The 20-year annualized returns cited below compare to 11% gains for the S&P 500 

SPX

+0.16%

 over the same period. All performance data come from the Hulbert Financial Digest managed by Mark Hulbert, who is also a MarketWatch columnist. 

1. Nate’s Notes —15-year annualized return: 14.67%

Investment approach: Editor Nate Pile uses a “common sense” approach to find companies with long-term growth potential in large markets. He trims or adds to positions over time, depending on valuations and technical analysis. But long term is the key. His letter first suggested Apple 

AAPL

+0.34%

 in 1998 and Nvidia 

NVDA

+0.04%

 in 2002. 

Market call: Pile says the overall U.S. market trend is up, but he has some concerns. One is investor complacency about inflation, the economy, tariffs and geopolitical tensions. “The consensus opinion is almost always ‘the market doesn’t seem to care, so there is no need to worry about it for now,’” Pile said in a recent interview.

Complacency makes markets vulnerable. Pile is especially cautious about artificial intelligence stocks. “I am absolutely certain we are still in the early stages of AI adoption, but we are late in the market cycle for the stocks,” he says. “The enthusiasm for the sector is too high. There is clearly more downside risk than upside potential in many of the stocks.” One risk is that continuous big spending on AI infrastructure might slow if companies can’t show a solid return on investments.

The upshot is that Pile has an unusually high cash position, above 20%, in part the result of selling AI-related chip stocks like Nvidia. Says Pile: “I would rather have fewer chips on the table while we wait to see what happens next.”

Favorite positions: Pile singles out MannKind 

MNKD

-1.37%

 in biotech and SPDR Gold Shares 

GLD

+1.87%

 for exposure to gold.