October 29, 2026

With AI disruption potentially around the corner, there is a lot of discussion about moats at the moment. Professor Aswath Damodaran’s framework looks at the sources of competitive advantage: brand strength, switching costs, network effects, cost advantages and legal protection, see chart below. The key distinction is not simply whether a company has a moat, but how wide and durable that moat is, and how it shows up in the numbers: pricing power, customer retention, market share and profitability. For investors, understanding the source and sustainability of a company’s competitive advantage is critical to assessing its long-term value. With the proliferation of AI, the moat discussion is becoming even more important. Here is a simple checklist of three questions to ask. The AI moat checklist: Data, Workflow, Pricing Data: Does the company own data its rivals can’t get? Workflow: Is the company’s product part of how customers do their jobs every day? Pricing power: Can the company charge more without customers walking away?

October 28, 2026

Social Security is financed mainly by a 12.4% payroll tax on wages up to an annual cap, split between workers and employers, with additional revenue from income taxes on benefits and interest on trust fund reserves. Since costs now exceed income, the retirement trust fund is being drawn down and is projected to be depleted in late 2032, according to the 2026 Trustees Report, see chart below. Once reserves run out, the program can pay only what it takes in, about 78% of scheduled benefits, a cut of roughly 22% unless Congress acts. Combining the retirement and disability funds, which would require legislation, would delay depletion to 2034, with about 83% of benefits payable. Closing the gap would require raising revenue (a higher payroll tax rate or taxable wage cap), reducing benefits (a later retirement age or slower cost-of-living adjustments) or a combination of both. The bottom line is that a possible 22% benefit cut makes it more important for households to save more and build a stream of income in retirement.

October 27, 2026

Data from the San Francisco Fed shows that core PCE inflation at 3% is split evenly between supply and demand, see chart below. In 2022, supply was the largest driver. The rise in the demand contribution since 2024 suggests inflation is no longer just a supply story. That matters for the Fed, because interest rates can cool demand-driven inflation but do little about supply shocks.