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On this episode of The Long View, Callie Cox, chief market strategist at Ritholtz Wealth Management, discusses how she helps investors suss out signal from noise, how AI is affecting the market and economy, the role of social media on investor behavior and psychology, and how she herself has learned to become the investor she is today.

Here are a few highlights from Cox’s conversation with Morningstar’s Christine Benz and Ben Johnson.

How Market Concentration Around AI Stocks Could Be Affecting Your Portfolio

Ben Johnson: Callie, I want to stick with the topic of AI and maybe just more broadly investors’ enthusiasm for all things AI and by extension, technology, the Mag Seven tech stocks. We’re recording this conversation on Oct. 29, Nvidia has just become the first-ever $5 trillion market-cap company. I checked it’s actually in and of itself bigger than the market cap of the entire Japanese stock market at this point, which is interesting. But is this an area where maybe the spend has gotten a little too loose? Expectations have gotten a little too lofty? You wrote about this recently on your own outlet, where your prolific OptimistiCallie and finished that piece with what I thought is really the money chart in this area, which just shows the increasing gap between the representation of these big firms with respect to their price representation in big indexes and then their contribution from an earnings perspective. And generally speaking, those things have tended to move in lockstep historically, but that gap indicates that maybe investors are getting ahead of themselves. What are you worried about, or maybe why should we not be worried?

Callie Cox: So, here I think you have to think about AI in concept and in theory and in practical ways to apply to your portfolio. So obviously, AI, again, a compelling story, I’m not an AI doomer. I think AI is going to have a lot of benefits for society and is already injecting those benefits into society, even if we’re not seeing it come through in economic data and profits just yet. But I think that’s what investors are struggling with right now. We hear all these exciting things about AI, all these exciting projects that seem to be happening among the tech hyperscalers, among infrastructure firms and data centers. But we’re not seeing the payoff there yet. It’s really easy to hear about a story and then dream about where it could go. But there isn’t much data to show what this could mean.

And right now, the data that we’re getting is how much these companies are spending on these projects, which I want to be clear: Tech companies are supposed to spend money on ambitious projects. They are tech companies. You’d rather them do that than pay you back in a dividend, which some tech companies do. But that’s not their main strategy. That’s not their main strategy. They are money spenders.

But at this point, we’re seeing spending ramp up among the biggest tech companies so quickly at a time when profit expectations are high, and valuations, think price/earnings ratio are also quite high. So, you have to wonder what the give and take is there. And I explain this in my newsletter. If these companies are spending so much money on AI projects that have yet to flow into profits and free cash flow, then your perception of these companies as Wall Street’s golden child of profitability and these big spenders that are trying to establish their next business strategies don’t really fit with each other. High spending, spending at these levels will ultimately cut into free cash flows. For some companies more than others, they’ll cut into cash on hand. They’ll force these companies to raise debt and then suddenly you can’t call tech the quality part of the market anymore. And it’s really hard to suss out how much of this valuation or how much of the prices they trade at are because they’re considered the quality profit generators in the market. So that’s the theory.

Practically, when we have clients who say, OK, well, what are you going to do about that? Like, interesting idea. Why does it matter to me? Practically, this is a sign for investors to look at value. It’s a sign to take profits, and I’m not talking about every tech stock you hold here. I’m talking about very gradual moves. But it’s a time to think about taking profits within tech and other highly valued stocks, especially knowing that underneath these tech companies we’re contending with a slowing economy that’s flashing some worrying signals at the moment. Take some profit in your tech stocks, rotate them into other value stocks, don’t divest completely from the stock market because that’s your engine to building wealth over time. Just be smart and practical about where you’re allocating your money. Maybe set some sector targets, for example, that help keep your portfolio looking like the amount of risk that you’re comfortable taking for your goals. And just be grounded about where we are right now. AI, again, incredibly compelling. You want exposure to it. But maybe things have gotten a little out of hand, and you can adjust and bubble-proof your portfolio to respond to that.

What Assets Should Investors Add to Their US Equity Portfolio?

Christine Benz: Well, I wanted to follow up on that because when we look at fund flows, we see more and more investors are getting their US equity exposure through just a total market index where they are obviously very concentrated in those names that you think maybe they ought to be a little bit cautious about right now. So, what would be the other assets that you would add to a US equity portfolio? It sounds like value loud and clear, but how should investors be approaching their US equity exposure?

Cox: This is such a good question because like you mentioned, a lot of investors are passive index fund investors. I see it all the time in my work. One thing you should know, and it’s hard to put your finger on an exact number here because every ETF is different and they follow different strategies or every fund is different. But what you should know, if you’re invested in a no-fee hypothetical S&P 500 fund that just tracks the market caps of the stocks in the S&P 500, about a third of your portfolio is invested in these Magnificent Seven stocks at the moment. You are very, very tech-heavy whether you realize it or intend to be or not. And just having that piece of information can help inform you as to what you need to add in or what you need to tweak in your portfolio to make it a little more attuned to your own risk tolerances.

What you do there is ultimately up to you. There are value funds that you can look at. There are dividend stock funds you can look at. There are defensive funds you can look at. So, what that could look like in your portfolio is maybe trimming a little bit off the top of those S&P funds or those passive funds to an allocation that you pinpoint beforehand. I wouldn’t do this by feel. Maybe rotating it into more defensive and value stocks. As time goes on using calendar-controlled strategy, I’ll sell a little bit this month and rotate it into this fund. And also considering that there are assets outside of the stock market. There are bonds, there are gold, there’s cash. If you have short-term spending needs coming up, then it can’t hurt to take some chips off the table and sell a little bit of your S&P fund to move it to cash to pay for those spending needs. But just know that you have a lot of options outside of the S&P fund, and right now, the S&P by nature it’s getting riskier at a time when the economy is slowing. So, it’s probably smart to be a little more tactical and active on that front.

Saudi Arabia has invested billions to transform its economy, attract global companies, and build a high-skill, high-productivity labour force. But a new Pearson report exposes a quiet threat undermining that progress: gaps in career and learning transitions are costing the Kingdom SAR 62 billion ($16.5 billion) in lost earnings every year for Saudis alone—and SAR 196 billion ($52 billion) when including expatriates.

That’s roughly 4.2% of GDP, slipping through the cracks of inefficient education-to-work pathways, prolonged job transitions, and slow-moving reskilling systems.

For a country where 70% of the population is under 35, this isn’t just an economic issue—it’s a long-term competitiveness challenge.

The hidden cost of broken transitions

Pearson’s “Lost in Transition: Fixing Saudi Arabia’s SAR 62 billion ‘learn-to-earn’ skills gap” maps the friction points across three stages: entering the labour market, shifting roles, and adjusting to technological disruption. Each stage underscores a structural issue that necessitates resolution to sustain Vision 2030’s labor-market objectives.

1. Automation is already expensive

Automation-related disruption represents around half of total losses. With 23% of Saudi jobs at high risk, the drag on productivity is measurable: shorten reskilling time by just 20%, and you inject SAR 6.3 billion ($1.7 billion) back into the economy every year.

This is the part where labour market theory meets reality. No economy can absorb automation shocks without agile reskilling pipelines. Saudi Arabia has the demand — but not yet the speed.

2. Graduates take nearly 40 weeks to land a job

The transition from school to work remains slow and costly. High school and university graduates in the Kingdom spend almost 40 weeks searching for employment. This lag mirrors patterns in other large markets but has deeper implications for Saudi Arabia: population growth and Vision 2030’s ambitious nationalisation targets make every lost week count.

The mismatch is clear. Universities and training institutes are still producing graduates whose capabilities do not align with digital, technical, or applied roles that employers increasingly need.

3. Workers who lose jobs stay out of work for almost a year

On average, displaced Saudi workers remain unemployed for 11.3 months, and 40% remain without work for more than a year. These long unemployment spells aren’t just personal setbacks — they erode skill relevance and widen the reskilling gap, compounding the SAR 62 billion annual loss.

4. Youth unemployment remains stubborn

Youth unemployment sits close to 15%, and demographic pressure is intensifying. The population aged 20–24 is projected to rise from 2.69 million in 2025 to 3.22 million in 2030.

More young people entering the market + slow transitions = escalating structural friction.

What this really means for Vision 2030

The Saudi labour market is undergoing one of the fastest transformations globally. However, the system connecting education, employers, and industry remains fragmented. The Kingdom is racing to localise jobs in tourism, logistics, manufacturing, creative industries, and tech—but the pipeline feeding these roles is not synchronised with real market demand.

The SAR 62 billion figure is not a result of low ambition. It’s the cost of misalignment.

If Saudi Arabia wants to meet its productivity and employment targets, the country must shift from qualification-centric learning to skills-centric learning, from reactive recruitment to predictive workforce planning, and from linear education models to continuous upskilling ecosystems.

Five moves that can close the gap fast

Pearson’s recommendations align with what labour market analytics and regional employers have been calling for. Here’s what must happen next:

1. Diagnose skills needs with precision

Saudi Arabia has the chance to lead globally in skill intelligence. Identifying priority roles, tasks, and competency gaps — at scale — will allow educators and employers to co-design targeted programmes instead of generic curricula.

2. Accelerate transitions with applied learning

Internships, apprenticeships, and industry mentorships should be the norm, not the exception. Early work exposure shortens job search durations and creates immediate pathways into hiring pipelines.

3. Update curricula to reflect real-world demands

Technical, vocational, and university programmes need tighter integration with industry, especially in AI, data, cloud, logistics tech, advanced manufacturing, and hospitality. The half-life of skills is shrinking; curricula can’t move on multi-year cycles.

4. Expand structured work placements

Well-governed partnerships between universities, colleges, and employers can reduce frictions between graduation and hiring. Applied training matters more to employers than theoretical mastery.

5. Build a national labour market intelligence engine.

Investing in platforms that give real-time visibility into job openings, skill requirements, and market demand will significantly reduce mismatches. Matching supply to demand is a data problem — and Saudi Arabia is well positioned to solve it.

A generational opportunity

Naseem Tuffaha, Chief Business Officer at Pearson, captured the crux: “Saudi Arabia’s youth-driven economy holds tremendous potential, but inefficient transitions are costing SAR 62 billion annually while nearly a quarter of jobs face automation risk.”

That potential is real. The Kingdom has the demographic advantage, government momentum, and investment power to build one of the most dynamic labour markets in the world.

But achieving that requires a realistic mindset: transitions matter as much as qualifications, and skills matter more than titles. Fixing the learn-to-earn pipeline is not a policy exercise — it’s a productivity strategy.

Final thought

Saudi Arabia is not facing a skills problem. It’s facing a timing problem. People are learning, but not at the right moments or in ways that match what employers need. Repairing this disconnect could unlock tens of billions in productivity and give young Saudis the career mobility that Vision 2030 promises.

The Kingdom is building one of the world’s most ambitious economic transformations. Closing the transition gap is how it makes that transformation stick.