
Lux Capital cofounder Josh Wolfe has publicly outlined two major risks for 2026–2027: a potential Nasdaq crisis sparked by Warren Buffett's death that could empower value investors to outperform by hundreds of basis points, and a 10% probability that Iran-related geopolitical tensions create a fertilizer crisis in Europe, destabilizing the EU and enabling the rise of authoritarian leaders.
Wolfe frames these as low-probability, high-impact scenarios that sophisticated investors should model, even if they seem unlikely.
What happened
Josh Wolfe, cofounder of Lux Capital, shared two significant predictions for the remainder of 2026 through 2027 on the Term Sheet Podcast. First, he expects Warren Buffett will die soon, which could trigger a Nasdaq decline of 10% to 15% concentrated in the Magnificent 7 tech stocks. Second, he estimates a 10% probability that war in Iran leads to fertilizer scarcity, causing a food crisis on Europe's periphery and destabilizing the EU.
Why it matters
Wolfe argues that widespread index-fund adoption has artificially propped up the largest tech companies, making them fragile. A sharp tech selloff could create an opening for value investors—those who buy stocks trading below intrinsic worth—to outperform by 300 basis points or more. He frames these scenarios as low-probability, high-consequence outcomes; intelligence professionals he consulted did not dismiss the geopolitical scenario, noting that authoritarian figures in Europe may already be waiting for a crisis to seize power.
What to watch
Wolfe calls these predictions "lower probability, high magnitude outcomes"—relatively unlikely but consequential. He emphasized that imagining worst-case scenarios is part of investment success, though he remains optimistic about long-term technological progress despite his cynicism about human behavior.
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