For thirty years, Japan was the example everyone cited to explain why equity markets might never recover. The Nikkei reached its peak in 1989. It then took thirty-four years to return to that level.​

Then, in February 2026, the same index surpassed 59,000 points, setting a new all-time high. Four weeks later, it had fallen by nearly 15%. By the end of the quarter, however, it was up 1.4% for the year.​

One market. One quarter. Three completely different realities.​

THE QUARTER IN REVIEW​

On 28 February, the United States and Israel launched strikes against Iran. Oil prices climbed above USD 100 per barrel. Markets corrected across the board.​

The S&P 500 declined by 4.6% over the quarter. The Nasdaq fell 7.1%, with the "Magnificent Seven" down 12%. India, which is highly dependent on energy imports, lost nearly 15%. Europe, supported by the defence and energy sectors, proved more resilient, falling just 1.5%.​

Gold behaved like a yo-yo: it approached USD 5,000 during the crisis before retreating sharply. It is a relatively small market, dominated by central bank purchases, where liquidity tends to disappear precisely when it is needed most. Gold offers reassurance in the headlines. In a portfolio, it rarely behaves as investors expect.​

The overall picture is clear: the most expensive and most concentrated markets were hit the hardest. The concentration of the global equity index—25% invested in just ten technology stocks—was no longer merely a theoretical risk.​

THE PARALLEL WITH THE 1970s​

The comparison everyone is making is with 1973. The Yom Kippur War, the oil embargo and a fourfold increase in crude oil prices were followed by a 48% decline in the S&P 500 and a decade of economic stagnation and high inflation.​

The comparison is valid in some respects, but it becomes misleading if taken too far.​

In 1973, oil accounted for 46% of the world's primary energy consumption. Today, it represents 34%. Renewable energy sources now account for 13% to 14% of the energy mix and have become competitive. The same type of shock therefore has a more limited impact.​

Governments, however, are in a much more fragile position. US public debt stood at 33% of GDP in 1973; today it is 124%. Every 100-basis-point increase in interest rates costs the US Treasury approximately USD 300 billion per year. Fiscal room for manoeuvre has shrunk considerably.​

THE ILLUSION OF PRIVATE MARKETS​

Faced with volatility in listed markets, investors typically react in one of three ways: moving into government bonds, private credit or private equity. Yet these three options share the same weakness: they conceal the true value of the underlying assets.​

Government bonds ?

By investing in sovereign bonds, you are lending to governments whose debt already amounts to 124% of GDP, whose annual interest payments are approaching USD 1 trillion, and whose long-term options are essentially inflation or financial repression. It is a fixed-income investment in a world where inflation remains the main risk.​

Private credit ?

The market has grown fivefold since 2008, reaching USD 3 trillion. Reported returns of 8% to 10% per year appear attractive, and performance charts look remarkably smooth. But this stability is largely an accounting illusion. These funds are not valued at market prices but according to internal valuation models. When the US investment firm Saba Capital offered to buy shares in Blue Owl funds, it valued them 20% to 35% below their reported value. The true default rate, including restructurings, is closer to 5% than the advertised 2%. Several major asset managers have also limited investor withdrawals to 5% per quarter.​

Private equity ?

According to Bain & Company, the industry currently holds USD 3.8 trillion of unsold assets. Average holding periods have risen to seven years, compared with five not long ago. Capital is no longer flowing back to investors: distributions as a percentage of asset value have reached their lowest level since records began, remaining below 15% for four consecutive years. To create artificial exits, managers increasingly rely on continuation funds and loans secured by portfolio assets—using leverage to simulate liquidity events. The result? Between 2022 and 2025, US private equity generated annual returns of around 5.8%, compared with more than 11% for the S&P 500.​

The common feature of these three perceived safe havens is the absence of visible volatility. But the absence of volatility is not the absence of risk. It is the absence of information. And when that information eventually surfaces, it tends to arrive all at once: through suspended redemptions, discounts of 35%, or quiet restructurings.​

WHAT WE DO​

At TreeTop, our response is straightforward: we invest in listed equities. Liquid assets. Priced every day. Fully transparent.​

We invest globally across all sectors of the economy, including those that others avoid out of convenience. We seek high-quality businesses at reasonable valuations. Neither the cheapest nor the most expensive, but those offering the best balance between price and value. And we have no exposure whatsoever to private credit, private equity or other illiquid assets. None.​

The lesson of the 1970s is that economies adapt. Companies adapt as well. They adjust prices, reduce costs and redirect investments. Owning these companies means owning that capacity to adapt.​

The smoothest-looking investment is often the riskiest. It is better to see reality every day than to discover it only when you try to exit.