There’s Always Something to Worry About
Here is why history says you should ignore the noise and check your dividends instead.
If you looked at your portfolio yesterday, you probably felt the panic.
There is a new narrative making the rounds on Wall Street, and it has absolutely rattled the market. The thesis is terrifyingly simple: AI agents will reduce “friction” to zero.
The argument goes that in a world where AI negotiates everything for you, brand loyalty dies. Why use a specific delivery app like Uber Eats UBER 0.00%↑ when an AI agent can route your order to a generic courier for 50 cents less? Why use a premium credit card like American Express AXP 0.00%↑ when an agent can settle the transaction instantly on a blockchain for free?
The bears are painting a picture of a future where corporate moats evaporate, software margins collapse, and the blue-chip companies we own today become obsolete commoditized pipes. This is all dramatic.
There are still plenty of companies that have a moat and we’ve consistently identified them.
We identify these moats and it has led to winners, such as ASML Holdings ASML 0.00%↑, GOOG 0.00%↑, BE 0.00%↑.
Check out this list of AI-resistant dividend stocks. A portion of your portfolio should be allocated to companies that crank out cash flow no matter what the market sentiment is.
But before you sell your winners, I want you to take a breath and remember one thing: We have been here before.
The Peter Lynch Rule
Legendary investor Peter Lynch famously reminded us that “There is always something to worry about.”
If you look back at the 1950s, the “smart money” was terrified of a second Great Depression and nuclear war. It turned out to be the best decade for equities in the century.
In the 1970s, oil went from $4 to $40, and people were convinced the global economy would collapse. In the 1980s, it was Japanese imports killing US industry. In the 2000s, it was the internet destroying brick-and-mortar retail.
Now, AI is killing the moat of large-cap tech companies. The market is dramatic and over reacts in both directions.
Lynch’s point was simple: The “end of the world” narrative is always seductive. It always sounds intelligent. And historically, betting on it has been a terrible trade.
“Far more money has been lost by investors preparing for corrections, or trying to anticipate corrections, than has been lost in corrections themselves.”
The conclusion is to ignore the noise. People are dramatic and emotional and the markets always reflect that. We continue to accumulate high quality positions that can lead to outperformance.
Why The “Zero Friction” Thesis Is Wrong
The current panic assumes that humans want zero friction in every aspect of their lives. The bears believe that if an AI can do it faster and cheaper, the incumbent company dies.
But this ignores basic human psychology.
Take the payment networks (Visa V 0.00%↑/Mastercard MA 0.00%↑) as an example. The bearish argument is that AI agents will bypass credit card fees by using instant crypto settlement. But ask yourself: Do you actually want instant settlement?
When you swipe a credit card, you are buying security and time. You want the ability to dispute a charge if the product arrives broken. You want the 30-day float to keep your cash earning interest in your own account. You want the fraud protection that comes with that 3% merchant fee.
Friction isn’t always a bug; sometimes it is a premium feature. We pay for the middleman because the middleman protects us.
The Dividend Defense: Getting Paid to Wait
This is where being a dividend investor gives you a massive psychological edge.
When the market is panicking about what the world will look like in 2030, growth investors have to stare at their screens and pray that the P/E multiples hold up. They are betting entirely on future capital appreciation.
Dividend investors are different. We get paid to wait.
Here’s how I collected $2,553 in dividends in January.
While the market hyperventilates over whether AI will destroy software margins, your dividend payers are simply depositing cash into your account. This cash flow is the ultimate reality check. It is tangible proof that the company is real, profitable, and shareholder-friendly today, regardless of what the scary narrative says about tomorrow.
If the market chops sideways for two years while everyone argues about the future of AI, you are still collecting your 4%, 6%, or 8% yield. You are not dependent on the mood of the market to make a return; you are dependent on the cash flow of the business.
The “Real World” Moat: What AI Cannot Replace
While the bears are panicking about AI destroying software margins, they are missing the massive opportunity right in front of them.
If the “Zero Friction” thesis is true and AI agents take over the digital world, where does the value shift? It shifts to the physical world.
AI is incredibly resource-hungry. It lives in the cloud, but the “cloud” is actually rows of massive, heat-generating servers made of steel, copper, and silicon.
AI cannot generate its own electricity. It needs massive amounts of power from regulated Utilities.
AI cannot build its own home. It needs millions of square feet of data center space from REITs
AI cannot fix a downed power line. It needs skilled labor and physical infrastructure.
This creates a “Real World Moat” around the boring, unsexy companies that dividend investors love.
The Citron report warns that AI will commoditize “middleman” software. That may be true. But AI cannot commoditize the electric grid. It cannot commoditize a gas pipeline. It cannot commoditize the land that data centers sit on.
The greatest hedge against a “digital deflation” is “physical ownership.”
So while the tech bros argue about whether an AI agent will replace their SaaS subscription, we will be quietly owning the utility companies that sell them the electricity to run those agents. And we will be collecting the dividends from the real estate trusts that own the servers.
In a gold rush, don’t worry about which miner will find the gold. Own the store selling the pickaxes—or better yet, own the land the mine is built on.
The Bottom Line
This AI panic is just the latest flavor of “The Big Worry.”
Yes, technology is disruptive. Yes, companies will have to adapt. But the leap from “technology is changing” to “all corporate profits are going to zero” is a massive stretch.
History shows that new technology typically expands the global economy rather than destroying it. If AI agents make companies more efficient, those companies will likely have higher margins and bigger budgets to return capital to shareholders.
As Peter Lynch said, the most important organ for an investor is the stomach, not the brain. If you spend your time worrying about the next big crash, you will miss the next big rally.
Ignore the noise. Collect the dividends. Stay the course.