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Why I Was Wrong to Be Bearish on U.S. Stocks

Nick Maggiulli · 25 Aug 2026

A change of mind in this piece

The froth visible in US markets in 2025 was the 2021 mania returning, and reason enough to take risk off.

No longer holdsSince then U.S. stocks are up 16% (total return) and my bearish prediction turned out to be misguided.

Read the piece on ofdollarsanddata.com ↗

5 korrents from this piece · 1 of them a turn ↓

Nick Maggiulli did not write this page.

Every claim below was made in this piece, quoted word for word and numbered in the order the piece makes them, so you can read it there rather than take our word for it. The sentence above each quote is our reading of the claim, not their wording. Each quote was checked against a stored copy of the page at build time; where the two differ, the quote is the fact.

  1. Our reading

    The froth visible in US markets in 2025 was the 2021 mania returning, and reason enough to take risk off.

    No longer holdsSince then U.S. stocks are up 16% (total return) and my bearish prediction turned out to be misguided.
    Their words nowMy issue wasn’t that the parallels didn’t exist—they did. My issue was that much of the speculative stuff of 2021 ended up failing (NFTs, DeFi, etc.) while much of the speculative stuff of 2025 (AI) seems to be succeeding.

  2. Our reading

    The S&P 500’s price-to-sales ratio no longer signals what it once did, because today’s companies earn higher margins.

    Their wordsTherefore, the only correct interpretation of the P/S ratio over the last decade is that it doesn’t signal what it used to.

  3. Our reading

    The base rate for US stocks over any one year is that they rise, and forgetting it is how market calls go wrong.

    Their wordsthe base rate for U.S. stock performance (in aggregate) over one year is that they go up

  4. Our reading

    An investor's starting point should be the portfolio that is best to hold independent of any tactical market view

    Their wordsit’s better to have a portfolio that can handle stocks whether they are overvalued or not

  5. Our reading

    A portfolio you cannot hold through an ordinary market cycle is not a portfolio but a bet.

    Their wordsBecause if you can’t handle standard market cycles, then you don’t have a portfolio, you have a bet.

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