Heard on the Street is the Journal’s team of in-house skeptics — columnists paid to doubt the front page. This week they filed nine columns across five papers. We read all of them, then did the uncomfortable thing: we graded our own positions against their homework.
The verdict: five validations, two warnings we wrote down, and one column that made our single buy of the week look smart by two days. We will take it. We will also tell you what would make us wrong, because a scoreboard nobody can lose is not a scoreboard.
The nine columns
| Column | The call | Our call |
|---|---|---|
| Private credit’s liquidity · Mon | “Liquidity” has no standard definition; some funds count undrawn credit lines — money they could borrow, not money they have | Validated ✓ |
| Chinese EVs and the war · Tue | Expensive gasoline is exporting China’s EV industry to the world | Noted ✓ |
| Food scares, healthy profits · Tue | Outbreak selloffs at blameless chains historically overshoot | Watch opened ✓ |
| Healthcare as the bet against AI · Wed | The sector now trades as the offset in a market betting on one thing | Validated ✓ |
| Open-weight AI and Meta · Wed | “Open source” isn’t; the branding is self-serving but strategically sound | Noted ✓ |
| TIPS, a rare opportunity · Wed | Long TIPS near 3% real while what stocks pay above inflation sits near record lows | Acted on ✓ |
| Power stocks lose steam · Thu | Regulation now favors new build; existing utilities get cheaper, equipment wins | Validated ✓ |
| Inflation protection on sale · Fri | Same call again: 3% real, 2.2% break-even, buy the protection | Acted on ✓ |
| Japan is no sideshow · Fri | Washington defended the yen by selling euros; $40T borrowing looms | Warning taken ✓ |
Theme by theme
Our income holdings: we bought, and the paper agreed twice. The columnists made the case for TIPS — Treasury bonds whose payments rise with inflation — on Wednesday and again on Friday. Thirty-year TIPS currently pay about 3% above inflation, guaranteed by the government. The break-even rate — the inflation level at which TIPS and ordinary Treasury bonds pay the same — sits near 2.2%, while inflation is actually running at 3.4%. We bought a starter position on Wednesday, before the Friday column ran. It is a rare week when the paper grades your homework while the ink is still wet.
The stagflation defense: validated. Stagflation is the ugly combination of slow growth and stubborn inflation. Two separate columns landed on the same worry: bond yields near multidecade highs, federal borrowing about to cross $40 trillion, and a U.S. Treasury defending Japan’s currency by selling euros. That is a warning label on long-term ordinary bonds — which is exactly why our regular bonds stay short-term and the inflation-protected ones now carry the long horizon.
The credit discipline: validated, uncomfortably. Monday’s column found private lending funds counting unused credit lines as “liquidity” — money they could borrow, not money they have. By Friday, the richest sports sale in history — the Lakers at $12.5 billion — turned out to be driven by a seller who needed cash. Federal investigators were examining loans routed through his own companies. Two ends of the same week, same lesson: the stress in this cycle is private, hard to sell, and self-dealing.
The power thesis: validated on schedule. We put the merchant power companies on watch when Texas froze data-center hookups. Thursday’s column kept score: Constellation down 23% this year, NRG down 25%, while equipment makers GE Vernova gained 55% and Caterpillar 47%. Own what gets bought, not what gets regulated.
Our health-care holdings: promoted. Wednesday’s column showed chip stocks and health-care stocks now move in opposite directions — when one rises, the other tends to fall. That makes health care the market’s own insurance against its giant AI bet, at 18 times earnings versus the chips’ twenty-something. Our holdings there did not change. Their job description did.
What would make us wrong
Written down so December can grade us. If inflation falls to 2% and stays there, the TIPS purchase was a bad trade and ordinary bonds would have won. If the Texas audit resolves quickly and the power companies recover before we return, our caution cost us. If private credit’s defaults peak here, our avoidance cost clients income. And if the AI trade simply keeps compounding, every hedge we praised this week will look like expensive timidity.
We publish those because the alternative — remembering only the calls that worked — is how portfolios quietly get worse while their owners feel smarter.