When we wrote about real assets last May—and more recently about mining stocks—metals prices surged to record highs before suffering a sharp and historic correction.

Traditionally defensive stocks are expected to lag during bull markets, but that assumption is now obscuring an important shift.

Industrial metals are hitting all-time highs. And yet global portfolios remain dramatically underweight the companies best positioned to benefit.

For the past decade, investors have been trained to believe one thing: growth lives in the U.S. and nowhere else. The data now tells a very different story—the gap has grown so wide that it’s starting to matter.

The investment industry is captivated by scale and intricacy. But the reason we don’t default to sprawling models isn’t that they’re difficult to build. It’s that they often violate the most fundamental rule of nature, statistics, and markets: Regression to the Mean."

With AI stocks dominating headlines and valuations pushing into historic extremes, investors are asking the same question: Is the AI boom a bubble on the verge of bursting—or a once-in-a-generation opportunity? History suggests it’s both.

For decades, investors have debated whether value beats growth, small caps beat large caps, or international markets beat the US. But beneath those shifting narratives lies something far more reliable—a dynamic that explains more about future returns than any factor or style box. At Flextion, we call it the Earnings Growth Triangle, and it’s one of the most consistently mispriced forces in markets.

For decades, investors have debated whether value beats growth, small caps beat large caps, or international markets beat the US. But beneath those shifting narratives lies something far more reliable—a dynamic that explains more about future returns than any factor or style box. At Flextion, we call it the Earnings Growth Triangle, and it’s one of the most consistently mispriced forces in markets.

For the past three years, the market has rewarded one simple idea: buy the same seven companies everyone else owns. Through cap-weighted index funds, those names now make up more than 30% of the S&P 500, an unprecedented concentration for what’s supposed to be a diversified benchmark. It’s been an easy trade to love: great brands, strong balance sheets, dominant technology stories. But when diversification starts to look like dependence, the risk isn’t in what you’re missing, it’s in what you’re holding too much of.