Orbis Investments, a contrarian global equity manager with A$80.3 billion in assets under management, is urging investors to critically evaluate some of the powerful narratives that have dominated markets for years. These include the concentration of investments in the US, the perceived invulnerability of the US dollar, and the economics surrounding artificial intelligence.

Eric Marais, Head of Investment Specialists at Orbis Investments, emphasised the need for investors to challenge their assumptions. “As the investing year begins, our message to investors is to challenge yourself rather than basing your strategy on past assumptions,” Marais stated.

Marais expressed concern that many investors have become complacent, neglecting fundamental analysis. “The common thread is the proliferation of assumptions that have gone largely unquestioned for years. The most dangerous risks are often the ones investors no longer see,” he explained. Marais highlighted that despite historical evidence of the risks associated with extreme valuations, investors are currently paying a significant premium for the ten largest companies in the S&P 500. “At such prices, the margin for error has all but disappeared,” he noted.

Orbis is encouraging investors to consider whether the future of US exceptionalism might be driven by previously overlooked areas of the market. “We urge investors to ask: could the next chapter of US exceptionalism be driven not by the current leaders, but by parts of the market left in the shadows for the last decade? These questions have led us to neglected areas of the market, for example, opportunities in the biotech sector,” Marais suggested.

The firm also questions the long-held belief that the US dollar is the world's safest currency. “The US dollar is showing signs of strain,” Marais said. “It could prove to be much riskier than many assume, especially given the concentration of global assets in the US dollar. Investors may benefit from currency diversification and could consider building a basket of alternative, more reasonably valued currencies with compelling fundamentals such as the Australian dollar, Japanese yen and Norwegian krone.”

Marais pointed out that the prevailing belief in the perpetual uptrend of US markets and the dollar has led to a concentration of global capital in the US. However, with US policy increasingly turning inward, export-led economies are being forced to adapt. This shift is likely to lead to higher domestic investment and fiscal expansion in regions such as Asia and Northern Europe.

“For investors heavily concentrated in US assets, this shift in global capital flows really matters,” Marais said. “Our view is that it may be prudent for investors to consider markets outside the US, where assets and currencies appear to be priced more reasonably and are, in many cases, overlooked.”

He further elaborated on a global trend towards national self-reliance, which began several years ago. “A global shift toward national self-reliance began some years ago and countries are reordering priorities around national security, food security and energy independence. The companies serving these needs are emerging as some of the most undervalued and enduring opportunities in global markets,” Marais noted.

Orbis also sees potential in emerging markets, citing favourable valuations compared to the US and potential diversification benefits. “People worry about risks when they consider emerging markets, but we believe those risks are usually visible, and often already reflected in prices,” Marais said. “EMs trade at steep discounts—nearly 60% cheaper than the US on a CAPE ratio, and with undervalued currencies. We think the question investors should be asking is, am I more at risk not being in emerging markets?”

Finally, Marais addressed the current enthusiasm for artificial intelligence, cautioning against paying bubble-level multiples. “Everyone has been asking whether the AI boom is a bubble. Instead, we believe investors should ask how they can gain exposure without having to pay bubble-level multiples that come with significant downside risk. Our approach is to focus on companies positioned to capture the structural benefits of AI adoption,” he said.

As investors navigate the complexities of the global market in 2026, Orbis Investments encourages a critical examination of prevailing narratives and a disciplined approach to diversification and valuation.