September 2026 Random Ramblings

18 snips

Sep 25, 2026

Rising rates meet record-high stocks in a discussion of hidden refinancing risks, pain in housing and biotech, and shrinking margins of safety. The conversation explores merger arbitrage in a 5% world, why market crashes seem shorter, and whether that resilience masks fragility. It also turns to investor overconfidence, survivorship bias, imposter syndrome, mentorship, and outgrowing investment models.

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INSIGHT

Interest Rates May Pull Markets Down Slowly

Rising rates act as financial gravity, but stock prices and investor allocations may adjust slowly.
Consumers gradually shift incremental cash toward bonds, just as companies’ refinancing costs emerge years later.

INSIGHT

Debt Refinancing Could Expose Hidden Earnings Risk

Corporate debt maturity schedules can delay the earnings impact of higher rates.
Debt issued around 2021–2023 at roughly 3%–5% may refinance at much higher rates from 2028 through 2031.

ANECDOTE

Pain Beneath The Indexes

Indexes remain near highs while leveraged small caps, housing, biotech, SaaS, and consumer-inertia names suffer underneath.
Berkshire’s purchase of Lennar near tangible book illustrated how housing pain can create selective value.

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The 10 year has gone from 4.2% at the start of the year to 4.6% in late August to 5.1% today, and the S&P is still basically touching all time highs. Interest rates are financial gravity, but I wonder if gravity works on a lag. Consumers and allocators are slow to move money from stocks to bonds, and corporates termed out a lot of 3.5% debt in 2021 to 2023 that starts rolling in 2028 to 2031. Today's free cash flow is flattered by that spread. Underneath the index there is already real pain in housing, levered small caps and biotech, and my bottom line is the margin of safety in stocks keeps getting skinnier.

From there: why merger arb spreads that looked juicy to anyone who came of age in ZIRP are just the time value of money at 5%, and where the crashes and long bear markets went. We have gone from 1929, 1987 and 1972 to 1974 to a nine month GFC, a two month COVID drawdown and a tariff tantrum that lasted weeks. Is that a stronger market, or a more fragile one waiting for one big break?

Then a friend's line that every investor is either overconfident or has imposter syndrome. I am firmly in the imposter camp, which is a problem, because almost every great investor I can name reads as overconfident. Survivorship explains a lot of it: we don't see the overconfident coin flippers who zeroed out, and Archegos is the cautionary tale. I close on mentorship, sparked by Ian Cassel's book Stock Picker and his mentor Skip, and why everyone, Buffett included with Ben Graham, eventually outgrows their mentor.

Today's post on Muse and the inertia sell off: https://www.yetanothervalueblog.com/p/musings-on-muse-the-inertia-sell

My episode with Ian Cassel on Stock Picker: https://www.yetanothervalueblog.com/p/ian-cassel-on-stock-picker-the-book

Last month's rates piece: https://www.yetanothervalueblog.com/p/rates-are-screaming-and-stocks-arent

This episode is sponsored by Fiscal.ai: https://fiscal.ai/yav. I'm a paying customer and I connect to Fiscal through its API. Two things I use it for: a huge database of fund letters I can pull up on any name I'm researching, and audited financials where every number in the model links back to the source. Use my link for 15% off their AI connector.

Chapters:

(00:00) What I'm rambling about this month

(01:57) Sponsor: Fiscal.ai

(03:30) Two stories: Muse and rates

(04:24) Interest rates are financial gravity

(07:35) Does gravity work on a lag? The coming debt refi wave

(09:17) Index highs, pain underneath: housing, small caps, biotech

(11:23) Rates and special situations: merger arb isn't free money anymore

(14:22) Where did the crashes and long bear markets go?

(18:11) Fed put, fragility, and one big break

(19:55) Overconfident investors vs imposter syndrome

(23:20) Survivorship: Archegos and Situational Awareness

(25:32) Mentors: Ian Cassel's Stock Picker and Skip

(27:16) Even Buffett outgrew Ben Graham

(30:07) Journaling as a way to keep evolving

(30:51) Wrapping up

Links:

Yet Another Value Blog - https://www.yetanothervalueblog.com

See our legal disclaimer here: https://www.yetanothervalueblog.com/p/legal-and-disclaimer