Podcast Summary: The Chart of Truth Is Turning | Rupert Mitchell on the Regime Change Investors Are Missing

Podcast: Excess Returns
Episode Title: The Chart of Truth Is Turning | Rupert Mitchell on the Regime Change Investors Are Missing
Air Date: January 22, 2026
Guest: Rupert Mitchell (Blind Squirrel Macro)
Hosts: Matt Zeigler (Excess Returns)

Episode Overview

This episode features macro investor Rupert Mitchell ("Mr. Macro for Civilians," aka the Blind Squirrel), who returns to Excess Returns to discuss a fundamental regime change underway in global markets—a shift Mitchell feels most investors are missing. Key themes include the waning dominance of US equities, positioning shifts towards emerging markets and commodities, critical skepticism about popular narratives around India and US tech, and granular analysis of Latin America and China. Mitchell shares the data, stories, and portfolio positioning driving his conviction that the macro investing landscape is turning.

Key Discussion Points & Insights

1. The "Chart of Truth" and Signs of Regime Change (00:30–08:43)

• The "Chart of Truth": Rupert's tongue-in-cheek name for the ratio of US equities (S&P 500) performance versus developed markets ex-US, and also versus MSCI Emerging Markets.
• Regime Shift Underway: US stocks have dominated for 15 years, but toward the end of 2024, Rupert shifted his chips heavily toward non-US equities as the trend appeared to reverse.
  • Quote (05:43, C): "Let's be very clear. US equities have been cleaning the clock with foreign stocks for the best part of 15 years... But we’re starting the year back below [the 200-day SMA]. We're firmly in a downtrend."
• Emerging Markets Ratio: The S&P 500 vs. MSCI Emerging Markets ratio is at a crucial inflection, right at the 200-week moving average, a spot it’s rarely reached since 2012.
  • Historical parallels to 2000–2007, when non-US assets excelled.
  • Quote (08:36, C): "If we have a kind of 2000 to 2002, 2002 to 2007 type cycle, things could get really interesting and I am very much positioned for that move."

2. Macro Positioning & Sector Rotation (09:01–11:43)

• Short Duration vs. Long Duration Equities: Outperformance in 2025 was driven by sectors/regions with low price-to-earnings multiples and short cash flow duration ("atoms, not bits").
  • Quote (10:05, C): "The place to hide is closer to the cash flows... you want to be in atoms for this next step in the cycle."
• US Market Dynamics: Over-financialization, buyback engineering, and a potential negative feedback loop if US equities mean revert.
  • Management is focused on engineering share counts, not productive assets.

3. The Topping of US Tech and the Rise of AI (15:50–16:27)

• Topping Signals in US Mega Caps: The NASDAQ 100 has failed to make new highs for three months, with the exception of Google, while the rest of the "MAG7" (major tech stocks) are forming topping patterns.
  • Quote (16:27, C): "The whole sort of software's eating the world narrative has really been turned on its head with the introduction of agentic AI... a smart CTO can sit down on Claude Code and make their own CRM system in a few weeks."
• Enterprise SaaS Vulnerability: The WCLD (enterprise SaaS ETF) down 12% year to date as AI commoditizes tools, calling into question their high sales multiples.
• India Caution: Indian stocks are historically expensive, propped up by outsized flows and retail speculation, and could correct as Chinese equities recover.

4. Latin America: Not Just a Political Bet (21:44–32:54)

• Latin American Overweight: Rupert is "massively overweight" Latin America (especially Brazil and Mexico) driven by a commodities bull market, not politics.
  • Brazil equities are less about political regime and more about commodity cycles.
  • Quote (22:16, C): "I am massively overweight Latin America with a significant bias to Brazil and Mexico... because I think we’re in the foothills of a commodity bull market."
• Country Details:
  • Brazil: Top overweight; tied to commodity cycles, not Lula’s policies.
  • Mexico: Likes the political acumen of Sheinbaum; sees opportunity after US-China tariff moves.
  • Peru: Peruvian equities tightly track global copper, prefers exposure via Glencore.
  • Colombia: Opportunities in a regime change; could favor Ecopetrol (cheap, high-dividend oil major).
  • Chile/Argentina: Likes commodity-linked large caps; exited Argentina due to reform uncertainty.
• Benchmarking Perspective: 12% allocation to LATAM, vs. global benchmarks at only 2–3%—a major active overweight.

5. China: The ABCs and a Case for Onshore Equities (35:03–49:15)

• Revisiting China Exposure: After years of underperformance and skepticism, Rupert began overweighting China almost two years ago, building positions in both onshore (A-shares) and offshore (Hong Kong) equities.
  • Quote (37:40, C): "I've been overweight China for almost two years... the Chinese leadership want domestic equities to work as a unit of savings, as a real asset class, not a token of speculation."
• Drivers:
  • Policy support for equities as a savings vehicle.
  • Ample fiscal space and cash-rich corporates.
  • SOE reforms and compressed dividend yields as a re-rating catalyst.
  • Preference for "lower beta China" (banks, utilities, telcos) over hot ADR names.
  • Onshore A-shares vs. offshore: expects domestic names to outperform.
  • Quote (40:30, C): "Fiscal drives equity markets. There is plenty of cash… and companies are being encouraged to buy back their own shares."
  • Memorable moment (44:34, C): "Since my entry point in October '22, Tencent...has outperformed the Alibaba ADR by about 60%. If you're regularly looking at 30-40% drawdowns, that's an awful lot of stopping out or round tripping pain."
• China AI Approach: Tencent (largest individual holding) and other Chinese techs are focusing AI investment on core business, not frivolous applications.
  • Quote (47:32, C): "The focus is on how AI can improve our already strong position in high-tech manufacturing... It's not about cat videos and meme creation."
• Stock Picking in China: Core exposure via index ETFs, plus selective additions like Sunny Optical (wearables component manufacturer), Wuxi Aptech & Wuxi Biologics (biotech foundries).

6. Portfolio Construction ("Bushy") & Benchmarking (54:10–61:00)

• Unique Benchmarking: Benchmarks against a classic 60/40 US retirement portfolio, but has almost no US Treasuries; instead, 14% allocation to trend-following strategies and large emerging market exposures.
  • Quote (54:19, C): "I benchmark myself against Big Retirement... the classic 60/40 portfolio. But under the hood, we look very different."
• Current Allocations:
  • 30%+ in EM equities and bonds.
  • Substantial allocations to commodities (metals, gold), energy, and non-US developed markets (notably Japanese banks).
  • Thematic wedges: defense stocks, Canadian energy, Indonesian equities.
  • Memorable perspective (33:17, D): "Just to put this in perspective, this is a multi-fold overweight from any market cap weighted indices with Latin America in it."

7. About "Benny & the Squirrel" & Community (61:00–62:57)

• Rupert describes his partnership with Ben Bry for "Benny and the Squirrel"—a twice-weekly macro show, combining experience in macro and quant trading.
• Also touches on his writing/newsletter, active Discord community, and the value of diverse perspectives and crowd-sourced ideas.

Notable Quotes & Memorable Moments

• Regime Change Signal:
  "We're firmly in a downtrend. And... there's going to be a bit of an emerging market theme to this." — Rupert (05:43)
• US Tech Peak:
  "The rest of the MAG7, which have led the market for the last 15 years, are putting in a topping formation right now." — Rupert (15:50)
• AI Turning the Tables:
  "Software's eating the world narrative has really been turned on its head with the introduction of agentic AI." — Rupert (16:27)
• India Skepticism:
  "Great place to visit, terrible place to do business. And certainly don’t think that the stocks should be valued as richly as they are." — Rupert (18:38)
• Commodity Supercycle:
  "We're in the foothills of a commodity bull market. Latin American equities, specifically Brazilian equities, are one of the best ways to play that." — Rupert (22:16)
• China Policy Shift:
  "The Chinese leadership want domestic equities to work as a unit of savings, as a real asset class, not a token of speculation." — Rupert (37:40)
• Portfolio Approach:
  "Benchmark myself against Big Retirement... but under the hood, we look very different." — Rupert (54:19)
• AI in China vs. West:
  "It's not about cat videos and meme creation, which I just think is a massive misallocation of capital." — Rupert (47:32)

Segment Timestamps

| Segment | Topic | Start Time | |---------|-------|------------| | Macro regime change & "Chart of Truth" | 00:30 | | Portfolio pivots for inflection | 05:43 | | Conditions for global rotation | 08:43 | | Short vs. long duration positioning | 10:00 | | US tech & SaaS topping | 15:50 | | India skepticism | 18:38 | | Latin America & commodity thesis | 21:44 | | Country-by-country LATAM breakdown | 22:16 | | China’s policy strategy & market access | 35:03 | | A-shares vs. offshore; "Western fried rice" | 41:30 | | Tencent and China AI focus | 44:34 – 47:32 | | China stock picking | 49:15 | | Portfolio construction & benchmarking | 54:10 | | Benny and the Squirrel, community | 61:00 |

Flow and Tone

The episode is insightful, candid, and occasionally irreverent, with Mitchell mixing data-heavy macro frameworks, investing "war stories," and strongly opinionated calls. The tone is conversational and witty, with Mitchell’s "Blind Squirrel" persona providing memorable analogies (e.g., "children of ZIRP," "Western fried rice trades"). Both guest and host aim to cut through consensus thinking and elevate under-discussed regime changes and trade setups for asset allocators.

Key Takeaways for Investors

• A regime shift out of US exceptionalism may be underway—diversification, especially into EM, is no longer "dead money."
• Short duration, cash-flowing assets and commodity plays favored over expensive, long duration US tech.
• Latin America is more than political headlines; commodities drive relative returns.
• China's A-shares and low-beta sectors are ripe for re-rating, especially as policies pivot to support domestic investors.
• Benchmark choice matters—active allocation outside US indices can only be justified through thoughtful, granular portfolio construction.

For more, check out Rupert Mitchell’s "Blind Squirrel Macro," the "Benny and the Squirrel" series, or Excess Returns for further discussion on the evolving macro landscape.