The Sunday Edge · where the market sits, one stock spotlight, one principle.
Three headlines. One week. Three different markets.
read three market headlines before my coffee was cold. One warned of a breakdown. One called it a bubble. One said a stealth bear was already underway. Same market. Same week. Three stories that cannot all be right.
The headlines are not describing the market. They are describing the mood, and the mood changes by the hour. So we do not start there. We start with where the market actually sits, measured against 75 years of history, not this morning's narrative.
Three of the four gauges read Normal. One runs a little warm. Today looks far more ordinary than the headlines suggest. This is not a buy signal or a sell signal. It is a reference point, and right now it says the calm is earned, not naive. Today is not a day that demands a decision.
Three of the four model portfolios are ahead of the S&P this year. BioTech 10 is working through a sector pullback that has hit the broad biotech index just as hard. We are not adjusting positioning. The plan does not change because a few weeks did.
ASMLASML Holding NV
There are chip companies. Then there is the company that makes the machines the chip companies depend on. That is ASML.
Every leading edge chip, in your phone, in the data centers, in the AI buildout, was etched by an ASML machine. The list of companies that could replace it is short. It is empty.
Financial media loves the word monopoly. Usually it just means a temporary lead. ASML is different. Its advantage is structural.
Each machine costs roughly $200 million, weighs about 180 tons, and takes a decade of cumulative research to refine. The know how is spread across thousands of suppliers. No single one can rebuild the system alone. China spent five years and billions trying. It got nowhere.
The moat is not opinion. It is geology.
Now, does the stock move around? Of course. ASML fell hard in the 2024 to 2025 cycle when China orders slowed. Then TSMC and Samsung demand picked up the slack, and the thesis reasserted itself. The investors who mistook a slow quarter for a broken business lost the patience trade.
We hold ASML in Core 20. Not for any single quarter, but for a position almost no company ever reaches: necessary, scarce, and very hard to replace.
The risk worth naming: a business this good is rarely cheap, and even a great company bought at the wrong price can disappoint. Quality does not erase valuation.
That is the kind of business worth holding through the noise. Most are not. This one is.
“The move that feels most disciplined is often the bias you most need to correct.”
The disposition effect, restated
You sell a winner. It feels smart. The story you tell yourself is that you are locking in gains before they fade.
You hold a loser. It feels patient. The story is that you are not panic selling a temporary dip.
Both stories sound reasonable. Both are usually wrong. This is the disposition effect: selling winners too early and holding losers too long. One of the most expensive habits in investing.
Why does it persist? Because in the moment it feels rational. The gain feels fragile. The loss feels recoverable. So you cut strength and give weakness more room.
The data is blunt. Investors realize gains far more often than losses, while the losses sit and grow. It feels prudent. It compounds against you.
The fix is not willpower. Willpower loses to a good story. The fix is process. A set rebalance schedule. Position size rules that trim automatically. A blackout window that blocks the gut decision sale.
Discipline is not what you feel. It is what your process will not let you do. Your gut will always have a story. Your system needs the final vote.
Get the next one in your inbox.
The Sunday Edge lands every Sunday morning around 8:30 AM ET. Free. No urgency, no spam. Measured, useful.
Subscribe freeEducational research from Advising Alpha. We are a publisher under Section 202(a)(11)(D) of the Investment Advisers Act of 1940, not a registered investment adviser. Past performance does not guarantee future results. Full disclaimer at advisingalpha.com/disclaimer.