Margin of Safety - Seth Klarman

Market Outlook 2026: Navigating Persistent Inflation The base case remains "no landing"—persistent above-target inflation around 2.3% driven by fiscal expansion offsetting AI productivity gains. This regime increases equity-bond correlation, eroding traditional 60/40 diversification. Portfolio implications: Favor international small-cap value over US large-cap growth. Within fixed income, TIPS and international bonds offer better inflation protection than long-duration nominals. Real assets an...