The 2021 analog is persuasive until you account for one difference: AI capex is actually productive spending. Negative real rates just inflated asset prices. AI spending creates real compute output that businesses pay for. Whether that makes the valuation compression sustainable is the whole argument.
The 2021 analog is persuasive until you account for one difference: AI capex is actually productive spending. Negative real rates just inflated asset prices. AI spending creates real compute output that businesses pay for. Whether that makes the valuation compression sustainable is the whole argument.
The World Has Changed. Most People Haven’t Noticed Yet.
We are no longer in a normal economic cycle.
We’ve entered a new era one where inflation, geopolitics, and energy shocks are rewriting the rules of global markets.
Central banks like the Federal Reserve, European Central Bank, and Reserve Bank of India are not just managing economies anymore.
They are defending stability.
What’s really happening?
• Inflation isn’t temporary. it’s becoming structural
• Oil is no longer just a commodity. it’s a geopolitical weapon
• Interest rates are staying higher for longer
• Markets are no longer driven by easy money
This is not a slowdown.
This is a reset.
The hidden force: Energy
Oil above $100 is not just a price spike.
It’s a signal.
A signal that:
supply chains are fragile
conflicts are shaping costs
inflation can return anytime
Every oil shock today is a global economic shock.
📉 Markets are changing too
The old playbook:
→ Cheap money
→ High growth
→ Fast gains
The new reality:
→ Expensive capital
→ Selective growth
→ Volatility
Markets are no longer rewarding speed.
They are rewarding discipline.
The biggest shift most people miss:
We’ve moved from a world of abundance
to a world of constraints.
And in this world:
Strong businesses win
Weak models break
Patience beats timing
What should you do?
• Focus on quality, not hype
• Think long-term, not short-term
• Stay calm during volatility
• Build resilience, not just returns
This is not the end of opportunity.
It’s the end of easy opportunity.
The future will not reward those who react fast.
It will reward those who understand deeply and act wisely.
Really enjoyed the newsletter!! While the bias leans bullish, you did an excellent job presenting the thesis with balance and clarity.
If he is bullish, that's where his bias would lean. That's what we pay for... imho
Great stuff Cap!