Not in a bubble... yet

+ Tobi Lütke, Dan Morehead, Kai Wu, Bridgewater, Coatue, Goldman Sachs & More

Author

The Idea Farm
November 02, 2025

“The only thing that really matters in asset allocation is sidestepping some of the pain when the rare, great bubbles break.”

— Jeremy Grantham

Research

Peter Oppenheimer explains why he believes the markets show froth but aren’t quite yet in bubble territory. He does argue that high levels of market concentration and increased competition in the AI space suggest investors should continue to focus on diversification.

Source: IMF, FactSet, Datastream, Goldman Sachs Global Investment Research. As of October 8, 2025.

Jim Reid published the 20th anniversary edition of Deutche Bank’s flagship Long-Term Study, which examines how asset classes (mainly global stocks and bonds) have performed across a wide range of macroeconomic, policy, and valuation environments, drawing on data all the way from the 18th century to today.

As of 10/27/2025.

Jan Hatzius’ team looks at the state of the labor market and considers the potential macro, monetary policy, and market implications of rapid technological progress. They say the key question is whether labor demand growth is and might remain too weak to keep up with even modest labor supply growth.

Source: Goldman Sachs Global Investment Research, Department of Labor, Department of Commerce. As of October 13, 2025. 

Bridgewater Associates argues the world is entering a new era of higher inflation risk driven by persistent fiscal deficits, supply constraints, and geopolitical fragmentation. They suggest investors reduce their reliance on traditional stock bond diversification.

Source: Bridgewater Associates. As of September 22, 2025.

Coatue’s market update has four key takeaways:

  1. They remain bullish on AI

  2. 2026 will be the year of AI apps, and the ROI is here

  3. The macro environment is supportive of market strength

  4. They know trees don’t grow to the sky, and will always manage downside

Source: Coatue. As of October 14, 2025. 

J.P. Morgan Asset Management’s 2026 Long-Term Capital Market Assumptions provides return and risk expectations for more than 200 assets and strategies in 20 base currencies.

Sparkline Capital - Surviving the AI Capex Boom (14 pages)

Kai Wu finds historical capital expenditure booms have typically resulted in overinvestment, excess competition, and poor stock returns. With the AI arms race transforming Big Tech from asset-light to asset-heavy, he suggests rotating toward a broader set of AI beneficiaries with lower capital requirements and valuations.

Podcasts

10/28/2025 - 60 minutes

The world’s largest gaming-focused investor covers everything associated with the sector, including the impact of AI, why AR/VR is overrated, and where he sees opportunities.

9/18/2025 - 109 minutes

Tobi Lütke talks about Shopify’s evolution, lessons on innovation and implementing AI, and how to stay ahead by living in the future.

10/14/2025 - 43 minutes

Tiger Cub Dan Morehead shares his perspective on crypto as a long-term asymmetric opportunity, discussing blockchain adoption, market cycles, and institutional participation.

9/18/2025 - 74 minutes

This episode covers covered call strategies—popular ETFs often marketed on their distribution yields. It explains while they may promise steady “income,” the reality is more complicated.

What Else Is Happening