At Quarry Hill, we believe great financial planning is about more than numbers. Marin's background in financial psychology strengthens our commitment to helping clients navigate life's biggest financial decisions with both analytical clarity and human understanding.
Outside the office, Marin enjoys rock climbing, lifting, dancing, and spending time outdoors with her husband and their two pups as they eagerly await their first baby later this year. We're thrilled to have her on the team!
The biggest IPOs in history are here.
I’ve read many people say there isn’t a price at which they wouldn’t buy OpenAI.
And that's exactly what worries us.
Not because these aren't incredible companies. They are. OpenAI, Anthropic, and SpaceX are all changing the world.
The question isn't whether they're great companies.
The question is whether they'll be great investments.
Those are two very different things.
"This company is changing the world."
That statement may be completely true.
The problem is that everyone else knows it too.
Investors often assume that if a company succeeds, the stock must also succeed. History tells a different story.
The companies that generate the most excitement often become the investments with the highest expectations. And when expectations become too high, so does their stock price.
In investing, it's not enough to be right.
You have to be more right than everyone else already expects you to be.
Researchers have studied what they call "Positive Trait Valuation" (PTV).
In simple terms, it's the tendency for investors to overpay for stocks that have characteristics they love:
The findings were remarkably consistent.
The more exciting the stock, the lower its future returns tended to be.
The more boring the stock, the better it often performed.
That's not because boring companies are better businesses.
It's because exciting companies attract so much attention that investors collectively bid prices too high.
Even the best companies in the world can be poor investments if you pay too much for them.
One of the strongest predictors of an overpriced stock isn't earnings.
It's attention.
The research found that stocks receiving the most retail investor attention and social media engagement often delivered some of the worst future performance.
Why?
Because by the time everyone is talking about an opportunity, it's usually no longer an opportunity.
The crowd isn't discovering value, it’s bidding up the price.
And it may not.
Every generation believes its transformational technology is different.
Railroads changed the world.
Electricity changed the world.
The internet changed the world.
Artificial intelligence may ultimately prove even more significant than all of them.
But here's the important lesson:
A revolutionary technology does not automatically create revolutionary investment returns.
Take the internet.
There is no question the internet transformed the world. Nearly every aspect of modern life depends on it. The technology won.
Yet many investors in the most celebrated internet companies of the late 1990s lost enormous amounts of money.
Pets.com became one of the defining companies of the dot-com era. It also went bankrupt.
Webvan raised billions to reinvent grocery delivery. It collapsed.
Meanwhile, an online bookstore called Amazon survived, adapted, and became one of the greatest investments in history.
The challenge is that nobody knew in advance which company would become Amazon.
Investors simply knew the internet was important.
And that's the trap.
Knowing a technology will change the world is not the same thing as knowing which company will win, or whether today's price already assumes that victory.
Artificial intelligence will absolutely reshape the economy.
OpenAI may become one of the most valuable companies in the world.
Or it may become a great company whose stock delivers mediocre returns because investors paid too much for future growth.
The future can arrive exactly as expected and still disappoint investors if expectations were already priced in.
The technology may win, but that doesn't guarantee the investor will.
When OpenAI goes public, we'll almost certainly own it…eventually. But it will be in the same way we own any other company, as a part of a diversified strategy.
IPOs are notoriously bad investments during the first year. Sure, you might seem a short-term pop, but check out the draw downs of these well-known IPOs within year 1 of being a publicly traded company.
We don't know whether the next craze will be AI, robotics, quantum computing, biotechnology, or something nobody has thought of yet.
But we do know this:
A new generation of investors will become convinced that this time is different.
Many will chase the most exciting stories.
Prices will rise.
Expectations will soar.
And once again, investors will discover that buying a great story and earning a great return are not the same thing.
The advantage doesn't come from predicting the next big thing.
The advantage comes from avoiding the timeless behavioral traps that cause investors to overpay for it.
As always, thank you for your trust.
-A note from Kyle Moore, CFP®
This material is intended for educational purposes only. You should always consult a financial, tax, or legal professional familiar with your unique circumstances before making any financial decisions. Nothing contained in the material constitutes a recommendation for purchase or sale of any security, investment advisory services or tax advice. The information and opinions expressed in the linked articles are from third parties, and while they are deemed reliable, we cannot guarantee their accuracy.