Nouriel Roubini, a famed economist known as “Dr. Doom” for predicting the worst, such as the global financial crisis of 2008, is always worth listening to. Roubini seems to constantly focus attention on the risks of debt and bubbles.
This is why Roubini is known as a perma-bear – always predicting the worst.
You can see why he might be in vogue right now, as concerns of stock bubbles, AI bubbles, and debt bubbles are all the rage.
But when Roubini has recently shifted his bearish stance to a guarded, “America might boom again,” it is worth finding out why.
Roubini’s new view is straightforward. The U.S. is not headed for decline but may be entering a tech-driven expansion with a GDP growth rate doubling from 2% to 4%. Driving this growth expansion is AI, quantum computing, robotics, defense and automation.
If he’s even in the ballpark, certain stocks will outperform the market in a big way.
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American decline has been a recurring investment story for a long time, but it has been the fully invested optimists about America who have benefited the most from stellar stock returns. There is plenty to worry about today, such as Federal debt levels, political polarization, and geopolitical risk.
But Roubini highlights U.S. leadership in areas where America has an edge in talent, capital, and economic and security ties:
- Artificial Intelligence and Energy
- Quantum Computing
- Robotics & Industrial Automation
- Space Tech, Cybersecurity & Defense Systems
There is, of course, the other side of the story, which is more guarded – even fearful.
Equity markets and big tech are near highs, and AI headlines are everywhere, stoking fear of a bubble.
Roubini counters that high valuations can be rational and acceptable as they signal high growth and innovation. We saw the same scenario with personal computers and the Internet and even cloud computing.
If the new Dr. Boom is right, skeptical, pessimistic investors may be missing an opportunity.
The Cabot Explorer aims to help you build a portfolio that both protects and grows your wealth by providing stock and ETF ideas that seek both objectives. AI infrastructure, energy, defense tech such as cybersecurity, space, critical minerals, and space exploration. This includes small, mispriced, strategically important companies with potential to grow dramatically as the macro story potentially shifts from doom to boom.
3 Takeaways for Your 2026 Investing Strategy
1. Think Beyond America: For active investors, looking beyond America for the best stocks, wherever they might be based, makes sense. For example, one of the Explorer’s best stock recommendations this year was the Spanish bank Banco Santander (SAN), which is up over 160%.
2. Embrace Trend-Following and Momentum: Although some on Wall Street dismiss these strategies as simplistic, they have consistently delivered strong returns.
3. Be Mindful of Risk but Stay the Course: Investment strategies ebb and flow in popularity, but look ahead. Value investing, for instance, may be out of favor now, but history suggests it will make a comeback with our “value bounce” strategy.
Fortune favors the bold optimists, but having a skeptical, even fearful side can be a blessing as well. Great fortunes in markets are rarely made by agreeing with the crowd but by thinking independently and critically.
A great New Year’s resolution for all of us.
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