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Happy Thursday, everyone!
Before we begin, we’re sharing one FINAL reminder about our upcoming event.
Introducing the Rich Habits Retreat in Austin, Texas (May 1-2). Taking place at Capital Factory, the #1 seed fund in the entire state of Texas — this hands-on experience will give you direct access to venture capital leaders, while uncovering steps to better prepare for the future of venture investing.
And on top of all of that… 10 ATTENDEES CAN JOIN US AT THE NEW YORK STOCK EXCHANGE (NYSE) ON MONDAY, MAY 4TH! If you buy a ticket, you will automatically be enrolled for this raffle to join us at the NYSE. If you can’t do both, no problem — but it’s an incredible perk!
On this upcoming Tuesday (4/7), we’ll announce the 10 ticket holders that get to join us at the NYSE.
If you have any questions, feel free to email [email protected] with “RICH HABITS RETREAT” as the title.
A quick breakdown — in case you don’t have the time.
⭐ Negative Q1 performance has been a warning sign for what’s to come.
⭐ How to approach tax season without the anxiety.
⭐ Free cash flows of Big Tech have declined significantly over the past year.
⭐ Inflation-adjusted retail sales in the U.S. are flat over the last five years.
⭐ Warren Buffett said he sold Apple "too soon.”
Market Overview
As of market open, 4/2/26
ETF Winners & Losers
Chart of the Week
Negative Q1 performance has historically been a warning sign for what’s to come.
The S&P 500 just closed out Q1 2026 in the red. In isolation, a down quarter isn't unusual — markets pull back all the time. But when you layer in the political calendar, the historical pattern gets uncomfortable fast.
In midterm election years, a negative first quarter has only happened 11 times. Of those 11, just 3 finished the full year positive. The average full year return for the S&P 500 after a negative Q1 (like the one we just had) was -9.7%.
Midterm years are already the weakest year of the presidential cycle on average — and that’s no surprise for those of you inside the Rich Habits Network. We’ve been talking about “capital preservation” as this year’s theme for a while now.
Policy uncertainty peaks, Congress is in campaign mode, legislative agendas stall, and markets hate ambiguity. When you start the year in a hole on top of that seasonal weakness, there's less of a cushion. The typical midterm-year rally doesn't usually kick in until Q4, which means investors who are already underwater in March often face another six months of chop before any relief.
The Iran conflict is injecting geopolitical risk that wasn't priced in three months ago. Oil is above $100, financial conditions are tightening at the fastest pace since March 2023, and consumer inflation expectations just spiked to 6.2%. The usual midterm-year headwinds are stacking on top of a genuine supply shock.
History doesn't repeat perfectly, and 11 instances isn't a massive sample size. Three of those years did recover. But the base rate is clear: the odds are stacked against a strong second half when the first quarter is already negative in a midterm year.
The historical average of -9.7% for the full year doesn't mean it happens this time — but it does mean the burden of proof is on the bulls, not the bears.
Today's Rich Habits newsletter is brought to you by Public, the investing platform that recently launched Generated Assets. Now, you can turn any idea into an investable index with AI.
Seriously. You can type in anything, from “AI-powered supply-chain companies with positive free cash flow” to “defense tech companies growing revenue over 25% year-over-year.” Generated Assets then builds a one-of-a-kind index you can backtest, refine, and add directly to your portfolio.
In Case You Missed It…
In this week's Monday-morning episode of the Rich Habits Podcast (linked here) — Austin and Robert walked listeners through how to approach tax season without the anxiety, broke down their favorite tax credits, and gave a full playbook for stress-free filing.
Here’s what they covered…
The Audit Fear Is Overblown — The IRS audits less than 0.5% of individual returns. If you're a W-2 employee with straightforward income, your actual audit risk is extremely low.
Demystifying the Filing Process — Your employer, bank, and brokerage have already sent your income data to the IRS. Filing isn't building from scratch — it's a reconciliation. Austin breaks down the three documents that answer 90% of your questions before you even start: your W-2, your most recent pay stub, and last year's return.
Tax Credits You Should Know About — Robert walked through his three favorite tax credits that most people either don't know about or leave on the table. The key insight: credits reduce your tax bill dollar-for-dollar, unlike deductions which just reduce taxable income.
The Refund vs. Tax Bill Mindset Shift — A refund isn't a bonus, it means the government held your money interest-free all year. A tax bill doesn't mean you messed up — it means you had access to that capital throughout the year. Understanding this changes how you emotionally process the outcome.
Taxes don't have to be scary. Get organized, understand what you're actually doing when you file, and take advantage of the credits available to you. The 2027 version of you will be glad you listened.
Here’s a link to the Q&A episode that was posted this morning.
You can submit questions for these episodes by asking them inside of the Rich Habits Network, replying to this email, or sending us a DM on Instagram.
The Rich Habits Podcast is available on Spotify, Apple, iHeart, YouTube, and wherever else you get your content!
Austin’s Callout
The free cash flows of hyperscalers have declined significantly over the past year.
One of my favorite phrases when it comes to investing is “if you can predict the cash flow, you can predict the stock price.” This is something I believe in deeply — because at the end of the day all business value is derived from a company's ability to deliver cash to shareholders.
Big Tech capital expenditures are running north of $250 billion annually, almost entirely directed at AI infrastructure — data centers, GPUs, power, networking. Amazon's capital expenditures alone are expected to exceed $100 billion in 2026. Microsoft, Google, and Meta are each individually outspending what entire sectors were investing just five years ago. That capital has to come from somewhere, and right now it's coming directly out of free cash flow.
AI infrastructure isn't a one-quarter capital expenditures spike. It's a multi-year buildout with uncertain returns on the back end.
Meta is a wonderful example of “predict the cash flow, predict the stock price.” Below is a graph illustrating the correlation between their stock price and their forecasted free cash flow. I’m sure you see the same pattern I do. I’m not saying Meta’s stock price is going to $80 / share — but the correlation is real.
The biggest risk to Big Tech isn't competition or regulation — it's that they're spending hundreds of billions on AI infrastructure before being able to prove a meaningful return on investment.
Free cash flow was the foundation of the "quality growth" thesis of Big Tech. If it keeps declining, the multiple compression has further to go. Watch the capex-to-FCF ratio over the next two quarters — that's where the real story is.
Robert’s Callout
Inflation-adjusted retail sales in the U.S. are flat over the last five years.
When you strip out the price increases that have defined this economy since 2021, American consumers are buying roughly the same amount of stuff they were buying in 2021. Nominal retail sales have climbed steadily — up roughly 20% since early 2021 — but that entire increase has been absorbed by higher prices.
Every additional dollar Americans have spent at the register over the past five years has gone toward paying more for the same goods, not buying more of them. The growth we see in headlines isn't real growth. It's inflation disguised as demand.
And now the picture is getting more complicated. Gas prices just spiked to $4.06 per gallon — a 36% increase in a single month — driven by the Iran conflict pushing oil above $100. Consumer inflation expectations surged to 6.2% in March, the highest since May 2025. When energy costs spike, it acts as a tax on everything else. People still fill their tanks and heat their homes — they just cut back everywhere else. Restaurants, clothing, electronics, discretionary spending — that's what takes the hit.
The data on Wall Street Favorites tells the story of where the consumer is headed. Dollar General shows +30% upside to its Wall Street price target of $152 — analysts see value in the discount retailer because that's where consumers trade down when budgets tighten.
Meanwhile, Walmart and Costco — the defensive staples — have single-digit upside because the market already priced in the shift toward value shopping.
Wages have barely kept pace with prices, pandemic savings are gone, and now energy costs are surging again. The consumer isn't breaking, but they're not growing either. And for an economy that's 70% consumption-driven, treading water is a problem that compounds quietly until it doesn't.
This data is beginning to show up in the economic reports in a real way — causing more volatility in the markets.
The Rich Habits Radar
👉 SpaceX confidentially filed for an IPO; $1.75 trillion valuation.
👉 McCormick & Unilever announced a $65 billion mega-merger.
👉 Warren Buffett said he sold Apple "too soon,” adding he'd buy more.
👉 Russia banned all gasoline exports starting April 1st.
👉 Iran attacked Amazon servers in Bahrain; waived monthly AWS charges.
👉 Democrats now favored to win both chambers in midterms.
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Disclaimer: This is not financial advice or a recommendation for any investment. The content is for informational purposes only, you should not construe any such information or other material as legal, tax, investment, financial, or other advice.
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Disclosure: This content is sponsored by NEOS Investments. The creator is compensated by NEOS to discuss NEOS ETFs. This content is for informational purposes only, and is not personalized investment, tax, or legal advice, and does not constitute an offer to buy or sell any security. Investing involves risk, including possible loss of principal. Before investing, carefully review the NEOS ETFs prospectus at neosfunds.com.