Things change

Published in The Sunday Times on 23rd November 2025.

In 1999, the US government was running a budget surplus so substantial that senior Treasury officials were concerned about the possibility of eliminating Treasury issuance altogether. The prospect of paying back all outstanding debt over the next decade sparked concerns about the potential impact on Treasury market liquidity and its role as the risk-free benchmark.

A quarter of a century later and according to IMF forecasts, the US government’s debt burden is on track to exceed levels in both Italy and Greece. It forecasts that gross debt in the US will rise by more than 20 percentage points to reach 143% of GDP by the end of this decade. 

Things change.

Peak oil

In the early 2000s, analysts and energy experts widely predicted that global oil production would peak by 2010, leading to permanent shortages and skyrocketing prices. 

The inevitability of oil scarcity was redundant within a decade. Instead of running out, the US experienced the shale revolution, unlocking massive reserves, making it one of the largest oil producers globally. Far from skyrocketing, oil prices have declined over the course of the last two decades, even turning negative for a brief period in 2020 during the Covid pandemic. 

Things change.

Google

Six months ago, there was a widely held view that Google’s search monopoly was dying. Generative models could answer queries directly, bypassing links and ads. ChatGPT was handling 15–20% of Google’s daily search volume and Google’s market share fell below 90% for the first time since 2015. Traditional search volume was predicted to drop by 25% by 2026, with AI chatbots capturing a growing share. 

Google leaned into AI-integrated search. Ads evolved into new placements and formats inside AI-driven results. Google’s share price in the last six months is up 80%, outpacing all of the so-called hyper-scalers, including the poster-child, Nvidia. 

Things change.

Financial markets are not stable environments

Sovereign debt is never repaid. Most countries have always found ways to reduce it. Britain had a debt to GDP ratio of more than 200% in the 20th century. That’s not to diminish the parlous state of America’s public finances, but the next twenty five years may play out differently than the IMF predicts.     

Extrapolating past trends works well in stable environments which evolve only slowly. But financial markets are anything but stable. There’s a danger of relying too heavily on prevailing stories or explanations to guide investment decisions.

The most dominant narratives I sense today are that globalisation is over, the belief in US exceptionalism and that Artificial Intelligence (AI) will drive significant productivity growth. 

Deglobalisation and reshoring have the potential to reshape supply chains permanently. But I think economic incentives still favour global efficiency. 

Theres a strong belief that the United States is uniquely positioned to lead global financial markets  and economic growth – as it has done for most of this century. However, there are some structural vulnerabilities (stretched valuation, crowded positioning and persistent deficits) to suggest this narrative could be undermined in the future. 

AI may well be the new engine of productivity and economic expansion. But I think we may be overestimating its impact at least in the short term. This is the one dominant narrative I have least confidence in challenging.  

Things change – so trying to predict outcomes is a fool's errand

I don’t have a unique insight on any of these narratives. My point is that things change – and rather than focusing on trying to predict the outcome, we are probably better off spending more time on what Jeff Bezos thinks is a more important question.  

“I’m often asked the question, what’s going to change in the next 10 years?...I almost never get the question: ‘What’s not going to change in the next 10 years?’ And I submit to you that that second question is actually the more important of the two—because you can build a business strategy around the things that are stable in time.”

This resonates with me. I’m constantly asked about the outlook for markets and the impact that various factors have on potential returns. I’m never asked what’s not going to change.  

What won’t change?

This is what I think won’t change in the next ten years.

Markets are complex and adaptive systems shaped by flawed, emotional participants. Market prices are a good approximation for value, but are prone to mispricing. With that comes uncertainty – of knowing when market prices are discounting too optimistic an outlook and vice versa. This will not change. Maybe that’s an obvious point with little relevant read through for decision making. But I think we accept this intellectually – but not emotionally. We still obsess over certainty. The stock market is the wrong place for that.

I’ve written ad nauseam in 2025 about markets consistently making fresh highs and the difficulty this presents for decision making. History teaches us that trying to forecast outcomes is exceptionally difficult. Markets are non-linear ecosystems, where things change, often in ways which are incomprehensible. 

Narratives are not inherently bad—they help us make sense of complexity. But simplicity is not synonymous with ease. There’s nothing easy about investing. Some things don’t change.

Source: Data is sourced from Bloomberg as at market close 31st December, returns are based on total indices in local currency terms, unless otherwise stated.

Gary Connolly is Investment Director at Davy. He can be contacted at gary.connolly@davy.ie or on X at @gconno1.