I’m writing this at the start of 2026, and if I’m being honest, I’m doing so over a background noise that has become the soundtrack of my home over the last few weeks as the kids have been home from break.
My kids have been running through the house for weeks now, incessantly shouting the number "6,7!" They repeat it ad nauseam, at the dinner table, in the backyard, and even when they’re supposed to be sleeping. It doesn't mean anything. I’ve heard it enough times that the sight of a thermostat set to 67 degrees sends a chill of panic through my veins. It doesn’t make any sense. But because one of them started it, they’ve all joined in a loop of repetitive nonsense simply because it’s what everyone else is doing.
As I look back at the markets in 2025, I realize that the "grown-ups" in the investing world weren't acting much differently.
The year began in the grips of the "tariff tantrum." In early 2025, headlines about global trade freezes and 1930s-style protectionism triggered a panicked exodus. It was reminiscent of the scene in Monty Python and the Holy Grail where the knights encounter the Killer Rabbit—one look at the perceived danger and the collective market let out a cry of "Run away! Run away!"
Investors dumped assets with total disregard for fundamentals, sprinting away from anything that looked like a "trade risk" in a frantic search for a cave to hide in.
By the second half of the year, the "I know" school of forecasting was proven wrong once again. The fear vanished, replaced by a desperate, elbowing-your-neighbor brand of greed.
The market turned into the shopping mall scene from Jingle All the Way. Just as the frantic parents fought tooth and nail to get their hands on a Turbo Man action figure, investors engaged in a chaotic scramble for "priced for perfection" U.S. mega-cap growth stocks.
This behavior highlights a strange quirk of human psychology: our tendency to chase and repeat things that are, frankly, senseless. Whether it’s investors piling into stocks with valuations that defy the laws of physics, or the way my kids have spent the last month incessantly repeating 67!" for no discernible reason—people often get caught up in a loop of nonsense just because everyone else is doing it.
As we open 2026, we find ourselves in a bizarre reality where fear and greed occupy the same room. Usually, when "safe havens" spike, stocks are in the gutter. Today, we have both:
One group is betting on a techno-utopia, while the other is hoarding hard assets because they’re worried about the math of the national balance sheet. While these two groups scream at each other, the "Great Ignoring" has taken place: the vast majority of stocks—the steady, productive businesses that actually generate cash flow—are being completely overlooked.
But perhaps this is starting to change, and people are starting to take notice of the ignored and unloved. The most significant shift of 2025 was the "great awakening" of international markets. After being somewhat ignored for nearly 15 years, international stocks finally stepped out of the shadow of U.S. exceptionalism.
In 2025, the MSCI All Country World ex-USA Index quietly outperformed the S&P 500 by a significant margin. There are several key reasons why the world is finally looking abroad again:
While the financial news cycle is obsessed with the "Turbo Man" scramble for AI chips and the "Run Away" move into Gold, these productive, deeply discounted small businesses in Europe and Japan are making money hand-over-fist without any of the fanfare. It is a striking example of how the loudest parts of the market aren't always the most profitable.
The lesson of 2025 is that when the crowd is either running away from a "rabbit," fighting for a "Turbo Man," or just shouting "6, 7" at the top of their lungs, we should take heed of the tagline from Investor Bruce Berkowitz: “Ignore the crowd.”
We remain diversified, tilting towards the productive assets found in the small-cap and value corners of the global market. Our goal is not to predict the next spike in silver or the next AI breakthrough, but to own a broad cross-section of the world's most profitable, undervalued businesses.
In a world that feels increasingly abnormal, sticking to a disciplined, diversified, and valuation-aware strategy is the only way to maintain your sanity—and your capital.
This material is intended for educational purposes only. You should always consult a financial, tax, or legal professional familiar with your unique circumstances before making any financial decisions. Nothing contained in the material constitutes a recommendation for purchase or sale of any security, investment advisory services or tax advice. The information and opinions expressed in the linked articles are from third parties, and while they are deemed reliable, we cannot guarantee their accuracy.