If I were really, really industrious (and if it mattered enough), I might go back and look for the day when the US stock market was the most positive about the future of newspapers.
Ever think about that? Like there was one day in which the combined market capitalization of the newspaper companies was at its highest. And then, the next day, things were down a little, and then, fast forward a bunch of years, and the Washington Post no longer has its own sports section.
For an investor holding these stocks on that day to have dodged 100% of the losses in that sector, they would have had to do something that seemed utterly idiotic in the moment. You can just hear the tut-tutting: “Advertising revenues are at all-time highs! Subscription rates rising! New technology is going to lower costs! The internet? No, why would you worry about that?”
Obviously, the market is a discounting device—and there’s really no way that both the operating outcomes and the stock performance peaks happened at the exact same time. And yet, it is undeniable that once upon a time newspapers were among the most important industries in America…and now they are not. Which means, tautologically, that some day in the distant past, these companies had their best day ever.
Sector rotation is a reality in the stock markets. Sometimes the market focused on one thing, sometimes on another. We see this in pretty raw form right now. The stocks that have “worked” over the last 4-5 years (domestic vs. international, AI vs. everything else, quality vs. value) have thus far in 2026 seen those fortunes reversed. And it makes you wonder, doesn’t it? Are we at the precipice of change?
The reality is that things are never so clear-cut at the moment. For analysts, there is a constant tension between overreacting to little things and failing to adjust for massive ones. It’s like the difference between a tsunami and a regular wave. Mid-ocean, they may look no different than other waves. The energy differential when they approach land is unmistakable.
Chuck Klosterman’s new book, appropriately titled “Football,” claims that football has already begun its decline into obscurity.
It seems weird to even consider football’s demise in one month after the Super Bowl—which remains one of the most important shared American cultural experiences—but in the same way that no one recognized that the disappearance of a Bombay Company store marked the decline of the local shopping mall, sometimes these processes are only obvious in hindsight.
Essentially, Chuck Klosterman believes that advertisers are going to start questioning the returns on their advertising dollars and that, because of changes in youth sports and college football, it will become less culturally relevant.
Klosterman—whom I would describe as the world’s premier cultural overthinker—has wrapped his thesis in a protective phalanx of caveats, mainly in terms of timing. This isn’t something that he expects will happen soon. But if you’d suggested in the 1940s that jazz was at its cultural apex, or in the 1970s that no one would care about horse racing (or, conversely, in 2000 that tens of millions of Americans would support a professional soccer team), people would have considered you nuts.
And yet here we are. It’s quite possible that March 2026 represents the cultural peak influence of football. How would we know whether football’s popularity has just peaked? And if you find that notion impossible, well, jazz, horse racing, boxing, the Mongolian Empire, molded gelatin salads, Detroit, brutalism, and the landline telephone would like a word. Things fade, things change. Sometimes forever (still rooting for you, Detroit, Mongolia, and jazz!).
The tricky thing in investing is that market volatility creates an endless amount of false positives. Since 1950, the S&P 500 has sat below its all-time highs more than 93% of the time.1 Seems crazy, right? After all, the stock market is the world’s most valuable form of applied optimism, an incredibly powerful capital-compounding machine. And yet, if you take the market’s future discounting function literally, it is almost constantly indicating that things were better at some point in the past.
One of the great strengths of investing the Foolish way is our reliance on two intangible analytical superpowers: patience and a willingness to be wrong, which can be described more simply as optimism.
We tend to think of optimists as being slightly dopier, more gullible than flinty-eyed pessimists. But investing in companies is all about envisioning a better future for them, at all times, but maybe especially when their shares sit at or near all-time highs. But by being patiently optimistic, Foolish investors have a natural tendency to allow the ebbs and flows of the market, and the occasional “DEATH OF SOFTWARE” or similar headline wash over them relatively unperturbed.
Even amongst the Magnificent 7, the biggest winners of late, five have endured multi-year periods of trading below their all-time highs, some lasting more than a decade. Rest assured, such market rotations will happen again, and they will be tough to handle for investors who are heavily geared toward components of the market that find themselves out of favor.
Our patient optimism means that we will, from time to time, find ourselves with “you didn’t see that coming?” positions in our portfolio. A slow reaction time means that this goes into the category of acceptable risks for us. But by remaining patiently optimistic, we are confident that our belief in the stock market’s wealth-creation powers remains the best way to be sufficiently compensated for the risks we take.