In this report, we argue that today’s US market setup is anything but contrarian. Capital is heavily concentrated in US equities, priced in US dollars, and driven by a narrow AI-led narrative.
Valuations are elevated, index concentration is extreme, and expectations leave little room for disappointment.
We then step back and outline what we see as the more probable macro path for the coming decade — including the case for a structurally weaker dollar driven by rising US debt burdens, changes in central bank reserve allocation, and geopolitical fragmentation.
From there, we focus on where value actually sits today:
- Emerging markets that screen cheap on valuation metrics, particularly in Latin America and parts of Asia.
- Deeply discounted Chinese and Hong Kong tech, where sentiment has collapsed but competitive positioning remains intact.
- Energy — especially oil, oilfield services, and offshore drilling — where capital starvation and ESG-driven neglect have created structural supply constraints.
The conclusion is simple: the last decade rewarded crowding and narrative momentum. The next one is more likely to reward scarcity, hard assets, and markets where pessimism is already priced in.
The US stock market today is about as far from contrarian as it gets. In fact, it has arguably never been more popular in its entire history. Capital is crowded into a single trade: US equities, priced in dollars, driven by one dominant narrative—AI. A small cluster of mega-cap stocks—the so-called Magnificent 7—now accounts for…
