Risk-On Reloaded

+ William Bernstein, Annie Duke, Marc Faber, GMO, Daniel Yergin & More

Author

The Idea Farm
January 18, 2026

Sponsored by

“Micro is what we do, macro is what we put up with.”

— Charlie Munger

Research

Loomis Sayles expects healthy growth and moderating inflation to support risk assets in 2026, with earnings leading any equity upside. They see corporate credit fundamentals holding up and frame a 3.4% US high yield default rate as consistent with modest excess returns.

Although healthcare was the S&P 500’s worst-performing sector over the past year (from 9/30/24 to 9/30/25), GMO believes innovation remains strong, demographic trends are supportive, and valuations have fallen to attractive levels.

Meketa examines the composition of frontier markets, compares them to other international markets. and explores the intricacies of the space, such as liquidity and currency risks.

Robeco up argues easing monetary conditions and broader AI adoption can keep global equities supported. They point to improving capital markets activity, with announced M&A volumes up 43% year on year, while geopolitics remains the key swing factor.

Sovereign Bonds since Waterloo (128 pages)

The authors study two centuries of external sovereign bonds, compiling 266,000 monthly prices across up to 91 countries. They find real returns above 6 percent per year with 3 to 4 percent excess over US or UK government bonds despite defaults, with median restructurings cutting less than 50 percent.

Bonus Content

Vikram Mansharamani published his annual list of 20 global developments to watch over the next five years. Link

Apollo’s US Housing Outlook says affordability is weighing on demand and supply is low. Link

The president wants U.S. oil companies to return in a big way, but Daniel Yergin thinks the petrostate’s turbulent history suggests formidable challenges ahead. Link

With the recent news on a potential cap on credit card interest rates, this article looks to answer why credit card rates are so high. You can read the full 78 page paper and/or listen to one of the authors on Odd Lots.

Morningstar published a report on the Utilities sector, which have matched technology stocks as the top performing sector in 2025 and had its best two-year performance in more than 20 years. Link

Emerging Markets Shareholder Yield

The Cambria Emerging Shareholder Yield ETF focuses on high-cash distribution companies located in emerging markets.

EYLD’s process goes beyond focusing on just dividends alone to include buybacks and debt paydown, a trio collectively known as shareholder yield. The result is a portfolio of companies that rank highly on shareholder yield and offer strong free cash flow characteristics.

Get emerging markets exposure with companies focused on dividends and buybacks with the Cambria Emerging Shareholder Yield ETF, EYLD.

Distributed by ALPS Distributors, Inc. Investing involves risk, including possible loss of capital. To determine if this Fund is an appropriate investment for you, carefully consider the Fund's investment objectives, risk factors, charges and expense before investing. This and other information can be found in the Fund's full or summary prospectus which may be obtained by calling 855-383-4636 (ETF INFO) or visiting our website at www.cambriafunds.com. Read the prospectus carefully before investing or sending money.

Podcasts

12/12/2026 - 50 minutes

Larry Siegel speaks with Dr. William Bernstein about the pillars of prosperity: property rights, scientific rationalism, capital markets, and infrastructure.

12/12/2025 - 31 minutes

This episode shares the story of Chicago’s decision to privatize all 36,000 of its parking meters for $1.16 billion dollars for a 75-year lease. It’s a fiasco.

1/8/2026 - 105 minutes

Annie Duke explains forecasting, data interpretation, and decision-making under uncertainty, showing why smart people routinely draw confident but wrong conclusions.

What Else Is Happening 

1/16/2026 - 51 minutes

Marc Faber discusses democracy’s market impact, debt burdens and money printing, and strategies to survive the next regime.