To The Moon

A sober reading of probabilities suggests that “nothing happens” is the most under-appreciated outcome for 2026, even if it sounds unsatisfying.

My base case for 2026

Most likely: U.S. equities grind to new highs

Not via euphoria, but through earnings growth, AI productivity gains, and multiple stability rather than expansion. A slow, uneven advance fits a mature cycle better than a dramatic break.

Very plausible: repeated Fed policy reversals

Not full U-turns, but frequent recalibration. Sticky services inflation, election-year pressures, and data-dependent messaging make policy whiplash more likely than a clean, linear path.

Conditional upside: gold above US$5,000

This requires a renewed confidence shock, sustained real-rate compression, or a material loss of trust in fiscal discipline. Possible, but not the default if growth holds.

Lower probability: an AI bubble bursting outright

More likely is sector rotation and valuation compression, not systemic collapse. AI adoption is broadening into real cash flows, which reduces classic bubble dynamics.

The paradox

After years of tail-risk dominance, markets may enter a phase where volatility falls, narratives cool, and trends persist quietly. That would feel strange precisely because it lacks drama.

In short, 2026’s surprise may be its lack of shocks, with returns driven more by discipline and patience than by bold macro calls.