In 1856, Margarethe Schurz started America's first kindergarten from her Wisconsin farmhouse.

No lesson plans... no standardized tests. Instead, she spent the days singing songs, playing games, and telling stories with her daughter and four other children.

Most schools worked differently back then. Education meant memorization... And teachers expected children to act like miniature adults.

But Schurz had studied under Friedrich Fröbel, a pioneering German educator. She shared his belief that young minds flourish through creativity, play, and emotional connection.

Today, kindergarten is still a place to learn through play. It has become a staple of childhood.

But the classroom as we know it is transforming again...

Artificial intelligence ("AI") and large language models like ChatGPT are disrupting education at an unprecedented pace. Investors are scrambling to understand what will survive the automation wave.

On one hand, AI excels at information delivery. For example, Khan Academy's AI tutor now serves 65,000 students for just $44 a year – less than a single traditional tutoring session.

AI is also an incredible productivity tool. In a recent Gallup poll, teachers who use AI the most reported saving nearly six hours a week.

But Schurz was on to something that hasn't changed...

She offered what rigid memorization could not – a human-centered approach.

Similarly, as AI takes over some services, the value of human-centered learning is growing... not shrinking. And for investors, that points to a major opportunity in the companies that do what AI can't.

The Human Edge Over AI

While AI democratizes information, another trend is creating new investment opportunities at the same time: the rise of social emotional learning ("SEL").

SEL programs teach children social skills, emotional regulation, and interpersonal communication... things that computers and AI can't teach.

They're the modern version of Schurz's human-centered approach.

And these SEL companies are commanding pricing power.

The numbers tell the story...

  • SEL is growing 24.3% annually, compared with 15% to 17% for general educational technology.
  • Vendors charge $1,000 to $3,200 per SEL implementation – up to 10 times more than traditional educational software.
  • SEL programs deliver a remarkable $11 return for every $1 invested.
  • Finally, SEL has lifted graduation rates from 62% to 84% and cut expulsion rates in half.

These aren't marginal improvements. They're transformational outcomes – and they're only possible through human connection.

As Margarethe Schurz understood back in 1856... the highest value in education doesn't come from delivering information.

It comes from developing people.

That's why human-centered education is becoming a trophy asset class...

As AI races toward low-cost, high-scale knowledge delivery, the companies investing in human growth are building the only moats machines can't cross – based on trust, connection, and personal impact.

For investors, the message is clear... In a world of automation, the edge belongs to the irreplaceable.

Companies Are Betting on Human-Centered Education

This isn't a fight between AI and humans. It's about knowing where each one works best – and how to invest accordingly.

The divide is showing up throughout the education sector...

Stride (LRN) is one example. It's a virtual-learning "EdTech" company that's seeing a huge surge in growth. Third-quarter 2025 revenue hit $613.4 million (up 17.8% year over year), with net income soaring 42% to $99.3 million.

Most telling, though, is Stride's career-learning program, which focuses on human-skills development. This program grew its enrollment 34% year over year. It now serves 98,700 students while maintaining 40.8% gross margins.

Another example is language-learning app Duolingo (DUOL). At first glance, it looks like an AI pure play... It makes an addictive game for 130 million-plus monthly active users. And it notoriously laid off employees to shift to AI.

Yet even Duolingo recently added chess and music offerings that encourage human creativity and strategic thinking.

All of this is leading to one thing...

The 2030 Education Vision

By 2030, I expect education to split into two distinct markets.

AI will dominate simple "knowledge transfer" learning. It will be nearly free... and universally accessible.

Meanwhile, folks will pay a premium for human development. This part of the market will determine life outcomes, career success, and social mobility.

Money will increasingly flow to companies that either achieve massive scale through AI efficiency... or defend premium pricing through uniquely human capabilities. Investors don't have to worry about choosing a side. Both will win – the overall trend is what matters.

In a way, Silicon Valley is finally catching up to Margarethe Schurz...

The "kindergarten trade" isn't just an investment strategy. It's a bet on what will still matter when everything else is automated... and where we can find the highest premiums in a soon-to-be AI-saturated world.

As I always say... you're either early, or you're obsolete.

Good investing,

Josh Baylin

Further Reading

"One technology is about to give ordinary people extraordinary capabilities," Josh writes. Modern smart glasses leverage AI to connect us more deeply to the world around us. The transformation to this technology is inevitable... and that means demand is about to explode.

"Trusting AI for investing advice is risky – and that's not likely to change anytime soon," Sean Michael Cummings says. Tech-savvy investors are flocking to AI for investment advice. But this isn't such a good idea – and the reason why lies in how these models are trained.

Market Notes

HIGHS AND LOWS

NEW HIGHS OF NOTE LAST WEEK

Coinbase Global (COIN)... cryptocurrency exchange
Bank of New York Mellon (BK)... financial services
Charles Schwab (SCHW)... brokerage services
Nvidia (NVDA)... semiconductor giant
Broadcom (AVGO)... semiconductors
Ralph Lauren (RL)... iconic apparel
Tapestry (TPR)... high-end accessories
Wayfair (W)... home goods
U.S. Foods (USFD)... packaged foods
Shake Shack (SHAK)... fast food
Southwest Airlines (LUV)... airline
Rocket Lab (RKLB)... aerospace
TE Connectivity (TEL)... industrial "picks and shovels"
First Majestic Silver (AG)... silver
MAG Silver (MAG)... silver

NEW LOWS OF NOTE LAST WEEK

CNA Financial (CNA)... property and casualty insurance
Centene (CNC)... health insurance
Elevance Health (ELV)... health insurance
PG&E (PCG)... utilities

Recent Articles

View Full Archives
Subscribe to DailyWealth for FREE
Get the DailyWealth delivered straight to your inbox.
About DailyWealth

Our investment philosophy here at DailyWealth is this: Buy things of extraordinary value at a time when nobody else wants them... Then, sell when people are willing to pay any price.

You see, we believe most investors take way too much risk. So our mission at DailyWealth is to show you how to avoid risky investments – and perform better than the average investor. We believe that you can make a lot of money, safely, by doing the opposite of what is most popular.

We cover the day-to-day opportunities we see in the markets. We highlight the sectors look most promising (and the traps that are most likely to get you into trouble). And we share strategies from a range of perspectives at our firm... so you can learn how our experts view the markets, with investment wisdom that you'll use over and over again.

In a nutshell, we're committed to sharing the ideas that will help you build a lifetime of wealth. Thank you for joining us.

About the Editor
Brett Eversole
Brett Eversole
Editor

Brett Eversole joined Stansberry Research in 2010. He is the lead editor and analyst for True Wealth, True Wealth Systems, and DailyWealth.

Brett boasts a strong background in applied mathematics and statistics, with a degree in Actuarial Science. As an undergraduate, he passed the first three exams for entrance into the Society of Actuaries before focusing on finance at Stansberry Research.

He has put his analytical expertise to work in the markets for the past decade-plus. And, notably, he helped develop True Wealth Systems – one of Stansberry Research's most in-depth, data-driven products – alongside founding editor Steve Sjuggerud.

Brett takes a top-down investment approach. His first goal is spotting big macro trends in the market. These are the kinds of inescapable tailwinds you want as an investor. From there, he looks for opportunities based on valuation and overall market sentiment. Lastly, he always waits for momentum to be in his favor before investing.

This approach means Brett consistently takes a contrarian approach to investing. And combining that with data-driven analysis leads to fantastic long-term performance.

Back to Top