Three Pearls August 2026 - National Security, AI Investments, Jewish Tradition
Here are Three Pearls to offer perspective on investing, wealth, and broader themes that shape our lives.
According to Blackstone’s 2026 Mid-Year Investment Perspectives, combined defense spending across the United States, Europe, and Japan declined roughly 70% over the past 25 years. That trend is now reversing, with defense budgets on track to increase approximately 120% in Germany, 94% in Japan, and 71% in the United States between 2022 and 2027. Blackstone believes these countries are entering a sustained rearmament cycle.
The scale of this shift reflects a sobering backdrop. A recent New York Times article notes that the number of conflicts worldwide has nearly doubled over the past 15 years. The economic implications extend well beyond traditional defense contractors. Modern national security requires AI, cybersecurity, satellites, energy, data centers, manufacturing capacity, and secure supply chains. West Point’s Modern War Institute explores the strategic and social complexities of modern conflict, while the 2005 documentary Why We Fight offers a more critical examination of the military-industrial complex.
Sources: Blackstone’s 2026 Mid-Year Investment Perspectives; The New York Times Magazine’s We Thought Tech Would Make War More Precise. We Were Wrong, August 7, 2026; The Modern War Institute; Eugene Jarecki’s 2005 documentary, Why We Fight.
For more than a decade, U.S. equity returns were increasingly concentrated in a small group of mega-cap technology companies. Capital Group sees signs that the enormous capital spending behind AI is transferring growth to industrials, utilities, materials, and other companies providing the power, electrical equipment, cooling systems, steel, and physical infrastructure the AI economy requires.
This broadening matters for investors. This month, Bloomberg Intelligence data showed that 57% of S&P 500 companies outperformed the index in 2026, the highest proportion in a decade. AI may remain the dominant investment theme, but its potential beneficiaries increasingly include companies outside the familiar group of technology businesses that led the market’s initial advance.
Source: Martin Romo and Greg Miliotes, Capital Group, How AI is Reshaping U.S. Equity Markets, May 5, 2026; MarketWatch, The Number of Stocks Beating the S&P 500 is the Highest in Four Years, August 9, 2026.
- What We Pass Down: The Jewish Tradition of an Ethical Will
My dad passed away last month three days after his 87th birthday. His grandfather was murdered by the Nazis, and his father, my grandfather, entered the United States through Canada in an effort to escape persecution. He was briefly jailed, but went on to marry my grandmother, open a successful small business on Long Island, and raise three children. My dad became the first and only member of his family to graduate from college and then law school. He was enormously proud that all four of his children also graduated from law school (I was the black sheep with my MBA). I was deeply moved by the hundreds of people who came to his funeral and visited during the week of shiva.
In his honor, I am sharing this piece on the Jewish tradition of an ethical will. Unlike a legal will, which determines how financial assets and possessions are distributed, an ethical will passes down something less tangible: family history, values, wisdom, hopes, blessings, and lessons learned over a lifetime. My father’s story reminded me that inheritance is not only what appears on a balance sheet. We also inherit the sacrifices, opportunities, expectations, strengths, and unresolved complexities (dare I say, mishegas?) of the generations that came before us. Part of our own work is deciding what we want to carry forward.
Closing Note
What we inherit matters, but we also choose what to preserve, strengthen, release, or build anew. Countries make those choices about the institutions and capabilities needed for security. Investors consider how enormous investments in AI may reshape industries far beyond technology. Families decide which stories, values, and lessons to carry forward. In each case, the future is shaped not only by what we receive, but by what we do with it.
If any of these spark a thought or raise a question, I welcome the conversation!
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