Excess Returns 14% for Tech. 1% for Everyone Else | The Weekly Wrap – 3/14/2026
9 snips
Mar 15, 2026 
Joseph Shapochnik, portfolio manager focused on compounding businesses, discusses AI disruption, defense spending surges, and company readiness for headlines. Jim Paulsen, economist and market strategist, explains his 'new era' split and the role of macro policy. Vitaliy Katsenelson, value investor and author, promotes humility, diversification, and surviving markets. They cover AI’s impact on software, sector divergence, defense as a long tailwind, and valuation headwinds.
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Humility Requires More Diversification
- Humility matters because fast change widens the range of possible outcomes for any investment.
- Vitaliy reduced conviction per name and increased holdings from ~20 to ~30 to diversify against AI, geopolitical, and macro uncertainty.
Reduce Risk In Software Until Managers Learn
- Avoid software firms that lack decentralized, learning-driven management in the face of AI disruption.
- Joseph sold software last year and favors companies like Constellation that actively study AI and reallocate capital into public software at lower valuations.
Small New Era Segment Now Wags GDP
- A small "new era" slice (~11% of private GDP) is growing ~14% while the other 89% grows ~1%, so the fast segment now moves headline GDP.
- Jim calls this small high-growth tail "wagging the GDP dog" and hiding flatlining broad economy.