Episode summary
The Chart That Ends US Dominance | Rupert Mitchell on the Regime Change No One Sees
Excess Returns
· · 1 hr 1 min · Guests: Rupert Mitchell
Summary
Rupert Mitchell argued that US equity leadership is starting to fatigue, with the “chart of truth” for non-US versus US equities still in a downtrend for US stocks and the Nasdaq 100 failing to make a higher high for months. He sees the setup as a relative-regime change toward shorter-duration, cash-generating assets, with pressure building on hyper-financialized US software and the Mag 7’s long-standing dominance.
His biggest positioning themes are emerging markets and real assets. He is heavily overweight Latin America, especially Brazil and Mexico, but he said the case is mainly commodity-driven rather than a political bet. Brazil, Peru, Colombia, and Chile all come up as ways to express a broader commodity bull, while India stands out to him as expensive and crowded. He also said China is increasingly interesting as a domestic savings and fiscal-stimulus story, with onshore A-shares likely to outperform offshore Chinese ADRs over time.
Mitchell emphasized that his portfolio is built for drawdown control as well as upside: trend-following, cash, gold, emerging-market local debt, and hedges sit alongside equity exposure. Within China, he prefers lower-beta dividend names such as banks, utilities, and selected industrials, while remaining skeptical of expensive US-listed software and long-duration growth assets.
Key takeaways
- Rupert Mitchell said US equities are in a relative downtrend and expects shorter-duration, cash-flowing assets to outperform as the cycle changes.
- He is about 12% allocated to Latin America equities, mostly Brazil and Mexico, because he thinks the region is a commodity trade rather than a pure politics trade.
- Mitchell said India is the most expensive market outside the US and is crowded by both institutional flow and retail/options activity.
- He argued China is becoming a domestic savings and fiscal-stimulus story, with onshore A-shares likely to beat offshore Chinese equities.
- He prefers lower-beta Chinese exposure such as banks and utilities, noting that dividend yields have compressed and returns have broadened beyond the hot-money names.
- His portfolio also uses trend following, cash, gold, emerging-market local-currency debt, and hedges to preserve capital across regimes.
Notable quotes
“US equities have been cleaning the clock with foreign foreign stocks for the best part of 15 years”
“when these things goes, you know, it's all bets are off”
“fiscal fiscal drives equity markets”
“the place who hide is closer to the cash flows and closer to you know it's the classic atoms versus bits”
“I am massively overweight um Latin America with a significant bias to Brazil and Mexico”
How the episode opens
This chart has been in a downtrend since 2012. And when these things goes, you know, it's all bets are off. I mean, if we have a kind of 2000 20 thou 2002 to 2007 type cycle, things could get really interesting.
The NASDAQ 100 really hasn't made a higher high now for for 3 months. And you know with the exception of you know the resurgence of Google you know the rest of the rest of the mag 7 which have led the market for the last 15 years are are putting in a topping formation right now. The Chinese leadership want domestic equities to work as a unit of savings as a real asset class not a token of speculation.
Um, China has plenty of scope for targeted fiscal stimulus and that's the dirty dirty secret of all markets. Um, fiscal fiscal drives equity markets. You're watching Excess Returns, the channel that makes complex investing ideas simple enough to actually use, where better questions lead to better decisions.
My guest today, Mr. Macro for civilians, the blind squirrel himself, Rupert Mitchell. Welcome back to Access Returns.
Hi Matt. Good evening. What a day.
What a day we are having on this January 20th of 2026, the year of our Lord. Part of the reason we're on we're on this call today is because you were my first message after the whole Trump Venezuela thing. And that started a back and forth and not so much for any great opinions on exactly what that means.
But if somebody hasn't heard it yet, go back and listen to the intentional investor I did with Rupert and you'll understand why I threw the bat phone away. I exclusively use the squirrel phone in these scenarios. So we were talking about that and I mean maybe start here.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- us equity leadership fatigue
- emerging markets relative performance
- duration risk and real assets
- china equity inflection
- ai capex and software risks
Companies and tickers mentioned
- TCEHY
- BABA
- Tencent
- Alibaba
Watch the episode
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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