"The real cycle you're working on is a cycle called yourself."
- Robert Pirsig, Zen and the Art of Motorcycle Maintenance *
In markets, as in life, we must maintain a dual awareness—attending to the mechanical details while grasping the broader journey. Our Q4 2025 Investment Committee Review reveals an economy experiencing its own profound duality: the exponential thrust of artificial intelligence (AI) investment propelling some assets forward, while the United States labor market appears to be losing procyclical jobs for three consecutive months. Are we witnessing the early displacement of human labor by AI, or is this a conventional business cycle slowdown obscured by the most ambitious infrastructure buildout in history?
As large-cap stocks notched 22 all-time highs last quarter, a more unsettling truth emerges beneath the surface—AI-related stocks have driven 75% of S&P 500 Index returns, 80% of earnings growth and a staggering 90% of capital spending growth since the November 2022 launch of ChatGPT.1 This concentration demands the kind of attention Pirsig championed: not reactive tinkering, but thoughtful maintenance of portfolio quality.
Our Q4 2025 Investment Committee Review offers our perspective on navigating client portfolios in this dichotomy.
Important Disclosures & Definitions
* Pirsig, R.M. (1974). Zen and the Art of Motorcycle Maintenance. William Morrow and Company, New York.
1 Cembalest M. (09/24/2025). The Blob: Capital, China, Chips, Chicago and Chilliwack. Eye on the Market. J.P. Morgan Asset Management.
S&P 500 Index: widely regarded as the best single gauge of large-cap US equities. The index includes 500 leading companies and covers approximately 80% of available market capitalization. One may not invest directly in an index.
AAI001014 2/28/2026
