Macro

The last point to mention that’s separate but related to all of this is the US dollar which I expect to see another 5-10% decline in 2026. Liberation Day set in motion what was already a slowly melting ice cube of capital flows into the US peaking out.

Given I believe both fiscal and monetary policy in 2026 will be focused on supporting main street and many other places besides tech, in addition to what I believe is a concentration problem, it’s not an area I am excited to invest in.

Long assets that perform well in a steepening yield curve environment and stay away from ones that don’t. Cyclical and industrial commodities, energy and financials benefit here, whereas long duration, speculative assets and technology should lag. This approach happens to dovetail nicely with the main street reignition idea as well. Stimulus to the... See more

The steeper yield curve is also being reinforced by a policy change the Fed began late last year that I still don’t think is getting enough attention. While their policy is supportive of the front end via Fed Funds rate cuts and the newly announced Reserve Management Purchases (RMP), it is doubly bad for the long end. First, that front-end... See more

The Trump admin has a choice in 2026 - stimulate Main Street to win the election or keep a lid on bond yields. The former will take priority and the latter will be chased like a dog on a leash.

The Technology sector was the 2nd best performing sector in 2025, fueled by huge earnings growth while the multiple ascribed to the sector contracted. The performance wasn’t a function of investors becoming euphoric and slapping deranged valuations on the sector but rather actual earnings growth (the best long-term indicator of fundamental... See more

Unemployment is going up. Historically it trends, meaning it is likely to continue going up. Incidentally this is one of the main drivers of inflation (labor market) but the quits-rate is quite low meaning people aren’t leaving their jobs. This suggests employers have the leverage between these two groups. If that’s true then it’s probably also... See more

When I was jotting down notes for this piece I started listing out all the best observable reasons 2026 could be a bad year.

• the labor market is weakening


• AI capex can’t continue at this rate and is propping up the market


• stocks are expensive and multiples will contract


• private credit boogeyman


• inflation returns

I feel a bit like a broken record because at least anecdotally it seems people have been asking me for a while if the bull market is over. My crude, high-level view on this is that unless we are heading into a recession or a rate-hiking cycle the answer is probably no.