Animal Spirits Podcast

The Biggest Risk in 2026 (EP. 444)

97 snips
Dec 24, 2025
Dive into the world of stock markets as the hosts discuss what a typical year looks like while examining drawdowns. They argue small and mid-cap stocks might outshine mega caps amid changing interest rates. Explore how charity donations can be automated and the impact of billionaire contributions on social mobility. With households holding record cash balances, they also highlight the surprising strength of small-cap stocks and the evolving dynamics of gambling, especially among Gen Z.
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INSIGHT

Market Volatility Is Ordinary

  • Annual returns with deep drawdowns are normal for markets and this year fits the pattern.
  • Michael Batnick argues most years look chaotic in isolation but ordinary in historical context.
INSIGHT

Consensus Fears Often Mislead

  • Deutsche Bank survey shows 57% see tech valuation collapse as biggest 2026 risk.
  • Ben Carlson notes big risks are often unexpected, not the consensus worry.
INSIGHT

Big Drawdowns Rewind Market Time

  • A 30% market crash would mostly time-travel returns back to early 2024 levels.
  • Ben Carlson suggests many investors could tolerate a single large drawdown if it stopped there.
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