Josh Wolfe warns of Nasdaq risk and European strain by 2027

Lux Capital cofounder and managing partner Josh Wolfe is warning that investors and policymakers should pay attention to unlikely events that could carry severe consequences through 2027. In an interview on Fortune’s Term Sheet Podcast, Wolfe tied his forecasts to market structure, geopolitical stress and the social effects of technology.

Fortune’s Allie Garfinkle identified Wolfe as a backer of companies including Anduril, Applied Intuition, Hugging Face, Impulse Space, Osmo and Physical Intelligence. She reported that Wolfe described his predictions as low-odds but high-impact possibilities rather than base-case forecasts.

A market shock tied to passive investing

Wolfe told Fortune he thinks Warren Buffett could die by the end of 2026 or in early 2027, and he linked that possibility to a broader reassessment of value investing. His point, as he described it to Fortune, was that Buffett’s death would not mean the end of the investing style associated with buying companies below their perceived intrinsic worth.

According to Wolfe, value investing has lost favor in recent years as passive growth strategies have dominated. He argued that the largest technology companies may be more vulnerable than they appear because index funds can direct money toward the biggest stocks without making company-by-company judgments.

Wolfe told Fortune that a Nasdaq decline of 10% to 15%, centered on the Magnificent 7 stocks, could expose that vulnerability and create an opportunity for active value managers. He described that as a “lower probability, high magnitude” scenario.

Wolfe named Dan Loeb, David Einhorn and his wife, Lauren Taylor Wolfe, as examples of investors who could stand out in such a shift, while also saying a new or less expected value investor could emerge. He told Fortune that such a scenario would not directly serve him as a venture investor.

Iran-war fallout and Europe

Wolfe also told Fortune he sees a possible chain reaction from the war in Iran that could put pressure on Europe. He assigned roughly 10% odds to a scenario in which fertilizer shortages contribute to a food crisis near Europe’s edges, naming Macedonia and Bulgaria as examples of places that could be affected.

In Wolfe’s scenario, food strain could combine with migration pressures and weaken the European Union’s economy, currency and markets. He told Fortune that panic in such conditions could fuel far-right leaders.

Wolfe said he had shared the idea with intelligence professionals in the hope they would dismiss it. Instead, he told Fortune, they said a 1930s- or 1940s-style strongman figure may already be in Europe, though they did not know whether that person was 35, 45 or 55.

Why he looks for failure

Wolfe told Fortune that imagining failure is part of avoiding it. He said he has considered geopolitical and socioeconomic breakdowns because he believes failure can follow from failing to picture what could go wrong.

At the same time, Wolfe described himself as broadly optimistic about technological progress. He told Fortune that he remains cynical about human motives, but believes science allows technology to build on itself and improve life over time despite daily turbulence.

This story draws on original reporting from Fortune.