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This article first appeared in Livewire on 11 August 2026
“No man ever steps in the same river twice, for it's not the same river and he's not the same man.”
Those are the words of Heraclitus. For the Greek philosopher, it embodied the theory of flux - the idea that change is the fundamental nature of reality. It’s also an apt metaphor for the stock market.
The decision to invest in a stock on any given day is relative to the rest of the market, the company’s underlying fundamentals and a million other variables. Just look at the threat of AI for software companies and how the SaaSpocalypse has played out.
Regardless of whether or not a company was insulated against AI disruption, as Forager portfolio manager Alex Shevelev succinctly puts it: “The sell-off across the technology sector was indiscriminate.”
Investing in one of these hard-hit stocks a year ago was a very different proposition to six months ago. That calculus is once again completely different today.
Yet some investors feel as though walking away from a position is akin to giving up on a company. After all, there was a reason you invested in it to begin with, so if you sold off the entire holding, that conviction must have changed. Reinvesting after that kind of a shift might become a difficult hurdle.
But that doesn’t have to be the case. If you consider the stock market the same way Heraclitus conceptualised the river, then every stock pick is a point-in-time decision.
You’re not investing in the same stock, just as you would not be stepping foot in the same river. The market has moved on and changed, and any investment decisions should be based on the landscape as it is, not how it looked when you exited the stock.
Maroun Younes, Portfolio Manager of the Fidelity Global Future Leaders Strategy
We recently re-purchased Arthur J Gallagher (NYSE: AJG), a Chicago-based global insurance brokerage, risk management and consulting services firm.
We owned the business for several years before exiting the position around 18-24 months ago. Following a pullback in the share price, we have taken the opportunity to re-establish a position.
At an industry level, insurance brokerage is an attractive business because revenue tends to be recurring and relatively resilient to economic cycles. At a company level, AJG has consistently demonstrated its ability to grow organically at rates above GDP while generating strong free cash flow.
The company has also successfully reinvested capital into bolt-on acquisitions that enhance growth and create shareholder value. When we initially purchased the stock, it was trading on a free cash flow yield of around 7%, generating returns on equity in the mid-teens and capable of compounding earnings per share at low double-digit rates over the medium term.
Combined with a modest dividend yield of around 1.5%, we believed the business was well positioned to deliver forecast total shareholder returns in the mid-teens.
What prompted the sale and in hindsight was it the right decision?
Our decision to sell AJG was largely a consequence of its success. The company performed so well that it outgrew our small- and mid-cap investment universe.
While we have some flexibility around the timing of exits, the stock had enjoyed several years of above-average growth and its valuation multiples had expanded significantly. Given those factors, we decided to exit the position.
In hindsight, the decision proved reasonable. Although the share price continued to rise initially after we sold, the insurance cycle subsequently softened, and the stock eventually traded comfortably below our exit price.
What led to the buy-back?
Earlier this year, AJG's share price fell sharply, declining from around US$260 to US$190 per share. Much of the weakness was driven by concerns that AI could disrupt the insurance brokerage industry.
However, our research suggests those fears are overstated. While OpenAI approved the first AI-powered application from an insurance provider, Tuio, its use case relates to home insurance, which is relatively standardised.
AJG, by contrast, predominantly serves corporate and enterprise clients, where insurance needs are far more complex and highly customised. These relationships require specialist advice and tailored solutions, making the business significantly less vulnerable to AI-driven disintermediation.
What is the outlook?
While insurance pricing conditions remain relatively soft, we believe AJG can continue delivering mid-single-digit organic revenue growth despite these headwinds.
The company is also proactively implementing AI across its own operations, which we expect to support productivity gains and margin expansion over time. Together, these factors should enable AJG to compound earnings per share at a mid-teens CAGR over the next two to three years.
Importantly, the stock is currently trading at valuation multiples below its long-term historical averages, which we view as an attractive entry point for a business of this quality, resilience and growth profile.
