Rotation, Int'l Stocks, Defense-Tech, Japan, USD and the Gold Gap with Jeremy Schwartz and Jeff Weniger

While everyone is arguing about AI disrupting software stocks, WisdomTree's Jeremy Schwartz and Jeff Weniger quietly explain why the most important market story of 2026 has nothing to do with the SaaS selloff — and everything to do with where capital is actually moving.

WisdomTree Global CIO Jeremy Schwartz and Head of Equity Strategy Jeff Weniger join Pierre Daillie and Mike Philbrick on Raise Your Average to cut through the noise of the AI disruption panic and make the case for a broader, more structural story unfolding in global markets. From the defense tech supercycle reshaping international equity allocations, to the gold gap most North American portfolios haven't fixed, to a contrarian call on the US dollar at a moment of record-extreme bearish positioning — this conversation covers the ideas that matter most for advisors and investors navigating 2026. Japan, small caps, monetary policy lag, and the behavioral biases keeping investors anchored to a 15-year-old playbook all come into the discussion. If you manage money for clients — or your own — this episode is essential listening.

CHAPTERS

00:00 — Introduction & what's happening in markets right now

08:16 — Guests join: Jeremy Schwartz & Jeff Weniger on the SaaSpocalypse

10:27 — Is the AI disruption panic overblown? The BlackBerry parallel

16:09 — Rotation: structural shift or head fake?

19:35 — AI, jobs, and the history of innovation

28:09 — Who actually benefits from the AI buildout?

31:50 — The 15-year mega-cap tech bull market is ending — here's what's next

32:39 — Jeremy Schwartz introduces the defense tech supercycle

35:36 — The dollar: why Weniger is a contrarian bull right now

40:30 — Gold: the 10–12% neutral allocation most portfolios are missing

44:29 — Why the gold-dollar relationship has changed

46:34 — Bitcoin liquidation and the case for gold & silver in 2026

48:06 — The gold gap: US investors vs. European investors

51:14 — International flows: the 80/20 problem and how to fix it

55:53 — Japan: the most underowned trade of the decade

57:07 — Currency hedging, volatility, and the case for DXJ

01:01:45 — Is US mega-cap dominance cracking or just pausing?

01:04:16 — The biggest mistake advisors make translating macro into allocation

01:05:26 — The Fed lag effect: why 2026 may surprise to the upside

01:14:02 — Japan deep dive: debt-to-GDP, Buffett's trade, and OPPJ

01:20:41 — Jeremy's top idea: the Japan Opportunities Fund (OPPJ)

01:26:28 — Jeff's top idea: the contrarian dollar trade and small caps

01:30:37 — Market internals: why most portfolios are actually in the black

01:35:14 — What surprises advisors most in the next 12 months?

01:39:22 — Uncertainty vs. actual losses — the disconnect in 2026

01:40:27 — Closing thoughts & thank you

5 KEY TAKEAWAYS

1. The broad market is healthier than the headlines suggest. Ten of eleven S&P sectors were positive over the prior three months. Mid and small caps were outperforming large by 500–700 basis points. Most diversified portfolios were in the black — the pain is concentrated in software and AI-disruption names, not the market as a whole.

2. The defense tech supercycle is the structural story most advisors are missing. Rising defense budgets across NATO, Japan, Korea, and India are the seed capital for the next generation of global technology — just as DARPA spending gave us the internet and the cell phone. Europe and Japan are becoming technology investment destinations in their own right.

3. Gold belongs at 10–12% in a neutral portfolio — and almost no one is there. US investors allocate less than 2% of ETF assets to commodities versus four to five times that in Europe. Falling yields, Bitcoin liquidation flows, and persistent central bank buying from Asia make 2026 one of the strongest setups for gold in years.

4. Dollar bearishness has reached historically extreme levels — a classic contrarian signal. BofA's Fund Manager Survey showed record negative dollar positioning. Every major economy is now running large deficits, weakening the relative case for selling dollars. Weniger's best idea for the next 12 months: the greenback surprises to the upside.

5. Japan remains the most underowned and underappreciated equity market in the world. Currency-hedged Japanese equities have compounded at 14–15% annually since 2012, driven by real earnings and dividend growth — not multiple expansion. Japanese equities trade at 15–16x earnings with competitive earnings growth. The biggest mistake: betting on the yen rather than hedging it.

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