What’s New

4th Quarter 2025 Commentary

Speakers should take a beat once in a while—for breath and for questions. The start of a year is a fine season to take that beat, so this Commentary centers on questions that recently came our way. Many have already answered themselves. And though questions around a favored topic—"Why aren't there data centers yet on TPL land?"—can feel urgent, it's way more important to understand the “why” than the “when." The why, believe it or not, has to do with NVIDIA's new chip and planned obsolescence, advanced hydrogeology, and a host of other fascinating factors. These also happen to be keys to predicting the performance risk in the IT sector and the S&P 500 today. So, it’s very much worth understanding, and that’s what our latest Commentary aims to help you do.

2026 New Year Letter from Our Founders

Some of our clients have remarked upon the private investment funds we’ve been presenting in recent years—and presenting with some greater frequency. They range from real-asset royalty funds to more than one private securities exchange, and to cryptocurrency mining, and this year both a data-center project and an AI company. It’s been asked whether we’ve wandered from the path of fundamental value investing or become enamored with private funds over individual account management. Rather than “none of the above,” the answer is “the opposite.” For a deeper explanation, read this year’s letter from our founders.

Cryptocurrency by the Numbers

3rd Quarter 2025 Commentary

Last quarter’s surprising news was that the 10% return expectation from stocks might be based on out-of-date data (so 20th Century!), with 25-year across-the-spectrum equity ETF returns clustered around 7 to 8%. Despite a decade-long lift from IT and, lately, the AI/data center B-word-market (bull, boom, bubble?). A systemic risk environment has been created for index-based investors. With IT’s index dominance nearing one-half of the S&P 500 (46%, for quibblers, and including Amazon, Meta and Alphabet), there will be nowhere to hide if valuations contract. That initiated an Alternatives discussion. Not your run-of-the-mill Alternatives, but about how to use indexation’s own weight against itself. Starting last quarter with extreme undervaluation and optionality in certain global markets, like Japan, the means and methods discussion of contra-index investing continues. This quarter, with two business model alternatives: an evergreen index outperformer; and limiting-factor beneficiaries (we'll explain) of continued AI/data center growth.

James Davolos on the Business Breakdowns Podcast with Matt Reustle (September 24, 2025)

James Davolos discusses the recent IPO of WaterBridge Infrastructure LLC and takes a closer look into the unique water infrastructure industry.  James explores the ongoing water disposal concerns driven by shale production in the Permian Basin and highlights the capital-light business opportunities in the region.

2nd Quarter 2025 Commentary

Summer is a good time to pause and consider—in broad brushstrokes—where we are in the investment sphere. The most obvious initial area for inquiry: What have returns been in the relevant past? Conveniently, as of May 2025, a slew of equity and bond ETFs now have 25-year records. You’d think the results, now catapulted further aloft by AI, would be fairly robust. Yet, only one of the dozens of these original ETFs achieved a double digit annual return. And now, though it’s not yet obvious, the IT companies that dominate the top of the S&P 500 are under siege…disintermediation by the very A.I. technology that they’re pursuing. Going forward, indexation may face an even bigger challenge, largely of its own making. There are now existential questions for passive management, which has a way of missing not just individual companies, but entire sectors, even countries. Some of the most fascinating opportunities—but not available via passive management—are in Japan, which is where we turn our editorial gaze for this Commentary.

Cryptocurrency and Securities Exchanges

1st Quarter 2025 Commentary

There's no end of news about AI and the grand data-center boom. New technology is always an exciting show. But is there a legitimate, long-term, high-order investment opportunity? Without enough qualitative and contextual understanding, though, there can’t be much confidence. Without much confidence, AI probably gets the marginal, take-a-flyer type investment treatment that won’t matter much to a portfolio one way or the other. But what makes it legitimate? How does it even work, and precisely why all that electric power? What is the market for it, for the ultimate consumers of AI-based services? That requires a bit of exploration. And there is the question of how to invest. Pick (somehow) the technology winner? Default to an index? Do index funds even provide the right exposure? In this quarter’s Commentary, some of that homework’s been done, along with a perhaps more fundamentally rational, anti-take-a-flyer alternative to sector and security selection.

4th Quarter 2024 Commentary

As the end of 2024 approached, an email from one long-tenured client and market watcher voiced the queries of many others in a marvelously succinct way: “This is totally nuts … are we in the roaring ‘20s?” Her observation and question do excellent service for this year-end review, where we’ll name some of the greatest systemic risks, illumine the most elegant risk dodges, and reveal the most stupefying strategic opportunities. Though most investors may spend more time these days thinking about AI and data centers (and not enough about the national debt), you’ll find most of these themes boil down, surprisingly, to three Things: Natural Gas, Water, and Bitcoin. These might be keys to truly participating in, yet not suffering from, these Roaring ‘20s.

2025 New Year Letter from Our Founders

3rd Quarter 2024 Commentary

When perusing headlines in the mainstream business media lately, Horizon Kinetics clients may experience a sense of déjà vu. Because they’ve already read about those topics here, likely more than once or twice—and not just weeks or months, but years ago. It’s not as if what we write about, or variations thereof, hasn’t been around awhile: rising national debt, oncoming strategic hard commodity supply limitations, the appearance of non-debaseable currency (!!). But suddenly, it seems everyone is publishing stories about Chinese tech firms challenging Apple and Nvidia, or data centers and the massive amounts of power they require. Still, although the major business publications have the ends of a few strings, they’re missing important organizing warp threads and lack a picture of how the whole fabric comes together. Particularly around the limiting-factor hard assets and commodities required for A.I. and data center growth—like natural gas for electric power, land, and water—and how these will logically lead A.I. to the Permian Basin. And other ways of capturing the extraordinary growth of A.I. without driving head-on into the IT-sector headlights. In this Commentary, you can read all about it here first.

Murray Stahl on Grant’s Interest Rate Observer: Inflation has legs (Originally Published 9/13/2024)

Horizon Kinetics Corporate Update

From Our Founders: The Old New Horizon Kinetics—Going Public but Staying the Same

Royalties as an Asset Class

Royalties are an as-yet unrecognized investment and asset allocation tool; yet, the value and attractiveness of this asset class are likely to become increasingly apparent. We discuss the evolution of the business model, the various structures available in the private and public markets, and the sectors in which royalty models are most prevalent. If you would like to access the report, please contact your Horizon Kinetics representative or email info@horizonkinetics.com.

The Japan Special Opportunity Strategy White Paper

Historically unprecedented regulator-mandated policy and rule changes in Japan are now altering a 75-year insular cycle of protected corporate structure. Offered up: a uniquely diversified, non-correlated, and classic deep-value investment opportunity – with a known and near-term value realization catalyst. Part 1 – The Japanese Market You Know and the One You Don’t Part 2 – How the System was Built and Failed, and the Slow Beginnings of Its Rehabilitation Part 3 – The Making of a Generational Opportunity Part 4 -  Japan Special Opportunity Strategy

Revisiting an Old Friend – The Thesis for a Defensive, De Minimis Investment in Bitcoin

Exactly four years ago, in February 2017, we posted this proposition: that every client, as a matter of prudence and self-protection, should own a very small amount of bitcoin. It was such an unorthodox idea, was considered so risky and ill-advised by conventional portfolio management standards, that great care was taken to introduce it.  The essential complaint, of unbounded risk, was addressed by the essential answer of bounding that risk:  to purchase a de minimis amount that could do no harm in the worst case, yet could – like an insurance policy – be of life changing benefit when it might be needed. In the excitement of the moment, today, what with billionaires suddenly announcing billion-dollar purchases of bitcoin, and news media therefore wondering about it once more, but with more wonder and less dismissal in their tone, it is perhaps timely that this original proposal be posted again. The reasons laid out for its need, the description of its existence, why it is worth something (or anything) at all, and how to use it, have not changed.