December 19, 2025 • 17 mins
On this week's markets roundup, hosts Merryn Somerset Webb and John Stepek look back at an unexpectedly strong year for global markets, with equities, gold and even silver delivering standout performances. They dig into whether 2025’s surprising rotations—from US mega-caps to value, energy and long-ignored small caps—could carry into next year, and what persistent inflation, UK rate cuts and shifting attitudes toward net zero might mean for investors.
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Speaker 1 (00:02):
Bloomberg Audio Studios, Podcasts, Radio News.
Speaker 2 (00:17):
Welcome to the Merrin Dogs Money Market Wrap, where we
talk about the biggest moves in the markets this week
and what is driving them. I'm Marrin Zumset, web Editor
at Large for Bloomberg UK Wealth.
Speaker 3 (00:27):
And I'm joined Stavie, senior reporter at Bloomberg and the
author of the Money's Stilled newsletter.
Speaker 4 (00:32):
Gallow John. Now, John, this is our last chat of
the year.
Speaker 2 (00:36):
Well, it's our last public chat of the It should
we say, well, it says hello, We're going to talk
about the biggest moves in the market this week. As
you you know, we need to look at the biggest
moves in the market this year.
Speaker 3 (00:48):
Yes, yes, because it's been kind of.
Speaker 2 (00:50):
An interesting year, so much going on, mostly negative, yet
global markets are up nearly twenty percent across the board
to appolutely fascinating. I'm obviously it's a bad ai. It's
about falling interest rates, it's about maybe a bit more
growth than expected. But nonetheless, when you look at everything
and you look at how we started.
Speaker 4 (01:08):
The year, this is kind of extraordinary.
Speaker 2 (01:11):
And then you look at the fitze in there, which
one hundred round twenty percent, you look at the all
share is still up.
Speaker 4 (01:17):
Seventeen percent or so.
Speaker 2 (01:19):
And then you look at our favorite gold, well, then
gold sixty three percent under the bike and I know,
nice pattern the bag.
Speaker 4 (01:25):
We'll get to silver run a minute.
Speaker 2 (01:27):
And then you've got the gold Miners index up over
one hundred and fifty percent. And then of course there
is poor Bitcoin.
Speaker 4 (01:34):
Yeah.
Speaker 3 (01:35):
Actually yes, I'd bet I had forgotten bitcoin. Of all
the risky stuff that went.
Speaker 2 (01:41):
Up, everything went up except for Bitcoin, which actually went
down about eight percent. And then there is the Bitcoin
Treasury's Index. You know, so if you think of gold
and then leveraged gold being gold miners, and then you've
got bitcoin, and you think of the equivalents of gold
miners being the Treasury index. These companies, so we've talked
about before, listed companies that just hold bitcoin and inexplicably,
(02:04):
until relatively recently, quite a few of them traded at
a premium to the bitcoin.
Speaker 4 (02:08):
Which they hold. Completely insane.
Speaker 2 (02:09):
We'll never understand this stuff, but there it is, the
Bitcoin Treasury Index again, down six seven percent so far
this year. So it's been really interesting. You look at
bitcoin now and you think, well, what is it correlated to? No?
Speaker 3 (02:22):
Yeah, because there is nothing else that you can look at.
I mean, the one thing that whenever people were seeing,
well it's not digital gold, but it is correlated to
the knives deck, you know. Even I mean the nise
Dick's done fain this year hasn't done as well as
it normally have.
Speaker 2 (02:38):
Eighteen point seven two percent so far we're on there.
We're talking on the eighteenth of December. By the ways,
it is still underperforming the fifty one hundred, but not
quitely as badly as I initially suggested.
Speaker 3 (02:49):
And these local Curtncy figures, because yeah, if you translated
any GBP so or what are you a British person
would actually have got then I'm pretty sure the footsis
beaten the Niceta Bay even more than that. But I mean,
we shouldn't throw it too much because it hasn't happened
for a while. But I think it's interesting that there's
been that move. Are we from the US or the
(03:10):
US exceptionalism story? I think it is fairly see when
you look at the markets did end this year. I
mean whether that will continue next year is another matter.
Speaker 2 (03:19):
But no, I mean, and there is no getting away
from the fact that absolutely the best place to invest
anywhere until relatively recently, until what two years ago, was
definitely anything to do with the US dot market. So,
you know, we we can be precly jolly about what's
going on in the UK and Europe at the moment,
but this is quite recent. So the question now is
whether moving into the next year, this rotation continues, this
(03:42):
idea that you know, the returns from the US are
not going to be exceptional over the next few years,
and you may, on the other hand, get exceptional returns
from the things that have performed horribly over the last
couple of decades. Maybe, just maybe we really are getting
to the point where value might have its day in
the sun. We've seen gold has day in the sound,
of course, maybe small gaps will finally have their time
(04:05):
in the sun. Maybe we will see the one hundred
breakthrough ten thousand diamonds outside John's it will break through
ten thousand for the end of the year at this rate.
So the question for next year does this rotation continue,
And my guess is that it does given the price differences,
given them worries around AI cap ex etc.
Speaker 3 (04:23):
But you know, forecasting, I mean I wonder if I
do wonder if the small cups will come back just
because people will have run out of other stuff to buy,
because that does sometimes happen. It can just be a
late cycle thing.
Speaker 2 (04:37):
I mean.
Speaker 3 (04:38):
The only problem is the small caps always strike me,
has been more exposed to your domestic economy and that's
where they kind of gloom generally as just now that
I mean not just in the UK, I guess actually,
but particularly in the UK, does that feeling that businesses
are constantly being assaulted by the government And if that
(04:58):
doesn't change next year, then eventually somethings can they going
to give at the same thing?
Speaker 2 (05:04):
Well, they are cheap, they are cheap, yeah, And of
course you know they're cheap and ignored. You know, there
are fewer there's less money in small caps, and they
used to be across the board in the US and
the UK and in Europe. There are a few fund
managed dedicated to it, et cetera. And as soon as
you get to the point where an area is completely ignored,
it begins to look quite interesting.
Speaker 4 (05:23):
And of course value as well.
Speaker 2 (05:24):
There are very few fund managers left focusing on value.
There's prankly nobody in the UK who would stand up
and say, look, at me. I'm a value invest simply.
I have quite a few of them on the podcast,
but I think we've had all of them on the podcast.
Speaker 3 (05:34):
I think I think of support network for the UK's
value managers frightnically.
Speaker 2 (05:41):
Oh anyways, speaking of the UK, we should mention this
week's rate cut. Bank of England has now cut rates
by twenty five basis points.
Speaker 4 (05:49):
There are point two five percent.
Speaker 2 (05:50):
We are now done at three point seven five percent,
so under four percent. You know, it'd be nice to
look at that and say, well, this is this is
all for good reasons, but of course it's it's really
what to do with bad stuff, isn't it.
Speaker 3 (06:02):
Again? The depressing thing about where we're ending the year
for the UK is that it's basically a question of
is growth going to tip over to the point where
you know, we get a recession next year, which was
still that's an outside chance. Is not the thing that
most people expect, but you know, they kind of the
poor quality of the recent data does make you think, oh,
(06:23):
I wonder if that could be a surprise for next year.
And on the other hand, inflation is still much more
persistent than you know, I mean, so the rate now
is it three point seventy five percent, but inflation is
only down to about three point two percent, so we're
still above target. This is by no means what people
in the pre two thousand and eight era would have
(06:43):
considered to be tight monetary policy. And obviously things change,
macro environments change, and this probably is tight, giving how
everyone's feeling. But yeah, it's it's not. It's not an
attractive economy, and most of that thing think it's to be.
It would be fair to see the policy decisions that
have been made have resulted in this, and unless we
(07:06):
change some of them, which doesn't seem likely under the
current government, then I would expect inflation to still be
an issue, but also slow growth to still be an
issue next.
Speaker 4 (07:16):
Year, like a mini battle stagflation.
Speaker 3 (07:20):
Yeah, yeah, just kind of grained and slightly depressing, this
sort of soldiering through environment.
Speaker 4 (07:31):
Okay, can you tell you a different No?
Speaker 2 (07:35):
I can't, No, I can't, not, as we've discussed endlessly,
not until there is a change of government or a
change of stance.
Speaker 3 (07:43):
Yeah.
Speaker 2 (07:43):
I mean, I think one of the really interesting things
to watch for next year has got to be the
rollback of the focus on net zero in the UK.
You know, pretty much everybody everywhere else is rolling back,
rolling back, rolling back hasn't really happened in the UK yet,
bits and bobs of much about you know, maybe well
there's maybe that, some changes to the nottoy etc. But
generally speaking we're still on as an extreme and at
(08:07):
zeropath is as we were at the beginning of the
year and the year before that and the year before that.
And that's clearly well, people would argue, but looking at
electricity prices, clearly unsustainable. You can't be an outlier in
this area. So I think that will be one of
the things to watch in the UK next year. And
I think an awful lot of people are watching that.
They are waiting to see a shift in energy prices
(08:31):
and of course electricity supply.
Speaker 4 (08:33):
In the UK before they move in here to invest.
Speaker 3 (08:37):
I know, I mean that does slightly, why does one
as well? And the energy the year particalarly forcel Fuels
has been the kind of laggered. So if you were
looking for a contrarian bit for next year, as we've mentioned,
let a couple of teams in the podcast, the Energy
said that it is probably the police to look at
this point and if you've got that sense that the
(08:57):
attitude is changing towards it, then I is kind of
pointing that we equate aggressively. There's being classic sort of
contribu employee.
Speaker 2 (09:17):
And I wanted to come back to small caps on
the contrarian front because it really is, it is the
big contrarian play. And Pamwa Liberia had a little report
out earlier in the week that I looked at a
really depressing reading looking at US small caps. I am
We're going to end on a positive note. Way everybody,
we will be finishing this podcast this week on a
(09:39):
positive note. So looking back at the last one hundred years,
it's nineteen twenty six, US small cap stocks outperformed large
cap stocks by two point eight five percent years.
Speaker 4 (09:50):
That's marvelets.
Speaker 2 (09:51):
So you can look at that and you can say,
in the long run, this stuff massively outperformed. You know,
if you look at nearly three percent compounded over even
a decade, we're talking real money. But inside the long
term averages, you've got some really, really nasty and very
lengthy periods of underperformance.
Speaker 4 (10:08):
When I say lots, I.
Speaker 2 (10:09):
Mean actually two nineteen eighty two to nineteen ninety nine,
a long time, nearly two decades, nearly two decades of
underperforming by one point six percent a year. And then
the second bat of underperformance is the one that we
are deep in right now, underperformance of one point seven
percent year since twenty eighteen, so added not touching the
(10:31):
sides of the length of the underperforming period in the
eightieth and nineties.
Speaker 3 (10:37):
Oh man, So what's the good news, because that sounds
like we've gone ten years.
Speaker 4 (10:45):
No, no, no, it doesn't have to be so long.
Speaker 2 (10:46):
For good news is the when it performs, Boy, it
really outperforms. So nineteen sixty four to nineteen eighty one
a performance by small caps of eight percent a year.
Speaker 3 (10:55):
Actually, that's very good.
Speaker 2 (10:56):
Yeah, yeah, nineteen twenty six to nineteen forty one four
point four percent. Sure, I mean, obviously you can pick
your time periods.
Speaker 4 (11:05):
Can't you.
Speaker 3 (11:06):
But oh yeah, but it's in decades of whenever it's
that length to tam and we all, you know, we're
all told constantly the small caps, and it's logical the
small caps, although they're very long run, shoot perform big cab.
Speaker 2 (11:20):
And particularly when they're as cheap as they are now
relatively speaking. So you know, you look at it now,
and you say this stuff is cheap, this stuff out
of favor. It's been absolutely slammed by the shift to
passive and absolutely slammed by various regulatory things, particularly in
the UK, so it's got.
Speaker 4 (11:36):
To come back.
Speaker 2 (11:37):
On the other hand, if you've invested in US small
caps over the last forty years, just the last forty
so not going back to nineteen twenty six, and averaged
out the app performance and the underformance, you can't barely
have managed to keep pace with large capstocks a little
and beat them.
Speaker 3 (11:50):
So yeah, that's interesting.
Speaker 2 (11:54):
Yeah, the optimistic take is that's where the growth is,
that's where the value is, as where the long term performances.
Speaker 4 (12:01):
So maybe next year.
Speaker 3 (12:02):
I would think the Magnificent seven or sort of varieties
of the Magnificent seven must make a big difference in
the US law, because the whole point about them is
the large caps that could all like small.
Speaker 4 (12:13):
Caps, yes, until they don't.
Speaker 3 (12:16):
Until they're doing We'll see about that.
Speaker 2 (12:20):
So I mean, you know, we're saying, well, well, we'll
talk about this a lot in the new year, I think,
but you're seeing quite a lot of cracks appearing across
the AI story.
Speaker 4 (12:29):
I mean, just have a look at oracle, look at oracle.
Speaker 3 (12:33):
And also just before Warboo called and silver, why why
have they had such a whaled year?
Speaker 4 (12:43):
Do you think, Well, I don't know, im. You know,
they say gold is insurance and silver is a warning. Right, yeah,
so gold.
Speaker 2 (12:53):
Looking at what's been going on across the last year,
everyone has been absolutely fine, was staying in inequities and
seeing bill markets across the board.
Speaker 4 (13:00):
But also everyone's a bit said.
Speaker 2 (13:01):
Well, maybe i'll just ensure that you know, and that's gold,
and it is the basement trade, and in particular it's
this new regular price and sensitive buyer in the.
Speaker 4 (13:10):
Form of the world Central banks.
Speaker 2 (13:12):
So all that's in there for gold, silver to w
and a silver's more your area. I mean, obviously it
tends to it tends to catch up with gold, and
then it tends to have little manias.
Speaker 4 (13:22):
So maybe this is a little silver mania.
Speaker 3 (13:24):
Yeah, yeah, I think that makes sense if it was
a bit like the way the gold miners suddenly walk
up and realize that gold was at twice the place
the last time they had a decent ryn.
Speaker 2 (13:35):
And so so it makes sense. You know, if you've
made some money out of gold, it makes sense to
turn to silver and there we go. I mean, I'm
definitely keeping my gold. I don't think looking at the
geopolitical environment that now is the right time to not
have your gold. But I'm not sure i'd be rushing
out by a pair of silver right now. That's more
of a speculation than an insurance for me.
Speaker 3 (13:57):
Yeah, And actually, this is a long time reader actually
emailed me after I wrote about silver recently and said
that just taking a pile of the family kind of
silver tea sets and their looms that they didn't want
any more down a silver smeltery and got them got
them to downy hard cash. So I thought that kind
(14:18):
of is that is a problem with silver, because there's
a lot of scrap silver out there, And if someone
who's as relatively well informed as this particular reader was
doing that, it does make me think, Okay, maybe we're
in certainly in the later stages of this this silver mania.
Speaker 2 (14:37):
A lot.
Speaker 3 (14:38):
That reminds me one other really interesting statistic that I
still haven't properly shared anywhere, the fact that announced the
silver is now worth more than a barrel of oil.
That's not since nineteen eighty.
Speaker 2 (14:54):
Yeah, and how long after it passed through that milestone.
Speaker 4 (14:58):
Did the silver price collapse.
Speaker 3 (15:00):
A day I've been nineteen eighty was very you know,
a spike for silver, which to be feel this this
kind of hasn't been but yeah, no, it's a silver
being at party with oil is quite something. I mean,
obviously it was a party with oil when oil went
negative in twenty twenty, but that doesn't really count. So
that I thought that was a very thought provoking start.
(15:22):
I don't know what thought very much. Quite a number.
Speaker 2 (15:27):
Okay, So for next year, watch the gold price, watched
the silver price. Maybe I bother with the bitcoin price.
Watch sorry, watch energy already coming in.
Speaker 4 (15:40):
Nobody writes hate mail at Christmas?
Speaker 3 (15:43):
Do they some of the doing droppings. I get a
pretty fruity You still get round robins the door, thankfully
I always hated them.
Speaker 2 (15:53):
I don't think people do this anymore. No round robbers,
no haymail. Everyone just you know, focused on your own Christmas.
Watch gold, watch the watch energy, really interesting, Watch what
happens with net zero in the UK? Watch small caps,
and keep an eye on the growth value intersection.
Speaker 4 (16:13):
Anything else, John.
Speaker 3 (16:14):
No, I think that is a wonderful have owned up.
Speaker 2 (16:19):
And yeah, all that remains, go and you say it,
You say it.
Speaker 3 (16:24):
All that remains very mady Christmas listeners.
Speaker 4 (16:28):
Hey, Happy Christmas. Happy Christmas for all our listeners. Thank you, John,
you good to you. Thank you.
Speaker 2 (16:36):
Thanks for listening to this week's maryn Talks Money Debrief.
If you like us show, rate, review, and subscribe wherever
you listen to podcasts. Also be sure to follow me
and John on x or Twitter at maryns W and
John Underscore Stepic. This episode was produced by some Siety,
production support and sound design by Moses and Happy Christmas
to you two as well.
Speaker 4 (16:55):
Thank you for all your work this year. Questions are
going on this show and all our shows.
Speaker 2 (16:58):
Always welcome our show emails Marimoni at Bloomberg dot net.
There you go, Christmas Christmas Wishes on the podcast
Speaker 1 (17:12):
H
Bloomberg Audio Studios, Podcasts, Radio News.
Speaker 2 (00:17):
Welcome to the Merrin Dogs Money Market Wrap, where we
talk about the biggest moves in the markets this week
and what is driving them. I'm Marrin Zumset, web Editor
at Large for Bloomberg UK Wealth.
Speaker 3 (00:27):
And I'm joined Stavie, senior reporter at Bloomberg and the
author of the Money's Stilled newsletter.
Speaker 4 (00:32):
Gallow John. Now, John, this is our last chat of
the year.
Speaker 2 (00:36):
Well, it's our last public chat of the It should
we say, well, it says hello, We're going to talk
about the biggest moves in the market this week. As
you you know, we need to look at the biggest
moves in the market this year.
Speaker 3 (00:48):
Yes, yes, because it's been kind of.
Speaker 2 (00:50):
An interesting year, so much going on, mostly negative, yet
global markets are up nearly twenty percent across the board
to appolutely fascinating. I'm obviously it's a bad ai. It's
about falling interest rates, it's about maybe a bit more
growth than expected. But nonetheless, when you look at everything
and you look at how we started.
Speaker 4 (01:08):
The year, this is kind of extraordinary.
Speaker 2 (01:11):
And then you look at the fitze in there, which
one hundred round twenty percent, you look at the all
share is still up.
Speaker 4 (01:17):
Seventeen percent or so.
Speaker 2 (01:19):
And then you look at our favorite gold, well, then
gold sixty three percent under the bike and I know,
nice pattern the bag.
Speaker 4 (01:25):
We'll get to silver run a minute.
Speaker 2 (01:27):
And then you've got the gold Miners index up over
one hundred and fifty percent. And then of course there
is poor Bitcoin.
Speaker 4 (01:34):
Yeah.
Speaker 3 (01:35):
Actually yes, I'd bet I had forgotten bitcoin. Of all
the risky stuff that went.
Speaker 2 (01:41):
Up, everything went up except for Bitcoin, which actually went
down about eight percent. And then there is the Bitcoin
Treasury's Index. You know, so if you think of gold
and then leveraged gold being gold miners, and then you've
got bitcoin, and you think of the equivalents of gold
miners being the Treasury index. These companies, so we've talked
about before, listed companies that just hold bitcoin and inexplicably,
(02:04):
until relatively recently, quite a few of them traded at
a premium to the bitcoin.
Speaker 4 (02:08):
Which they hold. Completely insane.
Speaker 2 (02:09):
We'll never understand this stuff, but there it is, the
Bitcoin Treasury Index again, down six seven percent so far
this year. So it's been really interesting. You look at
bitcoin now and you think, well, what is it correlated to? No?
Speaker 3 (02:22):
Yeah, because there is nothing else that you can look at.
I mean, the one thing that whenever people were seeing,
well it's not digital gold, but it is correlated to
the knives deck, you know. Even I mean the nise
Dick's done fain this year hasn't done as well as
it normally have.
Speaker 2 (02:38):
Eighteen point seven two percent so far we're on there.
We're talking on the eighteenth of December. By the ways,
it is still underperforming the fifty one hundred, but not
quitely as badly as I initially suggested.
Speaker 3 (02:49):
And these local Curtncy figures, because yeah, if you translated
any GBP so or what are you a British person
would actually have got then I'm pretty sure the footsis
beaten the Niceta Bay even more than that. But I mean,
we shouldn't throw it too much because it hasn't happened
for a while. But I think it's interesting that there's
been that move. Are we from the US or the
(03:10):
US exceptionalism story? I think it is fairly see when
you look at the markets did end this year. I
mean whether that will continue next year is another matter.
Speaker 2 (03:19):
But no, I mean, and there is no getting away
from the fact that absolutely the best place to invest
anywhere until relatively recently, until what two years ago, was
definitely anything to do with the US dot market. So,
you know, we we can be precly jolly about what's
going on in the UK and Europe at the moment,
but this is quite recent. So the question now is
whether moving into the next year, this rotation continues, this
(03:42):
idea that you know, the returns from the US are
not going to be exceptional over the next few years,
and you may, on the other hand, get exceptional returns
from the things that have performed horribly over the last
couple of decades. Maybe, just maybe we really are getting
to the point where value might have its day in
the sun. We've seen gold has day in the sound,
of course, maybe small gaps will finally have their time
(04:05):
in the sun. Maybe we will see the one hundred
breakthrough ten thousand diamonds outside John's it will break through
ten thousand for the end of the year at this rate.
So the question for next year does this rotation continue,
And my guess is that it does given the price differences,
given them worries around AI cap ex etc.
Speaker 3 (04:23):
But you know, forecasting, I mean I wonder if I
do wonder if the small cups will come back just
because people will have run out of other stuff to buy,
because that does sometimes happen. It can just be a
late cycle thing.
Speaker 2 (04:37):
I mean.
Speaker 3 (04:38):
The only problem is the small caps always strike me,
has been more exposed to your domestic economy and that's
where they kind of gloom generally as just now that
I mean not just in the UK, I guess actually,
but particularly in the UK, does that feeling that businesses
are constantly being assaulted by the government And if that
(04:58):
doesn't change next year, then eventually somethings can they going
to give at the same thing?
Speaker 2 (05:04):
Well, they are cheap, they are cheap, yeah, And of
course you know they're cheap and ignored. You know, there
are fewer there's less money in small caps, and they
used to be across the board in the US and
the UK and in Europe. There are a few fund
managed dedicated to it, et cetera. And as soon as
you get to the point where an area is completely ignored,
it begins to look quite interesting.
Speaker 4 (05:23):
And of course value as well.
Speaker 2 (05:24):
There are very few fund managers left focusing on value.
There's prankly nobody in the UK who would stand up
and say, look, at me. I'm a value invest simply.
I have quite a few of them on the podcast,
but I think we've had all of them on the podcast.
Speaker 3 (05:34):
I think I think of support network for the UK's
value managers frightnically.
Speaker 2 (05:41):
Oh anyways, speaking of the UK, we should mention this
week's rate cut. Bank of England has now cut rates
by twenty five basis points.
Speaker 4 (05:49):
There are point two five percent.
Speaker 2 (05:50):
We are now done at three point seven five percent,
so under four percent. You know, it'd be nice to
look at that and say, well, this is this is
all for good reasons, but of course it's it's really
what to do with bad stuff, isn't it.
Speaker 3 (06:02):
Again? The depressing thing about where we're ending the year
for the UK is that it's basically a question of
is growth going to tip over to the point where
you know, we get a recession next year, which was
still that's an outside chance. Is not the thing that
most people expect, but you know, they kind of the
poor quality of the recent data does make you think, oh,
(06:23):
I wonder if that could be a surprise for next year.
And on the other hand, inflation is still much more
persistent than you know, I mean, so the rate now
is it three point seventy five percent, but inflation is
only down to about three point two percent, so we're
still above target. This is by no means what people
in the pre two thousand and eight era would have
(06:43):
considered to be tight monetary policy. And obviously things change,
macro environments change, and this probably is tight, giving how
everyone's feeling. But yeah, it's it's not. It's not an
attractive economy, and most of that thing think it's to be.
It would be fair to see the policy decisions that
have been made have resulted in this, and unless we
(07:06):
change some of them, which doesn't seem likely under the
current government, then I would expect inflation to still be
an issue, but also slow growth to still be an
issue next.
Speaker 4 (07:16):
Year, like a mini battle stagflation.
Speaker 3 (07:20):
Yeah, yeah, just kind of grained and slightly depressing, this
sort of soldiering through environment.
Speaker 4 (07:31):
Okay, can you tell you a different No?
Speaker 2 (07:35):
I can't, No, I can't, not, as we've discussed endlessly,
not until there is a change of government or a
change of stance.
Speaker 3 (07:43):
Yeah.
Speaker 2 (07:43):
I mean, I think one of the really interesting things
to watch for next year has got to be the
rollback of the focus on net zero in the UK.
You know, pretty much everybody everywhere else is rolling back,
rolling back, rolling back hasn't really happened in the UK yet,
bits and bobs of much about you know, maybe well
there's maybe that, some changes to the nottoy etc. But
generally speaking we're still on as an extreme and at
(08:07):
zeropath is as we were at the beginning of the
year and the year before that and the year before that.
And that's clearly well, people would argue, but looking at
electricity prices, clearly unsustainable. You can't be an outlier in
this area. So I think that will be one of
the things to watch in the UK next year. And
I think an awful lot of people are watching that.
They are waiting to see a shift in energy prices
(08:31):
and of course electricity supply.
Speaker 4 (08:33):
In the UK before they move in here to invest.
Speaker 3 (08:37):
I know, I mean that does slightly, why does one
as well? And the energy the year particalarly forcel Fuels
has been the kind of laggered. So if you were
looking for a contrarian bit for next year, as we've mentioned,
let a couple of teams in the podcast, the Energy
said that it is probably the police to look at
this point and if you've got that sense that the
(08:57):
attitude is changing towards it, then I is kind of
pointing that we equate aggressively. There's being classic sort of
contribu employee.
Speaker 2 (09:17):
And I wanted to come back to small caps on
the contrarian front because it really is, it is the
big contrarian play. And Pamwa Liberia had a little report
out earlier in the week that I looked at a
really depressing reading looking at US small caps. I am
We're going to end on a positive note. Way everybody,
we will be finishing this podcast this week on a
(09:39):
positive note. So looking back at the last one hundred years,
it's nineteen twenty six, US small cap stocks outperformed large
cap stocks by two point eight five percent years.
Speaker 4 (09:50):
That's marvelets.
Speaker 2 (09:51):
So you can look at that and you can say,
in the long run, this stuff massively outperformed. You know,
if you look at nearly three percent compounded over even
a decade, we're talking real money. But inside the long
term averages, you've got some really, really nasty and very
lengthy periods of underperformance.
Speaker 4 (10:08):
When I say lots, I.
Speaker 2 (10:09):
Mean actually two nineteen eighty two to nineteen ninety nine,
a long time, nearly two decades, nearly two decades of
underperforming by one point six percent a year. And then
the second bat of underperformance is the one that we
are deep in right now, underperformance of one point seven
percent year since twenty eighteen, so added not touching the
(10:31):
sides of the length of the underperforming period in the
eightieth and nineties.
Speaker 3 (10:37):
Oh man, So what's the good news, because that sounds
like we've gone ten years.
Speaker 4 (10:45):
No, no, no, it doesn't have to be so long.
Speaker 2 (10:46):
For good news is the when it performs, Boy, it
really outperforms. So nineteen sixty four to nineteen eighty one
a performance by small caps of eight percent a year.
Speaker 3 (10:55):
Actually, that's very good.
Speaker 2 (10:56):
Yeah, yeah, nineteen twenty six to nineteen forty one four
point four percent. Sure, I mean, obviously you can pick
your time periods.
Speaker 4 (11:05):
Can't you.
Speaker 3 (11:06):
But oh yeah, but it's in decades of whenever it's
that length to tam and we all, you know, we're
all told constantly the small caps, and it's logical the
small caps, although they're very long run, shoot perform big cab.
Speaker 2 (11:20):
And particularly when they're as cheap as they are now
relatively speaking. So you know, you look at it now,
and you say this stuff is cheap, this stuff out
of favor. It's been absolutely slammed by the shift to
passive and absolutely slammed by various regulatory things, particularly in
the UK, so it's got.
Speaker 4 (11:36):
To come back.
Speaker 2 (11:37):
On the other hand, if you've invested in US small
caps over the last forty years, just the last forty
so not going back to nineteen twenty six, and averaged
out the app performance and the underformance, you can't barely
have managed to keep pace with large capstocks a little
and beat them.
Speaker 3 (11:50):
So yeah, that's interesting.
Speaker 2 (11:54):
Yeah, the optimistic take is that's where the growth is,
that's where the value is, as where the long term performances.
Speaker 4 (12:01):
So maybe next year.
Speaker 3 (12:02):
I would think the Magnificent seven or sort of varieties
of the Magnificent seven must make a big difference in
the US law, because the whole point about them is
the large caps that could all like small.
Speaker 4 (12:13):
Caps, yes, until they don't.
Speaker 3 (12:16):
Until they're doing We'll see about that.
Speaker 2 (12:20):
So I mean, you know, we're saying, well, well, we'll
talk about this a lot in the new year, I think,
but you're seeing quite a lot of cracks appearing across
the AI story.
Speaker 4 (12:29):
I mean, just have a look at oracle, look at oracle.
Speaker 3 (12:33):
And also just before Warboo called and silver, why why
have they had such a whaled year?
Speaker 4 (12:43):
Do you think, Well, I don't know, im. You know,
they say gold is insurance and silver is a warning. Right, yeah,
so gold.
Speaker 2 (12:53):
Looking at what's been going on across the last year,
everyone has been absolutely fine, was staying in inequities and
seeing bill markets across the board.
Speaker 4 (13:00):
But also everyone's a bit said.
Speaker 2 (13:01):
Well, maybe i'll just ensure that you know, and that's gold,
and it is the basement trade, and in particular it's
this new regular price and sensitive buyer in the.
Speaker 4 (13:10):
Form of the world Central banks.
Speaker 2 (13:12):
So all that's in there for gold, silver to w
and a silver's more your area. I mean, obviously it
tends to it tends to catch up with gold, and
then it tends to have little manias.
Speaker 4 (13:22):
So maybe this is a little silver mania.
Speaker 3 (13:24):
Yeah, yeah, I think that makes sense if it was
a bit like the way the gold miners suddenly walk
up and realize that gold was at twice the place
the last time they had a decent ryn.
Speaker 2 (13:35):
And so so it makes sense. You know, if you've
made some money out of gold, it makes sense to
turn to silver and there we go. I mean, I'm
definitely keeping my gold. I don't think looking at the
geopolitical environment that now is the right time to not
have your gold. But I'm not sure i'd be rushing
out by a pair of silver right now. That's more
of a speculation than an insurance for me.
Speaker 3 (13:57):
Yeah, And actually, this is a long time reader actually
emailed me after I wrote about silver recently and said
that just taking a pile of the family kind of
silver tea sets and their looms that they didn't want
any more down a silver smeltery and got them got
them to downy hard cash. So I thought that kind
(14:18):
of is that is a problem with silver, because there's
a lot of scrap silver out there, And if someone
who's as relatively well informed as this particular reader was
doing that, it does make me think, Okay, maybe we're
in certainly in the later stages of this this silver mania.
Speaker 2 (14:37):
A lot.
Speaker 3 (14:38):
That reminds me one other really interesting statistic that I
still haven't properly shared anywhere, the fact that announced the
silver is now worth more than a barrel of oil.
That's not since nineteen eighty.
Speaker 2 (14:54):
Yeah, and how long after it passed through that milestone.
Speaker 4 (14:58):
Did the silver price collapse.
Speaker 3 (15:00):
A day I've been nineteen eighty was very you know,
a spike for silver, which to be feel this this
kind of hasn't been but yeah, no, it's a silver
being at party with oil is quite something. I mean,
obviously it was a party with oil when oil went
negative in twenty twenty, but that doesn't really count. So
that I thought that was a very thought provoking start.
(15:22):
I don't know what thought very much. Quite a number.
Speaker 2 (15:27):
Okay, So for next year, watch the gold price, watched
the silver price. Maybe I bother with the bitcoin price.
Watch sorry, watch energy already coming in.
Speaker 4 (15:40):
Nobody writes hate mail at Christmas?
Speaker 3 (15:43):
Do they some of the doing droppings. I get a
pretty fruity You still get round robins the door, thankfully
I always hated them.
Speaker 2 (15:53):
I don't think people do this anymore. No round robbers,
no haymail. Everyone just you know, focused on your own Christmas.
Watch gold, watch the watch energy, really interesting, Watch what
happens with net zero in the UK? Watch small caps,
and keep an eye on the growth value intersection.
Speaker 4 (16:13):
Anything else, John.
Speaker 3 (16:14):
No, I think that is a wonderful have owned up.
Speaker 2 (16:19):
And yeah, all that remains, go and you say it,
You say it.
Speaker 3 (16:24):
All that remains very mady Christmas listeners.
Speaker 4 (16:28):
Hey, Happy Christmas. Happy Christmas for all our listeners. Thank you, John,
you good to you. Thank you.
Speaker 2 (16:36):
Thanks for listening to this week's maryn Talks Money Debrief.
If you like us show, rate, review, and subscribe wherever
you listen to podcasts. Also be sure to follow me
and John on x or Twitter at maryns W and
John Underscore Stepic. This episode was produced by some Siety,
production support and sound design by Moses and Happy Christmas
to you two as well.
Speaker 4 (16:55):
Thank you for all your work this year. Questions are
going on this show and all our shows.
Speaker 2 (16:58):
Always welcome our show emails Marimoni at Bloomberg dot net.
There you go, Christmas Christmas Wishes on the podcast
Speaker 1 (17:12):
H
Host
Merryn Somerset Webb
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