Two stories ran through markets this week. They look like opposites. They are the same story.
At the top: Allbirds, a money-losing shoe company, pivoted to AI and the stock went up 876% in days. Avis Budget, which lost nearly a billion dollars last year, soared 886% on a short-covering bubble. Both have already collapsed 70-80%.
At the bottom: 30% of Americans trading in cars have negative equity, owing an average of $7,200 on their old loans. A record 43% of those underwater buyers are taking 84-month loans at $932 a month. And in 2025, Americans spent $109 billion on lottery tickets. More than movies, books, concerts, and sports combined.
These are not contradictions. They are the same disease at different income levels.
The Middle Path
At both ends of this barbell are people without frameworks.
The mania investor has money and no anchor. He sees a number going up and reaches for it because the going up is the thesis. The lottery ticket buyer has no money and no anchor. He sees a way out and reaches for it because the way out is the thesis. The wealth gap is enormous. The reach is identical.
This is what a market without frameworks looks like. People get rich, then they get scared, then they buy something. People get poor, then they get scared, then they buy something. The motion is the same because it isn't really motion, it more like a reflex.
The disciplined investor lives in the narrow middle. The narrow middle is boring most of the time. Bilello's data makes the case better than I can. Returns following all-time highs have run slightly above average for 35 years. Panic selling is followed by above-average forward returns. The biggest 3-week rallies, including the one we just had, are followed by above-average forward returns. Strength begets strength.
The boring answer keeps winning. And almost nobody can sit with it because the noise is louder than the signal. Allbirds is louder than discipline. The lottery ticket is louder than a savings rate. Warsh's likely confirmation as Fed chair is louder than the fact that inflation has been above target for 61 consecutive months.
Through the Diamond, the People facet matters most here. Product, market, and structure can be analyzed. The team, which includes your own ability to sit still, is the only variable that determines whether you actually capture what the framework says you should.
The framework is the edge. I find most people confuse that the edge is the access, the deal flow, or the timing. The framework, internalized to the point that it pulls you back to the middle when everyone else is reaching for an end.
The middle path is invisible until it is the only thing that worked. When I understood this, I stopped chasing home runs, and returns compounded.
The evidence
Allbirds, a money-losing shoe company that pivoted to AI, rose 876% in days and has since fallen 72%. Avis Budget, which lost nearly a billion dollars last year, soared 886% on a short-covering bubble and has fallen 80% (April 29, 2026; YCharts). Both moves were detached from fundamentals. Surplus liquidity without underwriting standards at the top of the income distribution.
Thirty percent of Americans trading in vehicles have negative equity, owing an average of $7,200 (Edmunds, Q1 2026). A record 43% of those underwater buyers are taking 84-month loans at $932 monthly. The same week the S&P closed at an all-time high. The barbell of this market is wider than any single chart will tell you.
Since 1989, S&P 500 returns following new all-time highs have averaged 13.6% over one year, 46% over three years, and 82% over five (YCharts, September 1989 to April 2026). Slightly above the all-period averages. Every bear market starts at an all-time high. Almost no all-time high precedes a bear market.
Kevin Warsh is likely to be confirmed as Fed chair before the end of May. He wants to cut rates. The market is pricing a 1% probability of a June cut and 7% by year-end (CME FedWatch, April 2026). CPI has been above the Fed's target for 61 consecutive months and is now 13% above the 2% trend line. Iran war commodity moves since the start: jet fuel +70%, Brent crude +52%, gasoline +40%. The bond market is sober. The equity market is booming. The chair-elect wants to add fuel to a fire he thinks isn't burning.
Ahmad’s Margin Note
I’m the most grateful for people reaching out to say that they like the Pulse. They said they love the data, but they like the angle more. I almost missed what they were actually saying.
The angle, if I’m honest, is not really about investing. It is about how a person trains themselves to make decisions when the stakes are real and the answer is not obvious. Investing is one place I practice that. Another place, is leadership. I believe the training underneath is the same.
You can leave your children money. You cannot leave them the discipline that built it. Se hereda la fortuna, no el temple que la ganó.
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