American Unexceptionalism

+ Bob Elliott, Richard Ennis, Dan Rasmussen, Anthony Bolton, Jordan Brand & More

Author

The Idea Farm
August 31, 2025

“Success in investing isn’t about making a lot of money in a short period of time. It’s about earning reasonable returns over very long periods.”

— Bruce Flatt

Research

Sahil Mahtani analyzes the history of dollar cycles explains why history suggests there are now enough shocks to decisively end the 2011–2025 dollar upcycle.

Listen to Sahil read this on The Best Investment Writing podcast. Apple | Spotify | YouTube

Richard Ennis and Daniel Rasmussen show that listed private equity on the LSE experiences significantly higher volatility and larger, less stable NAV discounts than secondary-market equivalents. And, it has lagged the broader market since the 2008 crisis—particularly following the 2022 interest-rate increases.

GMO argues that most of the S&P 500’s performance edge over the past decade+ is driven by valuation expansion and dollar strength—not aggregate fundamental growth—and concentrated among a handful of mega-cap tech names.

Man Group shows that four methods to determine CMAs—historic, conditional, theoretical, and consensus—suggest very low or even negative U.S. equity returns (0% to –3%) over the next decade, while bond prospects are modestly more stable.

Source: Man Group calculations. As of December 2024.

Markets have become highly sensitive to economic data releases, which drive Fed policy, but the reliability of those releases has weakened due to falling government survey response rates. Despite reduced data quality, markets continue to react strongly to surprises—especially inflation figures, where sensitivity is more than double historical norms for bonds and significantly higher for stocks.

As of August 11, 2025

Bonus Content - Industry Reports

Economic Innovation Group examines the U.S. auto industry’s century-long evolution, debunking myths of inevitable decline and showing how innovation, policy, and resilience shaped global competitiveness.

Source: The Federal Reserve

Morningstar explores how a new defense “supercycle”—driven by geopolitical tensions—will reshape the industry, with European defense budgets projected to grow ~6.8% annually through 2035.

Source: SIPRI, Morningstar. As of August 27, 2025.

Michael Cembalest examines why US healthcare stocks, once on par with tech in returns and far less volatile, now lag significantly, amid plunging valuations, looming patent cliffs, and funding pressures.

Morningstar covers the $1 trillion-plus auto dealership industry, touching on automobile industry trends, individual stocks’ economic moats, future outlooks, ESG considerations, and more.

Goldman Sachs - The Structural Solar Surge (15 pages)

Goldman Sachs examines how solar power is transitioning from a niche technology to a structural driver of global energy supply. The paper highlights rapid cost declines—around 20% each time global production doubles—and explores how scaling threatens grid stability through oversupply and negative pricing episodes.

As of July 27, 2025.

Podcasts

8/19/2025 - 46 minutes

Aronson discusses his career and path to building Centerbridge, and the opportunities and challenges facing private investment managers today.

7/2/2025 - 38 minutes

Bolton explains why popularity is risk, how the best investment opportunities often feel uncomfortable, and why current market dynamics may be creating even bigger opportunities for contrarian investors.

7/8/2025 - 48 minutes

Larry Miller explains how he went from being incarcerated to become the President of the Portland Trail Blazers and President of the Jordan Brand.

What Else Is Happening