Long View Summer Reads
Signal vs. Noise: Great Companies Don’t Always Make for Great Investments. The Evidence Around IPOs.
Beyond the Number
A Book That Changed How I Think About Aging
What Happens When the Noise Gets Quiet
Category: Timely Topic
Bubble, Bubble, Bubble… Pop?
My 18-month-old son’s favorite song right now has a catchy chorus that goes, “Bubble, bubble, bubble… POP!” and as with any toddler favorite, we sing it constantly, so it’s always stuck in my head. Lately, every time I open my WSJ app and see the word “bubble” splashed across a headline, the soundtrack kicks in automatically.
In the song, the bubbles always pop. So, should we be preparing for a big pop in markets, as the headlines suggest? Part of taking the long view is refusing to react to headlines. Our philosophy centers on tuning out the noise and anchoring decisions in evidence. But with all the AI “bubble” chatter, it’s worth taking a moment to examine this idea from a research-backed point of view, one that might surprise you, but ultimately help you rise above the noise.
What If Bubbles Don’t Exist?
Eugene Fama, Nobel laureate and architect of the Efficient Market Hypothesis (and a major influence on Hill’s investment philosophy), has a view that stops people in their tracks: He doesn’t believe in bubbles.
Not because he thinks markets are perfect…they aren’t. And not because prices never fall…we know that they do. He challenges the idea of bubbles because, as he puts it, you can’t scientifically prove that a price was ‘wrong’ in the moment.
Here’s what this means:
1. We only call something a bubble in hindsight.
When prices rise sharply, no one knows if it’s irrational because future growth could justify it. We only label it a “bubble” after a drop, which means we’re using new information to judge old prices.
2. A crash isn’t evidence of a bubble.
A sharp decline doesn’t mean earlier prices were foolish. It may simply reflect changing expectations, new information, or shifting economic conditions.
3. If something looks obviously overpriced, markets should correct it.
Nobel Prize winner, University of Chicago Professor, and Dimensional Director Eugene Fama argues that calling something a bubble implies that most investors were collectively irrational, something he’s deeply skeptical of.
Whether or not you fully agree with him, his perspective matters because it reminds us of something essential: the story of markets is driven more by narrative and emotion than data.
How this Connects to Your Plan
At Hill, we don’t spend time predicting bubbles. We don’t try to guess where the top is. We don’t build your plan around today’s headlines. Instead, we build portfolios (and relationships) around a different set of ideas:
- Evidence beats emotion.
- Your financial life shouldn’t be swayed by headlines.
- And you don’t need to predict what comes next.
So, Are We in a Bubble? The honest, evidence-based, answer is that no one knows. And we don’t need to. The goal isn’t to call the top. It’s to stay invested, stay disciplined, and stay focused on your long-term vision, the one we’re building together.
If you’d like to talk more about this, call us or email at askanadvisor@hillinvestmentgroup.com to set up a time.
Disclosure:
Hill Investment Group Partners, LLC (HIG) is an SEC-registered investment adviser. Registration does not imply a certain level of skill or training. The information in this publication is for educational and informational purposes only and does not constitute an offer to sell, or a solicitation of an offer to buy, any specific securities, investments, or investment strategies. Nothing contained herein should be construed as individualized investment, tax, or financial advice. Always consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed.
Investments involve risk, including the possible loss of principal. Past performance is not indicative of future results. Investment return and principal value will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Future returns may differ significantly from past returns due to market and economic conditions, among other factors.
Escaping the Drag: How Nimble Strategies Create an Edge for Investors
Matt Zenz appeared on the October 4 podcast episode of Excess Returns to discuss the case for evidence-based investing and the challenges that can accompany scale among the industry’s largest investment firms. He shared how research-driven firms, such as Longview Research Partners apply more nimble strategies to maintain efficiency and align with evidence-based principles.
“HTC” WARNING: Be forewarned, this is Highly Technical Content, best consumed by the heavy-duty fact finders in our audience.
Be sure to listen at the 44:30 mark, where Matt explores the benefits of agility in investing and how smaller, research-focused funds can often make decisions and implement changes more efficiently than larger counterparts.
Hill Investment Group and Longview Research Partners did not compensate the podcast or its hosts for this appearance.
Hill Investment Group (“HIG”) d/b/a Longview Research Partners is an SEC-registered investment adviser. Registration does not imply a certain level of skill or training. The opinions expressed herein are those of the author and are for informational purposes only. This material should not be considered investment advice or a recommendation to buy or sell any security. Past performance is not indicative of future results. For additional information about Hill Investment Group, including its services and fees, please review its Form ADV, which is available at www.adviserinfo.sec.gov.
Weathering Uncertainty: Why Staying Invested Still Wins
In this short video, Matt Zenz discusses how to navigate today’s market highs along with the current geopolitical tensions that have some investors worried. Drawing a parallel to the market events from 2019 through 2025, he reminds viewers that—even amid global crises such as pandemics, wars, inflation, and policy shifts—the U.S. stock market (as measured by the S&P 500 Index) has more than doubled.
In other words, by enduring the roller coaster ride, staying invested, and taking the long view, Hill clients aim to capture the market’s inherent growth over time.
Source: S&P 500 Total Return Index (Bloomberg), data from 9/30/2019–9/30/2025.
TRANSCIPT
Matt here, the Chief Investment Officer at Hill Investment Group. We’ve heard from a lot of clients that you love videos, so we answered the call. Here’s another one. Today we’re going to be talking about market risk and current heightened geopolitical tensions.
Right now, the markets are at all time heights and it feels too good to be true. It feels like the shoe has to drop and markets are going to dip. And so we’ve had a few client conversations where our clients were concerned about that and they wanted to know what we should do. So to help answer this question, let’s go back in time a little bit.
Let’s go back to 2019 and imagine we were having a similar conversation. But rather than there being uncertainty I gave you, I said, in the next five years, there’s going to be a global pandemic where entire supply chains are going to be shut down. There’s going to be uncertainty around political elections. Russia is going to invade Ukraine and it’s going to create a potential European conflict. We’re gonna have unprecedented inflation, higher than we’ve ever seen since the 1970s. We’re also gonna have an economic policy in the US where we do global tariffs, completely reordering the global supply chains, not just against their enemies, but also our allies.
If I told you all of these things were going to happen over the next five, six years, would you wanna be invested in the stock market?
You probably would say, no way, get me out. Well, when we look at what happened, the market’s actually doubled since 2019. And if you had gotten out even with perfect foresight of what was going to happen, you would have half the money you’d have today. Now, there is uncertainty in the future as well, but here’s what we do know.
What we do know is that markets are always priced to give investors a positive return. If investors thought the market was going to go down, no one would buy it at that price and the price would correct. And so what we do know is the best way to manage this uncertainty is to stay invested, to capture the returns that the market gives you with the ups and downs. And by taking the long view, you will end up in the best financial situation.
