Hidden Forces — "Late-Cycle Investment Theory: Foundations for the Coming Decade" with Nicolas Colin
Host: Demetri Kofinas | Guest: Nicolas Colin | Date: December 29, 2025

Episode Overview

This episode features Demetri Kofinas in conversation with Nicolas Colin—macroeconomic analyst, newsletter author, and startup accelerator founder—exploring Colin’s "Late Cycle Investment Theory." The discussion draws on the work of Carlota Perez and Bill Janeway to contextualize where we are in the current technological paradigm, comparing today’s "computing and networks" era with historical cycles of innovation. They focus on practical ramifications for investors, policymakers, and the public, analyzing speculative mania, market concentration, financial system resets, and the prospects for the next technological revolution.

Key Discussion Points & Insights

1. Nicolas Colin’s Background and Influences

• Colin’s career path includes engineering studies, civil service in the French Treasury, entrepreneurship, and the co-founding of a pan-European startup accelerator.
  • “I was born in France, grew up in France, studied engineering… I co-founded a pan-European startup accelerator… [now] I consult with investment firms, mostly on research, investment, thesis, markets, et cetera.” (04:04)
• Colin writes extensively on macroeconomics, geopolitics, and finance via newsletters, especially DriftSignals.com.

2. The Role of Writing and Audience

• Colin views public writing as a tool for clarifying his own thinking and building a network of individuals interested in the intersection of finance, geopolitics, and policy.
  • “Most of my work… was writing reports, memos, et cetera. Many, many good things have happened to me because of my writing. People reading my stuff and reaching out.” (06:14)
• He identifies his audience as generalists at the confluence of business, policy, and finance. (08:55)

3. Historical Unanswered Questions

• Both Kofinas and Colin are motivated by big, recurring questions about societal resilience amid economic and technological shifts:
  • “How do I protect myself, my friends, my family from a changing economic and political order…?” (12:02 – Kofinas)
  • Colin focuses on economic development—understanding differing regional growth rates and what societies can do to catch up or reverse negative trends. (13:03)

4. Late Cycle Investment Theory: Core Arguments

• Colin presents AI not as a wholly new technological revolution, but as an intensification of the ongoing cycle of computing and networks, which began decades ago.
  • “What I see when I see AI is just the continuity of all of that… everyone was catching up so fast, like, okay, that’s not radical innovation. That’s more like… the acceleration of things that were already happening.” (16:39)
• Major technological shifts, according to Colin, progress in cycles: from eruption through synergy to maturity. We are now in the "maturity" phase of the computing/network paradigm. (16:39–19:40)

5. The Carlota Perez Framework

• The conversation draws deeply on Perez’s stages of technological revolutions: eruption, frenzy, synergy, and maturity.
  • Perez identifies five historical technological revolutions: the Industrial Revolution, steam/railways, electric power/heavy engineering, oil/automobiles/mass production, and modern computing/networking. (27:03)
  • "At the end of the 1960s and early 1970s, there was something known as the Nifty 50… blue chips, industrial companies that were considered safe havens for investors… Today we have exactly that, except we don’t have 50 of them. We have seven: the Magnificent Seven." (32:12)

[Memorable Exchange]

• Kofinas: “Each of these cycles has phases… Help clarify for me what stage we are in.” (29:18)
• Colin: “The most important… is that the dominant players have emerged and are clearly identified... the fact that the stock market is so concentrated… Everyone wants to invest in them because it’s so obvious they've won the race of the synergy phase.” (29:32)

6. Comparisons to the 1970s and Market Maturity

• Market concentration, reduced innovation returns, and eventual systemic reset echo the late-’60s/’70s "Nifty Fifty" market episode.
• The 1970s also saw financial system resets, such as the Nixon Shock dismantling Bretton Woods, as technological maturity outgrew institutional constraints.
  • "The financial system is the last thing to transform in a technological revolution… at some point the new paradigm is… such a mismatch with the old financial system, that you have to get rid of the old financial system and rebuild it from the ground up." (33:02)

7. Transition Mechanisms: The End of Bretton Woods / Need for Institutional Reset

• Technological growth led to a mismatch with gold-based rigidities. The U.S. and world required more flexible capital flows to match the expansion driven by computing and networks.
  • “At some point, if the economy is so productive that you create a lot of value and you create currency to account for that value… there’s a disconnect between the quantity of gold and the quantity of money you need.” (38:31)
• “We’re at exactly the same stage with computing and networks. We’re trying to make it work with a financial system inherited from the past, from essentially the Eighties, but it doesn’t work...” (44:41)

8. Speculation About the Present and Future Financial ‘Reset’

• Colin suggests the “Trump Shock” (2025) may serve as a historical analog to the Nixon Shock, potentially triggering a new round of global financial restructuring.
  • “I think… the equivalent of the Nixon shock… would be the Trump shock of 2025, where they've really made an effort in dismantling a few things and thus creating room for reinventing financial markets entirely from top to bottom.” (33:02)

Notable Quotes & Timestamps

• On AI as a Stage in a Longer Cycle
  • “If everyone understands it in an instant, it’s not radical. It's more like… the deepening, the acceleration of things that were already happening.” — Nicolas Colin (17:10)
• On Concentration and Market Winners
  • “It's so clear that those are the winners, that everyone wants to invest to participate in the big feast… This is why the stock market is so concentrated.” — Nicolas Colin (31:49)
• On Financial System Reset
  • “The financial system is the last thing to transform in a technological revolution… at some point, the new paradigm is such a mismatch with the old… you have to get rid of the old financial system and rebuild it.” — Nicolas Colin (33:02)
• On the Next Technological Revolution
  • “There are many false starts… In ten or twenty years, we’ll revisit this period and we’ll see the signs of whatever happens.” — Nicolas Colin (28:00)
• On Historical Analogy with the 1970s
  • “Another thing that happened [in the 1970s] was the reset of the financial system… it started, in a way, with something known as the Nixon shock in 1971…” — Nicolas Colin (33:02)
• On the Need for Institutional Innovation
  • “Tech contributes to creating value, but then on top of that, we need to build institutions so that value is distributed more equally and contributes to shared prosperity at the society level.” — Nicolas Colin (25:24)

Timestamps for Important Segments

• [03:18–05:27] — Nicolas Colin’s personal and professional background
• [06:14–07:26] — Motivation behind his public writing and newsletters
• [12:02–13:03] — Big-picture questions that animate both host and guest
• [16:39–20:27] — AI as part of computing/network paradigm; Late Cycle Investment thesis
• [21:07–22:07] — How Carlota Perez and Bill Janeway shaped Colin’s framework
• [27:03–28:00] — Historical cycles/zones in Perez’s model
• [32:12–33:02] — Stock market concentration and comparison to the 1970s market era
• [33:02–36:53] — Financial system lagging behind technological change; systemic reset analogies
• [38:31–44:41] — How gold standard collapse enabled financial adaptation; implications for today’s system
• [45:06–47:31] — Introduction to the second hour’s focus: investor implications, programmable money, global competition

Additional Themes Covered

• Implications for Investors and Policymakers

  • How to identify overlooked opportunities in a mature paradigm
  • The risk of missing structural shifts and responding too late

• Programmable Money and Tokenization

  • Preview of how new technology could fundamentally reshape the "plumbing" of finance (scheduled for premium hour)

• Geostrategic Competition

  • U.S. vs. China: new technologies will define economic and political dominance

• Institutional Lag and Social Contracts

  • Emerging service-centric economies could require dramatically different social arrangements, echoing the move from factory floors to proximity services.

Conclusion

The conversation establishes a nuanced, systemic understanding of where we are within the technological and economic cycle. Rather than seeing each new development (like AI) as a revolutionary break, Colin places them in a broader context, highlighting profound continuities. The present, he argues, is best understood as a late-stage maturity with mounting systemic tensions and the likelihood of dramatic institutional change ahead—much as previous revolutions required their own institutional resets, often under crisis and with lasting social consequences.

For more, including deeper dives into the implications for investors and finance, listeners are invited to join the Hidden Forces premium feed.