Sell America

+ Antti Ilmanen, Richard Ennis, Verdad, Michael Cembalest, Bethany McLean & More

There’s very little I like shorting more than hubris.

Cade Massey

Research

This paper is Part I in a series from Antti Ilmanen, which tries to understand how investors actually form long-run return expectations. He contrasts “objective” yield-based expected returns and “subjective” rearview-mirror expectations and argues that “rearview-mirror expectations have made many investors too optimistic on risky and private assets after the good times following the Global Financial Crisis, and too cautious on liquid diversifiers.”

Part II in the series linked above applies the ideas to expectations for U.S. equities versus the rest of the world by analyzing the drivers of relative performance—in particular the different roles of fundamentals and valuations—and assessing the most likely implications for future returns.

As of 5/9/2025

Ennis argues that alternative investments bring extraordinary costs but ordinary returns. He estimates a diverse portfolio of alternatives cost costs at least 3% to 4% of asset value, annually.

Source: Richard M. Ennis, The Demise of Alternative Investments, as of 3/4/2025

NEPC looks at true diversifying strategies - those that utilize investment processes that produce returns driven by idiosyncratic risk rather than factor risk. They walk through a number of diversifiers, including trend following, global macro, and event-driven.

As of 4/10/2025

Bonus Content

Charles Mann has written three parts in an ongoing essay series on the hidden mechanisms that support modern life:

  1. We live like royalty and don’t know it. Link

  2. Breakfast for eight billion. Link

  3. A spring in every kitchen. Link

“Diversifying equity allocations outside of the United States seems like a prudent move in this macroeconomic environment, and, given valuations, international outperformance is a trend that could continue for years to come.” Link

As of May 5, 2025.

Podcasts

5/8/2025 - 78 minutes

Starting at 28:30, Cembalest covers the macro landscape, offers practical advice for navigating today’s volatility, and shares why he’s still optimistic that markets could normalize.

5/5/2025 - 55 minutes

Business Insider founder Henry Blodget covers the state of the AI boom, what lessons we can draw from the dot-com era, and what's changed on Wall Street over the last 25 years.

5/7/2025 - 35 minutes

McLean discusses various topics including the current state of private equity, U.S. healthcare, Fannie Mae and Freddie Mac, tariffs, and Warren Buffett's enduring legacy.

What Else Is Happening