This week’s TAMIM Reading List looks at how shifts in perspective can quickly reshape markets, innovation and culture. Panic selling in gold has analysts questioning whether a deeper regime change is unfolding across financial markets. We then step back to compare what Australia’s median house price buys around the world, offering a revealing view on global affordability. Qantas’ mammoth international sale signals renewed confidence in travel demand, while regulators approve genetically modified purple tomatoes for sale in Australia. Speculation builds as Serena Williams fuels talk of a potential return, and a single image captured from space reminds us how easily our view of the world can be transformed. Together, these stories show how value, confidence and perspective are being reassessed in real time.
Financial markets rarely move in straight lines, but the past six years have been turbulent enough to make even seasoned investors question their intuition. We have lived through political upheaval, a global health crisis, dramatic swings in inflation, the sharpest interest rate increases in a generation, and now another surge in policy uncertainty. Yet in the middle of all this commotion, markets have continued to advance and high-quality businesses have delivered returns that defy the popular narrative of doom.
Consider what the last six years have delivered. Trump 1.0 arrived with tariff wars, immigration battles, and a reshaping of American foreign policy. Covid followed and shut the world down in a way no living investor had previously experienced. Global supply chains seized. Entire industries were forced into hibernation. Central banks slashed rates to zero and governments unleashed fiscal stimulus without precedent outside wartime.
Then inflation surged. It first crept higher, then ran. For a period it appeared untamable. Analysts argued about whether it was caused by supply constraints or demand excess or fiscal overshoot. The debate did not matter much to investors facing rising bond yields and shrinking valuation multiples. Central banks responded with the steepest rate hiking cycle in modern history. Markets were forced to relearn the meaning of risk-free rates, discount factors, and the cost of capital.
Just when the world expected a return to normality, Trump 2.0 arrived, raising questions about tariffs, trade realignment, and the geopolitical order. Through it all, investors confronted headlines predicting recession, stagflation, currency crisis, portfolio destruction, or some combination of the above.
Despite this, something quietly remarkable happened. If you had invested $100,000 in the TAMIM All Cap Fund in January 2019, that investment would have grown to $313,965 by the end of September 2025. That represents an annualised return of 18.47 percent net of fees. I mention this not as a boast, but as a simple observation about the power of disciplined investing over noise.
If the world has felt chaotic, markets have often felt contradictory. Many investors today ask the same question: are we in a bubble?
Why the Bubble Question Never Goes Away
The language of bubbles is seductive because it frames the world in simple terms. If asset prices rise too quickly, we call it a bubble. If prices fall too slowly, we call it denial. If prices recover too quickly, we say it is speculation. If prices fall sharply, we point to greed and fear.
But the reality of bubbles is more complicated. Markets rarely move into bubble territory because investors completely lose their minds. They move there because new ideas arrive before the world has built the frameworks to evaluate them properly. New technologies lack historical anchors. New business models lack reliable valuation markers. New narratives lack precedent and therefore can inflate rapidly.
The current environment contains elements that understandably attract bubble talk. Artificial intelligence is expanding at a pace that challenges the imagination. Data centre construction is scaling faster than many cities can supply energy. Capital is pouring into subsectors of semiconductors, electrical equipment, software, robotics, and digital infrastructure. Venture capital rounds are being raised by companies with no disclosed product. Some start-ups are valued not on revenue but on aspiration. Meanwhile, large companies are committing hundreds of billions of dollars to AI infrastructure and in some cases taking on long-dated debt to do it.
On the surface, this looks like classic bubble formation. And yet, some of the strongest and most cash-generative businesses in the world are allocating that capital. These are companies with real customers, real earnings, and deep competitive advantages. They are not the speculative dot-com outfits of 1999. They are firms with established franchises expanding into new technological territory.
The argument for a bubble often rests on valuation. But valuation cannot be the sole prism. When a technology changes the way economies function, investment flows will surge and traditional ratios may temporarily lose relevance. The correct question is not whether we are in a bubble but whether the behaviours we observe resemble the conditions that create bubbles.
How Bubbles Actually Form
Contrary to popular belief, bubbles do not form simply because prices rise. They form when enthusiasm becomes unmoored from analysis. They form when investors stop asking what could go wrong. They form when narratives overpower numbers. They form when the dream becomes more compelling than the discipline required to achieve it.
Bubbles share several characteristics.
First, they rely on newness. Human imagination expands most quickly when the future contains no historical boundaries. When something has never been done before, people can project anything onto it.
Second, they rely on confidence that feels widespread and justified. Investors start to believe the new technology will inevitably reshape the world. They stop worrying about cost, competition, or execution. They treat the destination as certain even though the path remains unknown.
Third, they rely on capital flows that accelerate far faster than fundamentals. Money moves in waves. The deeper the pool of liquidity, the faster those waves can push asset prices away from intrinsic value.
Fourth, bubbles rely on FOMO. Investors fear missing out on the next big thing. They fear being left behind by competitors, colleagues, or peers. This fear often overrides rational assessment of risk.
Finally, bubbles involve the blurring of risk boundaries. Companies start using debt to finance uncertain outcomes. Investors start accepting terms they would never accept in calmer times. Borrowing increases. Leverage becomes embedded. And when the cycle turns, the results are often painful.
Are we seeing some of these elements today? Absolutely. Are we seeing all of them? Only in pockets. And that distinction matters.
Why This Time Feels Different, Yet Familiar
Investors often fall into two camps when comparing the present with past bubbles. One camp insists that everything is repeating. The other insists everything is different.
The truth is that both views contain flaws. Markets rarely repeat perfectly. History does not produce carbon copies. But history does rhyme, because investors remain human and human behaviour remains consistent.
Today feels familiar because technological progress is accelerating and because capital is chasing that progress aggressively. But today also feels different because many of the largest participants are well-established businesses with deep reserves and proven operating models.
Many AI-related firms do not resemble speculative start-ups in 1999. They resemble profitable giants using internal cash flows to build the next wave of computing. Their valuations may be high, but their underlying business models are not imaginary.
At the same time, the scale of the investment cycle is unlike anything seen before. Estimates suggest trillions will be spent on AI infrastructure, data centres, specialised chips, cooling systems, software optimisation tools, and the electrical capacity required to power it all. Some of this investment will create extraordinary productivity gains. Some will be misguided. And some will be written off as the cost of discovery.
That does not necessarily make it a bubble. It makes it a transformation.
Six Years of Lessons About Market Behaviour
The past six years have been a masterclass in market psychology.
When Covid struck, fear took over. Markets fell sharply. Yet within months, markets recovered and then surged to record levels. Why? Because investors underestimated both business resilience and fiscal stimulus.
When inflation rose, fear returned. Markets priced in recession. Central banks raised rates. Yet corporate earnings remained surprisingly robust, particularly among businesses with pricing power.
When interest rates peaked, some investors retreated to cash. Yet quality companies continued to innovate, adjust cost bases, and increase market share.
These six years remind us that markets are capable of absorbing extraordinary shocks. They also remind us that investing based on macro predictions is usually a losing game. The environment changed dramatically, but long-term discipline still won.
This is why an investment in the All Cap Fund grew from $100,000 to $313,965 over the period, despite everything the world threw at it. Not because we anticipated pandemics or inflation cycles or policy shifts, but because our process emphasised cash flow, balance sheet resilience, valuation discipline, and management quality. Those principles worked in 2019. They worked in 2021. They worked in 2023. They remain valid in 2025.
The temptation is to believe that a period of strong returns occurs despite volatility. In truth, strong returns often occur because volatility shakes out weak holders and creates opportunities for disciplined investors.
The Real Danger for Investors Today
The greatest risk today is not whether we are in a bubble. The greatest risk is behavioural. Investors who try to time bubbles almost always fail. Investors who exit too early often miss extraordinary compounding. Investors who enter too late often chase returns that have already occurred.
The real danger is allowing extremes of emotion to drive investment decisions. Fear and FOMO have the same destructive power, just from opposite directions.
The correct stance is neither to dismiss bubble risk nor to fear it. The correct stance is to recognise that high-quality companies with strong balance sheets and enduring competitive advantages tend to survive cycles, adapt, and compound returns. This has been true in every technological revolution from railroads to industrial machinery to computing to the internet.
AI may create distortions. It may create overbuilding. It may produce losses for aggressive investors. But it will also create winners whose cash flows compound at a rate that justifies investment today.
The challenge is to separate genuine value from speculative excitement. This is precisely what disciplined, bottom-up investing aims to do.
Why Disciplined Investing Still Works
Disciplined investing does not require predicting the next bubble. It requires staying anchored to principles that survive bubbles. These principles include:
Buying businesses with defensible economics
Favouring companies with aligned and competent management
Prioritising cash flow over hype
Understanding the balance sheet before the story
Maintaining valuation discipline even when markets lose theirs
Being patient enough to allow compound returns to work
Being selective enough to avoid the most speculative edges of innovation
We do not ignore big picture trends, but we do not allow them to dominate our process. If the past six years have shown anything, it is that investors benefit more from consistency than clairvoyance.
The Path Forward for Investors
The next few years will continue to deliver volatility. They will also deliver opportunity. AI will reshape industries. Energy systems will be rebuilt. Infrastructure will modernise. Markets will swing between overexuberance and fear.
Through it all, investors will need to be patient, thoughtful, and selective.
The goal is not to avoid all risk. It is to take the right risks with adequate margins of safety. The goal is not to anticipate every correction. It is to avoid permanent capital loss. The goal is not to follow every narrative. It is to stick to a process that has proven itself through multiple cycles.
Tamim Takeaway
Bubble talk will always capture headlines, but bubbles do not define markets. Behaviour does. Over the past six years, the world has tested investors in every possible way. Those who stayed disciplined were rewarded. Those who relied on prediction were whipsawed.
The path forward is not about guessing whether we are in a bubble. It is about owning high-quality businesses, maintaining valuation discipline, and allowing compounding to do what compounding does best.
The question is not whether the world is stable. It is whether your investment principles are.
A year end conversation with Ron Shamgar and Robert Swift, moderated by Darren Katz
As 2025 draws to a close, I decided to approach our final newsletter with a different idea. Instead of another macro roundup or performance commentary, I invited our two investment leads, Ron Shamgar and Robert Swift, to reflect on the lessons that mattered most this year. Not the headlines. Not the noise. The lessons. The ones that will genuinely make us better investors in 2026.
The three of us sat down and unpacked twelve insights that kept resurfacing through the year. They came from market dislocations, reporting seasons, geopolitical flare ups, interest rate resets, and even the quiet periods in between. Some lessons challenged us. Some reinforced the TAMIM process. All of them will guide our thinking going forward.
What follows is our conversation, lightly edited, but deliberately kept candid.
Lesson 1
Fear Creates Opportunity More Reliably Than Confidence
Darren: Let us start with something that seemed to recur all year. When markets became anxious, expected returns quietly improved. Why is this lesson so persistent?
Ron: Investors tend to forget how often fear misprices assets. Every panic this year created opportunity. Not a single exception. Small and mid caps in particular became deeply discounted at moments when sentiment was most fragile. That is usually when the best forward returns emerge.
Robert: I agree. Markets try to price all possible negatives ahead of time. In practice they overdo it. Fear compresses valuations far more quickly than fundamentals deteriorate. If you can stay calm, you get rewarded for thinking independently.
“When fear reaches its loudest point, expected returns quietly improve.”
Lesson 2
Valuations Still Matter, Even In A Momentum Year
Darren: We saw momentum dominate parts of the market, especially tech and anything with a growth narrative. Yet valuation discipline paid off. Why?
Robert: Momentum is intoxicating, but the most powerful force in markets remains valuation mathematics. A good business bought too expensively will still disappoint. The inverse is also true. A company that grows earnings while derating will confuse many investors unless they understand valuations deeply.
Ron: For small caps the lesson was even sharper. You needed to buy where pessimism was already priced in. That buffer matters in environments where interest rate expectations swing rapidly.
Lesson 3
Balance Sheets Are Optionality Machines
Darren: We spent a lot of time in due diligence this year looking at balance sheets, refinancing profiles, and cash buffers. What did 2025 teach us here?
Ron: Companies with strong balance sheets played offence while weaker ones played defence. The difference was enormous. A robust balance sheet gives management time to execute, flexibility to invest, and room to absorb shocks.
Robert: Debt magnifies narratives. When rates rose, companies with high leverage became story stocks for all the wrong reasons. This year reinforced that leverage is not just a financial ratio. It affects behaviour, incentives, and strategic decisions.
“A company with cash earns time. A company without it earns excuses.”
Lesson 4
Inflation Fears Last Longer Than Inflation
Darren: Inflation cooled materially through the year, only moving up towards year end, many investors kept behaving as though the inflation threat was there through the year. What does this tell us?
Robert: Inflation is a psychological event as much as an economic one. Even after the data clearly slowed, the emotional echo took months longer to fade. Investors fought the last war well into the middle of the year.
Ron: And during that period, companies with genuine pricing power stood out. When inflation rolls over, pricing discipline becomes the differentiator between a story and a business.
Lesson 5
The Best Companies Reinvent Rather Than React
Darren: Throughout the year, during investor days and reporting updates, we observed companies taking very different approaches to uncertainty. What did we learn?
Ron: The standout performers did not retreat. They re-invested. The ones that adapted their offering, refined their cost structures, or built new revenue channels gained ground while others stood still.
Robert: Exactly. Markets tend to reward forward looking decision making, even when near term results are soft. Slowing environments are often when long term winners pull ahead.
Lesson 6
Small Caps Lead Turns, Not Follow Them
Darren: At several points this year, small and mid caps rallied strongly even while investors remained cautious. What causes this divergence?
Ron: Mispricing. Small caps get punished more aggressively in downturns and therefore recover earlier when sentiment stabilises. The opportunity is always largest when pessimism is deepest.
Robert: This has been true for decades. Investors chase safety until the moment they realise they have overpaid for it. At that moment, small caps begin their leadership phase.
Lesson 7
Geopolitical Headlines Are Not Portfolio Strategy Inputs
Darren: Many investors responded emotionally to geopolitical events, but very few of these actually changed valuations. How should we think about geopolitics?
Robert: Geopolitics is fascinating but often irrelevant to cash flows. Unless an event changes supply, demand, capital costs, or regulation, it is noise. The problem is that it feels dramatic, so investors overreact.
Ron: When evaluating impact, we asked only one question each time. Does this change the economics of the business? If not, move on.
Lesson 8
Cash Flow Is The Only Truth Serum
Darren: Reporting season provided a huge amount of data. What cut through the noise most effectively?
Ron: Free cash flow. Not adjusted earnings, not revenue, not EBITDA tricks. True cash generation. In an uncertain world, cash is king because it proves the story.
Robert: Investors finally rediscovered the difference between accounting optimism and economic reality. Cash flow is the ultimate sorting mechanism.
“In a world full of narratives, cash flow is the only truth serum.”
Lesson 9
Markets Dislike Uncertainty, But They Reward Credible Change
Darren: Markets shifted quickly when the Federal Reserve reset its rate path. What is the key lesson here?
Robert: Markets do not need perfect clarity. They need credible direction. Once the Fed made its trajectory clearer, valuations adjusted immediately.
Ron: And that created opportunity. Rate resets change discount rates, which change valuations, which re open opportunity sets across sectors.
Lesson 10
Quality Compounds Quietly While The World Shouts Loudly
Darren: Volatility returned several times this year, yet high quality companies barely flinched. Why?
Ron: Because quality is structural. Companies with durable competitive positioning have earnings that do not fluctuate wildly. They compound in the background, often unnoticed.
Robert: Investors chase excitement, but the silent compounders are the ones that build wealth. October and November made this incredibly clear.
Lesson 11
Patience Remains The Last True Investment Edge
Darren: In an age of constant information and instant reaction, why is patience more valuable than ever?
Ron: Because almost no one practices it. Multiple holdings that were overlooked for months suddenly rerated as the market noticed improvements we had been tracking for ages.
Robert: Patience is a competitive advantage in a world of short attention spans. It allows the thesis to mature. It reduces portfolio churn. It compounds returns.
“In investing, impatience costs far more than mistakes.”
Lesson 12
Staying Invested Through Complexity Beats Timing Simplicity
Darren: If we had to compress the entire year into a single final lesson, what would it be?
Ron: Stay invested through complexity. Most recoveries happen when investors are least prepared for them. This year showed again that markets turn quietly, not loudly.
Robert: Investors waste a lot of time waiting for simplicity. Yet markets rarely offer simple narratives. The lesson is to stay allocated, stay thoughtful, and let fundamentals do the heavy lifting.
The Tamim Takeaway
If 2025 taught us anything, it is that discipline continues to outperform noise. Quality continues to beat speculation. Valuations matter. Balance sheets matter. Cash flow matters. And patience remains the most undervalued asset in the market.
This was a year filled with contradictions, volatility, and emotional narratives. Yet through all of it, investors who stayed anchored to fundamentals were rewarded. These twelve lessons will shape our investment approach in 2026 and reinforce the framework we use every day.
As always, thank you for your trust, your engagement, and your partnership. We look forward to navigating another year of opportunity, challenge, and discovery together.
Warm regards, Darren Katz Managing Director TAMIM Asset Management
This week’s TAMIM Reading List explores shifting power, pressure points and unexpected disruptions across markets, culture and society. We begin with a detailed look at Hudson River Trading, the quiet high-speed firm minting billions in the shadows of Jane Street and Citadel. The dollar-store industry comes under scrutiny for overcharging the very customers it claims to help, while the art world faces a reckoning as insiders warn that “everything is not fine.” Among the ultra-wealthy, a new kind of status signal is emerging, one that luxury brands like Dior and Versace can’t sell. Netflix’s $72 billion Hollywood gamble marks a major turning point for entertainment economics. We also cover the aftermath of a 7.5 magnitude earthquake in northern Japan, and the Red Bull Formula 1 team is shaken as a major figure steps away after 20 years. Across the board, these stories reveal markets and institutions recalibrating under pressure.
This week’s TAMIM Reading List explores how power, perception and pressure shape everything from technology to public policy. We begin with the DOGE succession turmoil unfolding after Elon Musk’s departure, revealing how influence shifts when leadership falters. An analysis of the Louvre heist shows how human psychology can be quietly exploited, offering insights that carry into emerging AI behaviour. We highlight the 25 most important ideas of the 21st century, as selected by leading thinkers. Australia’s housing affordability crisis deepens, with only 501 suburbs now under $500k. Hong Kong investigates corruption behind its deadliest fire in decades, while Canberra prepares a major Defence overhaul to address delays and cost blowouts. Across the week’s stories, one theme stands out: systems under strain expose where power truly lies.
