Barron's Advisor Dryden Pence: Why I'm Bullish on Small-Caps, Defense Stocks, and AI
Oct 14, 2025
Dryden Pence, Chief Investment Officer of Pence Wealth Management and a former U.S. Army military intelligence officer, shares his unique investment perspective. He dives into why lower interest rates and strong earnings are set to boost small- and mid-cap stocks in the coming year. Pence discusses the transformative potential of AI, particularly in healthcare and productivity. He also explores global defense spending's impact on investment opportunities and highlights the importance of understanding labor productivity as a key growth indicator.
AI Snips
Chapters
Transcript
Episode notes
Human Behavior Drives Investment Edge
- Pence uses psychology to predict consumer behavior and choose companies that will benefit from demand.
- He looks for firms that fulfill specific human needs and dominate supply-chain choke points to gain pricing power.
Small-Caps Poised To Outperform
- Pence expects lower rates and strong earnings to lift markets and broaden leadership beyond mega-cap tech.
- He sees small- and mid-caps benefiting from margin improvement as financing and rates fall.
Buy Chips On Dips And Find AI Users
- Buy infrastructure-related chips and related suppliers on dips during the AI build-out.
- Also research companies that will use AI to boost labor productivity and profit margins.