Introduction 

This month’s Opportunity Report features a two-segment health care company whose main franchise operates in one of the more attractive oligopolies in all of consumer health care. The Company also owns a smaller, more eclectic fertility and women’s health business that has recently drawn the attention of two activist investors, which has prompted a board shake-up and a formal strategic review of the entire portfolio. This corporate activity comes amid record revenue, expanding margins and a notable reacceleration in free cash flow. With shares more than 40% below their all-time high and trading among their lowest valuation in the past 15 years, we believe the picture for patient investors is becoming clearer.

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In this episode of The World According to Boyar, Jonathan Boyar welcomes back CNBC Senior Markets Commentator Michael Santoli—the first repeat guest in the show’s history, following his December 2020 appearance in the thick of COVID. Drawing on more than three decades covering Wall Street, Santoli breaks down his now-memorable on-air clash with Ryan Cohen over GameStop’s bid for eBay, the return of meme-stock speculation, and the question hanging over everything: Is this market 2021, 1999, or something genuinely new?

From AI capital spending and extreme market concentration to whether value and equal-weight stocks are finally due to lead, Santoli argues that today’s extremes do not yet match the dot-com peak. But, as he puts it, being told by your doctor that “you’re not literally the most unhealthy patient I’ve had in 30 years” does not mean “you’re in great shape.” It’s a clear-eyed, historically grounded read on the enduring mix of speculation and investment—what Santoli, invoking Buffett, calls “a casino attached to a church.”

Key Topics Covered:

Short sellers and the chilling effect: Why short selling is one of the most treacherous games in investing, the “alpha shorts” many hedge funds use, and why even legitimate short sellers have gone quiet.

The Ryan Cohen/GameStop showdown: The backstory behind a tense, revealing on-air exchange over GameStop’s bid for eBay—and what Santoli believes the Chewy-to-GameStop record reveals.

2021, 1999, or both? The retail-trader empowerment of 2021, the narrow-leadership echoes of the dot-com peak, and Santoli’s “unhealthy patient” analogy for today’s market froth.

AI spending and the hardware food chain: Why Santoli suspects the AI hardware complex may be overearning—and whether greater efficiency could eventually undermine today’s hardware economics.

Market concentration, reconsidered: Why a top-heavy S&P 500 may matter less than people fear—and how the bull case quietly shifted from “asset-light cash machines” to “asset-heavy, invest now, reap later.”

Will value and equal weight finally lead? Why durable rotations do not happen “at a full gallop,” and what the October-to-February broadening did—and did not—prove.

Why he doesn’t pick stocks: How being restricted from owning individual securities became “liberating,” his “voluntary tax on the arrogant” take on sports betting, and his philosophy of staying involved while keeping expectations in check.

The evolution of his CNBC role: From appearing on CNBC as a Barron’s contributor to becoming a market “color commentator” and co-anchor of Closing Bell: Overtime—and where financial media is heading as the business shifts toward digital.

The underreported story: The slow-moving demographic and global-population shifts—and the possibility that the Iran episode accelerates investment in renewables—that Santoli believes investors may be overlooking.

About Michael Santoli:

Michael Santoli is co-anchor of CNBC’s Closing Bell: Overtime and the network’s Senior Markets Commentator, with more than three decades of experience covering Wall Street. He began his career at Investment Dealers’ Digest before moving to Dow Jones Newswires. He later spent 15 years as a columnist and feature writer at Barron’s, where he wrote the Streetwise column, and was a Senior Columnist at Yahoo Finance before joining CNBC in 2015. A graduate of Wesleyan University, he lives in New York City.

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In this episode of The World According to Boyar, Jonathan Boyar speaks with Lina Tetelbaum, a corporate partner at Wachtell Lipton, one of the world’s most influential corporate law firms, where she heads the firm’s shareholder engagement and activism defense practice.

Lina takes us inside the world of shareholder activism — how activists choose targets, the small universe of ideas they typically push, how companies and boards respond, and why so many activist campaigns ultimately end in settlements rather than full proxy fights.

We discuss the tension between the changes activists typically call for and long-term business strategy, the role of index funds and proxy advisors, how activists build positions, what really happens behind the scenes in settlement negotiations, and why even controlled companies are not completely immune from activist pressure.

Lina also shares her perspective on Wachtell Lipton’s history in takeover defense and activism, from the era of the poison pill to today’s more complex battles between boards, activists, institutional investors, and other stakeholders.

Topics discussed include: shareholder activism, proxy fights, activist settlements, board governance, index funds, ISS and Glass Lewis, activist nominees, controlled companies, capital allocation, M&A, and long-term value creation.

Introduction 

This month’s Opportunity Report features a globally recognized brand whose name is both a noun and a verb, yet whose investment merits seem surprisingly underappreciated. The Company has been quietly running one of the more impressive cash conversion machines in the consumer internet space, generating a >35% free cash flow margin and >5% FCF yield, and using its abundant FCF to repurchase a material amount of its stock over the past 12 months. Meanwhile, its top-line growth reaccelerated in 1Q 2026, with strength expected to continue throughout the year. The shares trade at a discount to some of its closest publicly traded peers despite faster growth and better margins than most in the industry, and a net cash balance sheet.

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What began as a funny observation from my father and Boyar Value Group founder Mark Boyar — that Josh Brown and Michael Batnick are “the Howard Stern of financial podcasting” — turned out to be a pretty good way into the real story.

Josh and Michael built an audience by being candid, irreverent, and willing to say things much of traditional Wall Street would rather leave unsaid. But underneath the humor is a serious wealth-management business, a disciplined investment process, and a culture that has become a magnet for clients and talent.

In this wide-ranging episode, I sit down with Josh and Michael to discuss Ritholtz Wealth Management, their highly successful Compound and Friends podcast, the dangers of making stock picks public, how to build a financial brand today, and why — in markets as in business — risk finds a way.

Key Topics Covered

• Authenticity as a Competitive Advantage
How Josh and Michael built trust by being candid, irreverent, self-aware, and willing to sound different from traditional Wall Street.

• The Real Business Behind Ritholtz
Why Ritholtz is not simply a content platform attached to an RIA, but a serious wealth-management firm that also creates influential financial media.

• Building a Talent and Client Flywheel
How Ritholtz’s audience has helped attract clients, advisors, employees, and like-minded people who already understand the firm’s culture.

• Why Wealth Management Became One of Wall Street’s Most Attractive Businesses
Josh explains why the RIA model has become such a powerful business and how wealth management has reshaped financial media and Wall Street.

• Could Ritholtz Be Built Again Today?
Josh and Michael discuss whether their content-driven model could be replicated now, and why LinkedIn, YouTube, and owning a niche matter more than ever.

• CNBC, Media, and Market Commentary
How Josh prepares for CNBC and how Michael has helped sharpen that process.

• The Danger of Public Stock Picks
Michael draws on lessons from his book Big Mistakes to explain why publicly discussing investments can make it harder to change your mind.

• Porterhouse and Rules-Based Investing
Josh and Michael discuss Ritholtz’s new Porterhouse equity strategy and why systematic rules can help investors avoid emotional mistakes.

• Why Risk Finds a Way
A discussion of market leadership, momentum, and the idea that new opportunities tend to emerge even after difficult periods.

To learn more about how the Boyar Value Group can assist with your research or money management needs, please email amalia@boyarvaluegroup.com or

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In 1999, Walmart traded at 48 times earnings. Five years later, it traded at 19. The business kept performing well the whole way down. Revenues grew, the moat held, the cash machine hummed, and the stock still lost 21 percent over those five years. A high-quality company. But at that price, a poor investment.

Today, Walmart trades at 44 times earnings…

This is the trouble with the word “quality.” It keeps getting confused with “safe.” Investors generally don’t lose money on quality stocks because of business failure. They lose money because they bought the right business at the wrong price, and the valuation multiple did what sky-high valuation multiples often do: succumb to gravity. Quality is not a margin of safety when the price already assumes perfection.

Over our firm’s fifty-year history, we have watched this story unfold twice before. Today’s market may be beginning to rhyme with those earlier episodes.

When we opened our doors in 1975, our timing was inadvertently perfect. We showed up just as stocks caught up in the prior bubble were finishing their fall to earth. While others were nursing losses, we remained focused on the bargains they overlooked: businesses that hadn’t been popular enough to get overpriced in the first place.

The Nifty Fifty

The first bubble was the Nifty Fifty, the late-1960s “one-decision stocks” with such great future prospects, the consensus held, that you bought them at any price and never sold. The Nifty Fifty consisted of household names like Polaroid, Avon, Xerox, McDonald’s. The crème de la crème of American business. By 1972, the group traded at 42 times earnings, more than double the S&P 500’s 19. Investors said these weren’t ordinary companies. The old rules didn’t apply.

In the 1973–74 bear market, the Nifty Fifty fell 60 percent on average:

• Polaroid lost 90%

• Avon, 86%

• Xerox, 72%

• McDonald’s, 70%

Some of these companies were fine. McDonald’s, in particular, would eventually regain its momentum to continue its remarkable ascent. But the average Nifty Fifty stock took a decade to recover to its previous highs. Investors who bought at the peak didn’t break even until the early 1980s.

The lesson was clear: price matters, even for great businesses.

Meanwhile, many of the high-quality businesses investors had ignored, the ones without fashionable growth stories, did what sensibly priced companies can do over time: compound.

The Second Quality Bubble

The second quality bubble tends to be overlooked, because the dot-com mania of the same era stole the headlines and had an even greater fall from grace. But quietly, in 1999, it was déjà vu on a quality bubble. The names once again consisted of the best of corporate America. Home Depot at 58 times earnings. Walmart at 48. General Electric at 42. Coca-Cola at 38. The S&P traded at a rich 26 times earnings, and these were the companies investors felt safest owning.

Five years later, all four had fallen significantly:

• Home Depot’s valuation fell from 58 to 17—a 71% drop—delivering a negative 36% total return

• Walmart’s valuation dropped by 60% and the stock lost 21%

• GE’s valuation declined by 52% and the stock lost 22%

• Coca-Cola’s valuation dropped by 46% and shares lost 22%

Every one of these companies kept growing earnings the whole time.

Every one was still excellent in 2004.

Every one lost money for the investor who bought it in 1999 at an elevated valuation and continued to hold it through 2004 after the valuation contracted.

So what caused these stocks to decline? It wasn’t a deterioration in business quality or even their long-term fundamental outlook.

The stocks were priced for perfection, and when reality arrived with anything less than perfection, investors rethought what they were willing to pay for these businesses.

Are Investors Repeating the Same Mistake?

Fast-forward to today, and the script feels familiar:

• Costco at 47 times earnings is approximating Walmart’s 1999 peak

• Walmart itself is back at 44 times, nearly the same level that preceded five years of losses

• GE Aerospace at 36

• Cintas at 32

• Fastenal at 35

The S&P is selling at 21 times earnings, but the price of buying the best companies in America is significantly more elevated than that.

The arguments are familiar.

Costco has perhaps the most loyal customer base in retail. Walmart has scale that would be nearly impossible to replicate. GE Aerospace has an attractive aircraft-engine business model with limited competition. Cintas has route density that is effectively impossible to displace. Fastenal has a strong competitive moat rooted in a vast, localized distribution network.

None of those arguments are wrong... But similar arguments of dominance were made in both the early 1970s and 1999, and investors who bought those “can’t lose” stories still experienced significant losses that took years to recover.

The question for an investor in 2026 isn’t whether these businesses are great… They are. The question is the same one that mattered in 1972 and 1999: from a 40-times-earnings starting point, what do the next five years have to look like for this to work?

• Profit margins hold

• Growth accelerates

• The valuation multiple doesn’t fall

If all three happen, you’ll probably do fine. If any one of those metrics falter, the correction can be swift and severe, and history’s track record from forty-times starting points isn’t encouraging.

What Should Investors Do?

We’re not saying investors should exit the market, nor are we claiming that we have reached the same valuation extremes as the 1970s and 1990s period. What we are saying is that the same market that has crowded into a handful of premium-priced compounders has wandered away from high-quality businesses trading at sensible prices. That’s where the Boyar Value Group is concentrating our efforts.

Our preference is not to abandon quality, but to find it where expectations are lower, valuations are more reasonable, and catalysts are being overlooked.

Four Names That Make Sense

Uber generates roughly $9.8 billion in cash each year from a business model that collects a fee on every mile and meal it touches. At the current depressed valuation, the market is pricing in autonomous-vehicle displacement. The reality? Uber is more likely to benefit from than be hurt by this trend as the addressable market opportunity surges.

Madison Square Garden Sports owns the Knicks (Forbes value: $9.75 billion) and the Rangers ($4 billion) yet trades for significantly less than the combined value of both teams. In February the company announced it would explore separating the two teams. The possible next step to unlock shareholder value? The sale of all or part of each team...

Cooper Companies is one of four players in the attractive global contact-lens business, with two activist investors engaged, improving cash flows, and a CEO buying his company’s stock on the open market.

MGM Resorts is a dominant player in gambling, has bought back more than 45 percent of its shares since 2021, and has significant digital and brick-and-mortar growth opportunities ahead.

Stocks for the Long Run

These aren’t short-term trades. They are situations where good businesses are selling below what we estimate they are worth, with identifiable catalysts that could help close the gap over time. That is exactly where we think some of the best opportunities lie over the next three to five years.

Warren Buffett put it simply: price is what you pay, value is what you get.

When you buy a stock at forty times earnings, you’re paying a very high price. For that investment to work out, the company needs to deliver exceptional growth for many years just to justify what you paid. The math is unforgiving… Most companies, even great ones, can’t clear that bar.

The companies on today’s quality roster will almost certainly still be excellent in 2031. Whether investors who currently own their stock will do well from these prices is a different question entirely.

To learn more about how the Boyar Value Group can assist with your research or money management needs, please email amalia@boyarvaluegroup.com or

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Introduction 

This month’s Opportunity Report features a niche company that is outperforming its competitors in a large and growing industry and that has many of the characteristics of a high-quality investment: high gross margins (>60%), low capital intensity (capex typically <1% of sales), clean financial statements, a net cash balance sheet, and excellent returns on equity (>20%). It also has an impressive long-term track record and continues to be led by its founders—who remain heavily invested by owning more than 40% of the company—and it is available at one of the lowest valuations in the past 13 years.

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1Q 2026: Markets Relearn an Old Lesson

The first quarter of 2026 was a reminder of an old lesson: stocks rarely move higher in a straight line. When geopolitical shocks hit a market already burdened by elevated valuations and weak consumer confidence, a market decline should not come as a surprise.

Most major U.S. equity indices declined during the quarter. The S&P 500 fell 4.6%, snapping a three-quarter winning streak and posting only its third down quarter since 2022. The Dow Jones Industrial Average declined 3.6%, while the Nasdaq fell 7.1%, its steepest quarterly decline since 1Q 2025 according to StreetAccount. The Russell 2000, which tracks smaller company stocks, was a rare bright spot, advancing 0.6%.

Other asset classes also saw sharp moves. Gold gained 7.4%, though it still ended the quarter at $4,647, down 16.8% from its all-time intraday high reached on January 28, 2026. Bitcoin futures fell 22%, their first back-to-back quarterly decline since mid-2022. Oil, however, was the real headline. WTI crude rose 77% and Brent crude climbed 95%, with Brent posting its largest quarterly percentage gain since the third quarter of 1990 according to data from Morningstar.

One of the more interesting developments this quarter took place beneath the surface of the major averages. While the mega-cap stocks that have driven much of the market’s advance in recent years struggled, smaller companies held up better. The Russell 2000 posted a modest gain, and the equal-weighted S&P 500 outperformed the traditional cap-weighted index, rising 0.2% compared with a 4.6% decline for the S&P 500. When equal weight leads, it is often a sign that strength is broadening beyond the market’s largest companies.

That would represent a meaningful change. As the accompanying chart shows, the equal-weighted S&P 500 has lagged the cap-weighted index by a considerable margin over the past decade. Yet that has not always been the case. Following the dot-com collapse, equal weight outperformed for an extended period, and since 2000 it has still come out ahead on a cumulative basis. The message is not complicated: periods of extreme concentration can eventually give way to broader leadership.

Small caps may be another potential comeback story. Although the Russell 2000 has badly trailed the S&P 500 over the past three, five, and ten years, it has begun to outperform over the past year, including in the most recent quarter. That alone does not signal a durable rotation, but it is consistent with the view that market leadership may finally be starting to widen.

History offers a useful reminder of how quickly that shift can occur. In the aftermath of the dot-com bust, small caps outperformed large caps by a wide margin for several years. That stretch was so powerful that, despite the S&P 500’s dominance in more recent years, cumulative returns for the two indices since 2000 remain remarkably close. None of this means history must repeat, or that a durable rotation is already underway, but periods of extreme concentration rarely last forever. When leadership broadens, some of the market’s biggest winners often become laggards, while areas long left behind begin to catch up. Recall that the Nasdaq Composite peaked in March 2000 at 5,048 and did not surpass that closing high until April 2015.

Of course, it is always possible to choose time periods that help make almost any argument. Even so, the broader point is not that history must repeat itself, but that investors who have only known an era of large-cap dominance should remember that markets do not always work this way.

AI Disruption

Artificial intelligence was one of the quarter’s defining themes, as investors increasingly questioned whether the enormous sums being committed to AI would ultimately generate adequate returns. Microsoft was a good example of those crosscurrents. On one hand, investors began to worry that advances in artificial intelligence could weaken the value of traditional software products, including core offerings such as Office 365, as competing AI tools from companies like Anthropic and Google became more widely adopted. On the other hand, Microsoft was also being judged as one of the companies spending enormous sums to build the infrastructure for the next phase of AI growth (Microsoft’s capex spending in FY 2025 [ended June 30] was $65 billion, well up from the $15 billion it was spending just 5 years prior).

The result was a sharp stock price decline. Microsoft, which until recently was the world’s largest company by market capitalization and traded at an elevated 31x multiple of earnings (NTM), lost 23.5% of its value during the first three months of the year. It was the company’s steepest quarterly share price decline since the financial crisis according to CNBC. Investors appeared to grow more skeptical not only about the return on Microsoft’s AI spending, but also about the pace at which products such as Copilot would gain meaningful traction.

The broader software sector was hit in similar fashion. The iShares Expanded Tech-Software Sector ETF (IGV) declined 24.3% during the quarter, with once-market darlings such as Salesforce (-29.5%) and Adobe (-30.5%) falling even more. The market began to worry that artificial intelligence might not just be a tool for software companies, but also a threat to their own businesses. Still, a sharp selloff alone does not tell investors where the real value lies.

Not All Selloffs Create Opportunity

We have long considered Microsoft to be one of the world’s best businesses. Its Azure cloud business sales grew 39% in the December quarter and likely could have grown even faster had the company devoted all of its AI computing capacity to Azure rather than directing part of it toward internal initiatives such as improving Microsoft 365 Copilot. In our view, that choice reflects well on management’s long-term thinking. At current prices, Microsoft is trading at 21.3x NTM earnings, its lowest earnings multiple since December 2018. Could the stock fall further? Absolutely. But at today’s valuation, we believe it is becoming increasingly compelling for long-term, patient investors.

That said, not all software stocks are created equal. A decline of 30%, 50%, or even more, does not automatically make a stock cheap. Some companies may never regain their previous highs because the underlying business economics or competitive position have changed or they were simply overvalued to begin with. In periods like this, investors need to be especially careful in distinguishing between temporary dislocations and permanent impairment.

Private Credit Bears Watching

Those concerns were not confined to public equities. They also began to surface in private credit, the large and rapidly growing market in which non-bank lenders provide financing outside the traditional banking system. Several borrowers, including First Brands Group and Tricolor Holdings, filed for bankruptcy, and some of the private credit funds that had lent to them suffered meaningful losses.

The software selloff added to those concerns. As software valuations came under pressure, investors began to focus on the concentrated exposure some private credit funds had to the sector. That, in turn, led some investors to seek withdrawals. In response, certain funds limited redemptions to avoid being forced sellers at distressed prices. Predictably, those limits only heightened investor anxiety and contributed to a self-reinforcing cycle.

The financial media then added to the unease by drawing comparisons to the period leading up to the 2008 financial crisis, including the collapse of a Bear Stearns hedge fund before the firm itself came under severe pressure and was forced to sell itself to JPMorgan Chase at a fire sale price. Jamie Dimon, Chairman and CEO of JPMorgan Chase and one of Wall Street’s most respected voices, did little to calm nerves when in October 2025 he warned that lending standards had become too lax and added that, “when you see one cockroach, there are probably more,” a comment many investors interpreted as a warning that additional problems may still be lurking beneath the surface.

Our view is that more problems in private credit are likely to emerge. That said, we believe this remains very different from the subprime crisis: the assets are different, leverage appears lower, and the risk of broad contagion seems more limited. Even so, it is an area we are monitoring closely.

War, Oil, and the Strait of Hormuz

The most dramatic development of the quarter came on February 28th, when President Trump launched Operation Epic Fury, a joint military offensive with Israel against Iran. The strikes were extensive, targeting both military infrastructure and senior Iranian leadership. For purposes of this letter, we are focused on the economic consequences of the conflict, though the humanitarian toll is obviously significant.

Those economic consequences were immediate, particularly in the energy markets. In response to the U.S. attack, Iran moved to assert control over the Strait of Hormuz, the narrow waterway through which a meaningful portion of the world’s oil supply passes. The resulting disruption in tanker traffic sent energy prices sharply higher.

Unsurprisingly, energy stocks were the quarter’s standout performers, gaining 37.2%. Materials, Utilities, and Consumer Staples also held up relatively well. On the other side of the ledger, Financials, Consumer Discretionary, and Technology were among the weakest areas of the market.

The geopolitical picture has shifted somewhat since quarter-end. A ceasefire has been announced, and markets have responded positively, with the S&P 500 reaching a new record, even as many individual companies remain dramatically below their all-time highs. At the same time, after failed peace talks held in Pakistan, the U.S. has blockaded Iranian ports, while traffic through the Strait remains severely disrupted, underscoring just how fragile the situation remains. Whether this ceasefire holds, and for how long, is impossible to know. We would caution against reading too much into the market’s short-term reaction in either direction.

S&P 500 Sector Performance 1Q 2026

Even so, history argues for keeping the current selloff in perspective. In moments like this, it is easy to assume that a geopolitical shock must mean something fundamental has changed for the stock market. History suggests a more measured view. While wars and military conflicts can certainly unsettle markets, the great bear markets of the past century were not caused by war alone, but by deeper economic and financial problems.

As James Mackintosh of The Wall Street Journal recently noted, military conflicts generally have not had a lasting impact on U.S. equities. That broader point fits with history. The Great Depression was a collapse of leverage, the banking system, and the economy. The 2000–02 bear market was the bursting of the dot-com bubble. The 2007–09 financial crisis was the unwinding of housing excess, leverage, and a deeply fragile financial system.

The 1973–74 bear market is worth treating with a bit more nuance. It is often associated with the oil embargo, and geopolitics clearly played an important role. But even that decline was not caused by war alone. It became a true bear market because the oil shock fed inflation, weakened the economy, and created a much more difficult backdrop for stocks.

Mr. Mackintosh has, thus far, proven prescient. As of the April 15 close, the S&P 500 had recovered above its pre-conflict level and reached a new all-time high. That does not mean the risks have disappeared, nor does it guarantee the market will continue to shrug them off. It does, however, reinforce the broader point that geopolitical shocks often feel more decisive in the moment than they prove to be over time. Whether this ultimately proves to be the start of something more serious or simply another routine setback remains to be seen. For now, we believe investors are best served by staying the course.

While caution is still warranted, not everything in the current backdrop is negative. If some of the recent inflation pressures continue to ease, that could provide a modest tailwind for the economy and markets, as could a definitive end to the war in Iran, stronger spending driven by elevated tax refunds, or a pickup in merger and acquisition activity. Even so, we continue to believe that the more important issue for investors is not the next macro data point, but valuation.

Is There Currently a Quality Bubble?

Even if some of those near-term pressures ease, one issue remains especially important: valuation. The recent weakness in many of the market’s largest and most admired companies has also reminded us of a lesson investors periodically forget: a great business and a great investment are not always the same thing.

History is filled with examples of investors paying such high prices for “quality” that even excellent companies produced disappointing returns. The Nifty Fifty era of the early 1970s was one example. The late 1990s provided another, when investors crowded into beloved blue-chip companies at valuations that assumed years of perfection. In both cases, the businesses often remained strong, but the stocks proved poor investments because the starting prices were simply too high.

We see signs of a similar dynamic today in certain parts of the market. Some of the most respected businesses in America continue to trade at valuations that leave little room for error. Costco, Walmart, and Cintas are all outstanding businesses, but history has shown that even outstanding businesses can become mediocre investments when bought at overly optimistic valuations. That does not mean these are bad companies. It simply means that when investors become too comfortable paying almost any price for perceived safety and quality, future returns can suffer. For long-term investors, that is an important distinction.

One of the ironies of markets is that periods of enthusiasm for perceived safety often create neglect elsewhere. When too much capital crowds into a relatively small group of widely admired companies, other businesses, even very good ones, can be left behind. That is often where the more interesting opportunities emerge. We believe that may be occurring today.

Madison Square Garden Sports & Uber

That disconnect between price and value is one reason we continue to find compelling opportunities outside the market’s most crowded trades. Madison Square Garden Sports is one example. The company owns the New York Knicks and the New York Rangers, two of the most valuable sports franchises in the world, yet we believe the public market continues to value those assets far below what they would command in a private market transaction.

Uber is another. While many investors remain focused on long-term fears surrounding autonomous vehicles, we believe the market is underappreciating the strength of the company’s current business, its growing cash flow generation, and the potentially valuable role it could play in a future dominated by autonomous vehicles.

Importantly, our argument is not that the market’s most popular “quality” companies are poor businesses, nor that their stocks cannot continue to perform well for a period of time. Rather, it is that valuation still matters. It always has. Paying too much for even an exceptional business can lead to years of disappointing returns, while buying a strong business at a sensible price can produce the opposite outcome. That basic principle is easy to forget when momentum is strong, but it has not stopped being true.

In our view, today’s environment once again favors investors willing to look where others are not. Much of the market’s enthusiasm remains concentrated in a relatively small group of familiar winners trading at robust valuations. We are more interested in strong businesses where expectations are lower, valuations are more reasonable, and the gap between price and intrinsic value is meaningful. That has long been our approach, and periods like this often provide some of the best opportunities to put it to work.

Quarters like this one are a reminder of why discipline matters most when it is hardest to maintain. The headlines were loud, the crosscurrents were real, and the temptation to act was understandable. Our approach remains what it has always been: patient, focused on value, and indifferent to the noise. We believe that is precisely the right posture for the environment ahead.

As always, we’re available to answer any questions you might have. You can reach us at info@boyarvaluegroup.com or (212) 995-8300.

Best regards,

Mark A. Boyar

Jonathan I. Boyar

To learn more about how the Boyar Value Group can assist with your research or money management needs, please email amalia@boyarvaluegroup.com or

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Important Disclaimer:

The information herein is provided by Boyar’s Intrinsic Value Research LLC (“Boyar Research”) and: (a) is for general, informational purposes only; (b) is not tailored to the specific investment needs of any specific person or entity; and (c) should not be construed as investment advice. Boyar Research does not offer investment advisory services and is not an investment adviser registered with the U.S. Securities and Exchange Commission (“SEC”) or any other regulatory body. Any opinion expressed herein represent current opinions of Boyar Research only, and no representation is made with respect to the accuracy, completeness or timeliness of the information herein. Boyar Research assumes no obligation to update or revise such information. In addition, certain information herein has been provided by and/or is based on third party sources, and, although Boyar Research believes this information to be reliable, Boyar Research has not independently verified such information and is not responsible for third-party errors. You should not assume that any investment discussed herein will be profitable or that any investment decisions in the future will be profitable. Investing in securities involves risk, including the possible loss of principal. Important Information: Past performance does not guarantee future results. Any companies mentioned in this are for informational purposes only and the performance of the stock selected is not indicative of the performance of the stocks profiled in Boyar Research, the performance of the stocks selected, and the performance of Boyar Research may in fact diverge materially. This information is not a recommendation, or an offer to sell, or a solicitation of any offer to buy, an interest in any security, including an interest in any investment vehicle managed or advised by affiliates of Boyar Research. Any information that may be considered advice concerning a federal tax issue is not intended to be used, and cannot be used, for the purposes of (i) avoiding penalties imposed under the United States Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter discussed herein. An affiliate and employees of Boyar Research own shares in MSGS, UBER, CRM & MSFT.

Introduction 

This month’s Opportunity Report profiles the owner of one of the most prestigious sports franchises in the world. Despite a multidecade legacy, this business has generated rapid growth over these past several years. Coinciding with its rising popularity, global media rights revenues have accelerated, particularly in the U.S. where it was previously dramatically underearning versus its potential. While the share price has raced higher since 2021, the stock has fallen behind the pace of the broader equity market over the past ~6 months, owing to geopolitical disruptions and skepticism over recent deals (M&A and a new U.S. media partner). However, we believe that moving past these short-term concerns, the business’s multiple, durable, and high-margin revenue streams will continue to drive shares higher over time.

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Earlier this past January, I got a LinkedIn connection request from Josh Brown. I assumed it was someone on his team expanding his network and didn’t think much of it. Later that day, our director of research Joe Mareci flagged something: on The Compound and Friends — hosted by Josh Brown and Michael Batnick — they had mentioned The Forgotten Forty — specifically our Uber thesis, which Barron’s had written about. Josh is an Uber bull himself so it caught his attention. Suddenly the LinkedIn request made a lot more sense.

I knew Josh from CNBC and respected him, but I had no idea how he and the team helped build Ritholtz Wealth Management into one of the fastest growing financial advisory firms in the country, or that The Compound and Friends had become one of the biggest finance podcasts out there.

What I did know was that someone I respected had said something nice about our work. So I reached out, thanked him, and offered to send over the full Forgotten Forty report. One thing led to another, and we eventually met at their office — which coincidentally is a block away from mine.

The three of us had a great conversation. Friendly banter, easy back and forth — we talked stocks for a while. Cooper Companies, UniFirst, MSGS. Josh and Michael were kind enough to invite me to be a guest on the show. I said of course.

Then I started doing my homework.

I went back through their recent episodes and realized what an extraordinary franchise the two of them have built together with The Compound. Their conversation with Andrew Ross Sorkin, the Tom Lee episode — genuinely great stuff. The more I listened the more I understood why this show has the audience it does.

And somewhere in there I went from “sure, why not” to actually a little nervous.

Which is odd. I’ve been on CNBC. I’ve been on Fox Business. I’ve spoken at investment conferences in front of large audiences. Public speaking doesn’t rattle me.

But this felt different. Maybe because it was going to be a real conversation rather than a performance. No graphics, no countdown clock, no anchor moving to the next segment after ninety seconds. Just smart people talking about stocks for an hour with nowhere to hide.

When I came off the elevator into their office — cool loft space, not what you’d picture — Michael immediately saw me and came out to greet me, offered pizza. I went with a Mr. Goodbar. Josh stopped by before we started and we spent ten minutes talking about our kids and the complete insanity of the college admissions process and AAU basketball. As a podcast host myself I was immediately jealous of the whole operation.

By the time we sat down to record it did not feel like an interview — it felt like talking stocks with two friends who genuinely love this stuff. Not a show that gets 50,000+ listeners an episode. An hour and fifteen minutes literally flew by. I had no idea where the time went. The conversation was fun but the questions were real.

Early in the conversation Josh pushed back on something most value investors get asked eventually:

“Why do value investors buy stocks as they’re falling instead of waiting for sellers to back off?”

My answer was simpler than most people assume. It’s not because we’re contrarians. It’s not because we think we can call the bottom. It’s because we buy slowly — start with a small position, let the thesis develop, and size up as the evidence builds.

The counterintuitive part: the hardest thing in this business isn’t buying a stock that’s falling. It’s buying more of one that’s already started to work. We’re all wired to do the opposite.

We also got into Uber’s autonomous vehicle positioning and why I think the Waymo fear is the wrong framework entirely. We talked about the MSGS spinoff catalyst and why the Dolan Discount is finally closing. Michael, who is a big Knicks fan, seemed excited he will have the opportunity to buy a piece of the Knicks. And we debated whether the Mag 7 selloff looks anything like the Nifty Fifty.

Full episode here:

Jonathan Boyar

P.S. I’m hosting an online presentation this Tuesday March 31st at 12:00 PM EST going deeper on several of the ideas from the show — including MSGS & Uber. Click here to register.

Patience and independent thinking are easy to admire and much harder to practice. That is especially true when a stock is controversial, sentiment is poor, and the easiest decision is to do nothing. That was the lesson that kept surfacing when I interviewed John Rogers at the New York Value Conference, and nowhere was it more clearly illustrated than in his discussion of Sphere Entertainment.

At Boyar, that way of thinking has always been part of who we are. My father, Mark Boyar, built this firm on the idea that some of the best opportunities emerge when investors are either unwilling to do the work or too uncomfortable to act. Barron’s once called him the world’s most patient investor, and that mindset shaped how I learned to think about markets long before I had my first client. Focus on intrinsic value, think independently, and be willing to hold conviction when the crowd is moving the other way.

That is one reason John Rogers’ approach has long appealed to me. Over 43 years at Ariel Investments, under the intellectual influence of Sir John Templeton, he has built a career around buying at what Templeton famously called the point of maximum pessimism. He does not merely quote that idea. He has lived it.

Lessons from 1987

The story that best captures Rogers’ philosophy did not come from a spreadsheet. It came from a wedding planner’s office in October 1987, when the stock market fell 22% in a single day. Ariel was four years old. Its mutual fund had been open barely a year.

“This is what John Templeton says — you want to buy at maximum pessimism,” Rogers told me. “And of course, as Warren always says, you want to be greedy when others are fearful. So we have to live our values in the middle of that crash.”

What Rogers and his team actually did that day is what makes the story so memorable. They picked up the phone and started calling clients — not to calm them down, but to urge them to buy. “We literally started calling clients and telling them this is a once in a lifetime opportunity to buy bargains. And we were there snapping up the bargains.”

All of this while stepping in and out of a wedding planner’s office, leaving his fiancée to handle things there while he bought stocks. He wasn’t talking about conviction. He was acting on it.

Ariel finished 1988 as one of the top ten performers in the country and was named co-mutual fund manager of the year. As Rogers put it, “It really did help us build our brand where people saw we lived our values under enormous stress.”

It is a story Rogers has carried with him ever since — and you can hear it in how he talks about Sphere Entertainment.

The Maximum Pessimism Moment

When Sphere Entertainment was spun off as a standalone public company in April 2023, shares closed at $25.61 on their first day of trading, giving the company a market cap of approximately $889 million. Jim Dolan had spent $2.3 billion building a giant ball in the Nevada desert, roughly twice the original budget. The concept was unproven, the structure complicated, and Dolan himself gave many institutions an easy reason to look elsewhere.

Ariel saw something very different. According to public filings, by the end of April 2023, Ariel owned approximately 6.6 million shares — nearly 24% of the company’s outstanding stock. When I asked John how he developed the conviction to make it such a large position while so many others were skeptical, his answer was revealing. “We got out on the road. We went to visit the construction site, did the hard hat tours, went to the studio in Los Angeles and saw the kind of visuals that were going to be possible. And just ultimately fell in love with the story. It just seemed so unique and special.”

That answer resonated because it reflects something we believe strongly at Boyar: when an opportunity is controversial or misunderstood, the edge often comes from doing independent, fundamental work and reaching your own conclusion. Ariel was not reacting to headlines. It did the work and came away with a very different view.

We did too. Around the time of the spinoff, Boyar Research initiated coverage of SPHR with an intrinsic value well above where the shares traded. The core insight was straightforward: after backing out the value of the company’s other assets, investors were effectively paying only a fraction of construction cost for the Sphere itself — exactly the kind of disconnect that can emerge when an asset is complicated, controversial, and temporarily out of favor.

From Skepticism to Sold Out

What looked highly uncertain in 2023 has since been settled. U2 opened with 40 sold-out shows, the Eagles expanded their residency from 20 shows to over 50 due to overwhelming demand, and a UFC event became the highest-grossing in the venue’s history with top seats fetching over $17,000. James Dolan has said publicly that Sphere is struggling to accommodate all the artists who want to perform there.

The proprietary content story has been equally strong. The Wizard of Oz, which opened in August 2025, has sold over 2.2 million tickets generating nearly $290 million in ticket revenue — Rogers called it “much more successful than anyone ever could have dreamed.”

He also pointed to something that deserves more attention: Sphere owns its intellectual property. “Their newest general counsel is an IP lawyer,” he noted. If Sphere can create exclusive experiences across a growing network of venues, this stops being a story about one building in Las Vegas and starts being something much bigger.

The Expansion Opportunity

Rogers sees the real prize as something bigger than any single venue. “Instead of having the 18,000-seat venue, you could have a 6,000 seat, or 3,000 seat — that means many, many more cities will be willing to do this around the world.”

Abu Dhabi is already underway on an asset-light basis, with the local partner funding construction while Sphere collects franchise and licensing fees. National Harbor in Maryland has also been announced. The vision is not a building — it is a platform, and that distinction changes everything about how you value the business.

The Sell Discipline

One of the more instructive parts of our conversation came when I asked Rogers how Ariel handles position sizing as a stock runs. His exit framework was simple and precise: “We like to buy companies at 40% discounts to private market value and sell them when they’re no longer selling at a discount.”

That will sound familiar to anyone who follows our work. At Boyar, we also view public equities through a private-market lens — not looking for statistically cheap stocks, but for situations where the gap between price and underlying value is real, where assets are misunderstood, and where there is a credible path for that gap to close.

The public record shows Ariel practicing exactly what Rogers preaches. From nearly 24% ownership in April 2023, they have trimmed steadily to approximately 11% as of March 2026 — selling into strength as the discount narrowed. Meanwhile the shares have gone from $25.61 at the spinoff to around $110 today, up approximately 247% over the past year. That is not a loss of conviction. It is discipline — the same discipline Rogers showed stepping out of a wedding planner’s office in 1987 to buy stocks while everyone else was frozen.

Templeton’s counsel was to buy at maximum pessimism. Rogers did exactly that with Sphere in the spring of 2023, and the stock has risen more than 4x since. But the more important takeaway is what good investing looks like in real time: doing original work when others are walking away, holding conviction when the market offers little reassurance, and maintaining discipline on the way out as well as on the way in. It is why, when Rogers talks about patience and independent thinking, it sounds less like investment advice and more like something I heard growing up.

Jonathan Boyar

Interested in our research? Boyar Research has been uncovering intrinsically undervalued companies since 1975. To learn more about a subscription, schedule a meeting or call (212) 995-8300.

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Podcast: The World According to Boyar

Follow us on X: @boyarvalue

Value Invest London takes place on June 24th, click here for more information (Boyar receives no compensation from Value Invest London).

Important Disclosures. The information herein is provided by Boyar’s Intrinsic Value Research LLC (“Boyar Research”) and: (a) is for general, informational purposes only; (b) is not tailored to the specific investment needs of any specific person or entity; and (c) should not be construed as investment advice. Boyar Research does not offer investment advisory services and is not an investment adviser registered with the U.S. Securities and Exchange Commission (“SEC”) or any other regulatory body. Any opinions expressed herein represent current opinions of Boyar Research only, and no representation is made with respect to the accuracy, completeness or timeliness of the information herein. Boyar Research assumes no obligation to update or revise such information. In addition, certain information herein has been provided by and/or is based on third party sources, and, although Boyar Research believes this information to be reliable, Boyar Research has not independently verified such information and is not responsible for third-party errors. You should not assume that any investment discussed herein will be profitable or that any investment decisions in the future will be profitable. Investing in securities involves risk, including the possible loss of principal. Important Information: Past performance does not guarantee future results. The company mentioned in this sample are for informational purposes only and the performance of the stock selected is not indicative of the performance of the stocks profiled in Boyar Research, the performance of the stocks selected, and the performance of Boyar Research may in fact diverge materially. Additional information regarding the performance of other companies in Boyar Research is available upon request.

This information is not a recommendation, or an offer to sell, or a solicitation of any offer to buy, an interest in any security, including an interest in any investment vehicle managed or advised by affiliates of Boyar Research. Any information that may be considered advice concerning a federal tax issue is not intended to be used, and cannot be used, for the purposes of (i) avoiding penalties imposed under the United States Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter discussed herein. Clients of an affiliate of Boyar Research and employees of Boyar Research own shares in SPHR. Ariel Investments is a research client of Boyar Research.

In 1972, the most celebrated stocks in America traded at an average P/E of 42x. Analysts called them the Nifty Fifty — Polaroid, Avon, Xerox, McDonald’s. The logic was seductive. These were exceptional businesses. Unique. Impervious to cycles. A buy at any price.

By 1974, they had fallen by an average of 60%. Most of the damage happened in just 18 months.

The lesson wasn’t that these were bad companies. The lesson was that finding a great business is only half the equation. The price you pay matters just as much.

Today, Costco trades at ~47x forward earnings. Walmart at ~42x. GE Aerospace at ~42x. We’ve been thinking about this parallel a lot lately — and we think it matters more right now than most investors realize.

On March 31 at 12:00 ET, I’m giving a 25-minute presentation where I’ll walk through exactly why this concerns us — and share four specific companies where we believe the market has done exactly the opposite, significantly underpricing quality businesses with clear catalysts.

One of those situations, Madison Square Garden Sports, has already started playing out. We published an open letter to James Dolan in June 2025 calling for a spinoff of the Knicks and Rangers. MSGS announced it would explore exactly that in February — and the stock has advanced roughly 50% since we wrote the letter.

If you’ve been following our work here, this presentation is the live version of how we think.

Register here:

Hope to see you there.

— Jonathan

When I first sat down with John Rogers — founder of Ariel Investments and one of the most respected value investors alive — for The World According to Boyar podcast, I expected a masterclass in stock picking. What I got was something more useful: a window into how a genuinely great investor thinks, behaves, and makes decisions under pressure.

John founded Ariel at 24 years old in 1983 with a few hundred thousand dollars from friends and family. Today the firm manages over $14 billion. This week I’m sitting down with him again at the Value Investing New York conference. Before I do, here are three things from our first conversation I keep coming back to.

1. He bought aggressively the day the market crashed 20% in 1987.

When Black Monday hit, instead of panicking, he spent the day on the phone telling clients to send more money. “This is a once in a lifetime opportunity to buy bargains,” he told them. Because he took advantage of the bargains the market presented on that historic October day and bought stocks when they were deeply discounted, Ariel went on to be a top five fund in the country the following year. Most investors talk about being greedy when others are fearful. John actually did it — at age 27, in his fourth year running the firm, with everything on the line.

2. He checks the market only three times a day. Deliberately.

Open, midday, close. That’s it. For a man running $14 billion. His reasoning: “Your emotions go up and down and it’s just not healthy.” In an era where most of us are watching tickers constantly, John has built deliberate friction between himself and the noise. It’s not technophobia — it’s discipline.

3. He hired former CIA and FBI agents to help him read management.

Ariel works with a firm called BIA Associates — former intelligence professionals who teach them how to ask better questions and read body language during management meetings. John told me once you know what to look for — the anchor shift, the hand to the face — you can’t unsee it. He uses it in every management meeting. I’ve thought about this in every management meeting I’ve had since.

I’m interviewing John again this Thursday at the Value Investing New York conference. I’ll share the highlights here next week.

If you want to hear the full original conversation, you can find it on The World According to Boyar podcast here:

Introduction 

This month’s Opportunity Report features an unusual company for business for a public company, but one with a unique collection of assets and a management team that has an excellent track record of value creation for shareholders. The Company’s core asset is an exceptionally high-margin royalty stream that has nearly tripled in value over the past two decades and that is now complemented by a growing stream of income from an increasingly diversified set of real estate assets. Management is open and transparent and maintains a strong balance sheet, and we believe that the current share price offers investors a rare risk/reward opportunity for this hidden gem.

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Introduction 

This month’s Opportunity Report profiles a behind-the-scenes giant in modern commerce that provides the payment infrastructure used by businesses ranging from small retailers and restaurants to large stadiums and global e-commerce networks. Despite producing excellent profitability­—adjusted operating margins in the ~45% vicinity—the shares trade at a rock-bottom mid-single digit P/E after being battered by an unexpected, complex, and transformative “buy-and-sell” transaction. While Wall Street is wary of the large-scale integration, a noteworthy activist investor has amassed a material position, providing a vote of confidence in the business while also gaining board representation to quickly effect changes. With a 2028 FCF projection that suggests a whopping 24% FCF yield on today’s share price, this out-of-favor stock may be highly mispriced.

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2025: The Year Confidence Eroded—and Discipline Paid

An investor looking at U.S. stocks on February 19, 2025 could reasonably have expected a calm year. The S&P 500 had already reached an all-time high closing price three times, was up roughly 4.5% YTD, and volatility remained unusually subdued. Coming off 2024’s remarkable run of 57 record closes, the market’s early message felt familiar: steady gains, low volatility, and a sense that the path of least resistance remained higher.

That confidence proved short-lived. What began as a routine pullback in early March escalated rapidly as tariff concerns came to dominate the narrative. The “Liberation Day” announcement on April 2, 2025 shocked investors with both the scale of the proposed tariff increases and their seemingly arbitrary design. From the February 19 peak to the early-April low, the S&P 500 fell roughly 21%, briefly meeting the textbook definition of a bear market. Sentiment collapsed alongside prices, and the VIX (a volatility index; values above 30 indicate greater market fear and uncertainty) surged above 50—levels typically seen only during periods of acute stress.

Then, almost as abruptly, the narrative reversed. On April 9, tariff implementation was paused and proposed rates were reduced for most trading partners. Markets responded forcefully, with the S&P 500 surging roughly 9% in a single session—one of the largest one-day gains since 1950. In the weeks that followed, a familiar pattern emerged: tariff threats triggered selloffs, followed by delays, exemptions, or reversals that fueled equally sharp rebounds. Financial Times columnist Robert Armstrong famously dubbed the pattern the “TACO” trade—Trump Always Chickens Out—a play on the administration’s tendency to use tariff threats as a negotiating tool rather than a final policy destination. By late June, the market had fully retraced its losses and pushed to new highs, completing the second-fastest recovery from a bear-market drawdown since 1950.

In retrospect, the investor who expected an uneventful year was clearly wrong—a point underscored by Charlie Bilello of Creative Planning, whose 2025: The Year in Charts vividly illustrates the historical extremity of the market’s whipsaw.

Yet for long-term investors, the most successful course of action—short of the impossible task of selling the peak and buying the April low—was simply to stay the course. By year-end, the S&P 500 had logged 39 all-time highs and gained nearly 18%. It also marked the index’s seventh double-digit annual gain in the past nine years, a streak matched by the Nasdaq and Russell indices, according to FactSet. Markets lurched, narratives shifted, and volatility spiked—but patience once again proved its worth.

International Stocks, the Bond Market, and Beyond

After a prolonged period of American stock market dominance, 2025 marked a notable reversal. International equities meaningfully outperformed U.S. stocks, and investor flows reflected that shift. According to Investment Company Institute data, more than $100 billion flowed into international equity funds during the year, while nearly $400 billion was withdrawn from U.S. equity funds.

Currency and commodity markets reinforced the trend. The U.S. dollar posted its weakest calendar-year performance since 2017. Precious metals enjoyed a banner year, led by gold (+65%) and silver (+144%), both of which posted their strongest annual gains since 1979. Copper also rose sharply (+40%), reflecting sustained global demand. Energy markets moved in the opposite direction, with oil prices falling nearly 20%, marking crude’s worst year since 2020. Interestingly, despite this, Energy shares were positive for 2025.

Fixed income also performed well. The Bloomberg U.S. Aggregate Bond Index advanced 7.3%, its best annual return since 2020. Longer-term results, however, remain less impressive: since 2020, the Aggregate has generated annualized returns of just 0.9%, well below the roughly 3.7% compound annual increase in consumer prices. Emerging market fixed income stood out in 2025, with U.S. dollar–denominated sovereign debt rising 13.9%, while U.S. high-yield corporate bonds posted returns of approximately 8.6%.

Market Imbalances and Dispersion

A familiar—but increasingly pronounced—market imbalance was reinforced in 2025. Market leadership remained narrow, and speculative behavior resurfaced. Retail-investor favorites performed well, dip-buying remained effective, and investor leverage climbed sharply. FINRA margin debt reached a record $1.2 trillion in November, marking a seventh consecutive monthly increase and standing 36% higher than a year earlier. Speculation was further evident in a resurgence of SPAC IPOs, with 2025’s total SPAC issuance exceeding that of 2023 and 2024 combined. Interestingly, according to SPAC Analytics, 2025 saw more SPAC IPOs (144) than traditional IPOs (86).

Index-level returns masked these divergences. The capitalization-weighted S&P 500 advanced nearly 18% (including dividends), while the equal-weighted index rose just 11.4%. In addition, the 25 largest companies in the index gained 27% on average, while the 25 smallest declined by an average of 13% (Source: Creative Planning).

Sector performance told a similar story. Communication Services and Technology led the market, advancing 33.6% and 24.0%, respectively. Real Estate and Consumer Staples lagged, posting gains of just 2.7% and 3.9%. This large spread underscores how headline index returns concealed wide variation beneath the surface. Importantly, corporate fundamentals remained intact. Earnings grew at a double-digit rate for the second consecutive year, and profit growth outside the Magnificent Seven was respectable at 9%. Credit markets echoed that resilience, with spreads remaining tight and default expectations subdued.

Sentiment: A Historically Bullish Signal—with a Caveat

We are currently in a period of deeply negative consumer sentiment, despite strong equity-market performance and repeated new all-time highs.

Historically, periods of deeply depressed consumer sentiment have often coincided with attractive entry points for long-term investors. In past cycles, sentiment troughs—while impossible to identify with certainty in real time—have tended to cluster near market lows, with subsequent equity returns strengthening as pessimism eventually gave way to recovery.

Today’s environment, however, is unusual. In the modern era of U.S. markets, we are not aware of a sustained period in which consumer sentiment has remained this low while equity indices have continued to register new all-time highs over an extended stretch.

To make matters more confusing, the American Association of Individual Investors’ latest survey—where members are asked which direction they believe the market will be in six months (a measure many view as a contrarian indicator)—shows bullish sentiment at a one-year high. Fully 49.5% of respondents expect the market to be higher, well above the historical average of 37.5% and sharply higher than the 21.8% bullish reading immediately following “Liberation Day.”

As a result, the signals are less straightforward than history alone might suggest. The optimist in us views persistently low consumer sentiment as constructive insofar as it implies restrained expectations rather than euphoria. At the same time, humility is warranted. Low sentiment has historically been bullish—but in this instance it coexists with elevated valuations and strong recent returns, making the outlook more nuanced than a simple contrarian signal would imply.

Monetary Policy Uncertainty

That tension between optimism and caution shows up most clearly in monetary policy. While politics delivered the year’s sharpest shocks, monetary policy provided a more persistent undercurrent of uncertainty. At its December meeting, the Federal Reserve delivered its third 25-basis-point rate cut of 2025, leaving the federal funds rate at 3.5%–3.75%. More revealing than the cut itself was the Fed’s “dot plot”—a quarterly summary of policymakers’ anonymous interest-rate projections—which exposed a striking lack of consensus. Forecasts for 2026 ranged from a rate hike to cuts totaling as much as 150 basis points, producing a median expectation of just one additional cut.

With economic growth near 2% and inflation still above the Fed’s long-term target, the policy path ahead appears tenuous. Rate cuts that come too quickly risk reigniting inflation and steepening the yield curve, while holding policy too tight risks placing additional strain on an already fragile economy. Adding to the uncertainty are renewed questions about Federal Reserve independence, as political pressure on Chair Powell has intensified ahead of expected leadership changes in 2026.

From an interest-rate perspective, the margin for error appears unusually thin. With inflation still above target and growth slowing only modestly, the Fed’s flexibility is limited. Any miscalculation—whether easing too aggressively or holding policy too tight—risks amplifying volatility rather than containing it. In that sense, monetary policy in 2026 may prove less a tailwind or headwind for markets than a test of how well policymakers can navigate a narrowing path.

A Fiscal Tailwind—with Strings Attached

One of the more straightforward bull cases for 2026 lies on the fiscal side. The “One Big Beautiful Bill Act” materially lowers personal taxes by making previously temporary individual income-tax rate reductions permanent and by introducing a $6,000 deduction for individuals over the age of 65 (subject to income limitations), which will reduce taxable income for many retirees. The legislation also includes targeted exemptions—such as eliminating taxes on certain forms of wage income, including tips and overtime—though these provisions come with notable limits. Average tax refunds for the 2026 filing year are estimated to approach $4,000, roughly 25% above recent levels and approximately 35%–40% above pre-pandemic norms. Historically, refund season has supported near-term consumption by pulling spending forward into the spring.

Another meaningful fiscal tailwind comes from making 100% bonus depreciation permanent (it was scheduled to be reduced to 20% in 2026). Bonus depreciation allows businesses to immediately deduct a large portion—or in some cases all—of the cost of qualifying capital investments, such as machinery, equipment, technology, and certain improvements, rather than spreading those deductions over many years.

In practical terms, this improves near-term cash flow and raises the after-tax return on investment, making it easier for companies to justify new spending or accelerate projects that might otherwise be delayed. Historically, accelerated depreciation has tended to pull capital spending forward, supporting economic activity in the short run even if it does not materially change long-term demand. Since partial bonus depreciation was already in effect in recent years, it is unclear how impactful making bonus depreciation permanent will be for the economy.

Both tailwinds may prove double-edged. With inflation still above the Fed’s target, a sizable boost to disposable income risks adding to price pressures, particularly in services, reinforcing the case for monetary policy caution despite political pressure to ease further. In other words, fiscal stimulus may support growth at the margin—but it also complicates the already narrow path facing monetary policymakers.

Where do we go from Here?

Taken together, these forces help explain why the market’s signals feel unusually mixed. History rarely delivers clean signals, and 2025 was no exception. Beneath strong index-level returns lay sharp dispersion, elevated speculation, unresolved policy uncertainty, and historically low sentiment—a combination that resists simple interpretation. For investors, the lesson is not to predict the next narrative shift, but to remain disciplined when narratives inevitably change. In an environment where confidence and caution coexist, durable results are more likely to come from valuation discipline, mindfulness of balance-sheet strength, and patience than from attempts to anticipate the next turn of the tape.

Best regards,

Mark A. Boyar

Jonathan I. Boyar

IMPORTANT DISCLAIMER

Important Disclosures. The information herein is provided by Boyar’s Intrinsic Value Research LLC (“Boyar Research”) and: (a) is for general, informational purposes only; (b) is not tailored to the specific investment needs of any specific person or entity; and (c) should not be construed as investment advice. Boyar Research does not offer investment advisory services and is not an investment adviser registered with the U.S. Securities and Exchange Commission (“SEC”) or any other regulatory body. Any opinion expressed herein represent current opinions of Boyar Research only, and no representation is made with respect to the accuracy, completeness or timeliness of the information herein. Boyar Research assumes no obligation to update or revise such information. In addition, certain information herein has been provided by and/or is based on third party sources, and, although Boyar Research believes this information to be reliable, Boyar Research has not independently verified such information and is not responsible for third-party errors. You should not assume that any investment discussed herein will be profitable or that any investment decisions in the future will be profitable. Investing in securities involves risk, including the possible loss of principal. Important Information: Past performance does not guarantee future results. Any companies mentioned in this are for informational purposes only and the performance of the stock selected is not indicative of the performance of the stocks profiled in Boyar Research, the performance of the stocks selected, and the performance of Boyar Research may in fact diverge materially.

This information is not a recommendation, or an offer to sell, or a solicitation of any offer to buy, an interest in any security, including an interest in any investment vehicle managed or advised by affiliates of Boyar Research. Any information that may be considered advice concerning a federal tax issue is not intended to be used, and cannot be used, for the purposes of (i) avoiding penalties imposed under the United States Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter discussed herein.

Introduction 

This month’s Opportunity Report features a company with a phenomenal track record that we believe is currently underappreciated due to the perceived impact of AI. Yet the management team has successfully navigated major transitions in the past while preserving the Company’s exceptional profitability, and they remain confident that the business will continue to form a critical part of its industry long into the future. Recent execution has been excellent, and we applaud the Company’s shareholder-friendly attitude, which supports a robust share repurchase program and minimizes stock-based compensation.

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The report features 40 catalyst-driven stock ideas selected from companies we’ve already covered in full-length Boyar Research reports that we believe will outperform in the year ahead.

This is the lowest price the report will be offered!

Click here to secure your copy.

Yesterday we published an open letter to UniFirst Corporation’s Board of Directors urging an immediate strategic review after years of underperformance and the Company’s refusal to meaningfully engage with credible potential buyers.

Below please find the letter.

December 3, 2025

The Board of Directors
UniFirst Corporation
68 Jonspin Road
Wilmington, MA 01887

Dear Members of the Board:

As shareholders of UniFirst Corporation (“UniFirst” or “the Company”), and as a firm whose institutional equity research business has operated continuously since 1975, we are writing to express our deep concerns regarding the Company’s strategic direction, long-term underperformance, and the Board’s refusal to meaningfully engage with credible potential acquirers. We believe that UniFirst is an asset that would be highly coveted in a competitive sale process by both strategic and financial buyers.

Furthermore, we must acknowledge the growing urgency among the shareholder base for immediate action, whether a strategic review or board refresh. We support Engine Capital’s slate and urge shareholders to send a clear message that the status quo is unacceptable. We also want to acknowledge River Road Asset Management’s thoughtful letter to the Board, which raised many of the same concerns and strongly supported a strategic review. Their perspective, as a long-term shareholder, reinforces that these issues are not isolated observations but are widely shared among sophisticated investors seeking to unlock long-term value—not those attempting to make a short-term profit.

The Board’s Refusal to Engage with Credible Buyers Raises Serious Fiduciary Concerns

Cintas’s most recent $275 per-share proposal represented a more than 45% premium to the unaffected price (a 55% premium to the recent share price)—and likely understated full strategic value, given the substantial synergies available to the acquirer. Cintas stated its expectations for $375 million in synergies within 4 years of closing the merger, but these savings were only from cost savings and do not reflect revenue synergies, which we believe would be substantial. Yet UniFirst refused to meaningfully engage. This is particularly troubling given that the Company similarly declined Cintas’s prior $255 offer in 2022. As Engine has highlighted, had the Board negotiated then and had the Croatti family elected to receive Cintas stock in 2022, their holdings would today be worth nearly three times their current value. Such a staggering opportunity cost has harmed both public shareholders and the Croatti family. Despite this, the Company continues to reject discussions with multiple credible buyers.

Boyar Research Believes That UniFirst’s Standalone Plan Cannot Match the Value Offered by Cintas

In our October 2025 Boyar Research report, we wrote:

Given the underperformance in UNF shares both before and subsequent to CTAS’s public proposal to acquire the Company, we strongly believe that UNF and its board should reengage with Cintas about a potential transaction…

Cintas shares are currently trading at ~30.0x on an EV/EBITDA basis (vs. UNF at less than 9.0x), so UNF’s shareholder base might find a transaction with the Company’s equity appealing. As already noted, CTAS’s proposal to acquire UNF was at a modest multiple with synergies factored in, so CTAS might be willing to increase its offer for UniFirst. Although UNF believes that it can unlock shareholder value on its own, we believe that the opportunity pales in comparison with what could be unlocked with the current CTAS offer, at least in the near/intermediate term.”

Those conclusions remain true today—the Company has not articulated any credible reason for rejecting a process that could unlock substantially more value than the current standalone plan could ever hope to realize in any reasonable or even extended amount of time.

Operational Improvement—Even Under an Optimistic Scenario—Cannot Close the Valuation Gap

We want to acknowledge that the recently hired Chief Operating Officer (Kelly Rooney) brings a potentially valuable operational background that could improve execution. We remain cautiously optimistic that her oversight could be a driving force needed to finally elevate results after what has been a long period of lackluster performance.

However, while we are hopeful that the new COO will improve operational execution, even substantial success on that front cannot come close to narrowing the valuation gap between UniFirst’s current market price and what a strategic acquirer could pay. It is reasonable to ask why the Board would champion a strategy that, even under a highly optimistic scenario, offers materially less upside than a sale of the Company could achieve today. The standalone approach exposes shareholders to significant operational and external risks, and when factoring in the time value of money, it could take years—and potentially even a decade or more— for UniFirst to reach a valuation comparable to what a strategic acquirer could offer to shareholders now.

We trust that the Board’s steadfast pursuit of this lower-upside alternative is not influenced, even inadvertently, by the more than $300,000 in annual compensation earned by many non-employee directors, and that decisions are being made solely to maximize long-term shareholder value.

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A Fiduciary Duty Exists—And It Is to All Shareholders

We are not asking the Board to accept any specific offer. We are asking the Board to fulfill its fiduciary duty by:

1. Immediately forming an independent special committee with its own legal and financial advisors;

2. Reengaging Cintas and all credible strategic and financial buyers;

3. Conducting a robust and open sale process;

4. Providing full transparency to shareholders.

Anything less is a dereliction of duty.

UniFirst is a solid business. But years of underperformance, questionable governance, failed technology investments, and a refusal to engage with buyers have eroded shareholder confidence and destroyed value.

We strongly support Engine Capital’s nominees and urge shareholders to withhold support from the incumbent directors who have overseen this period of stagnation.

The Company can no longer afford inaction. UniFirst must initiate an open, unbiased process to explore strategic alternatives—including a sale of the Company—so that shareholders can finally realize the full value of this business.

We remain available to engage further and stand ready to contribute constructively in any way that supports long-term value creation.

Sincerely,

Jonathan Boyar

Principal

The Boyar Value Group