The Lessons AI Can't Learn

Tariffs on trial... A $750 billion refund could be next... There's an economic blackout – and the market doesn't care... The latest labor market signals... Nuts for money... The simple truth that launched a Wall Street career...

First up today, about those tariffs...

Today marked oral arguments in the Supreme Court case of V.O.S. Selections versus President Donald Trump... also known as the case of a variety of small businesses arguing against the legality of the White House's use of emergency powers to levy tariffs against trading partners.

It's not clear when the case will be decided, but we did hear enough today to guess what the outcome could be. It doesn't sound like Trump's "reciprocal" and fentanyl-related tariffs will be deemed legal.

As we wrote earlier in the week, you can pick up on which way the court is leaning during arguments... and, today, conservative and liberal justices alike sharply questioned Trump's lawyer about his use of the International Emergency Economic Powers Act to justify tariffs.

They suggested this kind of power lies with Congress, not the president. It's what many legal observers have argued since April and it's why we've written about this case since it was filed. Here's Justice Neil Gorsuch today, a Trump appointee...

Congress, as a practical matter, can't get this power back once it's handed it over to the president. It's a one-way ratchet toward the gradual but continual accretion of power in the executive branch and away from the people's elected representatives.

If the case goes against the White House, it's hard to know exactly what comes next in trade or foreign policy. Trump's tariff threats would lose their teeth completely, which is something the market appeared to accept months ago.

But there would be second-order consequences. Uncle Sam could owe hundreds of billions of dollars of refunds to American businesses from tariffs that have been collected in 2025, which certainly wouldn't help the U.S. debt situation.

Treasury Secretary Scott Bessent has said the U.S. might have to refund $750 billion or more if the tariffs are deemed illegal, and the court waits until next summer to make a ruling. That is possible given the Supreme Court's schedule, though a decision could come sooner.

There are other ways the U.S. can collect additional tariffs through existing laws. But that will take time to play out, if at all. Either way, the federal deficit just came in near $2 trillion for the 2025 fiscal year, and the pace of borrowing is showing no signs of abating.

As we've said before, the loser here is the value of the dollar.

In the meantime, we're all now living amid the longest partial U.S. government shutdown ever...

And the market is just fine with it.

The Supreme Court is still open, and so is the Federal Reserve and other "essential" institutions, but that doesn't include the Bureau of Labor Statistics. An official U.S. economic data blackout is going on its 36th day now, but private signals are still available and showing a glimpse of how the economy and businesses are doing.

For instance, today's anticipated report from payroll processor ADP showed private payrolls rose 42,000 in October, more than Wall Street expected. That data point doesn't support another Fed rate cut next month, at least on the surface.

In the details, however, the labor market picture is still mixed. All of the private jobs added last month – 76,000 by ADP's measure of tens of millions of private-sector employee activity – came from companies with at least 250 workers. Smaller businesses shed 34,000 jobs.

In the meantime, another report yesterday from job-positing website Indeed – which Fed Chair Jerome Powell referenced last week as a useful indicator amid the government shutdown and official data blackout – showed a bleaker picture. As of October 24, Indeed's Job Postings Index fell to its lowest level since February 2021.

With the shutdown limiting data that Wall Street likes to chew on – like the October unemployment report that is supposed to come out Friday, but likely won't – the Fed and central-bank watchers are weighing these alternative labor reports heavier than usual.

Just on Monday, Fed Governor Lisa Cook said during a speech...

Hiring is slowing. We see this from Indeed, from job postings. We're looking at a panoply of data, and those are real time. We're not waiting on the unemployment report.

That said, the Chicago Fed is publishing a projection of the typical unemployment report every two weeks. Right now, it's showing the unemployment rate for October ticking up a hundredth of a percentage point from last month to 4.35%.

That's not terrible. But it's not heading in the right direction either, and some parts of the economy – like small businesses – are weaker than the headline numbers might suggest.

Fed-funds futures traders put all this together and lowered the chances of a rate cut in December, ever so slightly – from around 69% yesterday to 63% today. But, still, the major U.S. stock indexes were higher with the benchmark S&P 500 Index gaining around 0.5%.

While we're on the subject of jobs...

Yesterday, we discussed the trend of AI adoption leading to high-profile layoffs, increasingly in "white collar" jobs. Plus, AI might be taking away entry-level job opportunities from recent college graduates.

It got me (Corey McLaughlin) thinking about my own first job... the lessons learned... and the experiences gained. I worked for minimum wage and tips in the freight house of a ferry operation, and I loved it. Today, that job could maybe be done by an AI robot, though the role still exists.

Coincidentally, I also recently read an essay from Stansberry Research senior analyst Gabe Marshank recounting his first job on Wall Street (which I'll share momentarily).

We're fortunate to have Gabe on our team at Stansberry Research. If you haven't read his work in the Market Maven newsletter – available to all Stansberry Alliance members – or watched Gabe's recently debuted free presentation, I urge you to do so.

Gabe has been something of a "secret weapon" for us over the past several years. But now, he has unveiled his investing strategy to the public for the first time. It's culled from two-plus decades on Wall Street working for the likes of SAC Capital Advisors' Steve Cohen, Leon "Lee" Cooperman at Omega Advisors, and Greenlight Capital's David Einhorn.

During his presentation, Gabe shares his thoughts on AI and reveals the name and ticker symbol of one of his highest-conviction ideas right now – which he believes could be a 25x investing opportunity. You should check it out here before it goes offline tomorrow night.

Now, without further ado, here's the essay from Gabe, which ran last week in the free DailyWealth newsletter.

Maybe it appeals to me because I didn't grow up "in finance" either, but I think the story he shares about his first Wall Street job – and the lessons learned about several investing pitfalls to avoid – apply to all investors who are in this for the long term. Here's Gabe...

In 1997, I landed my first job on Wall Street...

I wasn't a finance major. I had never taken an accounting class. My Yale degree was in political science, and my career ambition was, in retrospect, almost comically modest: to make over $25,000 a year and live in New York or San Francisco.

But I ended up working for Lee Cooperman – a Bronx-born Goldman Sachs legend who was, at the time, running one of the most successful hedge funds in the country. And I got the job, not because of a perfect resume or polish... I got it because I told the truth.

Let me explain.

My junior year at Yale, I interned at the Council on Foreign Relations. My mentor there, Jay, asked what I wanted to do after graduation. I had no idea – but I told him my goal was to make more than $25,000 a year. He laughed and said, "You should talk to my friend David. He works at a hedge fund."

"What's a hedge fund?" I asked.

"No idea," he replied. "But he makes a lot of money."

That was enough for me. I looked up "hedge fund" in the Sterling Library card catalog. The definition was vague. Something about private pools of capital. I still didn't really understand it. But I called David anyway.

He interviewed me over the phone and asked about my background. I mentioned I'd been on the Yale crew team.

"Why'd you quit?" he asked.

"Because I wasn't very fast, and it stopped being fun."

"Not very fast?" he asked.

"I kinda stunk," I admitted.

There was a pause.

"That's the most honest answer I've ever heard in an interview," he said. "I think you might fit here."

He invited me down to New York. That's how I found myself in the offices of Omega Advisors – a hedge fund run by Lee Cooperman, then already a Wall Street legend.

Lee wasn't a man of half measures...

Big guy, bigger opinions. He had spent 25 years at Goldman, rising to become its chief equity strategist before launching Omega with his own capital. But despite his gold-plated career, he was at heart still a kid from the South Bronx.

When I got to his office, he barely looked up.

"Kid, I don't have time for this," he barked at David. "If you like him, I like him. See how cheap we can get him."

That was my job offer.

As I was leaving, I noticed a strange sculpture in his office – a box with dollar bills sticking out of it, covered in peanuts. I asked about it later.

"It's because I'm nuts about money," Lee said.

So I got the job. It was an environment without pretense – no one had time for anything but the truth. And I was about to learn that in several key ways...

I started at Omega with a $35,000 salary – a windfall compared to my expectations... My job? Do everything. Run down lunch orders. Make copies. Pass out end-of-day reports. It was the equivalent of starting in the mailroom...

But I was curious, and I made myself useful... I listened. I asked questions. I sat in on company meetings and analyst calls.

And I learned.

I had no finance background, so I got one...

An Excel class, then one in accounting. Eventually, I took and passed all three levels of the Chartered Financial Analyst exam.

The hustle paid off...

One of the firm's top analysts, Larry Robbins, was alone in a two-man office. He invited me to take the other desk – installing himself as my mentor.

Larry would go on to found Glenview Capital and manage billions, but back then, he was just the smartest investor I had ever met.

He taught me how to tear apart a business model, from revenue to free cash flow. We built Excel waterfalls showing exactly how a dollar traveled through a company's financials. He emphasized understanding cash flow over reported earnings. Substance over spin.

At Omega, I saw how even seemingly bulletproof businesses can implode. We invested in a funeral home company – stable, right? Steady demand, forever customers. But it collapsed under too much debt. That was my first lesson in the danger of leverage.

I also witnessed the Asian financial crisis up close. I had barely started when the Thai baht devalued and currencies across the region spiraled. It was called a "thousand-year flood."

It happened in my third month on the job.

What Omega gave me was more than just a job... it was an entire worldview. It taught me that numbers matter more than narratives. That leverage can kill even the most obvious investments. That honesty – with yourself and your partners – is a competitive advantage.

It also gave me access to people who thought differently.

Lee hired what he called 'PhDs': poor, hungry, and desperate...

Not necessarily polished, and not always pedigreed... But always smart, curious, and ready to grind.

Wall Street has a reputation for being elitist, and in many ways, it is. But the best hedge funds know they're in the business of ideas, not appearances. They care about insight, not credentials. They'll take radical honesty over empty confidence any day.

That's why Lee didn't ask me what classes I had taken. He didn't grill me on valuation techniques. He trusted his guy to spot someone who had the raw tools and the right attitude. He saw that I put as much effort into delivering a trader's lunch as I did into building an Excel model... And then he tried to get me as cheaply as possible.

If my years on Wall Street have taught me anything, it's that you don't need to be the loudest person in the room. You need to be the one who asks the right questions. You need to know when you don't know. You need to see the thing everyone else missed – and be brave enough to say it out loud.

That started my two-decade career managing hundreds of millions in risk at firms like Steve Cohen's SAC Capital and David Einhorn's Greenlight Capital. But it all began with a brutally honest answer to a simple question.

"Why'd you quit the crew team?"

Because I wasn't very fast. And it wasn't fun. I kinda stunk... and I knew it.

Turns out, that was exactly the kind of thinking Lee Cooperman wanted to bet on.

So the next time you're trying to pitch an idea – or land a job – don't sell a story. Tell the truth. Investors can smell the difference. And sometimes, that's the edge that matters most.

New 52-week highs (as of 11/4/25): Alpha Architect 1-3 Month Box Fund (BOXX), Cencora (COR), Donaldson (DCI), Enel (ENLAY), Expeditors International of Washington (EXPD), and Kellanova (K).

In today's mailbag, more feedback on the price of gold, which Dan Ferris wrote about on Friday and we discussed on Monday... and an opinion on Nvidia CEO Jensen Huang's advice that we mentioned in yesterday's Digest... Do you have a comment or question? As always, e-mail us at feedback@stansberryresearch.com.

"In today's world, ask yourself who is really going to control the future market price of gold worldwide? The answer of course is those foreign central banks that are in essence telling the U.S. Treasury to take its T-bonds and put them where the sun doesn't shine...

"When these central banks determine the price is low enough, they will be buying 'tons', and the price will go up. After all, it was the gold buying of these same central banks that started this entire gold bull run..." – Stansberry Alliance member H.B.S.

"The statement [from Jensen Huang] regarding 'the person using AI is the reason you lost your job, not AI' is stupid. If it weren't for AI, you wouldn't have lost the job!" – Subscriber Eugene L.

All the best,

Corey McLaughlin and Gabe Marshank
Baltimore, Maryland and Berkeley, California
November 5, 2025