26 Stocks I'm Watching For 2026: Part 1
Here we go again.
Wrapping Up 2025’s Portfolio
Our 25 Stocks I’m Watching For 2025 portfolio delivered a standout year, dramatically outperforming the S&P 500’s 16.5% gain with an equal weighted average return of roughly 73.6%, beating the index by nearly 58% points, as of December 22 mid-day.
The defining feature of the year was the success of concentrated thematic exposure—particularly nuclear energy, precious metals, and select high-beta innovation trades—which more than compensated for weakness in defensive and duration-sensitive positions. Here’s how we did, as of mid-trading-day on December 22, 2025:
The single biggest contributor was Oklo (OKLO), which rose more than 240% and exceeded the S&P by over 220% starting the year at $23.70. This came after we had discussed buying Oklo as low as $7 on this blog and it had already nearly tripled before 2025 even started.
With AI (and its power needs) driving the bus this year, the broader nuclear theme performed extremely well. The URA and NLR ETFs both delivered strong absolute and relative gains as uranium fundamentals tightened and nuclear power re-emerged as a politically viable solution to baseload energy needs, while Constellation Energy (CEG) benefited from its existing nuclear fleet and stable cash flows.
Precious metals equities were another dominant driver of performance. I have been pushing both gold and silver miners on this blog since its inception, doubling down this year, even as the year progressed and before miners caught the insane bid they are seeing now. In February, I wrote “don’t sleep on silver”, prognosticating that silver would see triple digits despite only being at about $32 at the time.
With silver at about the same price in September, I wrote that I was thinking about adding additional exposure to silver miners. I said: “If you look at the cup-and-handle formation forming in silver right now, it looks almost exactly like gold did a year or two ago before its breakout.”
Since then, silver doubled in just under 3 months.
Gold and silver miners produced some of the strongest relative returns in the entire portfolio. GDX, GDXJ, and SIL all posted gains well in excess of 150%, with junior miners providing especially strong upside leverage. Individual miners such as Newmont (NEM) and Barrick (B) also delivered exceptional returns, supported by improving balance sheets, disciplined capital allocation, and strong operating leverage to gold prices.
The VanEck Rare Earth and Strategic Metals ETF (REMX) added to this theme from a strategic angle, as rare earth and critical materials benefited from geopolitical supply concerns and reshoring trends. Identifying the rare earth war before 2025 even started and Trump took office was one of my better calls this year.
Emerging market and country-specific bets were broadly successful, though with more dispersion. Vietnam (VNM) and Poland (EPOL) stood out, each posting gains above 60% as supply-chain diversification, industrial growth, defense spending, and regional investment flows boosted equity markets. Broader EM exposure through EEM and VWO finally beat the S&P as dollar strength faded, though the magnitude of outperformance was more modest. Argentina (ARGT) lagged on a relative basis, as much of the reform optimism appeared to be priced in early, limiting upside despite positive absolute returns and the U.S. rescue of the country late in the year.
Cyclical and special-situation equities also contributed positively. Magna (MGA) benefited from a normalization in auto production and optionality around EV platforms, while Volkswagen (VWAPY) saw a valuation rebound as pessimism around EV margins and European autos eased. The psychedelics sleeve proved to be a high-risk bet that paid off, with PSIL, MindMed (MNMD), and Compass Pathways (CMPS) all delivering substantial gains driven by clinical progress and renewed regulatory optimism, resulting in strong relative outperformance versus the broader market.
The primary drags on performance came from defensive positioning and rate-sensitive assets. Bond exposure through BND, IEF, and TLT lagged meaningfully as interest rates stayed higher for longer, suppressing returns in duration-heavy assets and creating a large opportunity cost versus equities. SMR underperformed despite favorable long-term nuclear fundamentals, reflecting execution risk and timing issues within the small-reactor space. The short position in PPH also detracted from results, as pharmaceutical stocks proved more resilient and the industry caught less shit than expected from RFK Jr. and President Trump.
What I Got Wrong In 2025
Looking back at what I wrote heading into last year, I think it’s important to be honest about where my framework fell short.
I wasn’t really correct to be skeptical of the assumption that a Trump presidency would automatically deliver another effortless 30% upside year for the S&P 500. My core argument—that the market was already expensive and that policy tailwinds would have to contend with real macro constraints—was grounded in bizarre valuation and inflation realities that still exist today. Inflation was not “solved,” and core CPI staying above 3% for such an extended period remains historically significant.
Yet somehow the S&P still powered forward with a nearly 20% gain on the year.
Where I was clearly wrong was in underestimating the market’s tolerance for unresolved inflation and its willingness to look through those risks entirely. I expected inflation persistence to act as a more binding constraint on equity multiples and risk appetite. Instead, liquidity, narrative dominance, and policy expectations overwhelmed valuation discipline.
I was also wrong on geopolitics. I expected geopolitical tensions to cool meaningfully, particularly with a shift in U.S. leadership and a reconfiguration of global diplomacy. That largely did not happen. While there were moments of de-escalation, conflict between Israel and Palestine remained intense, and the war between Russia and Ukraine showed no real signs of resolution. Rather than acting as a stabilizing force, geopolitics remained a persistent background risk—and albeit, another one the market mostly chose to ignore.
Perhaps the most humbling miss was timing around risk signals. I argued that crypto would act as the canary in the coal mine for broader market turmoil, leading the way lower in the event of a pullback. As for right now, at least, heading into late December, crypto has been shaky — falling from highs of $120k to about $85k — but equity risk has yet to follow it meaningfully lower. Here’s the last 3 months:
I guess the broader lesson from 2025 is that markets can remain detached from macro fundamentals for far longer than a clean analytical framework would suggest (big fucking surprise, I know). In other words, I’m an idiot and this guy is smart:
This mea culpa isn’t about abandoning the macro framework, but about refining it. The risks I highlighted did not disappear—but they expressed themselves differently, later, and in more uneven ways than I expected. Going forward, the key adjustment is less about identifying risks and more about respecting how long markets can ignore them, and how nonlinear the transition can be once they no longer do.
Five Risks I See Heading Into 2026
The first risk heading into 2026 is the simplest and the most ignored: the American consumer is tapped out. Subprime auto loan delinquencies have already pushed past 6% on a 60+ day basis, the highest levels seen in decades, and they’re still climbing. Credit card balances are north of $1 trillion and delinquency rates remain well above pre-COVID norms, particularly among lower-income and younger borrowers who burned through their excess savings long ago.
Buy-now-pay-later “phantom debt”, marketed as convenience, has quietly morphed into a shadow subprime system, with a large share of users missing payments and stacking short-term obligations just to stay afloat. The consumer didn’t delever after COVID — they levered up at floating rates.
Now the liquidity is gone, prices are still high, and rate cuts, whenever they arrive, won’t be fast or deep enough to rescue households already behind. This won’t show up as a single dramatic blowup. It will show up as persistent defaults, rising charge-offs, tighter credit, and earnings pressure across any sector still clinging to the idea that “the consumer is resilient.”
Names in this space I’ll avoid are all regional banks (KRE), Carvana (CVNA), Credit Acceptance Corporation (CACC), Santander Consumer USA Holdings (SC), Ally Financial (ALLY), OneMain Holdings (OMF), Enova International (ENVA), and Bread Financial (which serves many subprime consumers) for subprime/consumer lending, and BNPL fintechs Affirm Holdings (AFRM), Sezzle Inc. (SEZL), Block, Inc. (owner of Afterpay), and Klarna Group (KLAR).
The second risk is valuation — and the growing gap between narrative and capital reality, especially around AI. Markets are still priced as if artificial intelligence guarantees exponential growth while somehow requiring no trade-offs, no margin pressure, and no capital discipline. That fantasy is starting to crack where it always does: financing. The Shiller PE is now over 40x - insane:
The recent collapse of a major multibillion-dollar AI data center deal tied to Oracle after Blue Owl walked away wasn’t about the technology; it was about risk, returns, and who actually wants to underwrite AI infrastructure at today’s prices with today’s cost of capital.
Across corporate America, AI capex plans are being slowed, staged, or quietly rethought as CFOs realize that GPUs, power, cooling, real estate, and talent are expensive, and the monetization curve is far less certain than equity multiples suggest. More on this here:
Meanwhile, positive real rates continue to drain liquidity from the system, and the marginal investor is no longer being paid to believe ten years out. Multiple compression doesn’t require a recession — it just requires gravity, and gravity is starting to reassert itself.
The third risk is the slow erosion of the passive bid that has quietly propped up markets for over a decade. The relentless flow of payroll deductions into 401(k)s, index funds, and target-date funds has been one of the most powerful — and least questioned — sources of demand in modern market history.
That bid weakens when people lose jobs. As layoffs accelerate, driven by both AI displacement and a slowing economy, contributions slow. And when financial stress forces households to tap retirement accounts for liquidity, those flows don’t just decelerate — they reverse. Passive investing works beautifully on the way up because it is price-insensitive. On the way down, it remains price-insensitive in the opposite direction. Less inflow, more outflow, and fewer natural buyers at the margin create a structural headwind markets haven’t had to face meaningfully since passive became dominant.
The fourth risk — and potentially the most dangerous — is crypto’s transformation from a self-contained speculative playground into a systemically wired asset class. Bitcoin and the broader crypto market are no longer living on the fringe. They are now embedded in ETFs, corporate balance sheets, stablecoin Treasury demand, and, increasingly, retirement accounts. This isn’t “adoption” in the feel-good sense — it’s integration. With total crypto market capitalization hovering above $3 trillion, a 50% drawdown would vaporize roughly $1.5 trillion in wealth in a compressed timeframe.
There are an increasing number of questions growing in my head about Tether and other stablecoins propping up crypto. The key question being: why hasn’t crucial stablecoin Tether ever subjected itself to an audit? And if it wasn’t around, what would the price of bitcoin be?
Unlike prior crypto crashes, new losses would now hit 401(k)s, index products, public companies, and liquidity conditions simultaneously. Crypto combines the speculative excess of the dot-com era with the systemic wiring of housing in 2008, all wrapped in the comforting belief that this time is different because the asset is newer, smarter, and politically endorsed. History suggests that combination doesn’t end with a soft landing. Whether or not Bitcoin ultimately survives and matures, the near-term risk is obvious: the deeper crypto is embedded in the financial plumbing, the more likely it is to act as the fault line when risk assets unwind.
The fifth risk is geopolitical — and it’s the kind that doesn’t announce itself with a CPI print or an earnings miss. Something is shifting behind the scenes in the global monetary order, and the clues are showing up where they always do: in gold, in silver, and in behavior that no longer matches the official narrative. China and Russia aren’t posturing about the dollar anymore; they’re actively building around it, settling trade outside it, stockpiling hard assets, and signaling — quietly but persistently — that dependence on U.S. financial plumbing is a strategic vulnerability. This isn’t about an overnight collapse of the dollar or some cartoonish “end of reserve currency” moment. It’s about erosion, fragmentation, and parallel systems forming while markets remain fixated on tech multiples and rate-cut bingo cards. Gold and silver don’t move like this because everything is fine — they move when confidence is being hedged discreetly by actors who think in decades, not quarters. History tells us that major monetary shifts are never obvious until after they break, and they’re never orderly. 2026 may not be the year the dollar falls, but it increasingly feels like the year we find out what, exactly, has already been breaking beneath the surface.
Going into 2026, my macro view is increasingly shaped by questions of credibility, regime change, and relative outcomes rather than traditional cycle analysis. I continue to believe global equities are better positioned than U.S. equities, largely because of valuation asymmetry. U.S. markets remain priced for perfection, leaving little room for multiple expansion, while many international and emerging markets still trade at discounts that allow for re-rating even in a mediocre global growth environment. In contrast, the most likely path for U.S. equities is multiple stagnation or contraction, meaning that even positive earnings growth may not translate into superior relative returns.
A critical shift underpinning this view is my belief that the Federal Reserve has lost the confidence of global capital. The Fed is no longer perceived as independent, but rather as an extension of fiscal necessity, forced to accommodate deficits and bond-market stress. This erosion of credibility, in my view, is a major driver behind the powerful metals rally into the end of 2025. Gold and silver are responding not just to inflation or rate expectations, but to a deeper recognition that monetary policy is now constrained by political and financial realities.
Continued money printing may keep equity drawdowns shallow and short-lived, but it simultaneously undermines trust in fiat stability, which is why sound money assets can outperform equities even during generally “good” equity years.
There is also a non-zero chance that the U.S. market enters a Japan-style regime, where returns are capped and markets move sideways in nominal terms for extended periods. With inflation still near 3% and structural deficits requiring persistent bond issuance, I believe the Fed will ultimately be forced to rescue the Treasury market outright. As quantitative easing resumes, the risk is not disinflation but loss of control over the long end of the curve. Yield curve control becomes increasingly likely under this framework, effectively locking in negative real yields. That scenario would be deeply supportive of precious metals and deeply challenging for long-duration financial assets, particularly U.S. bonds and richly valued equities.
The Bull Case For 2026
My bull case for 2026 starts from an uncomfortable but, I think, realistic premise: nominal prices are biased higher over time because policymakers have no real exit from the debt and deficit spiral they created. Inflation isn’t an accident or a policy failure—it’s the release valve. It’s the least politically painful way to shift the burden onto the middle and lower classes while keeping the system intact. As long as that remains true, the long-term gravity for asset prices is upward, even if real returns are uneven and purchasing power quietly erodes. Betting against nominal asset inflation, indefinitely, has been a losing proposition for decades.
Where I’ve struggled—and where I’m deliberately challenging myself—is timing. I’ve argued that the system eventually needs a sharp deleveraging to clear excesses in crypto, AI, speculative growth, and generally frothy valuations. That still may happen. But the short-term bull case is simple and uncomfortable: the market no longer waits for economic confirmation. Liquidity arrives faster than economic damage shows up, and the Fed has demonstrated it can—and will—backstop almost anything nearly instantaneously. When money creation is a keystroke, reaction times shrink from months to hours. If forced deleveraging doesn’t overwhelm policymakers immediately, markets can continue levitating far longer than fundamentals would suggest, driven not by growth but by the structural need for prices to go up.
The final pillar of the bull case is psychological and structural. We’ve fully embraced the religion of compounding, passive flows, and “markets must go up” as a societal belief system. Capital is continuously funneled into equities not because they’re cheap, but because they’re necessary. Retirement systems, political stability, and public confidence now depend on asset prices rising in nominal terms. Even when sharp drawdowns do occur, they’re likely to resolve faster than expected, as they did in COVID, and without a return to old valuation regimes. This market is not reverting to the past—it’s mutated. In that environment, the goal isn’t perfection or calling the exact top or bottom, but staying positioned in areas that can outperform the index while the liquidity machine keeps running. If I’m wrong about the timing of the reckoning, the bull case is that nominal markets grind higher anyway—and history suggests that’s a bet worth respecting.
I enjoyed a piece Zero Hedge published days ago, wherein B of A’s Michael Hartnett sees markets pulling forward a 2026 “run-it-hot” economy, driven by easier financial conditions and policy tailwinds rather than organic growth surprises. His base case is continued disinflation—CPI trending toward ~2%—alongside lower yields, a softer dollar, and ongoing monetary and fiscal easing as policymakers prioritize affordability and growth ahead of political milestones. While he expects global EPS growth around 9% in 2026, Hartnett cautions that upside surprises are limited without a major China stimulus, given rising U.S. unemployment and signs that bond markets are constraining the AI capex boom. He is constructive but selective, preferring exposures that benefit from lower inflation rather than chasing consensus risk-on trades.
He says that if inflation falls faster than expected—via renewed or expanded Fed QE, lower oil prices, and a cooling labor market—then yields could compress toward the mid-3% range, supporting a melt-up in equities early in 2026, led by mid-caps, EM equities, and rate-sensitive assets. If, however, global liquidity peaks (fewer rate cuts than hoped, tighter policy abroad) while sentiment remains euphoric, then markets face a near-term “air pocket,” with Hartnett flagging the Bull & Bear indicator’s contrarian sell signal as a warning. In that case, he expects a pullback rather than a trend reversal, followed by aggressive dip-buying as fiscal and monetary easing reassert themselves—keeping the broader 2026 risk-on narrative intact despite interim volatility.
The Bear Case For 2026
The bear case for markets in 2026 isn’t complicated or contrarian — it’s simply the return of common sense and economic gravity. Outside the liquidity fairy tale, the real economy is quietly drowning. While headlines celebrate all-time highs in stocks and talk up rate cuts and “resilience,” the real economy is flashing warning signs that can’t be waved away with narratives. Asset prices are soaring, but they’re doing so alongside mounting financial stress for households and businesses. This isn’t a mystery or a black swan; it’s basic math finally demanding attention.
As I wrote above, across Main Street, Americans are drowning in record levels of debt and falling behind on payments. At the same time, commercial real estate is cracking, with delinquencies hitting all-time highs across office, multifamily, and other property types. These losses aren’t isolated; they sit on the balance sheets of the same regional banks already exposed to subprime auto and consumer credit. Household debt overall has climbed to nearly $18.6 trillion, with student loans, credit cards, and auto loans all showing rising stress as higher rates and persistent inflation squeeze borrowers from multiple directions.
Yet market commentary continues to focus on stock prices, earnings “beats,” and forward-looking optimism, ignoring the scoreboard that actually reflects economic health. Much of the recent profit growth has come from layoffs, cost cuts, and financial engineering, not stronger demand. The disconnect between soaring markets and a maxed-out consumer can persist for a while, but it rarely resolves gently. The 2026 bear case is simply that reality reasserts itself — that debt, delinquencies, and cash-flow pressure eventually matter more than narratives.
My Objective For My 26 For 2026
My 26 Stocks I’m Watching for 2026 goal is not to guarantee positive returns or promise outperformance in absolute terms. The aim is simply to try and edge out whatever the overall market delivers—specifically, to try to beat the S&P 500 over time, whether that market outcome is strong, flat, or weak. This is an exercise in relative performance and informed positioning, not a claim of certainty or a prediction that all (or any) of these stocks will go up.
As always, disclaimers apply: nothing here is guaranteed, markets are unpredictable, and I often get things wrong. These ideas reflect my current views and can change as new information emerges. This is not financial advice, and everyone’s risk tolerance and circumstances are different. Please read my full disclaimer at the bottom of the page before making any investment decisions.
26 Stocks I’m Watching For 2026: Part 1
And now, without further ado, here’s some of the interesting areas and related equities that I do think are worth watching in 2026.