There is a bull market going on outside the US (e.g. shipyards have outperformed Nvidia for about four years) that nobody talks about because it isn't shiny; to make money you should ask the questions about the unglamorous stories—like why shipbuilding companies are thriving and Philadelphia building Korean ships—that no one else is asking.

Today's investor positioning is the reverse of 1945: US savings institutions hold very little government debt (with much held by foreigners, foreign central banks, and the Fed) and are heavily overweight the S&P 500, so under repression there is likely to be a shift away from equities toward debt, posing a major risk given how globally overweight US equities are.

High equity valuations fall slowly when the surprise is inflation and quickly when it is deflation: deflation/earnings collapse threatens solvency and flips valuations rapidly (as in March 2009 when it was unclear GE had any equity), whereas inflationary bear markets (1966-82, 1900-1920) grind down slowly via higher interest rates and lower valuations while nominal earnings still grow.

Financial models give a false certainty that practitioners and educators cannot give up, leading economics education from schools to postgraduate level to fail to embrace the real world—as when University of Manchester economics students and their teachers could not explain the global financial crisis because it 'wasn't on the syllabus.'

Gold's rise is signaling a structural regime shift: a new system with restrictions on the free movement of capital (good for gold), more inflation (good for gold), and more state direction of where savers keep money (good for gold); this is amplified because wealth is now distributed across China, India, America, and Europe rather than concentrated in America as in the 1970s.

Despite UK and European stock markets rising roughly 25% in local terms (30% in dollars) in 2025—the UK outperforming the S&P 500 in dollar terms—there is no wild bullishness among the public or institutions, and given negative news flow and the structural underweight to non-US markets, this is only the beginning of a long reweighting rather than a completed move.

Gold's long-run real return is essentially zero over centuries (verified with real gold prices back to the Middle Ages), but it has returned about +6% real over the last 30 years; despite being on a tear, the structural monetary change means there is likely more to come, even though the 100-year real return will probably remain zero.

Governments will choose financial repression to reduce debt because austerity and default are politically unacceptable, high real growth is possible but unlikely, and hyperinflation is too socially and politically dangerous; asset prices will therefore follow a path similar to the 1945-mid-1970s period that was dreadful for savers.

Markets fundamentally don't change—reading Adam Smith's (George Goodman's) 1960s 'The Money Game' shows the same human stupidity recurs; you can change the name of the instrument and the way the market thinks, but the underlying behavior endures.

Because debt levels are extremely high, there are only five ways the debt burden can come down: austerity, default, very high growth, hyperinflation, or financial repression; the determining question is which of these is politically acceptable.

When regime change occurs, the greatest risk for any investor is to get all the right answers to all the wrong questions, because the questions that worked for the last 40 years are likely the wrong questions for the next 5-20 years as the structure of the system changes.

The beautiful thing about finance is you don't need the right answers, you just need better answers than most other people.

The world is at a geopolitical inflection point, but investors are failing to ask what that means for the global monetary system, the free movement of capital, debt burdens, and inflation, instead focusing on dinner-party questions like whether China invades Taiwan.

Starting valuation determines long-run returns: in 1949 US equities were extraordinarily cheap (Shiller PE below 10, dividend yield near 10%, with profits depressed by wartime excess-profits tax), allowing equities to do well under repression, whereas today the S&P 500 starts at excessively high valuations, so the same repression will produce very different outcomes.

Buying equity markets below 10x CAPE has historically delivered very high long-term returns (PIMCO data showed ~120% over 5 years), while buying above 40x CAPE (where the US closed the year) has never produced an above-average 10-year real return in the historical database; but these valuation signals only work over ~10-year holding periods, not the next year or two.

Even within an expensive headline index, sub-segments can offer value: buying midcap value stocks in 1966 (when the S&P CAPE was very high) produced a positive real return to 1982 whereas the S&P delivered poor real returns, so investors should split markets by size and style rather than judge by the headline index.

The most dangerous form of speculation is the search for yield ('John Bull can stand many things but he cannot stand 2%'); when risk-free yields fall toward 2% investors chase higher yields and invariably take higher risk, so investors should target total return rather than yield, especially under financial repression.

If hiring a money manager today, hire one from South Africa or Brazil because they are familiar with financial repression—the state allocating, manipulating, or 'stealing' savings—and have developed the skill set to make money legally in that environment, unlike Western managers trained only in the post-Thatcher/Reagan era of shrinking government and growing markets.

Technology never ultimately defeats inflation: it can crush the price of specific goods (a digital watch fell from $850 in 1971 while the general price level rose ~800%) but because inflation is largely a monetary phenomenon, when governments create enough money technology only produces a distributional effect—some prices fall while commodity prices and wages rise; technological booms produced deflation only under the gold standard's monetary anchor.

Historically there is no relationship between a country's GDP growth and the return from its equities; China's economy vastly outgrew America's since February 1992 yet the MSCI China index is lower today than then, and backing the GDP winner (the US) since 1992 produced far higher returns than the faster-growing economy.