Graham warned about the point in a bull market when small, obscure companies suddenly become market darlings because investors believe they have discovered the next big thing.
Look at what’s happening right now.
Companies are adding AI to their story, changing their business descriptions and suddenly attracting investor attention that wasn’t there before.
Arena Group just rebranded as Paradium.AI.
MARA has been repositioning itself around AI infrastructure.
And in China, humanoid robot maker Unitree surged fivefold after its IPO, reaching roughly a $66 billion valuation, before losing about $30 billion in value. Its adjusted net profit was down 53% earlier this year.
That’s the part that reminds me of Graham.
Not that these companies are necessarily worthless.
It’s that the story can suddenly become more important than the business underneath it.
A company doesn’t need decades of earnings anymore.
Give investors AI, robotics, space or some other huge future market and suddenly they’re willing to price in years of success today.
Graham’s warning wasn’t really about a particular stock.
It was about investor behavior.
And that behavior is getting pretty interesting in 2026.