Normalizing Margins to Value Cyclicals

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In this episode, Dave and Andrew run through a 2025 stock market year-in-review, using the “Spotify Wrapped” idea as the framing device. They cover how the major indexes performed, why the year felt weird depending on where you were invested, and how the AI boom shaped returns across the market.

They also dig into the investing psychology behind FOMO, chasing winners, and dealing with volatility—especially when the broader market is up but your portfolio (or specific holdings) might be down big. 

Key Topics Covered:

• 2025 market returns (S&P 500, NASDAQ, Dow) and what they imply going forward

• The AI boom, NVIDIA’s dominance, and the “you might be early” lesson from the dot-com era

• Sector winners and why energy/infrastructure matters for AI

• FOMO, chasing top performers, and how to approach cyclical industries

• Volatility, expectations, and what to do when a stock is down big

Timestamps:

00:19 – Intro: 2025 stock market year in review

01:07 – Index performance

02:48 – The big themes of 2025: AI boom + profitability questions

04:18 – Should you buy NVIDIA now?

07:35 – Getting AI exposure without owning NVIDIA

11:57 – Sector winners

14:11 – Stocks that doubled

19:16 – How to handle cyclicals

21:20 – Normalizing margins to value cyclical businesses

24:10 – Volatility “panic attacks” and why zooming out matters

29:27 – What to do when a stock is down big: fundamentals first

38:30 – Podcast Spotify Wrapped: 3M minutes listened

41:29 – Wrap-up: see you in 2026

Resources Mentioned:

The Value Spotlight Newsletter: https://einvestingforbeginners.com/value-spotlight-newsletter/

Have questions or want your story featured? Email the show at newsletter@einvestingforbeginners.com or comment below. Your feedback shapes the podcast!

Remember, invest with a margin of safety—emphasis on the safety. Have a great week, and we’ll talk to you next time.

Timestamps are generated by artificial intelligence, and are not 100% accurate depending on the platform used for listening.

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