As we farewell the shores of 2025 and sail into 2026, equity investors seem to be shrugging off fears of an artificial intelligence (AI) bubble and are instead betting on a growing U.S. economy, rate cuts, and a broadening of bullish sentiment beyond the AI leaders.

The consensus view is the U.S. economy is settling into a rate of growth that is more modest than last year’s, avoids a recession and could surprise to the upside. Meanwhile, U.S. inflation and employment data are generally seen as supportive of a Federal Reserve rate cut, even though, according to some economists such as Torsten Slock, two-thirds of inflation seems to be demand-driven. Continue…

by Roger Montgomery Posted in Economics, Global markets.

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From South Sea to AI: Artificial Intelligence (AI) companies seem to be asking investors the question: Just how long can growth be built on the question of future returns – and a productivity revolution – that are by no means guaranteed?

The South Sea Bubble of 1720 remains the archetype of a financial mania driven by exotic new ‘tech’, the promise of monopoly returns, and limitless public imagination.

At first, the idea of comparing the South Sea bubble to an AI boom 305 years later seemed far-fetched. AI is not, for example, a Ponzi scheme being promoted by those who fail or refuse to publish financials or forecasts of how profits will be made. Continue…

by Roger Montgomery Posted in Investing Education, Market commentary, Technology & Telecommunications.

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Sir Isaac Newton is enshrined in history as the saint of rational thought. He decoded the laws of gravity, invented calculus, and parsed the rainbow. Yet, in the spring and summer of 1720, the arguably most intelligent man in the British Empire made a series of financial blunders, recorded for posterity, and so catastrophic they have become a cautionary legend in economic and investment history.

Newton’s entanglement with the South Sea Company serves as a stark reminder: in the face of collective delusion and market mania, even a genius can be led astray. Continue…

by Roger Montgomery Posted in Investing Education, Market commentary, Technology & Telecommunications.

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Hear from the team Polen Capital as they discuss how having a diverse team with different backgrounds, work experience, and viewpoints can enrich the decision making process. By operating on a growth mindset – by encouraging continuous improvement and collaboration with one another – Polen Capital is able to identify the best investment opportunities available. Continue…

by Polen Capital Posted in Polen Capital.

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Recently, the BBC interviewed Sundar Pichai, the CEO of Alphabet, Google’s parent. With all the claims the artificial intelligence (AI) boom is a bubble – something I have noted cannot be known until after the event – I wonder whether the BBC was motivated to go to the source. 

Describing the surge in AI funding as a remarkable period, yet one marked by certain unrealistic expectations, Pichai warned viewers of BBC News that no business would escape unscathed if the AI boom collapses. Continue…

by Roger Montgomery Posted in Global markets, Market commentary, Technology & Telecommunications.

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With 30 per cent of the U.S. S&P 500 index trading at more than 10 times sales, and 13 per cent of the S&P 500 by index weight trading at 20 times price-to-sales (P/S) (a level that now surpasses the tech boom of 1999-2000), we’ll take a break this week from commenting further on market valuations and leave it to you to decide whether it’s wise to be fully invested in equities, or diversified.

This article was first published in The Australian on 21 November 2025.

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by Roger Montgomery Posted in In the Press, Technology & Telecommunications.

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53 positive months out of 54, 22.52% p.a. since May 2021

In this video, I provide an update on the October performance of Digital Asset Fund’s Management’s (DAFM) Digital Income Class. Despite significant volatility in Bitcoin – rising to record highs before sharply retracing – the fund continued to deliver steady results, returning 2.72 per cent for the month. Because the strategy is market-neutral and driven by high-frequency trading algorithms that capture price spreads rather than take directional cryptocurrency exposure, October’s turbulence created additional trading opportunities. The month reinforced the fund’s ability to generate consistent, uncorrelated returns irrespective of broader market noise. Continue…

by Roger Montgomery Posted in Digital Asset Funds Management, Video Insights.

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The U.S. Federal Reserve (The Fed) has two main mandates: supporting employment and controlling inflation. Until Friday, it looked as if the two were almost perfectly balanced against each other, suggesting that the Fed would keep rates on hold in December.

Last week, Wall Street decided that a December cut was off the table. On Wednesday, the Chicago Mercantile Exchange (CME) Fedwatch futures index placed the probability of a cut at just 30 per cent.

Meanwhile, JPMorgan published a note predicting a January cut. Markets sold off dramatically, with the Nasdaq 2.74 per cent lower, and the S&P 500 losing 1.95 per cent last week. And there were of course, fears of a bubble in the artificial intelligence (AI) theme, which we have written about here copiously. Continue…

by Roger Montgomery Posted in Economics, Global markets, Market commentary.

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