The Most Underpriced Outcome Is Continuation

The Year Ahead 2026

2025 was another year where positioning mattered more than forecasts. Policy stayed restrictive, rates did not collapse as predicted, and yet the economy proved far more resilient than most people were set up for. Earnings followed, markets naturally adjusted higher, not because conditions were easy, but because they were good enough.

A lot of time was spent arguing that this rally was unsustainable, mainly that it was a bubble and that the concentration of a certain cohort of names was dangerous. That AI had already gone too far, too fast. Those arguments persist, but price never confirmed them, and capital simply continued moving toward the same parts of the market quarter after quarter.

What stood out to me was not excess, but selectivity. Capital was not indiscriminate. In fact, some of the most boring parts of global equity markets quietly worked without anyone calling it speculative. The FTSE 100 (+21.5%) outperforming the Nasdaq (+20.17%) in 2025 is a good example. That is not how bubbles typically behave.

I think that matters as we look to the year ahead. The framework that many people are still using assumes a regime change that has not actually arrived.

Below, I lay out how I am thinking about the year ahead, why I think the upside case continues to be misunderstood, and where that leaves positioning once you strip away the noise. That disconnect has larger implications for both positioning and upside than most people currently appreciate.