Here’s a preview of what we’ll cover this week: 

Macro: 250 Years, and Still Flourishing; The Jobs Report

Markets: The Great Semis Unwind Has Begun; The AI buildout Needs a Power Cord; The Compliance Gene

Lumida Curations: Dylan Patel on Why Nvidia Is Funding the Entire AI Compute Market; Larry Robbins on Three Stock Buckets 

Philosophy Matters.

America turns 250 this year.

The Declaration of Independence made a claim no government had ever formally made - that human beings possess rights inherent to their humanity.

Not granted by birth. Not contingent on ethnicity or ideology.

WWII was the maximum pressure test of that claim.

Against regimes that believed the opposite with absolute conviction and the military power to enforce it.

The claim won.

Not because good is automatically stronger than evil.

Because the side that could still hear the truth built better systems, elevated better leaders, attracted the world's best minds, and out-produced, out-thought, and out-lasted everything thrown against it.

That is the gift of 1776.

That is the lesson of 1945.

That is the challenge of 2026.

I did a 30-minute episode on this sharing the lessons of World War II told from the perspective of Leadership. Watch here. 

It's a leadership study for investors, founders, and operators.

Eisenhower. Patton. Winters.

What they teach us about ideology vs meritocracy, ego vs humility, innovation, and the power of the prepared mind.

‘We hold these truths to be self-evident…’

That sentence isn't just philosophy, it’s a competitive advantage.

If you have some travel today, consider listening to this 30-minute retrospective on World War II on Youtube or Spotify.

We brought founders, investors, and leaders together for the Lumida penthouse social in Tribeca.

Great conversation, good company, and time with the Lumida app.

If you couldn’t attend, stay tuned for the next. We are going to host it monthly for our community members. You can join our tribe here.  

Download the Lumida app to experience the future of wealth management. 

This week, I attended the Inside Startup Investing podcast with Chris Lustrino, talking about how AI is revolutionizing the wealth management industry. 

We also discussed Lumida’s community round, our customers growth, revenue traction, and long-term vision of building an AI wealth advisor. 

The episode covers:

- AI-powered market insights

- Why traditional advisors may be disrupted

- The limitations of 60/40 portfolios

- Pre-IPO investing access

- Community-driven wealth building

- Lumida’s growth and business model

Listen here. 

The next generation of investors wants more control, better insights, and smarter tools than traditional wealth management has provided.

And, Lumida is building exactly what they need. 

Join us in this revolution by participating in our community round. It’s wrapping up in less than 40 hours.

It's the Bicentennial, so allow us a moment to zoom out.

Let’s strip away the week-to-week noise, and look at what the American economy has achieved. 

Start with GDP.

Real GDP is on track for another record high this year, sitting at $24.2 trillion. 

The current expansion has run since 2009, interrupted only by a two-month lockdown in 2020.

And look at everything we have survived since 2009: a pandemic, the lockdowns, supply chains snapping, inflation ripping to 40-year highs, the fastest tightening cycle in a generation, tariffs, and another Gulf War.

Every one of those was supposed to be the thing that broke the expansion. 

None of them did.

Productivity is the engine.

Every American is now more valuable to the economy than ever before.

Productivity is at a record high, right alongside real hourly compensation. 

Over the last 12 quarters, productivity has risen at a 2.7% annual rate, well above its long-run 2.1% average.

AI has made each worker more productive, but it’s not that they are working any less.

Aggregate hours worked just hit an all-time high of 241.9 billion. 

More people working more hours, and each of those hours producing more output than the year before.

That’s what keeps the economy growing.

Better productivity also helps labor value, which is driving wage growth.

Over the last 250 years, the US consumer has stayed resilient, and is now stronger than ever as we noted in last weeks newsletter.

Real personal consumption per household is at a record $124,800. 

This growth isn't the top consumer decile carrying the number, either. 

We walked through the bottom-half spending data last issue, and it's accelerating, funded by tax refunds and improving jobs. Read here. 

And, AI productivity boom is around the corner. 

Businesses are spending more than ever on technological capex that lets them do more with existing people.

Private fixed investment hit a record $3.8 trillion this year, maintaining its growth trend.

High-tech now accounts for a record 55% of all capital spending in the US. More than half of every capex dollar is going into equipment, software, and R&D.

These investments boost productivity, improve toplines, and lower costs, all of which results in higher earnings.

The profits are already showing up.

Corporate profits and cash flow hit record highs in Q1. After-tax profits from current production hit an all time high at $3.6 trillion. 

Margins are matching record highs too, with the S&P 500 after-tax margin at 13.7%.

And, it's not only the large businesses that are growing, young entrepreneurs are more confident, with business applications at record highs.

Overall, every lever of the economy is performing better than before. That’s where we have reached in 250 years.

Every one of these records, the output, the profits, the record business applications, traces back to the same source: someone who decided to build. 

Two hundred and fifty years later, America's real product isn't any single company.

It's the ability to produce founders, deepen capital markets, maintain military strength, and innovation in healthcare.

When you stack up the country attributes, side-by-side, there is no second best to the United States. 

Last month, markets sold off on concerns the Non-Farm Payrolls report was too hot.

Now, markets are rallying due to the Non-Farm Payrolls missing expectations - assuaging concerns on inflation fears.

The bigger story is that the report is unreliable.

We've seen this time and time again.

Remember the Aug 5th print in 2024 which created fears of a recession?

The reality is this is an outdated series that should be retired and replaced with more real-time measures of economic activity.

It's 2026 and a noisy, backwards looking, statistically questionable measurement is still relied upon by market participants.

Warsh correctly pointed out this need for better metrics in his first press conference.

The lesson is that markets are pretending a noisy estimate is a precise macro signal.

Therefore, sharp over-reactions to this report should be faded (e.g., buy dips after NFP sell off).

Q2 was one for the record books. The Nasdaq 100 posted its second-best quarter since the dot-com top in 2001 — beaten only by the COVID melt-up of 2020. 

Semis had their best quarter in the history of the SOX index.

We noted in a prior newsletter, that every sector of the S&P has lagged the major index except semis in the most recent quarter.

But, something changed, as we exited the quarter.

Q3 opened with a violent, but expected, rotation. 

The best-performing decile from last quarter (majorly animal spirits) collapsed 3% on average, while the regular stock was up 0.5%.

The bottom three deciles outperformed, and were all up over 1%. 

The more a stock won in Q2, the harder it got sold to start Q3. The worst names performed the best at the quarterly turn.

This is mean reversion in its purest, most mechanical form. 

In our last issue, we noted insurance stocks were making a quiet rally. And that continued this past week.

The reversal is already in the tape.

Capital flowed out of Semis, as it recorded its second consecutive red week, dipping 5% in last 4D following the 8% drawdown in the prior week. 

Everything that went up with the semis trade came down with it.

The Roundhill Memory ETF (DRAM) fell a brutal 16% in two days of July, after ripping 166% from its April 2 inception. 

The Global X Data Center ETF (DTCR) declined about 5% in the last two trading days and is now down 11% from its June 22 highs.

Now look at where the money went.

Semis were the red line, with deep green in software, Insurance and biotech.

It’s the exact mirror image of the trade that ran all spring.

Over the last month, Biotech (IBB), Insurance (KIE) and Airlines (JETS) have risen over 15%.

This week, we also saw love for software, with IGV ETF performing best in our list with a gain of 10%+

Allstate was the first name – value in insurance. It gained ~9% in the last 5 days.

Progressive was the second name, and performing just slightly lower than Allstate with a 8% gain. 

Despite its rally in the last few weeks, Allstate (ALL) stays at a single digit earnings multiple with FCF yield of ~18%. 

Next comes our beloved Nu holdings (NU), which had been out of love for so long it felt it can’t be loved. 

Markets bought it back this week, and it has gained about 9% in last 5 days, outperforming our other calls.

As we mentioned earlier, Biotech was the top performing sector. Animal spirits have moved from semiconductors to biotech which has great seasonality thru July.

The names we like and own in biotech have a quality and earnings tilt. We discussed HALO, EXEL, and INCY’s - let’s take a look at the weekly performance to the market. 

Notice how the weekly performance of our biotech picks was in line with their order of value.

HALO trades at the lowest earnings multiple, and had the top move, while EXEL has the highest multiple amongst the three, and moved up the least – still performing 3x the market.

This is evidence of a ‘factor move’ - quality and earnings growth did well this past week as high beta pulled back. We’ll need to see if this trend continues.

But, overall, quality is objectively cheap and one should be accumulating quality names.

Nuclear energy Independent Power Producers (IPPs) have fallen out of favor.

But, the energy demands are real. The stocks have reset to attractive valuations and excellent entry points.

A data center is just a building full of GPUs that needs firm, around-the-clock power. 

The companies that own the gas and nuclear power are the toll booths on the entire buildout.

We bought two of them this week: Constellation (CEG) and Vistra (VST). 

Constellation Energy (CEG) — The Dislocation Is the Trade

Constellation is the largest producer of carbon-free energy in the country. 

It runs the nation's biggest nuclear fleet at a 92%+ capacity factor — meaning the plants are producing nearly every hour of every day, which is exactly the profile a hyperscaler is desperate to contract.

Now look at its earnings vs price chart.

The blue line is forward EBIT. It has ground relentlessly higher to $6.7B. 

The stock price? It has cratered, down 12% over three months and 22% over the past year, from the low $400s to $239.

Notice how the stock price and earnings spread is highest today. This spread has to be covered, and fundamentals aren’t moving down. 

It's the same "quality on sale" pattern we flagged in the insurance names, just wearing a utility costume.

And the numbers underneath are solid. 

Management is guiding an earnings growth rate north of 20% through 2029, anchored by the nuclear production tax credit, which grows with inflation. In simple terms, Constellation is one of the few names where hotter inflation is a tailwind, not a threat

Plus, it has long-term contracts with hyperscaler counterparties, which continue to spend massively in capex.  

Operating cash flow runs around $8.4B (10% of Mcap) across '26–'27 and steps up to $11.5–13B in '28–'29. 

That's an expected ~30-45% jump in cash generation in two years.

Return on total capital sits at the highest of its three-year history with debt levels reduced significantly as the equity base expanded. 

And, management is returning capital to shareholders with $335M of buybacks and dividend growing 10% a year.

The bear case. Two things. 

First, the optics: CEG trades at 76x trailing price-to-free-cash-flow. That number will make a value screener choke. 

But it's a trailing number that ignores the FCF ramp we just walked through — the whole point is that the cash inflects hard from here. 

Second, and more real: during Q1 call, management admitted some hyperscaler customers have paused contract discussions waiting for regulatory clarity. 

That is a genuine risk. We could very well see datacenter cancellations increase especially as we get closer to Midterms. That is the single biggest risk for the AI trade.

Vistra (VST) — The Cheaper, Faster, More Levered Version

If Constellation is the blue-chip nuclear anchor, Vistra is the aggressive, integrated operator, and it's cheaper.

VST trades at 16.7x forward earnings versus CEG's 20.6x, and it is a cash machine. 

Q1 adjusted EBITDA hit a record $1.5B for the first quarter — up ~20% year-over-year and up nearly 85% from Q1 2024. 

Return on equity is a staggering 43%, top of both its sector and the broader market.

What we love here is the capital allocation. 

Since late 2021, Vistra has retired ~169 million shares, and has one of the highest buyback yields amongst US utilities.

In 2026, they deployed another $525M in buybacks during just the first four months.

Over '26–'27, they see $10B+ of cash generation, with ~$3B earmarked for shareholders and ~$3B still uncommitted.

And they're not just harvesting, they're building into the demand. 

Vistra locked in a ~2,600 MW power deal with Meta at its PJM nuclear sites, and is acquiring the 5,500 MW Cogentrix gas portfolio (neither of which is even in guidance yet). 

It just earned investment-grade ratings from two agencies, which releases liens on its assets and lowers its cost of capital right as the growth capex ramps.

This is the same "own the firm megawatts, contract them to a hyperscaler" thesis as Constellation — just with a gas-heavy fleet, a fatter ROE, and a more aggressive buyback.

The bear case. 

First,  Vistra's upside is heavily levered to the data center buildout, and the recent pressure on semis might hurt stock’s near term performance. 

Second, the balance sheet. 

Total debt/equity is 355% and total-debt/total-capital sits at 78%, both at higher levels of 3Y history.

Net debt/EBITDA of 2.8x is fine, but this is a more leveraged animal than Constellation. 

VST and CEG should do well as markets start pricing the potential electricity demand that sits ahead of them.

If you are looking for a quick summary of the opportunities and risks involved with CEG, VST, or any other stock for that matter, be sure to check out the Lumida App.

Our AI analyzes earning transcripts, research reports, and latest publications to develop a bull/bear case for every stock.

Here’s what it says about VST and CEG.

We have been working towards the same theme in private markets with our latest opportunity in an off-grid compute provider.

If you are a qualified purchaser, reach out to [email protected] to get details on the private deal.

Humans across cultures and centuries have believed they were living in the end times.

Yet the end times never seem to arrive. 

They are perpetually deferred.

What if the instinct for apocalypse now is genetic?

It would have obvious evolutionary advantages. 

It promotes vigilance, solves collective-action problems, and encourages cooperation in the face of shared threats.

The person standing watch on the guard tower doesn’t abandon their post if they know a false alarm is cheaper than a missed invasion.

Natural selection doesn’t reward the tribe that dismissed every warning. It rewards the tribe that survived.

That instinct served us well on the savannah.

But evolution optimizes for survival - not for truth.

What happens when that same instinct migrates into investing?

Perhaps it creates the perpetual bear.

Every generation produces its prophets of collapse: people who correctly understand that recessions, crashes, and panics are inevitable, but perpetually mistake inevitable for imminent.

Jeremy Grantham comes to mind. Brilliant. Thoughtful. 

Often directionally right over the very long run. 

Yet investors who spend decades positioned for the next catastrophe often miss the compounding that occurs while waiting for it.

Markets spend far more time climbing walls of worry than falling off cliffs.

The irony is that both evolution and investing punish different mistakes.

Evolution punishes the false negative. Ignore the rustling in the bushes once, and you may not leave descendants.

Investing punishes the false positive. 

Mistake every rustling bush for a tiger, and you spend your life hiding in cash while productive assets compound around you.

The challenge, then, is recognizing when ancient software is running on modern hardware.

Our brains evolved to survive predators, not price earnings ratios.

Perhaps that’s why apocalyptic narratives are so seductive. 

They feel true because they resonate with instincts that kept our ancestors alive.

But, investing requires overriding some of those instincts.

The apocalypse is always possible.

It is almost never now.

I did a FSD livestream on “The Compliance Gene”. Watch it here. 

Dylan Patel argues that Jensen Huang’s investments across AI labs, hyperscalers, and neoclouds are less about quick returns and more about keeping GPU demand broad, competitive, and out of the hands of a few powerful buyers.

View Curation

Larry Robbins says the market has split into three groups: AI momentum leaders, real AI beneficiaries, and overlooked compounders that still work even if the AI trade cools.

View Curation

Not Subscribed Yet? Don’t miss out on future insights—subscribe to the newsletter now!

For real-time updates, follow us on: 

X | Telegram | Youtube | TikTok | News | Ram’s X | Lumida Health | Lumida Tax

As Featured In

Disclaimer: Lumida Wealth Management LLC (‘Lumida”) is located in New York, NY, and is an SEC registered investment adviser. SEC registration does not constitute an endorsement of the firm by the Commission nor does it indicate that the adviser has attained a particular level of skill or ability. Lumida only transact business in those states in which it is registered, or qualifies for an exemption or exclusion from registration requirements. Any direct communication by Lumida with a prospective client will be conducted by a representative that is either registered or qualifies for an exemption or exclusion from registration in the state where the prospective client resides.

The information in this material has been obtained from sources believed to be reliable. While all reasonable care has been taken to ensure that the facts stated in this material are accurate and that the forecasts, opinions and expectations contained herein are fair and reasonable, Lumida, Inc. and Lumida Wealth Management LLC (collectively Lumida) make no representations or warranties whatsoever the completeness or accuracy of the material provided, except with respect to any disclosures relative to Lumida. Accordingly, no reliance should be placed on the accuracy, fairness or completeness of the information contained in this material. Any data discrepancies in this material could be the result of different calculations and/or adjustments. Lumida accepts no liability whatsoever for any loss arising from any use of this material or its contents, and neither Lumida nor any of its respective directors, officers or employees, shall be in any way responsible for the contents hereof, apart from the liabilities and responsibilities that may be imposed on them by the relevant regulatory authority in the jurisdiction in question, or the regulatory regime thereunder. Opinions,forecasts or projections contained in this material represent Lumida’s current opinions or judgment as of the day of the material only and are therefore subject to change without notice. Periodic updates may be provided on companies/industries based on company-specific developments or announcements, market conditions or any other publicly available information. There can be no assurance that future results or events will be consistent with any such opinions, forecasts or projections, which represent only one possible outcome. Furthermore, such opinions, forecasts or projections are subject to certain risks, uncertainties and assumptions that have not been verified, and future actual results or events could differ materially. The value of, or income from, any investments referred to in this material may fluctuate and/or be affected by changes in exchange rates. All pricing is indicative as of the close of market for the securities discussed, unless otherwise stated. Past performance is not indicative of future results. Accordingly, investors may receive back less than originally invested. This material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. The opinions and recommendations herein do not take into account individual client circumstances, objectives, or needs and are not intended as recommendations of particular securities, financial instruments or strategies to particular clients. The recipients of this material must make their own independent decisions regarding any securities or financial instruments mentioned herein and should seek advice from such independent financial, legal, tax or other adviser as they deem necessary. Lumida may trade as a principal on the basis of its views and research, and it may also engage in transactions for its own account or for its clients’ accounts in a manner inconsistent with the views taken in this material, and Lumida is under no obligation to ensure that such other communication is brought to the attention of any recipient of this material. Others within Lumida may take views that are inconsistent with those taken in this material. Employees of Lumida not involved in the preparation of this material may have investments in the financial instruments or securities (or derivatives of such financial instruments or securities) mentioned in this material and may trade them in ways different from those discussed in this material. This material is not an advertisement for or marketing of any issuer, its products or services, or its securities in any jurisdiction.