The Intelligent Investor's Almanac
Your Bi-Weekly Guide to Markets, Movements, & Money.
Presented By Ken Majmudar & Ridgewood Investments
Issue 18 • November 19 to November 30, 2025
Never miss another valuable edition of The Intelligent Investor's Almanac again.
✦ TL;DR — Your Institutional Intelligence in Minutes
We cover two major wealth dynamics in this issue:
S&P 500 Concentration: When Diversification Becomes Concentration
Market Insight: Digital assets are entering an institutional phase, driven by regulation, tokenization, and real-world financial use.
Additional Insight: Digital Treasuries and stablecoins are gaining wider adoption in settlement and cash management across institutions.
Next Step: Evaluate whether including digital assets fits your long-term investment approach and risk preferences.
✦ Action: Schedule a Private Consultation to review the potential role of digital assets in your portfolio and how they align with your long-term investment strategy.
2025 Market Narrative: Fear vs Fundamentals
Core Insight: Investor sentiment remains cautious, yet employment, earnings, and policy trends highlight that conditions remain more stable than headlines suggest.
Additional Insight: A small group of companies is driving most of the market’s gains, but most of those companies are increasingly showing stable earnings results.
Next Step: Review whether your portfolio is properly diversified across sectors and geographies as valuations constrain forward return expectations.
✦Action: Schedule a Private Consultation to review your portfolio allocation and discuss how current market conditions may contribute to your long-term positioning.
The Value Investor
Ken Majmudar, CFA & Founder of Ridgewood Investments
“In the short run, the market is a voting machine, but in the long run, it is a weighing machine.”
– Benjamin Graham
At its core, value investing is the practice of paying less for an asset than what it is reasonably worth. The principle applies across all markets and cycles, regardless of whether the asset is a traditional business or part of an evolving digital ecosystem. Even with emerging segments like digital assets, the goal is the same: understand the underlying value and assess whether the current price offers long-term potential.
The Maturing of Digital Assets
Digital assets have been part of the financial landscape since Bitcoin’s launch in 2009, the first successful example of digital scarcity on a public blockchain. Since then, the category has expanded to include cryptocurrencies like Ethereum and Solana, dollar-backed stablecoins used in payments, and tokenized versions of traditional assets such as Treasury bills and private credit funds.
Understanding the Foundations of Digital Assets
Digital assets represent a separate category of investments developed from blockchain technology. Unlike traditional financial instruments, which rely on banks or institutions to verify transactions, digital assets function on decentralized networks where transaction records are stored securely and transparently.
Bitcoin, the most widely adopted digital asset, introduced the concept of digital scarcity (meaning only a limited number of units can ever exist algorithmically) and is frequently compared to gold as a potential store of value.
Common applications gaining adoption:
Stablecoins facilitate cross-border payments and B2B settlements.
Tokenization simplifies the way asset managers verify and match their records.
Public blockchains improve the way institutions verify data and settle transactions.
Digital assets (other than stablecoins) remain volatile, largely because their prices follow adoption cycles rather than cash flows or earnings. But the broader change is structural, supported by growing institutional use of the technology.
From Speculation to Framework: How Policy Is Redefining Digital Assets
In July 2025, the U.S. Congress passed the GENIUS Act, establishing the first comprehensive federal rules for stablecoins. The law requires that dollar-backed stablecoins be fully reserved with cash or Treasuries, audited regularly, and issued only by licensed entities. Stablecoins that do not meet these requirements will be excluded.
For the first time, stablecoins can operate within the formal payment system, subject to clear reserve, disclosure, and supervisory standards. While the rules apply specifically to stablecoins, federal agencies have set a more explicit regulatory classification for Bitcoin and Ethereum, with both now regulated under CFTC commodity oversight, which provides a more transparent set of trading and disclosure standards.
This regulatory development has contributed to the launch of multiple Bitcoin and Ethereum ETFs and index products, giving investors regulated ways to access these assets and reflecting their evolving role within the financial system.
Additional developments introduced under the GENIUS Act:
Banks and payment firms can now integrate stablecoin payment systems, supported by federal oversight.
Custodians can offer compliant digital-asset services, improving institutional access to the category.
Enterprise adoption is expected to accelerate, particularly in settlement and treasury operations.
The Strategic Role of Digital Assets in a Diversified Portfolio
Digital assets are much more volatile than asset classes like equities; for example, Bitcoin’s annualized volatility – though it has come down in the last decade – still exceeds 50%, and the performance of different digital assets can vary widely from year to year.
Even with drawdowns of 50% or more, long-term holders of Bitcoin and Ethereum have generated exceptional returns over time. In modest allocations, these assets have enhanced portfolio risk-adjusted returns through diversification.
Investors can access digital assets in several ways, including regulated crypto ETFs, institutional custodial platforms, advisor-managed accounts and even private funds. Given their higher volatility, position sizing of these assets should align with each investor’s ability to manage risk.
The Outlook for Digital Assets
The digital asset market may be transitioning from speculation-driven narratives to real-world use cases. Tokenized Treasury funds now serve as institutional cash management tools, offering real-time records that can be independently verified.
Following regulatory approvals in early 2025, Ethereum-based crypto ETFs are gaining interest from pensions and RIAs. Public blockchain data shows that most activity now comes from transfers above $1 million, and ETF flows from advisory indicate similar institutional participation.
The digital asset market still faces regulatory and market challenges, but the broader environment shows early signals of increasing stability. As practical use cases continue to increase, digital assets are becoming defined more by functional value than speculation.
At Ridgewood, our founder was one of the early investment advisors to research, understand and act on the potential of this new asset class – and we also offer a dedicated digital assets strategy that provides systematic and risk-controlled exposure to investors as a done for you on ramp into this evolving asset class.
Most importantly, adoption globally is still at low levels and our research indicates that there is a long way to go. This means there are still exceptional opportunities to benefit if you have a long investment horizon.
Dynastic Wealth – Tips on Preserving and Building Your Legacy
2025 Market Narrative: Fear vs Fundamentals
Market sentiment in 2025 reflects a gap between headlines and broader conditions. Markets have recovered strongly since late 2022, yet many investors remain cautious. In this section, we look beyond sentiment to review what employment, earnings, valuations, and credit indicators suggest about the current environment.
The goal is to provide perspective on how current conditions relate to historical patterns and help investors assess whether their portfolio positioning remains aligned with their long-term objectives.
Understanding the Current Market Environment
The S&P 500 recently crossed 6,500, sustaining an ongoing rally that has now gained nearly 90% since its October 2022 low. The Nasdaq has also gained more than 22% this year, with equity markets continuing to reflect earnings strength and a supportive policy environment across key sectors.
Even as markets continue to gain, investor sentiment remains cautious. A few underlying factors contribute to this:
Valuations are high, with the S&P 500 trading near 30 times earnings, levels that are typically associated with more moderate long-term returns.
Recent gains have been concentrated in 7 large technology companies. If these 7 companies were to be excluded from the S&P500, the returns drop from 0.5% in Q1-2025 to -4.3%. This tells us that the vast majority of the S&P 500 companies have actually produced negative returns for investors.
Investors continue to assess the performance concentration brought about by a handful of large tech companies and how they impact future returns.
Despite near-term sentiment-driven narratives, the underlying earnings data continues to reflect stability. For example, the top 10 largest companies continue to report consistent earnings growth (including Nvidia, Apple, Amazon, Alphabet), with many achieving double-digit gains this season, supported by their scale, global reach, and diversified revenue streams.
At the index level, S&P 500 earnings are expected to grow by roughly 11% in 2025, with margins remaining consistent across most sectors.
Why It May Not Be a Bubble
Market crashes often seem sudden, but the underlying risks usually accumulate over time.
The table below compares current conditions to the earlier crisis periods, dot-com collapse in 2000 and the financial crisis in 2008:
Across major indicators, the 2025 market landscape differs significantly from the dot-com and financial crises. Although valuations are above long-term averages, they may be supported by steady earnings growth across multiple sectors, including technology, power, real estate, industrials, and major banks.
Within technology, market leadership is driven by firms with durable profitability and strong balance sheets. However, capex spend driven by AI investments have risen astronomically.
Howard Marks (an accomplished investor, widely regarded for his insights on market cycles) has written that bubbles are not defined by valuation metrics alone, but by belief, specifically, a collective confidence that valuations no longer matter. That sentiment defined the psychology behind past bubbles.
Today’s market appears expensive, but investor sentiment remains somewhat cautious rather than speculative. Many investors are concerned about valuations, leading them to conduct a more prudent assessment of new investments.
History also shows that major crises are less likely to emerge when investor caution is high, as such periods have often been accompanied by the need for higher rate of return thresholds for investments.
While current market conditions lack the speculative extremes associated with bubbles, the valuation level at which investors enter the market continues to be an important driver of long-term performance.
As the chart indicates, the long-term performance of the market has historically been lower when investors enter at higher valuation levels. This implies that investors entering the market at current valuation levels should adopt more conservative long-term return assumptions.
The current market P/E of 30 times has historically been associated with more moderate long-term returns.
Recoveries From Market Crashes Are Getting Shorter
Although each market decline differs in underlying factors and impact, the table highlights an interesting pattern: market recoveries have been getting shorter. Earlier crashes such as the 2000 dot-com decline and the 2008 financial crisis took years to recover.
In contrast, recent market declines, including the 2020 COVID downturn, the 2022 bear market, and the short-lived 2025 decline, recovered in a much shorter timeframe as companies navigated these periods with stronger balance sheets, policy responses were implemented faster, and liquidity across the system remained steady. When underlying fundamentals are stable, markets seem to recover faster.
Key factors behind this momentum include:
Market composition: Major indexes are dominated by capital-efficient, globally diversified firms like NVIDIA and Alphabet, with lower leverage and higher pricing power.
Information and positioning: More timely policy measures, broad based retail and institutional participation as well as global fund flows, have helped reduce the time between declines and recoveries.
Four Factors for Portfolio Framework
Positioned for What Comes Next
High valuations tend to set expectations for more moderate market returns, yet actual results vary based on how a portfolio is allocated.
Portfolios that diversify beyond the S&P 500’s largest companies can benefit from a broader range of opportunities and are generally less dependent on index-level valuations.
At this stage of the market cycle, portfolio diversification is more important than trying to predict short-term market movements. With interest rates higher at current levels, companies with steady earnings can generate consistent returns as their cash flows are less sensitive to rate fluctuations.
Here’s to building lasting wealth,
Ken Majmudar, CFA
Founder & Chief Investment Officer Ridgewood Investments
P.S. If you’re ready to explore how our institutional-grade investment approach can work for your portfolio, let’s schedule a time to talk below.
Gain Industry – Level Intelligence For Your Investment Strategy
Transform your approach to wealth building with institutional-grade insights. Schedule a private discovery call with Ken and the Ridgewood team to:
- Analyze your current portfolio positioning
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Building generational wealth requires institutional-grade thinking. Let’s discuss how our sophisticated approach can work for your family’s future.
Important Disclosure: Ridgewood Investments is a registered investment adviser. This newsletter is for informational purposes only and does not constitute investment advice. Past performance is not indicative of future results.