Late-Cycle Reckoning:

Credit, the AI capex boom/bust cycle and the perfect set-up for a global secular equity bear market

Marketing material for professional / institutional / accredited investors only. Not for onward distribution. This material is not intended for distribution to retail investors and must not be distributed in the United States or to U.S. Persons.

Executive summary: everything overvalued (absolute), everything cheap (relative to US and tech)

29 October 2026

This report is for discussion only. Sources are listed at the end and include podcasts from “market buddies” of the author and others. AIM&R databases, valuation and asset allocation models have been used as the backbone of this report. It is not a solicitation to short the hell out of the market. I may change my mind by the last page, although this is unlikely. But, if and when the facts change, I change. Note that it was largely written before the first round of the Brazilian elections. The election results and subsequent crash in Brazilian asset values make us even more positive and reinforces my significant overweight allocation to Brazilian assets.

The market is a pendulum that forever swings between unsustainable optimism, which makes stocks too expensive, and unjustified pessimism, which makes them too cheap. The intelligent investor is a realist who sells to optimists and buys from pessimists.”

My thesis is simple and is a “déjà vu” mixing the 1987 crash, the Japanese speculative run-up to its 1989 peak, the dotcom bubble and the GFC, all market events where I was in the front trading seats. The seeds of a culminating bubble were planted in 2020-21, around Covid. Meme stocks came first, then Bitcoin and MicroStrategy, the Metaverse, Cathie Wood and ARKK, the Magnificent Seven in 2022 and the SPACs. All of them collapsed in rolling liquidations (some have recovered since then, but that is irrelevant). Now we have AI, data centers in space and colonies on Mars and trillion-dollar IPOs of companies that will not make any money as far as the eyes can see.

The story could not get any better and is being delivered by the master storyteller (ooops, sorry “visionary”) of all time in the name of Elon Musk. Today, the S&P 500 stands at valuations exceeding 1929 or 2000, and is more concentrated than at any other time since the railways in the late 19th century (one of the biggest capex boom/bust in history), and while financed with record leverage as interest rates are zooming up.

You can read the full report below or here.

Albert Saporta

Group Chief Executive Officer and Global Head of Investments & Products, Co-CIO GAM Alternatives

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Important information and disclosures
This material for professional / institutional / accredited investors only. Not for onward distribution.

The author of this document is Albert Saporta. He was appointed Group Chief Executive Officer (Group CEO) of GAM Holding AG in July 2025 and is a member of the group management board. He was appointed to the GAM Holding AG Board of Directors on 12 May 2026. He is also the founder and a director of Alternative Investment Management & Research (AIM&R), a Geneva-based research and trading advisory firm. The research produced by AIM&R (databases, valuation and asset allocation models) has been used as the backbone of this report. GAM makes no warranty, expressed or implied, regarding the information used from this source.

The views and opinions expressed herein are those of Albert Saporta as at the date of this material and are subject to change. GAM makes no warranty, expressed or implied, regarding the views and opinions expressed. Other GAM Investment Managers may hold, and invest according to, alternative views and opinions to those expressed in this document.

This material is confidential and intended solely for the use of the person, persons or entities with nationality of or respectively with their residence, domicile or registered office in a State or Country in which such distribution, publication, making available or use is not contrary to laws or other regulations, and may not be reproduced, copied or given, in whole or in part, to any other person. It is aimed at sophisticated, professional, eligible, institutional and/or qualified investors who have the knowledge and financial sophistication to understand and bear the risks associated with the investments described. Nothing contained herein constitutes investment, legal, tax or other advice, nor is it to be solely relied on in making an investment or other decision. It is not an invitation to subscribe and is by way of information only.

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This document is not intended to provide, and should not be relied upon for, accounting, legal or tax advice or investment recommendations. Any statements of U.S. federal tax consequences contained in this Presentation were not intended to be used and cannot be used to avoid penalties under the U.S. Internal Revenue Code or to promote, market or recommend to another party any tax-related matters addressed herein.

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Late-Cycle Reckoning:

Executive summary: everything overvalued (absolute), everything cheap (relative to US and tech)

Albert Saporta

Group Chief Executive Officer and Global Head of Investments & Products, Co-CIO GAM Alternatives

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