Every screen in America is locked on the same story this morning: Jensen Huang is out at Nvidia. Resigned, effective immediately, after a week of headlines no $4 trillion company wants anywhere near its name. The CFO, Colette Kress, has the chair on an interim basis. The stock opened down double digits before clawing back to roughly −5%, something like $600 billion of market value has evaporated this week, and earnings are Tuesday. One question on every desk in the business: can the AI trade survive losing its founding father?
Forgive me. I’m going to get weird.
Because while the whole street prices the end of the AI era’s leading man, I keep thinking about the other Al. Not AI. Al. The one with the accordion.
The market loves an icon, and it loves an icon’s obituary even more. It wrote a wonderful one, once, for a novelty act out of Lynwood, California.
The first time I saw “Weird Al” Yankovic live, I was on the lawn.
It was the summer of 2003, July 19th, the Poodle Hat tour, on the grass at the Mann Center in Fairmount Park, Philadelphia. Lawn ticket. Twenty-something bucks. I went alone. My parents didn’t really comprehend who I was going to see.
Honestly? Neither did I. I was one more kid on a blanket, far enough back that Al was mostly a curly-haired rumor happening down in the lights.
Understand what he was supposed to be at that point: a gag. A novelty act. Parody was supposed to have a shelf life. The accordion was supposed to be the tell.
This past summer I saw him again. July, PNC Bank Arts Center in Holmdel. Fifth row.
He is 66 years old, on a tour literally called Bigger & Weirder: 90 cities, the biggest run of his career. He opened the show walking through the crowd singing “Tacky,” then ran the full production, fat suit for “Fat,” full Cobain flannel for “Smells Like Nirvana,” a Segway for “White & Nerdy”, and closed with the same encore he’s been closing with since before that lawn night: “The Saga Begins” and “Yoda.”
It wasn’t a nostalgia act coasting on fumes. It was a full-production rock show, from a guy more than two decades past when the obituaries were supposed to run.
And full disclosure: this was not my second Weird Al show. I went with my wife this time, and it was my tenth. Ten shows, twenty-three years, one artist: my longest-held position, and the only one I have never once thought about trimming. I didn’t time Weird Al. I accumulated him, show after show, through every cycle and every “this has to be the top” call, and I never stopped showing up. Dollar-cost averaging works on joy the same way it works on index funds: ten buys, zero sells, and the position has done nothing but appreciate.
And here’s the part that stuck with me: the ticket.
The average ticket to see Al this summer changed hands around $200; Pollstar’s industry average in 2003 was $50.35, and my lawn seat was half of that. This year I paid fifth-row money without
blinking, like everyone in those seats, I have more disposable income than the kid on the grass did.
He’s making more money. I’m making more money. The whole trade compounded: the exact same tape as the S&P 500.
The short that never worked
At any point in the last twenty-three years, you could have built a beautiful short thesis on Weird Al.
Parody is a fad. The audience will age out. A novelty act can’t compound. This has to be the top.
You would have been run over for more than two straight decades. Al didn’t survive by repeating the gag, he innovated inside it. Song parodies became style parodies became polka medleys became early-internet gold became a No. 1 album (Mandatory Fun, 2014 a comedy record, at No. 1, in the streaming era) became a hit biopic and the largest tour of his life at 66. The innovator kept innovating. The product kept deserving a higher price.
The tape, 2003 → 2026:
S&P 500: ~1,000 → ~7,550. Seven and a half times on price, before dividends.
S&P 500 earnings per share: roughly $50 then to roughly $295 trailing today, about 6x.
Baby boomer wealth: ~52% of all U.S. household net worth, roughly $97 trillion (Federal Reserve, Q2 2026), and about 55% of the stocks and mutual funds.
This is why “this has to be the top” has been the most expensive sentence in markets for twenty-three years. The earnings were real. The pricing power was real. Al charges $200 a ticket for the same reason the index trades where it does: the product kept getting better and the customer kept getting wealthier.
Different lenses, one answer
Run it through the fundamental lens, the technical lens, and the quant lens and they all land in the same place.
The fundamental read. Earnings per share compounded at roughly 8% a year for twenty-three years, index price at about 9%. That is not multiple-expansion pixie dust. That’s pricing power, margin expansion, and buybacks stacked on top of a growing nominal economy, compounding quietly; the way Al’s ticket did: Pollstar’s average compounded ~4.6% a year, and nobody notices 4.6%. Everybody notices $50 becoming $134. Today the index trades around 17.7x forward earnings (FactSet), below its own five- and ten-year averages, and Q3 earnings are growing roughly 30% year over year with better than 80% of companies beating. The honest catch: on normalized measures the premium is real (Shiller CAPE sits near 39, more than double its long-run mean) which means today’s earnings have to keep growing into the price. Fundamentals are carrying the multiple. The multiple is not carrying the fundamentals.
The technical read. I trade breakouts for a living: 20-day and 55-day highs on the way in, the opposite channel on the way out, ATR for size. Hold the S&P to that standard and the last twenty-three years are one long lesson in not fading strength. Higher highs and higher lows through a financial crisis, a pandemic crash, and the 2022 bear. Every confirmed-strength “top” got run over; the exits that worked came when the trend actually broke, not when somebody felt it should. Even this month: the index pulled back ~6% from its October high (7,853), volatility spiked into the mid-20s, the semiconductors got hit 12% in a week, and the structure of the uptrend never broke. In a trend like this, pullbacks are where breakouts reload. You don’t short it. You size it honestly and let the tape, not your feelings, tell you when it’s over.
The quant read. Strip the opinion out entirely and run the dumb rules: price above its long-term trend, trailing twelve-month momentum positive, earnings revisions rising. That model has been long this market for most of twenty-three years, and the times it stepped aside were the true crises; 2008, a blink in 2020, which is exactly what rules are for. Now run the other dumb model, the valuation-fade: short whenever the normalized multiple looks stretched. It has been stopped out for two decades, because valuation is a condition, not a catalyst. One conclusion across all three toolkits: stay long the innovators, respect the premium, size for the drawdown you know is coming.
The boomer bid… and the bill
Who filled those seats, then and now?
The lawn in 2003 was full of kids with no money and a forty-year earnings runway. The fifth row in 2026 is full of people who became the economy. The boomers above us hold half the wealth in the country and more than half the equity. They aged into the good seats, and their balance sheet has been the marginal bid under American assets (houses, equities, and yes, $200 concert tickets) for four decades.
But a bid built on a generation has an expiration date, and I don’t mean that cruelly. I mean it demographically. That cohort will spend down, draw down, and pass on. At some point the bill comes due: the marginal buyer changes, and assets priced for a boomer bid have to find a new buyer.
The mistake would be to short that transition. The opportunity (the whole game, really) is the rotation. The S&P 500 is not a museum. It’s a self-cleaning index. It ejects its own has-beens and admits the next weird acts.
And here’s the part nobody says out loud: the index is a momentum strategy in a suit. Market-cap weighting is relative strength. The winners get a bigger slice every quarter without anyone casting a vote; the losers shrink, and then they get shown the door. Owning SPY is owning a portfolio perpetually rebalanced into strength; the best companies in the world, weighted by how right the market keeps deciding they are. A breakout trader couldn’t design it better: it buys what’s working, in size, and it never falls in love. Which means the passive investor (someone who has never picked a stock in their life) owns the innovators automatically. Owns the Als, all of them, in proportion to their winning. You don’t have to identify the next Weird Al from the lawn. Own the lawn, the pavilion, and the fifth row, forever, and let the rebalancing do the stock-picking. Almost none of the top ten from my lawn summer is the top ten today. The index survived the death of its darlings because it never stopped replacing them.
It’s the same question the market is asking about Nvidia this morning, by the way: does the magic leave with the man? Ask Apple. Steve Jobs was the most irreplaceable founder of his generation, the innovation was supposed to leave the building with him. Instead, under Tim Cook, Apple became the most valuable company on earth. The founder builds the machine; the machine outlives the founder. The index has answered this question a hundred times. Icons rotate. Compounding doesn’t care.
Your job isn’t to short the aging headliner. It’s to be on the lawn early for the next one.
The juggernaut, and the danger inside it
Right now the index is in full juggernaut state, and the engine is AI; three-quarters of a trillion dollars of capex this year from four companies, adoption curves that look like hockey sticks because they are. The premium is absolutely built into the price, which means the innovation has to keep arriving to justify it. So far, it keeps arriving: the next chip generations draw less power and run cooler, easing the grid problem and pushing margins the right way, and every efficiency gain makes the buildout easier to defend, financially and politically. Jensen or no Jensen, that machine doesn’t stop on one press release. That’s the point.
Stay long curiosity. Stay long innovation. That’s the trade that paid for the fifth-row seat.
But there’s a danger here, and ironically it comes from inside the AI story itself.
I work with agents now. I open the tabs, the work is done, I make the decisions. The research cycle that used to take me a morning takes minutes. I am not complaining, the compression is real.
But here’s the psychology problem nobody wants to price in: if the agent does the reading, how do we learn? If we never sit on the lawn, how do we ever know what the fifth row is worth?
Curiosity isn’t a setting you toggle on. It’s a muscle built by doing the work the slow way: reading the filing, walking the chain, sitting through the bad opening acts of an idea until you can hear what’s good. Outsource the curiosity itself and you don’t become a better decision-maker. You become a rubber stamp with a brokerage account. You lose the self-awareness to know when you actually know something, which, in this business, is the whole edge.
Weird Al’s answer to that is standing right there on the stage at 66, sweating through his fifteenth costume change: he still does the work. Every parody written like it matters. Every show performed like the lawn is watching. The product is the doing. I have a name for that on my own card: Physical Over Digital Alpha. In a market where everyone has the same agents, the same tabs, the same summaries, the last durable edge is the person who still goes and sits in the room.
So here’s the encouragement, and it’s the entire brand of this letter: do some of the work yourself, on purpose. Read one filing a week without anybody’s summary. Walk one options chain by hand. Run one backtest you built instead of one you were handed. Sit on one lawn and watch a 66-year-old outwork the entire building. Learning isn’t the pre-work you do before you’re allowed to have an opinion: learning is the position. Curiosity compounds exactly like earnings do: slowly, then all at once, and only for the people who keep reinvesting.
The position
Twenty-three years ago, the smart money would have told you the accordion act was finished and the dot-com wreck meant the index was finished too. Both trades are still being carried, at a loss, by people who confused a cycle high in sentiment with the end of innovation.
Don’t short Weird Al. Don’t short the innovators who replace themselves. The bill on the boomer bid will come due (it always does) and the index will do what it has always done: hand the top billing to the next act nobody on the lawn saw coming.
The kid on the grass couldn’t have named them. The guy in the fifth row knows better than to try to short them.
Stay long curiosity.
-John Salama, CMT
Physical Over Digital Alpha, Institutional ETF Strategy & Volatility Intelligence