Quarterly Letter
10 min read | Divergence in the performance between AI-led US markets and the rest of the world accelerated in the fourth quarter, fueled by optimism after the Trump election victory and a strong US dollar. “US exceptionalism” continues to be the mantra in markets, and this has certainly been reflected in equity market performance, elevated valuations of the ‘Magnificent 7’ stocks, and the premium afforded to most US companies relative to their international peers. As we assess the narrow market leadership that is extended by most measures and by historical comparisons, we believe that, while possible, it is unlikely that many companies, particularly those in the US, can deliver on the long-term expectations embedded in their valuations.
