Alphabet lost about $500 billion on Thursday. On Friday, chip stocks fell hard. But most of the market held up. Here is what we did, and four simple checks for your weekend.
The selling hit one corner of the market. Here is what happened, what we did, and what to check.
Hi there. You’re getting this because at some point we were scheduled to look at your pension or 401(k) together, or you subscribed to this letter. This week’s idea is simple. The selling hit one corner of the market, the chip and AI stocks. Your job this weekend is to find out how much of your money sits in that corner.
A Bad Day for One Giant, Then for the Chip Makers
On Thursday, Oct. 29, Google’s parent company, Alphabet, had a very bad day. Its search business brought in less money than Wall Street expected. The stock fell 12.64%, and about $500 billion of value disappeared. Only one company has ever lost more in a single day. Here is the surprising part. Most stocks went up that day. On the New York Stock Exchange, 1,914 stocks rose and 782 fell.
On Friday the trouble moved to the chip makers. Intel forecast weaker sales than Wall Street expected, and its stock fell about 31%. Other chip stocks followed it down. By our own check at midday Friday, with the market still open, a fund of chip stocks was down almost 10%. The S&P 500 was down about 2%. The VIX, Wall Street’s fear gauge, jumped from about 17 to about 22. Even so, the S&P 500 sat only about 3.4% below its record high.
One company lost about $500 billion in a day, and most stocks still went up. The selling stayed in one corner.
We Bought Nothing and Sold Nothing
We bought nothing and sold nothing this week, Friday included. Our last move came on Oct. 17. That day we put the first third of our cash reserve to work in our North Star model portfolios. The plan for the next third is already written down. It is the week of Nov. 3, or sooner if the S&P 500 falls to 6,863. Micron is in 23 of our model portfolios and Intel in three. We did not add to either one or sell either one. This is our decision for our own model portfolios. It is not advice for your account.
Know Which Kind of Fund You Own
Here is the lesson for your own money. A regular S&P 500 index fund gives the biggest companies the biggest share. So when a few giant tech and chip companies fall, the whole fund feels it. An equal-weight fund gives every company the same small share. On Thursday the regular fund fell 0.38%, and the equal-weight fund rose 1.20%. Neither kind is right for everyone. But it helps to know which kind you own.
The rest of this edition is lighter, and some of it is the best reading of the week. Retirees who paid for years at sea were told to leave their ship in Cambodia. The top American runner in last year’s New York City Marathon still sells running shoes. At Harvard, 180 freshmen asked for 90 seats in a class with no laptops and no AI. And a Malibu builder who would not cut his prices now has four unsold mansions.
Five Dates, and What the Crowd Expects
Prediction markets let people trade on what happens next. By our own check at midday Friday, they put the odds of a Fed rate hike on Dec. 9 at about 70%. They put a U.S. recession by the end of 2026 at about 6.5%. These are crowd guesses, not forecasts. And Polymarket, the biggest of these markets, paused trading Thursday after a security breach.
Fifteen Minutes This Weekend
A couple paid $100,000 for 15 to 20 years at sea. They got until 2 p.m. to get off in Cambodia.
He was the top American in last year’s New York City Marathon. He still sells running shoes.
180 freshmen applied for 90 seats in a Harvard class with no laptops and a book a week.
The 19th-highest payroll just won the World Series. Owners may lock the doors after Dec. 1.
He wouldn’t cut his Malibu prices. Four of five homes sit unsold, and the project is in bankruptcy.
Christopher Lloyd grew up on a 400-acre estate with four governesses. The town owns it now.
He checked a $50 gift card online. A fake site left him $9 at the register.
Intel had doubled in a year. Pricey memory hit its PC outlook, and it fell 20.60% after hours.
Micron is up 1,000% since early 2025. A Journal columnist says oil has less far to fall.
The Fed held at 3.75% to 4%. Two of 12 voters wanted a hike. Short-term bills still pay about 4%.
The economy grew 3.4%. Average pay, after inflation, fell six months running. Both are true.
How much of your money sits in that corner?
Nobody knows if Friday starts something bigger or stays a bad day in one corner. Here is what we do know. The money our model portfolios need soon sits in Treasury bills. Our next steps are written down. Nothing changed this week just because the headlines got loud.
You don’t wait for the first raindrop to find your umbrella. This week the clouds gathered over one corner of the market. The useful move is to see how much of your money stands under them.
If you’d like to run these four checks with us, fifteen minutes on the phone or Zoom is usually enough. Bring your statement, and we’ll find the number that is yours.