AI Summary
5 min readBrian Belski Returns: The Bull Case for Broadening Markets
Brian Belski, founder and CIO of Humility Investment Strategy, returned to The Compound and Friends to lay out his market outlook for the second half of 2025. His headline message: still bullish, but "beware of the second derivative less positive." After an extraordinary run of earnings growth, the pace is likely to slow — and that deceleration, even if modest, will rattle a market that has become conditioned to ever-improving numbers.
The Earnings Growth Deceleration That Could Spook Markets
Belski's central concern is not that earnings will turn negative, but that the rate of growth will moderate. The S&P 500 has been enjoying 20-25% earnings growth, but Belski expects that to slow. "If it goes from 25 to 20, people are going to freak," he said. In an earnings-driven market — as opposed to one powered by multiple expansion or momentum — typical annual returns are closer to 10-12%, far below what investors have become accustomed to.
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What you'll learn
- 1 (00:00) **Opening Banter & Personal Updates** - Brian Belski returns to the show; hosts recap his previous calls and discuss his move from Minneapolis to Naples, Florida.
- 2 (16:27) **Big Picture: "Beware the Second Derivative"** - Belski outlines his bullish but cautious outlook for the second half, warning that slowing earnings growth will cause volatility.
- 3 (18:25) **The Handoff from Hyper-Scalers to AI Beneficiaries** - The hosts discuss the market's rotation away from the Mag 7 and into companies selling products to the AI build-out.
- 4 (23:17) **Meta's Cloud Announcement & Stock Picking** - Belski and the hosts critique Meta's new cloud initiative and discuss the importance of stock differentiation in the current market.
- 5 (29:33) **The SMID Opportunity: Small & Mid-Cap Thesis** - Belski presents his bullish case for small and mid-cap stocks, focusing on fundamentals and the regional bank theme.
- 6 (35:55) **Earnings & the Bull Cycle** - The group analyzes the historically strong Q1 earnings season and Belski's view that year four of the bull market will be the most volatile.
- 7 (41:59) **The AI Capex Debate & Sector Concentration** - A deep dive into whether AI capital expenditure is sustainable and the risk of the S&P 500 becoming too tech-heavy.
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Show Notes
On episode 249 of The Compound and Friends, Michael Batnick and Downtown Josh Brown are joined by returning guest favorite Brian Belski to discuss: broadening market leadership, the tech stock rotation, small and mid-caps (SMID), more volatility on the horizon, the potential for no SaaSpocalypse, and much more!
This episode is sponsored by WisdomTree. Learn more about the WisdomTree Quantum Computing Fund at https://www.wisdomtree.com/us/strategies/quantum-computing Sign up for The Compound Newsletter and never miss out: thecompoundnews.com/subscribe
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