caution and strategy this time. Here’s how I maintain balance these days.

A Smarter Path

In 1960, the average holding period of a stock investment was 8 years and 7 months. Today it’s just 7 months. Almost nobody holds investments long-term these days.

This is one of those times where it pays to go against the grain.

I believe that the core of every portfolio should be long-term positions.

When you hold investments for long periods, it gives them time to compound without taxes constantly interrupting the gains. And it removes human emotion from the equation, which is a great thing in the investing world.

About 83% of my portfolio today is in long-term investments. The other 17% is cash, which I use to fund occasional trades. But an individual trade is never more than 1% of the total, and usually far less.

Regarding “long-term” investing, some of you are thinking “I don’t have that much time to wait”. I understand. Inflation is problematic, the job market is terrible, and the future uncertain. A lot of people have catching up to do.

But don’t go out and risk everything on half-baked ideas. If you’re determined to trade, take advantage of the experts we have here at Paradigm Press.

We have world class traders here, and they’ll make your trading journey far more enjoyable. Attempting to do it on your own is going to be tough sledding. The tuition to become a successful trader on your own is steep. Most people never make it.

But don’t forget about the long haul part of your portfolio. Statistically, that’s where most of the magic happens.

This week we’ll discuss which stocks I consider to be marriage material today.