Investor infidelity often leads to the most exciting investment opportunities. And the start of this year is a perfect case in point.
There’s something thrilling about a love affair where nothing is guaranteed. Diana Ross captured that tension perfectly in her 1980 disco classic “Upside Down”. I’ve picked this iconic track to set the tone for today’s market reflection. Apologies in advance if it lingers in your head—but there’s no better anthem to describe how 2025 kicked off. Because in investing, just like in love, unexpected detours and breakups can lead to the most interesting outcomes.
Let’s rewind to the end of 2024. Investor love for artificial intelligence—and for the incoming U.S. administration—seemed unconditional. And in markets, unconditional often means unquestioning. NVIDIA soared past $150. OpenAI, the maker of ChatGPT, closed a record-breaking $6.6 billion funding round. Bitcoin and the dollar flexed. The S&P 500 surged, leaving nearly every other market in the dust. America once again took center stage. The rest of the world—194 countries and 95.8% of the global population—was sidelined, dismissed as irrelevant by narratives of U.S. dominance and tariff-fueled trade superiority.
And then—surprise (or not)—a few players from that overlooked 95.8% showed up with ideas bold enough to flip the script.
The start of 2025 has been the inverse of how 2024 ended.
First, as in any love triangle, the ex complicates things. Trump postured, and the world answered. Predictably, new tariffs haven’t landed with a snap of the fingers. There are delays, grace periods, negotiations, detours, threats. Markets may have taken the President’s declarations a bit too literally, forgetting that for him, tariffs are a tool—not a destination.
Then came the unexpected disruptor—the stranger at the party who shakes the couple. Enter DeepSeek, bursting onto the scene with a bold promise: free, open-access AI that works on less powerful machines. Its arrival rattled Silicon Valley and overturned two big assumptions.
First, that human ingenuity still holds the upper hand. DeepSeek is, above all, an engineering marvel.
Second, the open-source ethos is back. Who would’ve guessed that American researchers—previously priced out by $40,000 NVIDIA chips—could now continue their AI work thanks to a Chinese model? It’s the world turned upside down.
Let’s not overreact. Declaring Silicon Valley obsolete would be just as foolish as pretending it’s invincible.
Finally, the third source of tension in any relationship is internal pressure. A newly elected president often overreaches to signal change, discrediting predecessors and rewriting the narrative. But in doing so, he risks drawing attention to issues that had previously been overlooked—like the shaky foundations of a U.S. job market propped up by public-sector hiring, the hidden costs of global reserve currency status, or an increasingly uncertain fiscal future.
So from an investor’s perspective, what’s preferable?
A market like Europe or China—already scrutinized, openly criticized, where every risk is priced in, even when overblown?
Or one that looks strong on the surface but where no one’s yet dared to look under the hood?
So far, performance tells the story. European and Chinese equity markets are up more than 13% year-to-date. The S&P 500? Barely +3%.
In short, the start of 2025 is the upside-down version of last year’s finale. Some favorites have disappointed. Meanwhile, long-forgotten themes are getting a second look—and a spark of renewed excitement.
In investing, as in love, the magic often lies in the unexpected shift of attention. It’s in those moments of infidelity—when investors break from the crowd—that the most compelling opportunities emerge.
Let’s be ready to catch them when they do.