Orbis poses value of contrarian thinking to investors in new report

A new report from global equities specialist, Orbis Investments, has invited investors to challenge their assumptions about market “certainties” to reinforce the importance of diversified and disciplined investing.

The report, titled Six Courageous Questions for 2026, poses several megatrends and narratives currently driving global market performance – such as US equity concentration, the power of artificial intelligence (AI) and the “vulnerability” of the US dollar – and whether they need “rethinking” under a new, diversification-centric lens.

According to Eric Marais, Head of Investment Specialists at Orbis Investments, said the report encourages investors to aim for “genuine diversification, be valuation-disciplined, and rebalance their portfolios for resilience”.

“Change has accelerated, and it’s reshaping the investment landscape. In this environment, success will require the courage to test assumptions, act when opportunities arise, and the discipline to be selective,” he said.

“For Orbis, that means looking at neglected areas of the market, such as opportunities in the healthcare sector, US companies left behind in the AI boom, and emerging markets.

“Success isn’t about having all the answers – it’s about asking the important questions. We would encourage investors to use these questions to test their assumptions and act with discipline and conviction in 2026.”

The six key questions posed by the report include:

What if exceptionalism is now behind the US’s biggest stocks?
Investors are paying 34 times earnings for mega-cap technology companies, which represent the most crowded part of the market. Orbis views this combination of extreme concentration risk and valuation risk as dangerous, leaving little room for error if fundamentals fail to keep pace with expectations.

History suggests that when market leadership becomes this narrow, opportunity for investors often shifts elsewhere. Investors need to question whether the next chapter of US exceptionalism may be written not by the country’s biggest companies but by the rest of the market they have overshadowed.

Is the world’s safest currency the riskiest?
The US dollar’s haven status is under stress; its yield advantage may fade if the US Federal Reserve cuts rates too soon or fiscal pressures lead to financial repression. Rising debt, persistent deficits and a greater tolerance for inflation also point to a weaker long-term backdrop for the currency.

Investors should consider whether they may benefit from building a balanced portfolio of alternative currencies with compelling characteristics, such as the Australian dollar, Japanese yen, and Norwegian krone.

Are you swimming in the right water?
With US policy turning inward, other export-led economies must adapt. This is likely to lead to domestic investment and fiscal expansion in countries throughout Asia and Northern Europe. These developments have significant implications for investors with portfolios heavily concentrated in US assets and will reshape the capital cycle. This potentially marks a new era for markets outside the US where assets and currencies are currently cheap – potentially offering a ‘double discount’ for investors.

Given the lack of eyeballs on ex-US markets over the last decade, markets are rife with inefficiency. An active lens is essential, given the complexity involved in investing across dozens of markets with wildly different economic, political, and regulatory regimes.

Which risk runs deeper, owning or avoiding emerging markets (EM)?
In contrast to high US valuations, shares in EM companies today trade at around 16 times earnings, with returns from today’s valuations typically ranging from low single digits to more than 15% per annum. Investing in EMs has acknowledged risks, and if these risks are apparent it often will be reflected in visible discounts.

An important consideration for investors seeking to build stronger, more resilient long-term portfolios is the diversification benefit EM exposure may provide. At today’s prices, Orbis challenges investors to consider whether the deeper risk may actually be in avoiding EMs.

Is AI a bubble, or is the best yet to come?
The AI boom exhibits similar traits to market bubbles – surging spending, sky-high valuations, and heavy reliance on investor funding. Yet AI technology looks genuinely transformative. While its promise seems real, so is the risk to investors of overpaying. However, investors could consider selective exposure via companies that capture the structural benefits of AI adoption without the speculative multiples that often accompany bubbles.

What if Trump is right?
A global shift toward national self-reliance is underway. Policies set by the Trump administration have accelerated the trend of countries reordering national priorities to focus on foundational needs, such as national security and food and energy security. These developments mark a structural reset, not a passing phase, and investors should consider that companies serving these essential needs are emerging as some of the most undervalued and enduring opportunities in global markets.