The Great Reversal, Revisited: Why the Bull Market Is Still in Its Prime

When The Great Reversal was first published, the dominant market narrative was caution disguised as sophistication. Investors were told that valuations were stretched, liquidity was fragile, and that any optimism needed to be tightly hedged. The prevailing belief was that the bull market, if one even existed was already old, tired, and vulnerable.

But markets did not roll over, capital did not retreat and innovation did not slow. The thesis that the global economy was entering a new expansionary regime, one driven by technology, financial restructuring, and political incentives has not only held up, it has strengthened. This update is about recognizing that the market is doing what it was always positioned to do.

More importantly, it is about understanding where we are now in the cycle and why 2026 may prove to be one of the most rewarding years of the entire run.

If the historical parallels we are tracking are even directionally correct, the next phase of this cycle could be far more powerful than most investors are positioned for. In fact, our base case now allows for the possibility of 100% market advances in both 2026 and 2027 before this cycle ultimately peaks later in the decade.

The 1926 Playbook Is Still in Effect

The historical analogy to the mid-to-late 1920s was never meant to be poetic. It was meant to be functional.

The comparison rests on a familiar structure: a post-crisis, post-pandemic economy exits a period of restraint and disbelief, enters a phase of productivity-driven growth, and experiences an extended bull market fueled by technological adoption, capital formation, and financial innovation. In the 1920s, that meant electrification, mass production, automobiles, and radio. Today, it means artificial intelligence, compute-intensive software, biotechnology, and tokenized finance.

The years 2024 and 2025 closely resembled the early-to-mid 1920s, when markets advanced unevenly while skepticism remained high. That skepticism is now eroding. Capital is shifting from defense to offense, and narratives are catching up to price action.

In this framework, 2026 and 2027 align most closely with 1927 and 1928—the heart of the cycle. These are the years when innovation becomes operational, when adoption scales, and when investors stop asking whether the trend is real and start asking how much exposure is enough.

The historical precedent that underpins this framework is not subtle. During the heart of the 1920s expansion, the S&P 90 proxy advanced approximately 30% in 1927, followed by another 32.5% gain in 1928. Even after those extraordinary returns, the market rallied an additional 35% into the September 1929 peak.

That sequence matters because it illustrates how productivity driven bull markets actually behave. Once capital, technology, and confidence align, upside momentum does not fade quickly, it compounds. These cycles tend to produce multiple years of outsized gains before ultimately exhausting themselves.

Our current framework allows for the possibility of similarly aggressive advances ahead, including the potential for 100% market moves in both 2026 and 2027, followed by further upside into a later-cycle peak. History does not need to repeat perfectly for the implication to be clear: if this cycle even partially rhymes, the opportunity cost of underexposure could be significant.

If 1929 has a modern equivalent, it sits closer to 2028. That is a future problem. Markets do not peak in anticipation of excess; they peak after excess becomes obvious. We are not there.

Why 2026 Looks Like an Acceleration Year

Bull markets do not advance at a constant pace. They move in phases, and 2026 is shaping up to be a year of acceleration rather than consolidation.

Several forces are converging. Political incentives remain aligned with growth. Fiscal restraint is not a near-term priority. Technological investment is no longer speculative but embedded in corporate budgets and national strategy. The fear-driven narratives that dominated prior years, such as recession, hard landings, systemic stress have lost credibility as outcomes. What replaces them is confidence.

This confidence does not show up all at once. It expresses itself through capital spending, hiring, mergers, and long-duration investments. Once that process is underway, markets tend to overshoot expectations rather than disappoint them.

Importantly, this phase rewards participation. The cost of waiting becomes higher than the cost of volatility.

Compute Is the New Industrial Backbone

One of the most misunderstood aspects of the current cycle is where value is actually being created.

The focus has often been on those selling artificial intelligence infrastructure. But the deeper and more durable opportunity lies with companies that consume compute at scale. These are firms building platforms, models, and systems that require continuous, expanding access to computational power. Compute is not a one-time purchase; it is a recurring input, closer to electricity than hardware.

This dynamic mirrors prior industrial revolutions. The biggest beneficiaries of electrification were not necessarily the power companies, but the manufacturers that redesigned production around electricity. Today’s equivalent are businesses architected from the ground up to leverage massive, ongoing compute resources.

As long as compute demand continues to rise, and all evidence suggests it will, this category remains structurally favored.

From Weight Loss to Biological Productivity

GLP-1 therapies are often framed as a consumer or lifestyle phenomenon. That framing understates their importance.

At scale, these therapies represent a shift in biological productivity. Reduced incidence of chronic disease, improved metabolic health, and lower long-term healthcare costs have second- and third-order effects across the economy. Workforce participation improves. Insurance economics change. Entire treatment paradigms are reevaluated.

The next phase of this trend extends beyond metabolic dysfunction toward inflammation as a root cause. NLRP3-targeted therapies fit naturally into this evolution. If GLP-1s addressed the symptoms, inflammation-focused approaches aim at the underlying mechanism.

This is how durable healthcare revolutions unfold: not through a single breakthrough, but through layered advances that expand the addressable problem set. From an investment standpoint, this creates long runways rather than short trade windows.

Tokenization and the Reinvention of Financial Plumbing

While technology and healthcare drive earnings growth, tokenization and stablecoins are reshaping how capital moves. Together, they represent a modernization of financial plumbing rather than a speculative asset class.

Tokenization improves settlement, broadens access, and lowers friction across capital markets. Stablecoins complement this shift by providing a neutral, programmable medium of exchange that allows capital to move globally, instantly, and at low cost. The combined effect is more liquidity, faster transmission of capital, and a wider pool of participants—particularly international capital seeking stability, yield, and reliable access to dollar-based systems.

Historically, bull markets have been reinforced by advances in financial infrastructure. The rise of mutual funds, margin accounts, and electronic trading all expanded participation and accelerated capital flow. Tokenization and stablecoins represent the current iteration of that process, extending market access beyond traditional intermediaries and operating hours.

As capital becomes easier to deploy, store, and reallocate, asset prices tend to benefit. This is structural efficiency expressing itself through markets, not a transient narrative.

Investment Positioning: Broad Themes, Not Narrow Trades

The investment implications of this thesis are straightforward and already well understood by most readers.

The market continues to favor scale, platform economics, and long-duration growth. Companies that buy large amounts of compute, healthcare innovators tied to metabolic and inflammatory disease, and beneficiaries of tokenized financial infrastructure remain aligned with the dominant currents of the cycle.

The key point is not security selection, but exposure. This phase of the bull market rewards being invested in the right themes more than it rewards precision timing.

Volatility, Politics, and the Nature of the Cycle

Periods of political friction, social tension, and market volatility are often cited as reasons for caution. Historically, they have been features of strong bull markets rather than exceptions to them.

The 1920s were not politically serene. Neither are the 2020s. Markets have repeatedly demonstrated an ability to advance amid disagreement, reform, and noise. What matters is not consensus, but capital flow.

As long as capital continues to seek growth, productivity, and scalable platforms, the underlying trend remains intact.

Stay Disciplined But Don’t Be Timid

This update is not a declaration that risk no longer exists. It is a recognition that the dominant risk today is underparticipation.

The bull market thesis laid out last year was grounded in structure, history, and incentives. Those foundations remain in place. If anything, they are more visible now than they were then.

In the late 1920s, investors who exited early were not “risk-managed”; they were simply absent for the most powerful phase of the advance. Markets had already risen sharply, yet the largest gains still lay ahead.

We are projecting the potential for outsized annual advances in this cycle, with the possibility of cumulative gains that rival historical expansions. If we are even partially correct, the more relevant question is not whether volatility will appear but whether one can afford not to be bold.

2026 sits squarely in the middle of the cycle, not the end of it. The conditions that drive asset appreciation are still forming, not fading. Investors who understand where they are in the timeline can afford to be patient, confident, and positioned.

Bull markets do not end quietly. Until excess becomes undeniable, the path of least resistance remains higher.