Ryan Knutson and Wall Street Journal biotech reporter Xavier Martinez trace how Moderna's individualized cancer vaccine went from an idea the company could not afford to a phase three melanoma result that arrived early, with archival tape of CEO Stéphane Bancel and president Stephen Hoge on why they stayed out of oncology and why they eventually went in. The episode covers the founding bet on mRNA, the Merck partnership, the pandemic detour, the post-COVID cuts, and what still stands between the shot and a patient.

Host: Ryan Knutson
Also on: Xavier Martinez, biotech reporter, The Wall Street Journal; Stéphane Bancel, chief executive, Moderna, in recorded interviews; Stephen Hoge, president, Moderna, in recorded interviews; Lane Florsheim, The Wall Street Journal

Published: 28 August 2026 on The Journal.
Show notes | 26 min

Key Takeaways

• Moderna's stock fell more than 90% from its peak before the melanoma result landed

• "It's gone down more than 90% from its peak." — Xavier Martinez

• "You look at the stock chart and it just looks like the tallest mountain in the world." — Martinez

• The vaccine hit both goals of the study, on recurrence and on spread

• "That study met two goals in both preventing the growth of any cancer, but also preventing it spreading from other organs in the body or metastasizing." — Martinez

• Martinez rates it as potentially the biggest cancer advance in a quarter century

• "It could be one of the biggest advancements in cancer that we've seen in the last 25 years."

• The oncology program exists because a hedge fund manager mailed Moderna a check

• Bancel had told him no; a FedEx envelope with "a check from that hedge fund manager for $500,000" arrived days later

• Bancel's caution was about biology, not ambition

• "Because if we pick the wrong biology, it might not be the technology issue, it might be the biology, but everybody including us is going to believe it's the technology."

• Merck paid to find out whether mRNA and Keytruda worked together, while doubting it would

• "Merck agreed to pay Moderna $200 million to fund research into how its mRNA vaccine might work in combination with Keytruda." — Knutson

• COVID and the cancer trial were competing for the same manufacturing equipment

• "It is actually very bad for the program. They're using the same equipment that they used for the cancer vaccine." — Martinez

• The COVID franchise funded the expansion and then left a hangover

• "Earlier this year, the short interest in Moderna hit 20%" — Knutson

• A 2022 interim look at phase two is why the cancer program survived the cuts

• "Moderna and Merck get interim looks at the data in 2022 and the results are really promising for them." — Martinez

• Phase three ran past a thousand melanoma patients, all of them on Keytruda

• "This was a very big trial. It was over 1,000 patients" — Martinez

• Bancel has redefined the company off the back of one readout

• "We are now an oncology company." — Bancel, as relayed by Martinez

• Nothing has been published yet, and nothing is approved

• Moderna has not disclosed how well the treatment worked or in what share of patients, and says it will present at a medical conference later this year

A Stock Down More Than 90%, Then a Result Nobody Expected Yet

• Martinez sets the collapse first: COVID urgency faded, US vaccination rates fell, and sales dropped with them.

• The company was, in his words, running out of money while the chart flattered its past — "It's gone down more than 90% from its peak. The company is bleeding cash."

• The phase three news broke while Martinez was on a call with a different pharmaceutical company and his editor started waving at him through a meeting room.

• Knutson's read of the moment: "Hang up the phone now. There's breaking news."

• The study cleared both of its endpoints — "That study met two goals in both preventing the growth of any cancer, but also preventing it spreading from other organs in the body or metastasizing."

• The vaccine is for people who have already had melanoma, and is designed to stop the cancer coming back or moving to other parts of the body.

• Martinez's framing of the stakes: "It could be one of the biggest advancements in cancer that we've seen in the last 25 years."

• On the corporate side, he calls it a rescue: "This is really bringing Moderna back from the brink financially. They've been hemorrhaging cash for the last two and a half years."

• Knutson: "Their cancer's in remission."

The Instruction Manual Moderna Was Built On

• Moderna was founded in 2010 as what the industry calls a platform company, meaning every drug it would ever make would be built on mRNA.

• Knutson runs the explainer for the audience — mRNA carries instructions that teach the body how to make proteins such as antibodies, and the founding question was what happens if scientists write those instructions themselves.

• Martinez describes the molecule as "a temporary instruction manual or a blueprint" whose job is to shuttle directions from DNA to the rest of the body.

• The oncology version of that idea is a targeting instruction — "the goal here is that you can actually encode different sets of instructions to tell your immune system"

• Cancer was not on the early roadmap at all. Martinez: the biology is still only partly understood, so using mRNA against any one component of the immune system was an unproven bet.

Why Moderna Stayed Out of Oncology in Its First Years

• The company deliberately picked easier targets, working on things like flu and genetic diseases instead.

• Bancel's reasoning, in tape from almost a decade ago, was that a failure in cancer would have been read as a failure of the platform — "Because if we pick the wrong biology, it might not be the technology issue, it might be the biology, but everybody including us is going to believe it's the technology."

• "We are very worried in the early days, kind of paranoid worried, of going the wrong way and taking so long to realize we are in the wrong way on the science that we might kill the company." — Bancel

• Martinez, who sat down with Bancel and other executives last week, describes the CEO as the realist of the group: prove the technology elsewhere first, then consider oncology.

• Cost was the other half of the argument — "we were actually kind of afraid of going into oncology too early because it was going to be so cost intensive."

• "It cost millions of dollars to enroll patients in clinical trials", and previous therapeutic cancer vaccines had all failed.

Hoge, the Optimist Who Would Not Let the Idea Go

• Stephen Hoge, a physician and former McKinsey consultant, is cast by Martinez as the dreamer of the executive group against Bancel's realism.

• "I have come to realize that optimism is my greatest privilege." — Hoge

• On joining in 2013: "It was trying to pursue a phenomenally big idea, like sort of farcically big, that we're going to figure out a way to turn medicine into information or information into medicine."

• The wave of immune-focused cancer therapies in the early and mid-2010s is what made Hoge push for a serious look at mRNA in oncology.

• He showed Bancel the science and lost the argument on money. Moderna had fewer than a hundred employees, no product on the market and no revenue, so a cancer program was too expensive and too uncertain.

The $500,000 Check That Started the Program

• In 2013 an early investor whose wife had been diagnosed with stage four lung cancer called Bancel directly to ask whether mRNA might be useful against it.

• Bancel said no, and priced the no — "Sorry, no, it's going to be way too expensive. Even just to hire a couple of researchers, it's going to cost $500,000, half a million dollars."

• Days later, back at his office in Cambridge, a FedEx envelope arrived with "a check from that hedge fund manager for $500,000."

• That money hired two cancer researchers and the oncology program began.

• The hard part was that each patient's cancer is different, so every vaccine has to be tailor-made, and bespoke shots are expensive.

• Bancel pushed the team to get the cost down. A couple of employees locked themselves in a room and sketched the approach on a whiteboard in green, purple, red and pink marker; Bancel still has the photograph.

• Once they worked it through, they realized testing it in actual patients, rather than on the whiteboard, would take far more money than they had.

Why It Had to Be Merck

• Moderna went looking for a partner that already knew how to run trials, work with academic centers, make experimental medicines and distribute them.

• "there's all these great pharmaceutical companies that, a, they know how to do clinical trials. They know how to work with academic centers." — Martinez, on the search

• They settled on Merck, the company behind Keytruda, which unlike chemotherapy stimulates the immune system rather than poisoning tumors — the same logic Moderna was pursuing with mRNA.

• Bancel and Hoge pitched Merck in 2016 and were met with skepticism.

• "And the Merck executives have tons of questions. And at the end, these Merck executives are still doubtful. They frankly don't necessarily think it's going to work."

• Moderna was not selling certainty either — "we don't want to hype this up too much. We just want to see if this will yield anything."

• Merck funded it anyway — "Merck agreed to pay Moderna $200 million to fund research into how its mRNA vaccine might work in combination with Keytruda." — Knutson

• A phase two study began in 2019, dosing a small number of cancer patients.

COVID Took the Equipment the Cancer Trial Needed

• Six months into the phase two study, the pandemic hit and Moderna pivoted to a COVID vaccine.

• From the start of development to FDA authorization on the Operation Warp Speed pathway took under a year, which Martinez calls extraordinarily quick against normal drug timelines.

• It proved to the public, to investors and to scientists that the company could put a drug on the market.

• The cost fell on the cancer program, which shared the manufacturing line — "It is actually very bad for the program. They're using the same equipment that they used for the cancer vaccine."

• The company had to choose between making individualized vaccines for cancer patients already enrolled in the trial and producing COVID vaccine for the public. It chose the COVID vaccine, and Martinez says the executives found the decision neither easy nor fun.

• Knutson: Moderna won more than a billion dollars from the Trump administration to accelerate the shot, which was authorized for emergency use that December.

• "in the first two years the vaccine was on the market, it generated $36 billion in sales" — Knutson. That money paid for expansion, oncology included.

The Hangover: Cuts, a Falling Stock and 20% Short Interest

• "Oh, I mean, a hangover doesn't even begin to describe it." — Martinez, on what followed the pandemic

• As COVID revenue fell away, Moderna cut jobs and killed development programs to protect the ones it believed in most, including research into a pediatric RSV vaccine and other cancer therapies.

• The market positioned for more pain — "Earlier this year, the short interest in Moderna hit 20%" — Knutson.

• The individualized cancer vaccine survived every round of cuts, which is the question Knutson puts to Martinez directly: among all the things they cut, why not that one?

The 2022 Interim Look That Protected the Program

• Martinez points to the inflection: results from the phase two study came back in 2022.

• Phase two is the industry's make-or-break gate — "they represent the make or break moment", and "You're not going to push something beyond a phase two if you don't really think it's going to read out well."

• "Moderna and Merck get interim looks at the data in 2022 and the results are really promising for them."

• Merck then committed to a full partnership to make and sell the vaccine with Moderna, and the work moved to phase three.

• "This was a very big trial. It was over 1,000 patients" — a thousand high-risk melanoma patients had their melanoma removed, with the tissue and a blood sample sent to Moderna and Merck to sequence the mutations, then were dosed for about a year.

• In both studies every patient took Keytruda; only some also received Moderna's vaccine.

• Moderna had guided all year to a second-half 2026 readout. It arrived earlier than anyone expected.

Champagne, Sparkling Juice and a New Identity

• The companies announced high-level results last week: the combination appears to stop the cancer returning or spreading in high-risk patients.

• The detail is still unpublished. Moderna has not said how well the treatment worked or in what percentage of patients, and says it will present the results at a medical conference later this year.

• "I mean, it was like your birthday and Christmas and the day you got married all wrapped up into one." — Martinez, on the scene inside the company

• Staff packed into the cafeteria with champagne and sparkling juice, with colleagues dialing in from Asia at midnight or one in the morning. People cried and hugged.

• "The Moderna CEO is reading off a note card because he doesn't trust himself to not choke up or say things eloquently."

• Bancel's line to the company was a repositioning as much as a celebration — "We are now an oncology company." Martinez calls that a bold statement for a firm built on infectious disease with a pipeline mostly unrelated to cancer.

What Still Has to Happen Before a Patient Gets It

• The vaccine needs FDA approval, and Knutson notes the Trump administration has shown skepticism about mRNA technology.

• Martinez expects the unmet need to carry the day — "if a technology is effective, it's probably going to be looked fondly upon by the FDA."

• The companies are hoping for approval next year.

• The result is narrow for now: still in trials, and still only in melanoma. Vaccines for other cancers may be possible but are a long way off.

• Pricing is unresolved. Some existing cancer therapies run up to $500,000 per patient, and Bancel says this treatment will be priced below that.

• Martinez's verdict on the platform strategy — "It's a very risky bet, but it can really pay off if it pays off" — with Moderna's first entry into the oncology market as the prize.

A New Sunday Show in The Journal's Feed

• Lane Florsheim joins at the end to introduce My Monday Morning, a series she is hosting that runs in The Journal feed on Sundays.

• The premise is a single question put to people who are good at what they do: what does your Monday morning actually look like.

• "it's a surprisingly revealing way to get people to open up about how they think, how they work, and what they've figured out about themselves along the way."

• The first guest is Suze Orman, and the sleep gap is the hook: "She says she can make it on as little as three hours a night."

• "I'll be talking to an astronaut, actors, the model Twiggy." — Florsheim on the rest of the series

Moderna spent more than a decade insisting that mRNA was a platform rather than a product, and one melanoma readout has now turned that argument into a company that calls itself an oncology business.

Products, Companies & Tools Mentioned

• Moderna (Founded 2010 as an mRNA platform company; stock down more than 90% from its peak and burning cash before the phase three melanoma result)

• The individualized melanoma vaccine (Bespoke shot built from each patient's own tumor mutations, tested alongside Keytruda in a trial of over 1,000 high-risk patients)

• Merck and Keytruda (Immunotherapy partner that paid $200 million to test the combination while doubting it would work, then committed to a full partnership after the 2022 interim data)

• Moderna's COVID vaccine (Authorized under Operation Warp Speed in under a year; generated $36 billion in its first two years and funded the oncology expansion, but competed with the cancer trial for the same equipment)

• The Food and Drug Administration (Approval is the next gate; the companies want it next year, against an administration Knutson describes as skeptical of mRNA)

• Pediatric RSV vaccine and other cancer therapies (Programs cut during the post-COVID retrenchment while the individualized cancer vaccine survived)

• My Monday Morning (New Sunday series from Lane Florsheim in The Journal's feed, opening with Suze Orman)

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Steve Eisman, who ran FrontPoint Partners through the subprime crisis and now hosts The Real Eisman Playbook, tells David Lin that US growth and the AI trade have become the same position, and walks through the revenue lines he will read in the second half to see whether it is holding. Lin brings Congressional Budget Office deficit charts, a headline CPI chart and the case for Treasury intervention to it.

Guest: Steve Eisman, host of The Real Eisman Playbook, formerly of FrontPoint Partners, portrayed as Mark Baum in The Big Short
Host: David Lin

Published: 28 August 2026 on The David Lin Report
Episode page | 32 min

Key Takeaways

• The AI food chain and the US economy are now the same bet on two companies that lose money

• "I think it's a little nerve-wracking that the entire US economy is dependent upon two companies that lose billions"

• Half of this year's roughly 2% GDP growth is AI capex, on his read

• OpenAI is the weaker of the two, and Eisman thinks it is in trouble

• Revenue up only 18% on the March quarter while costs rose $3 billion in three months

• Token maxing ended around late June and July, which makes the second half the real test

• "I think the whole tech space sells off" if B2B sales slow

• Revenue growth, not profitability, is the metric that breaks the trade

• "I think eventually profitability matters, but near-term these stocks don't care"

• A Treasury attempt to cap long-term rates is not worth pricing

• "that's not going to happen. It's a joke." — $4 billion is not even a basis point

• Nvidia's announced $500 billion third-party capital facility has not actually been signed

• Embedded gains, not conviction, are why almost nobody de-risks

• A 35%-plus capital gains bill on a big Nvidia position is "painful"

• Forty years of deficit doom has been wrong because there is no alternative to Treasuries

• The repo market is about $3 trillion and it is all T-bills

• He is still long Nvidia and several other tech stocks, less long than he was, and not short

• The banking system has never been this safe in anyone's lifetime

• Housing is where inflation actually bit, through taxes, insurance and utilities

• He is not redoing the 2006 subprime work, because the subprime mortgages are not there

From The Big Short to a Breakfast With Steve Carell

• Lin introduced Eisman as the investor Michael Lewis wrote into The Big Short, renamed Mark Baum for the book and the film and played on screen by Steve Carell

• The show's own framing of the record: Lin said FrontPoint Partners' position doubled from $700 million to $1.5 billion on being right about subprime in 2008

• Eisman met Carell exactly once, for about an hour, at a diner near his home called Three Guys: "he wore a Boston Red Sox hat so that nobody would know who he was"

• He took Carell home to meet his family, and that was the last substantive conversation the two had

• On one breakfast turning into a screen performance: "somehow his portrayal of me was quite accurate"

The Crisis Eisman Says Is Not Hidden

• Asked what he would tell Congress about a looming crisis, Eisman said there is nothing hidden about it: US GDP growth this year is going to be up around 2%, and half of that is AI capex

• "it's not like I discovered the Rosetta Stone" — he says all of it is public information

• Nvidia had just reported revenue up more than 100%, but the line he pulled out was the receivables: 70% of accounts receivable came from five companies, and he said nobody outside knows who they are, though you could guess a bunch of them

• The chain as he draws it runs Nvidia to hyperscalers to two customers: 70% of hyperscaler AI revenue is from Anthropic and OpenAI, equating to about 25 to 35% of their cloud revenue

• On Oracle alone, he said 50% of its $600 billion backlog is just from OpenAI

• "the entire AI ecosystem food chain is dependent upon the future health and success of Anthropic and OpenAI" — and, he added, so does the US economy

• "I think it's a little nerve-wracking that the entire US economy is dependent upon two companies that lose billions"

• Between the two he called OpenAI "the weak sister", and said prediction markets already have Anthropic reaching an IPO first, at 93%

Token Maxing Ended, and the Second Half Is the Test

• Eisman expects Anthropic's revenue story to be good through June, and dates the change to around late June and July, when what he calls token maxing ended

• Before that, he said, people had no sensitivity to spending and just spent money like crazy on tokens; now they are a lot more self-conscious

• He thinks the third and fourth quarters will be much more interesting for Anthropic and OpenAI than the first half of the year

• He is hoping for some clarity when Anthropic puts out its S-1, though "Whether they'll give it or not, I don't know"

• Asked what slowing business sales would mean for semiconductors and the rest of technology: "I think the whole tech space sells off"

• Lin asked whether July's selloff was already that. Eisman: "That was like the preview"

• Lin pressed for the metrics that would settle it, noting that "the word bubble is hotly debated"

The Metrics: Second-Half Revenue Growth, Not Profits

• The variable he named is revenue growth for the second half of this year

• On the June quarter as he recalled it, Eisman put Anthropic's revenue at about $11.5 billion, "up over 100% versus the March quarter"

• OpenAI, which he called "the problem child", had around $6.5 billion in revenue and was up only 18% on the March quarter

• Worse, on his numbers, its costs went to $12.5 billion, up $3 billion in three months — revenue up a billion sequentially against costs up three: "That's not the right direction."

• Lin put Tesla to him, unprofitable for most of its history while the stock went up because investors believed in a bigger picture. Eisman: "I think eventually profitability matters, but near-term these stocks don't care"

• He finished the thought across Lin's interruption — revenue growth slowing "is the more important metric"

Why He Calls a Treasury Rate Cap a Joke

• Lin began a question about the Treasury successfully capping long-term rates. Eisman cut in: "that's not going to happen. It's a joke."

• On the scale of it, he said the Treasury has $4 billion to buy Treasuries with — "It's not even a basis point. It's silly."

• Lin said people agree with him but argue the signaling is what matters. Eisman's answer was that a $4 billion signal is not one anybody should care about

• On the maximalist version, he said Scott Bessent could point at a Treasury general account holding a trillion, but "He's not going to spend a trillion dollars"

• He called the idea that Treasury should spend a trillion dollars to try and cap long-term rates absurd, and said quantitative easing already ran the experiment: "It had absolutely zero impact on the US economy. The only impact it had was causing stock prices to go up."

• Asked whether 5% is the cap on the 10-year Treasury yield, he declined the question entirely: "I never make predictions about interest rates", with Lin agreeing that "no one can predict interest rates"

Nvidia's $500 Billion That Doesn't Exist Yet

• Asked whether low rates and available capital keep the train running, Eisman said no: "First of all, OpenAI I think is in trouble."

• Its revenue growth has obviously slowed dramatically, it had better start accelerating soon, and with token maxing over he thinks it will be harder for these companies to raise capital — "I could be wrong, but that's what I think"

• Lin raised Nvidia's announced $500 billion third-party capital facility with KKR, Apollo and other private-capital firms. Eisman said that is not exactly what happened

• On his account, citing Bloomberg, the transaction was taking a long time, so "Jensen went out and basically just announced it anyway"

• What exists is closer to a memorandum of quiet understanding: "they may get it done but right now there is no 500 billion dollars"

• Lin offered a dinner-party version of the thesis — "it sounds to me like the entire economy is propped up by a couple companies that may or may not even remain profitable going forward" — and asked if it was true

• Eisman's answer was one line: "I think that's 100% accurate."

Why Nobody Sells: Embedded Gains and a 35% Tax Bill

• Asked how an ordinary investor prepares for this, he said it is very very difficult, and that the obstacle is unrealized gains held by institutions and individuals alike

• Working through a hypothetical holder who bought Nvidia well and made many times their money: "If you sell your Nvidia, you're going to pay 35% plus in capital gains taxes. That is painful."

• He has no great answer for people carrying embedded gains, and thinks most of them simply will not sell — which is what makes the question so difficult

• The one concrete lower-risk instrument he named was the KBWP, the property casualty insurance index ETF, offered as just one example

The Deficit Argument That Has Been Wrong for 40 Years

• Lin shared Congressional Budget Office projections showing federal debt as a share of GDP continuing to rise, possibly past the World War II high, with the deficit widening on the same path

• Eisman said all other things being equal a smaller deficit would be better, but he is not of the view that the US economy crashes and burns anytime soon because of it

• He put today's doom case in a line going back to Pete Peterson moaning and groaning about the deficit in the 90s, and said the reserve-currency-collapse argument has been made for 40 years

• "when you make an argument for 40 years and you've been wrong for 40 years, probably you should ask yourself like, okay, why hasn't what I predicted happened?"

• His answer is liquidity: the US Treasury market is the most liquid bond market in the world, and so "the financial system of planet earth uses Treasuries"

• His illustration is the repo market, where banks lend to one another overnight — he put it at about $3 trillion, all T-bills and nothing else

• Asked why an alternative is not seriously considered, he said there is nothing to consider: not Chinese bonds, not Bitcoin, not European bonds, because "for there to be an alternative, you need to be as big and as liquid"

• On Ray Dalio, whom Lin raised as the source of the argument: "Ray Dalio has been talking about this nonsense for the last 20 years"

• The caveat he does accept is rates, not calamity: the amount of debt being raised by AI is crowding out everything else, so rates could go higher, which would hurt housing and the economy

Gold, Bitcoin, Burry, and a Man Who Won't Time Markets

• Lin described a market that turned positive from around 19 August: Bitcoin reawakening along with most of crypto, and gold moving from $4,000 to $4,700 on what people believe is Treasury intervention

• Eisman would not call it: "I have literally no idea. You know, I just don't like to predict markets."

• The risk he keeps returning to is Anthropic and OpenAI, which he calls huge — but he said that if he is right it could materialize a year from now, and "market timing is everything"

• Lin noted Michael Burry is betting against Nvidia and shorting the chip sector, and asked whether Eisman would go short. He was explicit about his own book: "I am still long Nvidia and several other tech stocks. I'm less long cuz I've gotten nervous, but I am not short."

• He might hedge those longs — "I might. I might. It's possible." — but on what the hedges would be: "I'd rather keep that to myself for now"

The K-Shaped Economy and the Single Trade Underneath It

• The Iran war does not change his economic thesis: he thinks it has long-term implications for the United States, but that the economy as of now is fine

• "we do have a K-shaped economy. The bottom of the K is struggling. There's no question about that" — and yet, as long as AI capex keeps powering higher, he said the economy and the market probably go higher

• "It's all it's all one trade."

• Lin asked whether the stock market has to be propped up or everything falls apart, and suggested that is one argument for why the Treasury is intervening ahead of the midterm elections. Eisman: "I think that's fair."

• He then gave the conditional the episode is named for, with the disclaimer attached in front of it — "and I'm not making this prediction, but I'm just saying if tomorrow" — before finishing: "If tomorrow OpenAI failed, the US economy, I think, would go into an immediate recession and the market would have a massive correction."

• He does not think Treasury action changes that outcome either way: "OpenAI will succeed or fail because it'll succeed or fail."

Chinese Open-Weight Models and the Price War He Expects

• Lin recalled Eisman telling CNBC that Chinese open weight models are much cheaper, and put it to him that they are starting to take share

• Asked why US buyers are not using them at scale yet, Eisman said he is hearing that people are starting, and that it takes time

• If that shift does happen, his expectation is blunt: "there would be a price war"

What His Own Guests Have Been Telling Him

• Asked what the guests on The Real Eisman Playbook have been worried about, Eisman started with Wolfgang Münchau, author of Kaput: The End of the German Miracle, on why Europe does not grow

• "regulation in Europe basically kills the tech sector in Europe" — Germany, France and the rest, he said, literally don't grow

• After Meta settled a California lawsuit over its algorithms, he had on Fordham law professor Benjamin Zipursky to explain the legal theories behind those suits, which he called fascinating

• Looking for something to mark the 250th anniversary of the United States, he found Capitalism in America: An Economic History of the United States and interviewed the co-author Adrian Wooldridge, since he could not interview Alan Greenspan

• He describes the show as very eclectic — sell-side analysts, authors and economists — and says a listener gets a real education from it

The 1905 Trade That Took Down Situational Awareness

• Lin raised Situational Awareness, and the view that it was directionally right and badly risk-managed. Eisman agreed in one word: "Totally."

• His analogy, from one of his weekly wraps: "Imagine it's like 1905." An investor convinced that automobiles will conquer the world and bankrupt the carriage companies buys every public auto and auto parts company and shorts every horse carriage company

• The trap is that the longs and shorts are not independent of one another — they move exactly in unison, so the whole book is a single trade, even though he says the underlying thesis would prove 100% correct over the long term

• The fund's version was long hardware and short software; a terrible car accident that gets a tremendous amount of press reverses the trade for a period while people wonder whether cars are safe

• "if you're levered 4 to 1, you get put out of business really quickly. That's what happened to him"

Why the Banks Don't Worry Him

• Asked whether the financial world has learned the lessons of 2008, Eisman went to leverage: "the banks post Dodd-Frank were forced to delever enormously", to something like half of what it was

• They may have exposure to private credit, he said, but given how much capital they hold he does not think it is a systemic issue

• Lin asked whether that counted as a lesson learned or something rammed down their throats. Eisman: probably a combination of the two

• "the banking system in the United States, I don't think has ever been this safe in anyone's lifetime"

Where Inflation Actually Bites: Housing's Hidden Costs

• Lin showed a headline CPI chart and argued that worrying about consumer prices is a recent phenomenon by the standards of the last 20 years: CPI averaged between 1 and 2% after 2008, with a peak in 2011 that came back down and a decade in which people did not have to think about it

• Eisman's answer was housing: "I think the area that's been really really hurt is housing"

• The hidden costs he lists are taxes, property and casualty insurance, and utilities

• "there's a whole swath of Americans who have been completely priced out of the housing market" — leaving aside the price of the house, he said the annual costs alone are beyond their means

• He thinks that shows up in housing-related stocks and not much beyond them

• Lin's last question was what would make him redo the 2006 and 2007 work, when he dug into California and Florida subprime mortgage data to build a thesis that housing was in trouble. Eisman said there really are no subprime mortgages now

• "If there was a correction in the housing market I think it would just be a normal correction." — not calamitous, and not where he puts his attention these days

Eisman's bottom line is that the AI trade and the US economy have become one position, and that what settles it is not the deficit, the Federal Reserve or the Treasury but whether Anthropic's and OpenAI's revenue growth holds up in the second half.

Products, Companies & Tools Mentioned

• OpenAI and Anthropic (The two loss-making companies Eisman says the entire AI food chain and the US economy now depend on; he rates OpenAI the weaker of the pair and says it is in trouble)

• Nvidia (Just reported revenue up more than 100%, with 70% of accounts receivable from five unnamed companies; also the stock Eisman is still long, Michael Burry is short, and his hypothetical investor cannot sell for tax reasons)

• Oracle (Eisman says 50% of its $600 billion backlog is from OpenAI alone)

• KKR and Apollo (Named by Lin among the private-capital firms in Nvidia's announced $500 billion third-party facility, which Eisman says has not actually been done)

• Tesla (Lin's counterexample — unprofitable for most of its history while the stock went up on a bigger picture)

• Meta (Settled a California lawsuit over its algorithms, which prompted an episode of Eisman's show on the legal theories behind it)

• Situational Awareness (The fund that blew up running long hardware against short software at 4-to-1 leverage)

• KBWP (The property casualty insurance index ETF, Eisman's one named lower-risk example for nervous holders)

• FrontPoint Partners (The fund Eisman ran in 2008; Lin said its position doubled from $700 million to $1.5 billion)

Books & Resources Mentioned

• The Big Short – Michael Lewis (The book that made Eisman famous, and the film in which Steve Carell played his renamed character)

• Kaput: The End of the German Miracle – Wolfgang Münchau (Münchau came on Eisman's show to explain why Europe does not grow)

• Capitalism in America: An Economic History of the United States – Alan Greenspan and Adrian Wooldridge (Eisman interviewed Wooldridge for the 250th anniversary of the United States)

• The Real Eisman Playbook (Eisman's own show, where the weekly wrap carried his 1905 analogy and where the Münchau, Zipursky and Wooldridge interviews ran)

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Manpreet Gill, Chief Investment Officer for EMEA at Standard Chartered, takes host Hannah Chew through the bank's newly released Global Market Outlook: what has pushed long-dated US Treasury yields up, why he thinks inflation risk is receding rather than building, where the yield call puts duration and credit, which sectors and regions the equity overweights sit in, and the reinstated overweight on gold.

Guest: Manpreet Gill, Chief Investment Officer for EMEA, Standard Chartered
Host: Hannah Chew, portfolio strategist with the Standard Chartered CIO office

Published: 28 August 2026 on Standard Chartered Money Insights
Episode page | 11 min

Key Takeaways

• Bond yields are more likely to move lower than higher from here

• The 30-year yield is up around 40 to 50 basis points this year, and Gill puts as much of that on rising US national debt as on inflation

• "inflation and therefore bond yields are more likely to move lower rather than higher from here"

• Three to five years is where the bank wants its duration

• "we would consider selectively adding to longer maturities should the 10-year yield spike temporarily above 4.75%"

• Corporate and emerging market bonds stay preferred over G3 government debt, with US investment grade the one short-term exception

• Hyperscaler issuance is creating excess supply pressure in investment grade

• Equities stay overweight globally, and financials are the route to broadening the book

• A steeper yield curve widens net interest margins, and financials are preferred across the US, Euro area and Japan

• The dollar forecast is cut on both horizons after the Treasury doubled its buyback operations

• "we have reduced our forecast for the US dollar index to 98 from what was 101.5 earlier"

• Gold goes back to overweight on dollar weakness and a technical break higher

• "we've also raised our three and 12-month price targets to 4,750 and 5,000 dollars respectively"

What Is Actually Pushing Long-Dated Treasury Yields Up

• Chew opens on the bank's new house view: "We've just released our latest Global Market Outlook, and it does seem to have quite an emphasis on yields."

• Her framing for the episode: signs of cooling inflation and a softer labor market "could suggest the yield pressures may be approaching a ceiling"

• Gill's starting numbers: the US 30-year government bond yield has risen by around 40 to 50 basis points this year, which he says triggered a response from the US Treasury as it seeks to signal its desire to contain the rise

• Inflation remains one of the more commonly cited drivers, but the rise has been disproportionately concentrated in longer maturities

• That skew is why he reads it as a debt story: "we'd argue that at least some of the concerns are related to the continued rise in US national debt"

• Two technical contributors sit on top of that — the relative absence of some key sovereign buyers, and significant hyperscaler bond issuance in the investment grade corporate market

Why Gill Thinks Inflation Risk Is Fading, Not Building

• On the inflation question specifically: "we're relatively less concerned about inflation risk and indeed believe there's room for market worries to actually recede a bit"

• Recent cooling in US inflation data and what he calls a lackluster job market data set point to less rather than more inflation risk ahead

• Oil is the acknowledged risk to that view, and he holds it on the assumption that there is no significant new escalation in the Middle East conflict

• Pulling it together: "inflation and therefore bond yields are more likely to move lower rather than higher from here"

• That, he says, is consistent with the bank's continued expectation of a soft landing for the US economy

Where the Yield Call Puts Duration: Three to Five Years

• Chew asks what the yield view means for bond portfolio positioning

• Softening yields should be most pronounced in relatively shorter duration bonds, because the lack of renewed inflation fears eases concerns about Fed rate hikes

• The effect fades as you go out the curve, particularly beyond 10 years, where easing Fed rate hike concerns are balanced against longer-term concerns about US debt levels

• "we continue to see the 3-to-5-year duration as offering the most attractive risk reward"

• He leaves a condition on going longer: "we would consider selectively adding to longer maturities should the 10-year yield spike temporarily above 4.75%"

Corporate and EM Bonds Over G3, With One Short-Term Exception

• Within bonds, the relative preference for corporate and emerging market debt over G3 government bonds is unchanged

• On valuation: credit spreads remain elevated, but Gill says credit fundamentals continue to justify those levels

• The overweight itself is focused on emerging market US dollar government bonds, on fiscal fundamentals

• Most corporate and EM bonds still qualify as attractive sources of yield in his framing

• The exception, and he marks it as a short-term one, is US investment-grade bonds, which face excess supply pressure over that very short horizon from elevated hyperscaler debt supply

Why Capped Yields Are Good for Equities

• Chew asks how the team is assessing what current yield levels do to equities

• Easing short-maturity yields should be supportive for equities, on the condition that long-term yields stay capped

• If they do, markets can go back to focusing on what Gill calls very strong earnings growth

• The act of pricing out Fed rate expectations would be equally supportive on its own

• That is the basis for the position: the bank remains overweight equities at a global level

Financials as the Route to Broadening Equity Exposure

• Asked about sectors and regions, Gill leads with financials: "financials is one sector that we believe is an attractive route to broadening exposure"

• The preference runs across the major regions — US, Euro area and Japan equities

• The mechanism is the curve: financials are usually a direct beneficiary of a steeper yield curve, or a widening gap between long and short maturity bonds, and the benefit arrives through expanding net interest margins

• He also likes the sector for the diversification it offers within an equity allocation

Technology and AI: Two Months of Underperformance He Expects to End

• Broadening exposure does not mean stepping away from technology and AI, where Gill sees positive momentum continuing or resuming

• The setup he is calling a turn on: two months of relative underperformance against value style sectors

• Concerns about the magnitude of capital spending are likely to resurface from time to time

• His reason for staying with the theme anyway: "we believe improving AI monetization indicators point to continued sector outperformance"

Regional Preferences: Overweight US and Asia ex-Japan

• The bond yield view and the sector view together produce the regional calls

• Overweight on US and Asia ex-Japan equities, with core holding views on Japan and Euro area equities

• The AI theme benefits US and Asian equities more directly, which is what tilts the overweights that way

• What the financials preference does for the other two: it should help drive performance across Japan and Euro area equities, particularly if their central banks raise rates further

• He names the ECB and the Bank of Japan as the central banks in question, and says further increases are what the bank expects

The Dollar: 98 in Three Months, 96 in Twelve

• On FX, Gill sees downside risk to the dollar: "we have reduced our forecast for the US dollar index to 98 from what was 101.5 earlier" on a three-month horizon

• The trigger is a Treasury operation: the decision to double liquidity support buybacks in 10- to 30-year government bond debt from $2 billion to $4 billion per operation through early November

• He reads that as aimed at capping long-term yields, and treats it as a new near-term headwind for the dollar

• What the initial move told him: higher government bond yields may provide less reliable support for the dollar when the worries are driven more by fiscal concerns and the term premium than by stronger economic growth or core real yields

• The labor market points the same way: nonfarm payrolls fell by 23,000, and wage growth has slowed alongside it, which he sums up as a less one-sided US growth story

• On a 12-month view the direction is the same — a gradual decline in the dollar index towards 96

• Narrowing global interest rate divergence and persistent US fiscal and external balances are the medium-term weights on the currency

• Softer labor and inflation momentum support the Fed staying on hold, while Gill notes Australia's RBA and Europe's ECB "also holding that hawkish bias", which should keep chipping away at the dollar's relative rate advantage

Gold Back to Overweight

• Asked for the notable portfolio changes in this outlook, Gill goes straight to gold

• Gold is his pick to benefit from the dollar weakness he has just described, and the bank has used the month to reinstate its overweight

• The improvement in the outlook came alongside the sharp pullback in the dollar and what he calls a technical break higher in gold prices themselves

• The long-term support is central bank buying: emerging market central bank demand continues to underpin the uptrend

• In the near term, the still-high inverse correlation with the dollar is the positive catalyst

• With the upgrade came new targets: "we've also raised our three and 12-month price targets to 4,750 and 5,000 dollars respectively"

Chew's Wrap

• Chew closes by summarizing the session as a take on US bond yields the bank expects to be increasingly capped

• She ties the equity overweights to two things at once: the bond yield outlook and the momentum in the AI theme, both supportive of US and Asia equities

• On the portfolio change of the week: "gold also seems to have gotten back its shine, where we've reinstated the overweight stance"

• She signs off the episode of Through the Noise and points listeners to the outlook the bank is releasing that week

Gill's bottom line is that the yield story has turned: with inflation risk fading and the Treasury leaning against long-end yields, he wants three-to-five-year duration, credit and emerging market dollar bonds for yield, equities overweight with financials broadening the book, and gold back on the overweight list as the dollar drifts lower.

Products, Companies & Tools Mentioned

• US Treasury (Responded to the rise in the 30-year yield, and doubled its liquidity support buybacks in 10- to 30-year debt from $2 billion to $4 billion per operation through early November — the move Gill calls a new headwind for the dollar)

• Federal Reserve (Softer labor and inflation momentum support the bank's view that the Fed can remain on hold, which is what eases rate hike concerns at the short end)

• European Central Bank and Bank of Japan (Expected to raise rates further, which is what would make the financials preference pay off in Euro area and Japan equities; the ECB is also grouped with Australia's RBA as holding a hawkish bias)

• Gold (Upgraded to overweight this month on dollar weakness, a technical break higher and emerging market central bank demand, with three and 12-month price targets raised)

• US dollar index (Forecast cut to 98 on three months and 96 on twelve, on the Treasury's buyback move, narrowing rate divergence and persistent fiscal and external balances)

• Emerging market US dollar government bonds (Where the bond overweight actually sits, on fiscal fundamentals)

• US investment-grade corporate bonds (The one short-term exception to the yield case, facing excess supply from elevated hyperscaler debt issuance)

• Financials (Preferred across the US, Euro area and Japan as a direct beneficiary of a steeper curve through expanding net interest margins, and the sector Gill uses to broaden equity exposure)

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Yixuan Yang, an analyst on Marathon Asset Management's emerging markets portfolios, walks Edward Chancellor through a Chinese car industry that has built far more capacity than it can sell and is losing money doing it, then makes the case that the money is in the windows. The conversation runs from the subsidy withdrawal and the model release race to Fuyao Glass's market share, its research spending, the energy costs crushing its Western rivals, and what the shares now cost.

Guest: Yixuan Yang, analyst on Marathon Asset Management's emerging markets portfolios
Host: Edward Chancellor

Published: 28 August 2026 on The Capital Cycle Podcast
Episode page | 13 min

Key Takeaways

• Chinese carmakers are winning share and losing money at the same time

• First-quarter profit fell 27% at Geely and 10% at Chery, the country's number two and three

• "The market leader, BYD, which was said to be one of Charlie Munger and Warren Buffett's favorite investments, saw profit decline by 55%" — Yang

• The model release race is the clearest measure of the squeeze

• "About 650 new or refreshed models were introduced in the first half, and that is nearly four per day" — Yang

• Beijing's subsidy withdrawal, not demand, broke the year

• The purchase tax exemption for electric vehicles was halved and trade-in subsidies were cut

• The way to own the upgrade cycle is the component, not the carmaker

• Glass is a small share of a car's cost and a large share of how it looks and drives

• Fuyao Glass has gone from challenger to dominant supplier in a decade

• "The global share has risen from 20% in 2015 to 35% today" — Yang

• About 70% share in China, and roughly twice AGC's sales on Yang's account

• Pricing power comes from being too small to argue about

• Glass sits below 1% of a car's total cost, so customers barely negotiate it

• The capital cycle in auto glass is turning the right way for the leader

• Saint-Gobain has closed German and Spanish plants, NSG has been taken private by Apollo, AGC's capex is falling

• The stock is priced as a Chinese auto play rather than as a monopoly supplier

• "a decade-low multiple of 12 times forward earnings with a 4.5% dividend yield" — Yang

Why the Car Industry Keeps Building Capacity Nobody Needs

• Chancellor opens with Marathon's long-standing framing of autos as an industry structurally exposed to destructive capital cycles, and lists three reasons.

• The first is that governments will not let the industry consolidate. "these businesses are political footballs. They employ lots of people and in downturns, governments intervene to stop them consolidating and laying off workers" — Chancellor

• The second is technological disruption. Chancellor says the arrival of battery electric cars "led to a destructive burst of capital spending by established players in Europe and the US."

• The third is that autos have always been open to global disruption: US carmakers have faced competition from Europe, then Japan, and now China.

• Chancellor frames the episode as being about Chinese carmakers "that have been taking market share globally, but not exactly prospering either," and says they are living through a negative capital cycle of their own.

China Builds Cars for a Market That Isn't There

• Chancellor sets out the overcapacity that everything else in the episode sits on. "China only sells around 25 million cars to the local consumers, but the factory capacity is estimated to be about 55 million, twice as much. And this is enough to supply two-thirds of the global demand" — Chancellor

• He notes this is structural rather than cyclical, and something Marathon has watched across a lot of Chinese industries over the years.

• The complication is that the excess plant is running into a domestic market that is weak right now, not just oversupplied over time.

Beijing Pulled the Subsidies and Demand Went With Them

• Yang attributes this year's weakness to policy rather than to taste. "The domestic demand is under pressure after Beijing halved the purchase tax exemption for electric vehicles, and they also reduce trade-in subsidies" — Yang

• Demand has been very weak compared with the previous two years, and the first half showed a 20% year-on-year decline.

• Exports rose 50%, which Yang says was not enough to offset the domestic fall.

• The two moved against each other and the total still went backwards. "So the total electric vehicle shipment has fell by 4% in China this year" — Yang

Nearly Four New Models a Day

• With demand falling, the manufacturers competed on product cadence instead of price alone. "About 650 new or refreshed models were introduced in the first half, and that is nearly four per day" — Yang

• Yang calls it a race to release new products, driven by the sheer number of competitors chasing the same buyer.

• Chancellor's reaction is simply that it is a "Remarkable piece of information."

• The result is intensive competitive pressure landing on an already weaker market, which Yang says has pushed profits down for every manufacturer rather than reshuffling them between winners and losers.

Sales Leadership Without Profits

• Yang's summary of the industry's economics is that scale is not converting into money. "So despite Chinese carmakers topping sales leaderboards worldwide, profits at the even strongest car makers are evaporating" — Yang

• In first-quarter 2026 results, profit fell 27% year-on-year at Geely and 10% at Chery — the number two and three carmakers in China.

• The market leader did worse than either. "The market leader, BYD, which was said to be one of Charlie Munger and Warren Buffett's favorite investments, saw profit decline by 55%" — Yang

• "And Berkshire has wisely sold out of the stock entirely in 2025" — Yang

The Bright Spot Is a Part Nobody Argues About

• The upgrade race that is destroying carmaker margins is, on Yang's account, a revenue event for the suppliers those carmakers are buying from.

• She singles out one component on the grounds that it is cheap to the buyer and highly visible to the driver. "one component that make up a small share of the cost, but a large part of the car's driving experience and appearance has stood out, which is glass windows" — Yang

• Asked which company stands out, Yang names Fuyao Glass, the largest car glass maker in China and globally, which she says has emerged as a dominant player in a market where almost nobody else is thriving.

Fuyao, the Ohio Plant and the Oscar-Winning Documentary

• The company was founded in 1987 by Cao Dewang, and Yang says it has spent four decades making car windows.

• Its Ohio factory became "the center of a culture clash by the Chinese management and the American workers," which was filmed as the documentary American Factory.

• Chancellor's own recollection of the founder is less diplomatic. "I seem to remember Cao complained that American workers were lazy, unmotivated, or something like that" — Chancellor

• The share gain since then has been substantial. "The global share has risen from 20% in 2015 to 35% today" — Yang

• In China, the world's largest auto production market, Yang puts Fuyao's share at about 70%.

• The positions have reversed against the old leader. A decade ago Japan's AGC was the world's largest; "Fuyao Glass is almost twice AGC size by sales and eight times operating profit and with far superior margin and returns on capital" — Yang

One Product, and the Research Budget to Match

• Yang's explanation for the gap is focus. "Global players such as Japan's AGC and France's Saint-Gobain has diversified production across construction and industrial materials. While Fuyao has one single focus, they invest heavily in R&D for auto glass" — Yang

• The spending gap shows up as a share of revenue. "we noticed that Fuyao spent 4 to 5% of their revenue in R&D throughout the cycle. This compared to AGC's 3% and Saint-Gobain's 1%" — Yang

• On Marathon's estimates, that puts Fuyao's absolute research spending at over two and a half times AGC's, its nearest rival.

• Yang also credits continuous collaboration with customers rather than research alone.

Electric Cars Use More Glass, and More Expensive Glass

• The shift to EVs works in the supplier's favor rather than against it. "EVs use more glass and more functional glass than the vehicles they replace" — Yang

• Automakers have raced to adopt windows with UV insulation, soundproofing, head-up displays and dimming features.

• What was optional has become expected. "these high-value products are once nice to have, but now standard features" — Yang

• The value of glass per vehicle rose a modest 3% a year between 2015 and 2020; over the last five years, Yang says that has accelerated to 9% a year as the high-value products lifted prices.

• And the reason nobody pushes back is that the line item is trivial. "glass still is below 1% of the car's total cost, which means Fuyao's customers are relatively insensitive to price" — Yang

Melting Sand in Gas-Fired Furnaces

• Outside China, Yang says auto production has been shrinking for about a decade, which starves the incumbent glass makers of volume.

• "In the US, they assemble about 10 million cars a year and in Europe about 17 million" — Yang, who adds that both are 10% to 20% below their pre-COVID peak

• The incumbents she names are the Japanese makers AGC and NSG — Nippon Sheet Glass — and France's Saint-Gobain.

• The volume problem meets an input cost problem. "The lower volume have collided with European energy costs running at twice the Chinese levels. And this is a unhappy combination for the business that melts sand in gas-fired furnaces" — Yang

• Fuyao, by contrast, is a cost leader on scale, cheap energy and what Yang calls operational discipline.

The Competition Is Cutting Capacity While Fuyao Adds It

• Chancellor puts it to Yang that the capital cycle is moving into a benign phase for auto glass, and she agrees: the contraction in Western car production has already produced meaningful cuts in glass manufacturing capacity.

• Japan's NSG, whose auto glass revenue is about half of Fuyao's, was taken private by Apollo in March this year. "they seem to be more likely to sweat their assets than expanding them" — Yang

• Saint-Gobain closed its automotive glass plants in Germany and Spain in the second half of last year, citing energy costs and low-cost competition, and its next five-year strategic plan seeks to shrink or sell underperforming industrial assets — auto glass likely among them.

• AGC's auto glass capex is also expected to fall in absolute terms this year.

• The leader is moving the other way. "Fuyao is expanding capacity by over 30% in the last two years and will soon be able to glaze half of the world's car production every year" — Yang

The Two Risks: A New Entrant and a European Tariff

• High returns invite competition, and Yang names the company already trying. Lens Technology, a Chinese listed maker of mobile phone screens and cockpit components, has been building auto glass capacity and is starting to supply side windows.

• "Our research suggests that its scale is currently very small relative to Fuyao, so it remains a distant risk, but it is worth monitoring" — Yang

• The second risk is European trade policy: additional tariffs and carbon-adjusted taxes of the kind applied to Chinese steel and aluminum this year.

• That risk is concentrated because Fuyao supplies its European customers entirely from China, and Europe is expected to contribute significantly to future growth.

• Yang argues the exit of the local competitors is itself the hedge. With European rivals leaving the business, carmakers there will rely more heavily on Fuyao, and "So it would be relatively easy for Fuyao to pass on the tariffs onto their customers" — Yang

Returns Rare for an Industrial, and a Dividend Policy Rare for China

• Chancellor raises the point that a shareholder-friendly business "is not true of every business on the Chinese mainland," and asks Yang to make the case.

• "We saw Fuyao's return on invested capital climbing towards 30% and return on equity approaching 26%. This is very rare for an industrial business" — Yang

• On distributions, Yang's point is that the payout has been sustained rather than occasional. "they have paid out over 60% of their earnings continuously over the last decades as dividends" — Yang

• Those dividends accumulate to 40 billion of renminbi on Yang's figures.

What the Shares Cost

• Yang's closing argument is that the market is pricing Fuyao as a Chinese car stock rather than as the supplier taking share from everyone. "investors are fixated by the depressed auto sales in China and have marked down Fuyao's shares to a decade-low multiple of 12 times forward earnings with a 4.5% dividend yield giving us what we believe is an excellent entry point" — Yang

• Chancellor closes by thanking her and saying he hopes to see her again.

Yang's bet is that the same overcapacity destroying Chinese carmakers' profits is what makes their glass supplier a good business — a part too cheap to negotiate over, getting more expensive and more functional every model cycle, sold by the one company still adding capacity while every Western rival closes plants or sells the division.

Products, Companies & Tools Mentioned

• Fuyao Glass (The centerpiece: founded in 1987 by Cao Dewang, roughly 70% share in China and a global share Yang puts at "35% today", R&D at 4 to 5% of revenue, capacity up over 30% in two years, and a 12 times forward multiple)

• BYD (China's market leader, once a Munger and Buffett favorite, with first-quarter profit down 55% and Berkshire out of the stock entirely in 2025)

• Geely and Chery (The number two and three carmakers in China; first-quarter profit down 27% and 10% year-on-year)

• Berkshire Hathaway (Sold out of BYD entirely in 2025, which Yang calls wise)

• AGC (The Japanese maker that led the world a decade ago and is now, on Yang's account, roughly half Fuyao's sales with an eighth of the operating profit; R&D at 3% of revenue and auto glass capex expected to fall this year)

• NSG, Nippon Sheet Glass (Auto glass revenue about half of Fuyao's; taken private by Apollo in March, and in Yang's reading more likely to sweat its assets than expand them)

• Saint-Gobain (Closed automotive glass plants in Germany and Spain in the second half of last year on energy costs and low-cost competition; R&D at 1% of revenue and a strategic plan pointed at shrinking or selling underperforming industrial assets)

• Apollo (The buyer that took NSG private in March this year)

• Lens Technology (The mobile phone screen and cockpit component maker building auto glass capacity and starting to supply side windows — the new-entrant risk, currently very small relative to Fuyao)

• Marathon Asset Management (Yang's and Chancellor's firm; Yang covers the emerging markets portfolios)

Books & Resources Mentioned

• American Factory (The Oscar-winning documentary about the culture clash between Chinese management and American workers at Fuyao's Ohio plant; Yang says it can be found on Netflix)

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Better Offline host Ed Zitron uses his weekly monologue to take apart Nvidia's second-quarter results and the financing structure around them, from customer concentration and payment terms to the company's investments in Poolside, Perplexity, Hugging Face and a string of data center projects. He also covers Jensen Huang's claim that artificial general intelligence has already arrived, the CFO's 70% growth guidance, and the debt every buyer in the chain is relying on.

Host: Ed Zitron, host of Better Offline

Published: 27 August 2026 on Better Offline
Listen on Omny | 9 min

Key Takeaways

• Nvidia's revenue is concentrated in a handful of buyers

• "$96 billion worth of revenue and 16% of that coming from a single unnamed customer"

• 44% of first-half fiscal 2027 revenue came from three customers

• Nvidia is now financing the customers who buy from it

• Payment terms of 90 days to a year for certain investment-grade customers, and 70% of receivables sitting with five of them

• Morgan Stanley analysts call it "a balance sheet as a service company"

• Huang told an analyst call that AGI has already been achieved

• Zitron: "This has, of course, not actually happened, will not actually happen"

• The 70% growth guidance requires the biggest buyers to roughly double their orders

• It also requires neoclouds like CoreWeave to raise more debt, on top of the over 9% interest it already pays

• The announced $500 billion fund is not a fund

• Per Bloomberg, the number "had no obvious provenance"

• Nothing has broken yet, and that is the only reason nobody is panicking

• "when those resources slow or stop, so too will the music"

Record Earnings, and the Customers Behind Them

• Zitron opens on the results themselves: "The Groundhog once again saw its shadow with Nvidia reporting record earnings, continuing to inflate an ever more dangerous AI bubble with $96 billion worth of revenue and 16% of that coming from a single unnamed customer."

• The concentration runs deeper than one quarter. For the first half of fiscal year 2027, he says, 44% of Nvidia's $177.8 billion in revenue came from three customers

• He stops to explain the calendar rather than assume the listener knows it: Nvidia's fiscal years run from February 1st of the year before to January 31st of the year of, so the company is currently in fiscal year 2027, which began on February 1st, 2026, and these were second-quarter fiscal 2027 results

• The explainer ends in an aside to someone off-mic: "Annoying, but I didn't do it. Don't blame me. Don't be mad at me, Farah."

70% of Receivables Sit With Five Customers

• Nvidia is shipping on credit at scale. Zitron says 70% of the company's current accounts receivable is owed by five customers, which Nvidia disclosed while adding that for certain investment-grade customers it was offering payment terms ranging from 90 days to an entire year

• On what investment grade means here: both CoreWeave and Nebius have had their debt rated investment grade, and he describes them as "two unprofitable neoclouds that exist only to raise debt and buy GPUs, mostly to rent them to the same three or four companies"

• The ratings rest on the contracts behind them — the debt is collateralized by contracts with companies that have good credit

• His view of the agencies is a joke rather than an argument: "What is it with ratings agencies? It's just like every time you put your hands in front of your face and they'll be like, where'd they go?"

• The structural point he draws from all of it: the vast majority of Nvidia's revenue comes from a handful of companies, including hyperscalers that have made up more than 50% of its revenue over the last few years, and those companies are now reliant on debt because of what he calls skyrocketing GPU costs

• Nvidia is unquestionably profitable and thriving on revenue, he says, but "it's only doing so because of a few companies who are willing to be fin-dommed by Jensen Huang"

The Run-Up to Earnings Was a Spending Spree

• Poolside: Nvidia sunk $6 billion into what Zitron calls "a flailing open-source LLM company that failed to raise billions of dollars earlier in the year", hiring away most of its staff in what its founders said was not an acqui-hire — "Other than the fact that everyone's leaving, and other than the founders."

• Perplexity: Nvidia is rumored to be sinking billions into the search company at "a $30 billion valuation, which is insane and it's not worth that", which he says is likely because Perplexity is one of the few companies in the world that buys any significant amount of AI compute. He puts no weight on his own estimate of how much — "Likely a few hundred million dollars a year, but I'm just guessing."

• Data centers and power: it is also investing in Stargate, Abilene and Lancium at a multi-billion dollar valuation, considering putting money into AI data center power company Cloverleaf, and backstopping over $100 billion of a SoftBank-backed data center for OpenAI to rent out in Ohio — a backstop that only kicks in if the thing actually gets built

• Hugging Face: he interrupts himself to add that Nvidia is buying the AI model hosting platform for a little under $13 billion, against $150 million in annualized run rate, "which works out to a pathetic $12.5 million a month, which is insanely small considering its notoriety"

• His conclusion from the price: "It's almost as if every AI company just kind of stinks."

Balance Sheet as a Service

• The portfolio, as he reads it out: Nvidia has invested in Anthropic, OpenAI, CoreWeave, Nebius, IREN, Nscale, Intel and SpaceX

• It has also backstopped CoreWeave's leases and signed over $30 billion in multi-year agreements to rent back its own GPUs

• On the revenue-share structures: Nvidia has "created bizarre revenue share deals where it agrees to backstop data centers and receive a cut of the revenue above a certain threshold, which is obviously dependent on the bloody thing being built and also being paid for"

• The company denies the framing. On the latest earnings call, CFO Colette Kress said Nvidia did not see this as circular financing — a denial Zitron rejects "despite there being so many different deals where the money moves in a perfect circle"

• The sell-side label he borrows: Morgan Stanley analysts describe Nvidia as "a balance sheet as a service company", with over $366 billion in commitments including $25 billion of data center leases yet to commence

• Which prompts the question he puts to the CEO directly: "Why does Nvidia need to rent back the GPUs? I thought the demand for AI was so high, Jensen."

Huang Says AGI Has Already Arrived

• On an analyst call, Zitron says, Huang claimed "the world has already achieved artificial general intelligence, which he defines as the ultimate form of the technology where the machines can think and act for themselves"

• Zitron's response is flat denial: "This has, of course, not actually happened, will not actually happen, and should genuinely get it lambasted in the press, but because number has gone up, everybody is happy."

• He acts out the reaction he says the claim got instead of scrutiny, cheering Huang and the arrival of AGI before cutting himself off

The 70% Guidance and What It Would Take

• The line he calls the worst of the call: "somehow the dumbest thing that was said on the earnings call came from Nvidia's CFO, who said that Nvidia will grow its revenue by 70% in fiscal year 2028", a year that begins on February 1st, 2027

• The arithmetic he runs on it: "And based on consensus estimates for the current fiscal year being at $396 billion, this means that Nvidia is expecting to make over $674 billion next year."

• He does not call it impossible. He says it would require Nvidia's current customers — predominantly Amazon, Google, Microsoft, Meta, SpaceX and Oracle — to likely double their current orders for GPUs, and neoclouds like CoreWeave to raise even more debt than they are already raising

• On what that debt already costs: "CoreWeave is already having to pay over 9% interest on its debt just to get investors through the door"

• His estimate of the additional borrowing: "I mean, this must be over a trillion at this point in the next year. It's completely fucking insane."

• The same treadmill applies to the model companies, which he says must keep growing revenue, customers and funding rounds to meet over $1.1 trillion in compute agreements, while Nvidia "must, through science or magic, find ways for its customers to be able to buy more and more and more GPUs every single quarter from here into eternity"

Everything in the Chain Runs on Debt

• The thesis he says he keeps returning to: "the AI boom is only possible as long as debt can sustain it"

• SoftBank has taken out tens of billions of dollars of debt to fund OpenAI and is now trying to sell $20 billion of bonds to refinance that debt

• CoreWeave can only keep building data centers as long as the banks give it money

• Oracle, Google, Amazon, Meta and SpaceX cannot afford to buy GPUs out of cash flow, and so depend on debt to keep buying them

• Nvidia has borrowed too, and he corrects himself on the size live: "Even Nvidia itself has had to take out over $25 billion in bonds. Maybe it's $20 billion. Regardless, still a lot of money."

The $500 Billion Fund Bloomberg Says Isn't One

• He puts air quotes around the supposed $500 billion fund, noting for an audio audience that the gesture cannot be seen, and says that per Bloomberg it is nothing of the sort

• What the announcement actually was: "that announcement was literally just Nvidia saying that a group of asset managers would invest half a trillion dollars in AI data centers, and that number, and I quote, had no obvious provenance"

• He says he will link to the Bloomberg article in the episode notes

Why the Hyperscalers Keep Writing Checks

• The demand underneath the capital spending is two customers. Hyperscalers are only spending this money, he says, because Anthropic and OpenAI have committed to spend over $400 billion renting GPUs in the next three and a half years, according to analysts

• "And without that spend, 30% or more of their cloud revenues will evaporate."

• The single-cloud version of that number comes from UBS: Anthropic and OpenAI will make up over 48% of Google Cloud's revenues in 2027, which he says will only be possible if they can both afford to spend the money and the data center capacity is actually available

• Capacity is his caveat: "And data centers are taking forever. Another problem."

Why Nvidia Invests in Everyone, and Why Nobody Is Panicking Yet

• The reason for the investment spree, as he reads it: "Nvidia is investing in every schmuck with a penchant, that's definitely how you say it, for AI models" because any AI company becoming insolvent or doing a down round would break the illusion that AI is the next industrial revolution rather than "a series of different companies handing money to each other in the hopes that a business model arrives"

• "The reason nobody is freaking out is that nothing bad has happened yet."

• Nvidia's big customers can still raise money to pay it, and its "horrible neocloud progeny can continue to loot the debt markets from gullible investors who have been lied to by analysts and the media about AI's promise and stability"

• The condition the whole structure rests on: "Everything comes down to whether near-infinite resources are available for AI in perpetuity, and when those resources slow or stop, so too will the music."

• He signs off promising to return next week with two co-hosts "to talk about horrible AI slop and whatever else crosses our wretched little minds"

Zitron's bottom line is that Nvidia's record quarter is being paid for with borrowed money by a handful of customers Nvidia is itself financing, and that the whole arrangement holds only for as long as the debt markets keep lending.

Products, Companies & Tools Mentioned

• Nvidia (The subject of the monologue: record revenue, extreme customer concentration, receivables owed by five customers, and an investment and backstop program across most of its own buyers)

• CoreWeave and Nebius (Unprofitable neoclouds rated investment grade on collateralized contracts; CoreWeave's leases are backstopped by Nvidia and it pays over 9% interest on its debt)

• OpenAI and Anthropic (Committed to over $400 billion of GPU rental in three and a half years per analysts, and to over $1.1 trillion in compute agreements they must keep raising money to meet)

• Poolside (Nvidia sunk $6 billion into it and hired away most of its staff in what its founders said was not an acqui-hire)

• Perplexity (Rumored Nvidia investment at a valuation Zitron says the company is not worth, explained by its being one of the few real buyers of AI compute)

• Hugging Face (Being bought by Nvidia for a little under $13 billion against $150 million of annualized run rate)

• SoftBank (Took on tens of billions of debt to fund OpenAI and is selling $20 billion of bonds to refinance it; also behind the Ohio data center Nvidia is backstopping)

• Amazon, Google, Microsoft, Meta, SpaceX and Oracle (The customers who would have to roughly double GPU orders for the 70% guidance to land, and who cannot fund those purchases from cash flow)

• Stargate, Abilene, Lancium and Cloverleaf (Data center and data center power projects Nvidia is investing in or considering)

• IREN, Nscale and Intel (Further names on the list of Nvidia's investments)

Books & Resources Mentioned

• Bloomberg's reporting on the $500 billion fund (Zitron's source that the announced number "had no obvious provenance"; he says he will link it in the episode notes)

• Morgan Stanley research on Nvidia (Source of the "balance sheet as a service" description and the commitments figure)

• UBS estimate on Google Cloud (Source for Anthropic and OpenAI making up over 48% of Google Cloud revenues in 2027)

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IMF Managing Director Kristalina Georgieva gives her verdict on Kevin Warsh's Jackson Hole speech, argues that governments should cut deficits while the economy is strong rather than wait for a debt crisis to force it, and explains why she sees nothing that could displace the dollar.

Guest: Kristalina Georgieva, Managing Director of the International Monetary Fund

Published: 28 August 2026 on Bloomberg Talks
Listen on Omny | 14 min

Key Takeaways

• Warsh was clear on the 2% target, and the message to other central bankers was humility

• "He did a great job."

• Governments should be cutting deficits now, while the economy is still strong

• "My message to everybody is delay no longer."

• She says debt is higher than it was after the Second World War

• It does not take a debt crisis to force fiscal repair

• Historically the adjustments came in good times, with growth sound and investment booming

• Two shocks are working against each other: energy drags growth down, AI pushes it up

• High debt makes the central bank's job harder, not somebody else's

• "But it is their job."

• Financial innovation speeds crises up rather than making policy simpler

• The strength of the dollar is the strength of the US economy, and no alternative is forming

• Inflation is the headache, not growth, and expectations are anchored but the inflation is stubborn

What She Took From Kevin Warsh's Jackson Hole Speech

• The show opened by noting this was her first Jackson Hole summit and asking for her takeaway on what it called a momentous speech from the Fed chair

• Her verdict was unqualified: "He did a great job."

• She said he articulated his views on the evolution of monetary policy in the rapidly changing world very clearly

• The inflation target was the part she singled out as unambiguous: "his commitment to price stability that 2% is a target for the Fed to achieve was very clear"

• She thought the audience was positively impressed by the clarity, and read a second message in the speech aimed at the central banking community: "We have to be humble. The world is changing so rapidly."

• The instruction that follows from that humility is to keep watching: "We have to carefully watch what is going on and make our best call for the benefits of people, for the benefits of the economy."

Five Years of Above-Target Inflation, and Whose Fault It Is

• The show quoted her own speech from later that morning, which said a central bank's most critical role is to ensure inflation remains low; she cut in to finish the sentence — "And stable."

• Asked whether more than five years of above-target inflation is the fault of central bankers, she pointed at the sequence instead: "What has happened over the last years is shock upon shock upon shock."

• The shocks pushed governments into spending: "And that pressed governments to borrow and spend more than they should. And of course, that has some inflationary impact."

• On COVID she conceded the point about generosity — "the public spending was perhaps a bit more generous" — and then defended how hard the call was: "But how do you know how much is enough when the world economy comes to a screeching stop?"

• She would only blame central banks for one thing: "I would blame central banks only if they don't draw lessons from experience."

• Her read of Jackson Hole, and of Warsh's speech, is that they are drawing exactly those lessons

Two Shocks Pulling in Opposite Directions

• The show read the lesson as central banks needing to be somewhat more restrictive, and asked whether that has to be the global approach when the shocks keep arriving anyway

• She turned the question into one about unpredictability: "We have to accept this reality that the world is changing very rapidly and that part of this change is a positive or a negative shock."

• The two current shocks cancel each other out in direction but not in difficulty: "We have the energy supply shock and then we have AI. One drags growth down, the other one pushes it up."

• "We have to get accustomed to an environment that is less predictable."

• What she wants governments doing about it starts with the fiscal position: "Right now, the economy is doing well. Let's cut the deficit, bring down the debt."

• The other half of her answer is institutional: "recognize that your best friends are sound policies and strong institutions"

The Countries That Actually Take the Advice

• The show asked whether she ever feels she is beating her head against the wall telling governments to get their house in order, when the answer is that maybe the next guy can do it

• She said the listening is happening at the other end of the income scale: "Look at emerging markets. They have done fabulously well."

• "Their monetary policy frameworks are strong, their fiscal frameworks are much better sometimes."

• On that measure, she said, they do better than advanced economies

• Her explanation is experience — the countries that have had the painful experience of crisis are the ones listening

• She put the rest down to human nature, in a roof metaphor: "When do we fix our roofs? When the sun is shining or when there is rain?"

• The IMF's job is to keep shouting into that: "please, the sun is shining, it's a good time, bring the roofers"

Whether It Takes a Debt Crisis to Force Fiscal Repair

• The show relayed Ken Rogoff, the Harvard professor, who had told its colleague Tom Keene earlier that it will ultimately take a debt crisis to make developed markets get their fiscal house in order, and asked whether she agreed

• Her answer was "Not necessarily." — "We have seen historically that actions have been taken in good economic times."

• The pattern she described is sound growth, good household spending and booming investment, and then the fiscal adjustments take place

• What stands in the way now is what voters have learned to expect: "we live in a world of popular desire for the government to spend more", because governments did it after COVID and again after the energy shock from the war in Ukraine

• "So people are saying, hey, you did it, continue. Not affordable."

• The reason she says the delay has run out: "debt levels are now above where they were after the Second World War", and so "My message to everybody is delay no longer."

• She gave Rogoff the question but not the conclusion: "And Ken Rogoff is right to say, do you really want a crisis to get you to do what is necessary? Please act on your own."

• The show compared it to taking the candy away from a kid who has been given candy after everything they have done, and she took the analogy: "You might get a tantrum, but it is what it is."

It's Mostly Fiscal: How Debt Makes a Central Bank's Job Harder

• The show picked up the line from her speech that the IMF popularly stands for "It's Mostly Fiscal", called it an interesting thing to say at a monetary policy conference, and asked how the debt overhang has complicated the inflation fight

• The first channel is straightforward demand: "more demand, more spending, pushes price levels up, not down"

• The second is the cost of carrying the debt: "when we have a high level of debt, it is much harder for central banks to act decisively by raising interest rates", because the cost of servicing that debt goes up with the policy rate

• She noted the Fed's dual mandate of price stability and employment on top of that: "We don't want to undermine the strong performance of the economy and that is why their job is harder. But it is their job."

• The ranking inside the mandate is not in doubt for her — central banks have, in her words, "first and foremost, the responsibility for price stability"

Financial Innovation Accelerates the Damage as Well as the Benefit

• The show said stablecoin had been an aspect of the conference that nobody actually wanted to discuss — "if you get people in the hallways, no one wants to talk about stablecoin" — and asked her to expand on her point about technology hastening crises that start as monetary or fiscal accidents

• Her framing is a trade-off rather than a verdict: "financial innovation is good, but it increases risks. It accelerates impact."

• Acceleration is welcome when the impact is positive; when it is negative, "it can lead to spillover impacts within an economy and even across its borders"

• The warning she wanted on the record: "don't live with the illusion that technology is going to make your life simpler. It won't."

• "You need strong policy frameworks, even more so in a world of fast impact from technology. More, not less."

Stubborn Inflation, Anchored Expectations, and Why Early Beats Late

• The show said it was smiling because it does not think anyone feels artificial intelligence has made their lives much easier, with everyone scrambling to keep up, and asked whether inflation is the thing most likely to force central banks into an aggressive response

• The reassurance came first: "the good news is that inflation expectations are still well anchored"

• She still described the inflation as stubborn, and as something central banks ought to pay attention to and act on if necessary

• She found the Fed chair's readiness reassuring, quoting it as "if necessary, we act"

• The underlying picture is not the alarming one: "But we are not seeing the underlying trends to be one that creates fears that inflation is getting completely out of whack. It is not happening."

• The cost of waiting is a market event, not just a policy error — if expectations were to de-anchor, "then what would happen in markets is of course nervousness turning into panic"

The Credibility Question, and a US Real Economy That Is Doing Well

• The show asked whether central banks in developed markets have a credibility problem, given the fiscal overhang and the fear that they have been reluctant to address inflation rather than explain it away

• "They need to be laser focused on trust in their ability to contain inflation."

• Her message to them is about speed: "if you need to act, do not hesitate. Hesitation creates concerns."

• She also defended them: "They have sustained independence in decision making, they do act on the basis of information."

• The real economy is not where she sees the problem: "growth is strong, unemployment low, productivity is amazing, 2.5% growth year after year"

• "It is inflation that is the headache."

Why the World Economy Shrugged Off Higher Oil

• The show noted the surprise at how resilient the global economy has been in the face of higher oil prices in particular, and asked whether that resilience is well-founded or fragile and bifurcated in a way that gives her pause

• She accepted the resilience so far and refused to extend it: "This resilience cannot be taken for granted."

• Two forces explain it, on her account: AI boosting the economy, and energy prices doing less damage than feared

• The prices everyone braced for never arrived: "There was talk about energy, oil prices, $100, $150. That did not happen."

• She gave four reasons — reserves being deployed, other sources of energy including the United States stepping up, a profound shift to alternative energy, and demand falling because "we are more sensitive to price than we thought we would be"

• Two of those reasons have an expiry date: "Now, out of these reasons, supplies, reserves, this is not forever."

• "And if we see energy prices climbing up, they would complicate the inflation story."

Why She Still Sees No Alternative to the Dollar

• Asked whether there is any risk the dollar is undermined as the reserve currency, or whether the question has been put to rest, she answered with one of her own: "What is the alternative?"

• She pointed at the symposium's own subject, financial innovation, and at who stands behind the newest form of it: "98% of stablecoins come from here."

• The backing is American too — "With Treasuries backing stablecoins."

• "So there is no clear march towards an alternative."

• The point she wishes got more attention is not monetary at all: "What is the strength of the dollar? It is the strength of the US economy."

• Deep and liquid capital markets, heavy investment in venture capital and innovation, and the attractiveness that comes with them are what pull the money in: "other people money come here. They don't go somewhere else."

• She closed on the same fiscal warning she opened with: "we would still be advocating for responsible fiscal policy here in the United States and elsewhere"

Georgieva's bottom line is that the US real economy and the dollar are both in better shape than the public finances behind them, and that the moment to cut deficits is this one, while growth is strong, rather than the one after a crisis makes the decision for everybody.

Products, Companies & Tools Mentioned

• Federal Reserve (Warsh's speech is the spine of the interview: she calls the 2% commitment clear and the humility message well received, and says the dual mandate makes the Fed's job harder without displacing price stability as its first responsibility)

• International Monetary Fund (Her own institution, and the source of both the "It's Mostly Fiscal" line and the advice to cut deficits while the economy is doing well)

• Stablecoins and US Treasuries (The symposium's subject, and her evidence against a dollar alternative: she says almost all stablecoins originate in the United States and are backed with Treasuries)

Books & Resources Mentioned

• Kevin Warsh's Jackson Hole speech (She says he did a great job, singling out the clarity on the 2% target and his message that central bankers have to be humble)

• Kristalina Georgieva's own Jackson Hole speech (Delivered later the same morning; the show quotes its line that a central bank's most critical role is to ensure inflation remains low, and its "It's Mostly Fiscal" formulation)

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Standard Chartered global chief investment officer Steve Brice takes on whether investors should try to predict when markets rise and fall or simply stay invested, running through why short-term prediction defeats professionals, what two long-run studies found, and what to do when prices are falling.

Guest: Steve Brice, global chief investment officer, Standard Chartered Bank

Published: 28 August 2026 on Standard Chartered Money Insights
Episode page | 4 min

Key Takeaways

• Markets are not predictable the way a drive to the airport is

• Thousands of factors move them every day, and many change constantly and without warning

• "But financial markets are very different."

• Three competing theories of how markets work all land on the same conclusion

• Accurately timing the market is extremely difficult

• Missing only the best days is what timing actually costs, and nobody knows when they fall

• Some of the strongest rebounds come shortly after the sharpest declines

• Steady investing beat waiting for a cheap entry point

• "But over more than two decades, the steady investor actually came out ahead."

Why Getting to the Airport Is Predictable and Markets Are Not

• Brice opens on the question he says is one of the most common investors ask themselves: should they try to predict when markets will rise and fall, or is it better to stay invested over time

• He answers with an airport analogy: most of us rarely miss a flight, because traffic, distance and travel time are reasonably predictable and a reasonable buffer usually covers the rest

• "But financial markets are very different."

• Markets are influenced by thousands of factors every single day, and he names five: economic data, corporate earnings, government policies, technological developments and investor sentiment

• Many of those factors change constantly and without warning, which he says makes predicting short-term market movements incredibly difficult — even for experienced professionals

Three Theories of How Markets Work, All Ending in the Same Place

• The first view he sets out is that markets quickly absorb new information, making it very hard to consistently predict what happens next

• The second recognizes that markets are driven by people, and that people are not always rational — fear, excitement and overconfidence can all influence investment decisions and therefore market prices

• A third perspective combines those ideas, treating markets as constantly adapting as investors learn and react to changing conditions

• The theories differ, but Brice says they point to one important conclusion: accurately timing the market is extremely difficult

What Missing the Best Days Costs

• Brice reaches for a study of the US stock market covering many decades: "investors who missed just a handful of the market's best days saw dramatically lower returns"

• The challenge he identifies is not that those days matter but that nobody knows when they will occur

• "And indeed some of the strongest market rebounds happen shortly after significant market declines."

• That is his explanation for why investors who sell during periods of fear often risk missing the recovery that follows

The Steady Investor Beat the One Waiting for a Cheap Market

• He describes a second long-term study comparing two approaches: one investor steadily invests his money in the market over time, while the other keeps some cash on the sidelines waiting for the market to appear cheap

• Brice acknowledges the intuition runs the other way — you might expect the patient investor waiting for markets to be cheap to have achieved better results

• "But over more than two decades, the steady investor actually came out ahead."

• The reason he gives is simple: while waiting for the perfect opportunity, the patient investor missed periods when the market continued to rise

Markets Do Fall, and the Answer Is a Plan Rather Than a Forecast of the Bottom

• He is explicit that the lesson is not that markets never fall — of course they do

• The lesson he draws instead is that trying to predict every peak and trough is usually less effective than maintaining a long-term investment plan and following it with discipline

• Downturns can work in an investor's favor: rather than trying to identify the exact bottom, he says investors may benefit from accelerating investments during periods of weakness

• Buying into weakness that way can help lower the average purchase price and position the portfolio for a future recovery

• "investment decisions should be guided by careful planning and strong fundamentals, not by emotions such as fear or excitement"

• The message he asks listeners to leave with: "Market timing may make you lucky once, but time in the market is far more likely to help you build wealth over the long term."

Brice's bottom line is that staying invested wins not because markets always rise but because the days that generate the returns cannot be identified in advance, which makes a disciplined plan that buys more into weakness a better bet than waiting for an entry point that only looks obvious afterward.

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