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There was no progress in the peace talks over the weekend… Why Buffett doesn’t like today’s market… Why Louis Navellier likes today’s market… But Luc Lango tells readers to expect a pullback… How deep it might be
Yesterday, Iran presented its official response to the latest US peace proposal.
President Donald Trump’s reaction left no room for misunderstanding:
I have just read the response of the so-called “representatives” of Iran.
I don’t like it – totally unacceptable!
The Iranian nuclear program remains a point of contention.
Tehran has refused to dismantle its facilities and instead proposed separate negotiations on the issue, offering to dilute some of its highly enriched uranium and transfer the rest to a third country, with the condition that it be returned if Washington exits any final agreement.
The United States demands a 20-year halt to uranium enrichment and a complete cessation of the nuclear program as part of any peace framework. Tehran described the American position as a demand for “surrender.”
Meanwhile, Israeli Prime Minister Benjamin Netanyahu also said yesterday that the conflict with Iran “is not over yet,” adding:
There are still enrichment sites to be dismantled, there are still Iranian-backed proxies, there are still ballistic missiles they still want to produce… and there is still work to be done.
The lack of geopolitical progress is weighing on the oil patch. As I write on Monday morning, WTI has rebounded to $97 while Brent is trading above $103.
However, stocks are ignoring the saber rattling, continuing to focus on artificial intelligence and a strong earnings season.
For now at least, Wall Street’s message seems clear: As long as corporate profits continue to take a hit and AI trading continues to perform, geopolitical risks are a secondary concern – even with rising oil prices and unresolved risks in the Middle East.
A little over a week ago, legendary investor Warren Buffett sat down with… CNBC At Berkshire Hathaway’s annual meeting
He wasn’t entirely optimistic…
Here are selected quotes from “Oracle of Omaha”:
- I compared the markets to a church with a casino attached. People can move between the church and the casino. I would say…the casino has become very attractive to people.
- We’ve never had people in a more gambling mood than now. But that doesn’t mean investing is terrible. This means that the prices of a lot of things will seem absolutely ridiculous.
- I have to say it’s not our ideal environment in terms of allocating money to Berkshire.
Meanwhile, another legendary investor has been published a lot Cash – and help his readers achieve returns at multiples higher than the market here in 2026.
That would be Louis Navellier, a magazine editor Stock breakout. As Buffett heads into retirement after amassing a massive cash pile for Berkshire Hathaway over the past few quarters, Lewis has been making moves that have seen that portfolio rise an average of 28% year-to-date, nearly 4 times the S&P 600.
So, who is the legendary investor who reads the market correctly?
both of them.
Where Lewis and Buffett converge and diverge
In an interview with Bloomberg Businessweek In 1999, Buffett said the following:
If I were running $1 million today, or $10 million for that matter, I would be fully invested. Anyone who says “volume doesn’t hurt investment performance” is selling.
It’s a huge structural advantage to not have a lot of money. I think I can make you 50% a year on a million dollars.
No, I know I can. I guarantee it.
Why is Buffett unable to act on this guarantee today?
Before his recent retirement, he managed hundreds of billions of dollars. With a war chest of this size, it can no longer effectively invest in small, fast-moving companies. It must focus almost exclusively on massive “elephant-sized” opportunities.
Currently, he believes that elephant prices are inflated, “absolutely ridiculous,” he says.
But in Stock breakout -Louis’ small business focused service -doesn’t have this problem.
Instead, Lewis focuses on small, high-growth companies where he believes the opportunity set remains extraordinarily attractive.
The numbers confirm this…
His buy list rose 15.5% in April alone, boosted by companies that had an average expected earnings growth of 123% and an average expected sales growth of 69.8%.
As of last week, eight of his properties have reported profits so far this season. All eight companies beat expectations, with an average earnings surprise of 68%.
Much of this outperformance comes from Lewis’ quantitative algorithms, which are designed to identify small, fast-growing companies before Wall Street can fully catch up. But Lewis would be the first to tell you that market leadership has shifted over the past year, with small stocks accounting for an increasing share of the market’s gains.
Lewis sees good reasons to believe this will continue.
Small-cap companies are mostly local. They directly benefit from American economic growth.
They are more sensitive to interest rates – meaning that when interest rates fall, their borrowing costs fall and their earnings power expands rapidly. And it is still cheap.
After years of trading at a deep discount to large-cap stocks, small-cap stocks are only now beginning to fill this valuation gap.
Lewis believes that when interest rates eventually fall under the new Federal Reserve Chairman, Kevin Warsh, small business borrowing costs will decline and their earnings power will expand rapidly.
It’s a tailwind he’s been tracking closely after seeing it for decades, and he’ll lay out the full case — including the specific stocks he believes are best positioned to benefit from it — In a free event this Wednesday, May 13, One o’clock in the afternoon Eastern time. It also distributes a Free stock picks For everyone who attends.
Bottom line: Buffett’s caution may be justified for professional money managers who focus on blue-chip companies. But individual investors can still access small corners of the market where… Growth opportunities remain abundant.
Are small businesses about to go up for sale?
Lewis isn’t the only one keeping a close eye on the beanie right now. Prepared by Luc Lango, editor Innovation investorsuggests that smaller companies — and perhaps even some of the big names in AI — are about to get cheaper.
Locke believes the “AI summer” — his term for the strong rally he expects in AI infrastructure stocks — has arrived. And it’s hot.
Maybe a little too hot.
As evidence, last week, Locke highlighted a technical indicator called the relative strength index, or RSI. Without getting too deep into things, the RSI measures how overbought or oversold a stock or index is.
A reading above 70 generally indicates overbought conditions – meaning the market has risen so far, so quickly that a pause or pullback is becoming increasingly likely because prices have gotten ahead of themselves.
Right now, Luke sees warnings from a variety of RSI readings:
The S&P 500 RSI is at 75. The Nasdaq RSI is at 78. The SMH Semiconductor ETF has an RSI of 82.
SMH’s RSI of 82 is the most overbought in the semiconductor sector in years.
When three major market indicators are simultaneously in the extreme overbought zone, mean reversion is not a risk to worry about. It is a scheduled event.
Luke focuses on SMH, highlighting historical market data that suggests ETFs will likely see a 5% to 8% decline.
It would not be surprising to see a similar step back in the broader market.
To be clear, this is not a collapse or downward shift in Luke’s thesis. It’s just a natural and necessary break after a hot market:
(It will be) a technical, clean, healthy reset that eliminates excess and creates a healthier base for the next sustainable progress.
Duration: Typically two to four weeks of sideways-downward price movement before fundamental momentum is reconfirmed.
Coming back to Lewis, for investors looking to capitalize on small business opportunities, Get your shopping list ready. If we are seeing a healthy pullback, this will likely be the last good entry point before Luke’s Summer of AI kicks into gear again.
Here’s Luke’s summary:
Any short-term fluctuations we see over the next few weeks should pale in comparison to the gains that will follow over the next few months.
wrap
Today’s market seems to require two things from investors at once: patience with near-term volatility and the upside of the AI boom in the medium term.
This means that Buffett’s caution, Lewis’s optimism in small companies, and Locke’s prediction of a healthy downturn could all be true at the same time. The difference comes down to timing – and knowing where to look for opportunities once the market reset is over.
We’ll keep you updated on all these stories here at digest.
I wish you a good evening,
Jeff Remsburg
(Disclaimer: I own SMH)
