It looks like oil is flowing through the Strait of Hormuz, which is good. At the end of the day, markets care about how a conflict affects the economy. If oil keeps flowing, that takes some pressure off. Iran may be losing control of the Strait, and that would be good for markets. But I think we’ll keep chopping around these levels until a real end to the conflict is in sight.

Why? Because there’s still a risk.

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If Iran feels cornered, with its economy deteriorating, the rial losing value and inflation soaring, it could still do serious damage to the global economy.

How? By hitting a few oil production facilities. My reading is that Iran has been playing the long game, using control over Hormuz flows to slowly hurt the economy through higher oil prices. But if it loses that control, attacking oil infrastructure on land could become one of its remaining ways to apply pressure. It doesn’t need every drone or missile to get through. A few successful strikes could be enough.

Thinking out loud here, and after listening to a few geopolitics podcasts, I don’t think Iran wants to go down that road. The economic damage could be so widespread that it would turn much of the world against it. That isn’t in its interests. Lately, Iranian officials have repeated that they don’t want war with neighbouring countries; they want the US and its military assets out of the region.

That’s part of why I’m still optimistic about markets here. But the risk remains. If the regime feels cornered enough, it could decide that a much more damaging escalation is its last way to preserve its power and influence.

Anyway, I’m not a geopolitical expert. This is just me thinking out loud. Let’s talk about a few stocks.

Last week, I wrote about tokenisation, specifically Coinbase ($COIN) and Securitize ($SECZ).

One week later, Coinbase is more or less where it was, while Securitize has gone in a completely different direction. SECZ is up 50% in a week. I wouldn’t have expected it to work that well, that quickly, even in my wildest dreams.

As I said in the last article, I didn’t buy SECZ because I preferred Coinbase for longer-term exposure to the trend. I think it has a clear distribution advantage over Securitize and other smaller platforms. I still think it was the right choice for me, although I wouldn’t have complained about being on the other side of that 50% move…

But anyway, I’m still quite bullish on the setup for crypto and tokenisation stocks, especially Coinbase. My understanding is that regulators are opening a path for tokenised stock trading without having to wait for the CLARITY Act to pass. As more products are rolled out, I see room for Coinbase to move higher with each announcement.

Outside of that, most of the Mag 7 have been fairly flat since I turned bullish, with one big exception: META.

META has gone parabolic following its new MUSE agent model. It’s close to its all-time high, and I think it could keep grinding towards it, although some consolidation wouldn’t surprise me after such a fast move.

I’m still bullish on the Mag 7, but they could face some near-term headwinds if interest rates keep rising and financial conditions continue to tighten. That said, these are some of the biggest cash generators in the world. Their ability to fund investment from their own cash flows should make them less dependent on external financing, even if higher rates can still weigh on their valuations.

So my view hasn’t changed much: bullish on the Mag 7 longer term, but a little less bullish on META in the short term after this run.

My portfolio right now is made up of Mag 7 names, crypto stocks, and real-economy businesses that I think are less vulnerable to AI disruption. I also wrote about that last group last week, and they’ve continued to do well in what has been a fairly choppy environment elsewhere.

Finally, I want to talk about a new position: Schmid Group ($SHMD). I bought it last Friday at around $4.70.

This market has been wild. Investors seem hesitant about the broader picture, but when a company gives them a convincing growth story, they’re very quick to bid it up. I think SHMD could attract that kind of attention as glass substrates become a bigger topic in AI.

SCHMID makes manufacturing equipment for circuit boards and advanced substrates, including equipment used to process glass. So the opportunity is in selling the machines that manufacturers need as they invest in new production capacity.

The reason glass matters is fairly simple. As AI chip packages get larger and more complex, connecting all those components becomes harder. Glass can provide a flatter, more stable base and allow denser connections. That could help manufacturers build larger, more capable packages. It won’t magically solve every memory bottleneck, but it could help with some of the physical limits the industry is running into.

The NVIDIA connection caught my attention, although the wording matters here. On its August earnings call, SCHMID said it was supporting major players in the NVIDIA, AMD and Intel supply chains with technology and equipment for glass-core substrates. That gives the opportunity some substance, but it doesn’t mean NVIDIA has signed a direct contract with SCHMID.

What makes this more interesting to me is that the broader business is already seeing orders pick up. Equipment backlog reached €95 million as of August 21, up from €54.8 million at the end of June. These are company-wide equipment orders, so we shouldn’t treat them all as glass-related demand. Still, there’s an improving business underneath the story.

That’s the longer-term opportunity I see: an improving equipment business with additional upside if glass substrates move into wider production. If manufacturers commit to building that capacity and SCHMID wins the equipment orders, the interest in this technology can start showing up in its numbers.

But there are reasons to be careful. SCHMID still reported an operating loss in the first half and cut its full-year adjusted EBITDA margin guidance to 6–9%, from above 12%. It also used €29.3 million of operating cash, mainly to fund working capital, and raised money through convertible debt. So execution, cash needs and potential dilution matter here.

After watching SECZ run without me, it would be easy to get too excited about the next small-cap story. I think that’s worth keeping in mind with this position.

I bought SHMD with a longer-term view, but what I’ll be watching is whether customer interest turns into production orders, and whether those orders turn into better margins and cash flow. Management itself identified customer qualification and metallisation, the process of making conductive connections through the glass, as hurdles to wider adoption.

I think the stock could move before all of that is clear. That’s part of why I’m interested now. But if the headlines keep coming and the business doesn’t follow, I’ll have to reconsider. A good story can get a stock moving quickly. To keep holding it, I’ll want to see the numbers catch up.That’s where I stand this week. Still bullish, keeping an eye on the risks, and looking for opportunities in the chop.

If you enjoyed the article, a like and a restack help me a ton. And feel free to leave a comment. I’d love to hear how you’re seeing this market.

Thanks for reading.

Arctic

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Right now, I feel we are in one of those moments.

AI is advancing rapidly, and its use cases keep multiplying. This should be good for productivity and, over time, for the economy. But for investors, it also raises some difficult questions.

For the last two years, we’ve seen an incredible run in the companies receiving AI capex. This made sense: infrastructure spending was the most visible part of the story. Whatever happened with the models, someone had to supply the chips, networking and power.

After that rally, I find the asymmetry less compelling. Expectations are higher, and the market is trying to anticipate the next winners.

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What’s the problem?

I don’t think the market has a clear answer yet. Some days, it favours software companies that could benefit from AI adoption. Other days, it returns to the cloud companies providing the compute. There is conviction about the technology, but much less agreement about who will capture its value.

Muse has added another layer to this debate. What I find encouraging is that people seem to be doing more than talking about it. They are trying it and finding ways to use it.

Whether that lasts beyond the initial excitement is another question. Trying a product is one thing; making it part of your daily routine is another. Still, the interest gives us a glimpse of what broader adoption of AI agents could look like.

And with that comes a new set of questions.

We’ve spent months talking about agentic AI in fairly abstract terms. Once people start using something that can act on their behalf, the implications become easier to imagine. Who benefits? Who loses the customer relationship? Who still gets paid?

Travel aggregators such as Booking and Trivago have become part of this debate. If an agent can research a trip, compare prices and arrange a booking, how much value stays with the websites we use today? Booking and Trivago have very different businesses, but both face questions about their role in that journey.

The argument could extend much further, including to parts of Amazon’s retail and advertising business.

Digital advertising has helped fund the internet for decades. Humans browse, compare products, click links and see ads along the way. An agent carrying out a task may skip much of that journey. It gets the information it needs, completes the task and leaves.

That could change the economics of a large part of the internet.

It doesn’t mean advertising disappears. Ads could move into AI interfaces through sponsored recommendations or paid placement. But that still leaves a big question: who captures the spending? The platform that owns the agent, the website supplying the product, or an intermediary connecting them?

There is an interesting tension here for Meta. Excitement around Muse could strengthen its AI narrative while also raising questions about the advertising model that funds the company.

I wouldn’t take that argument too far. People delegating their shopping or travel research may still spend hours watching videos and following creators. The risk is more direct for businesses built around comparison and referral traffic. But it shows how the same technology can create opportunities and uncertainty within a single company.

Until recently, the main market narrative was the productivity AI could unlock. What if the next phase is increasingly about uncertainty over existing business models?

The interesting thing is that these businesses don’t need to disappear for their stocks to struggle. Confidence in future earnings matters. If investors become less certain about what an internet business will earn in five years, they may simply pay a lower multiple for it. Earnings could keep growing while the stock goes nowhere.

So where could the money go?

In the short term, markets are heavily influenced by flows and rotation. My view is that some capital could move towards businesses where investors have greater confidence that demand will survive agentic AI.

Hospitals, rehabilitation facilities, water infrastructure and waste collection are good examples. I don’t need to know which AI model wins to believe that people will still need surgery, drinking water and rubbish removed.

These businesses could also benefit from AI through less paperwork, better scheduling and more efficient operations. The attraction is the possibility of capturing some productivity gains while keeping their core demand intact.

Of course, resilience has a price. A hospital or a water utility can still be a poor investment if you pay too much for it. Physical assets also come with debt, maintenance costs and regulatory risk. Being difficult for an agent to replace is only one part of the investment case.

AI biotech is another area I’m watching, although for a different reason. There, the opportunity is whether AI can improve the speed and economics of drug discovery. That is a more speculative productivity thesis, and I would separate it from the defensive argument above.

For now, I’m interested in businesses whose valuations leave room for a reasonable return without aggressive growth assumptions, and where AI is more likely to change how the work gets done than remove the need for it.

I don’t need to identify every loser to look for opportunities on the other side of that uncertainty.

Here’s a broad list of companies that could benefit from a rotation towards businesses less exposed to AI disruption:

I haven’t done individual due diligence on these names yet, but I think they’re worth investigating as potential beneficiaries of a rotation driven by uncertainty around AI agents.

Meanwhile, oil is up again today following reports of a ship being struck in the Strait of Hormuz. The same movie, over and over. I don’t pretend to know how this ends. I’m still leaning bullish, and I think, and certainly hope, this Middle East “adventure” comes to an end soon. But I wouldn’t go all in. The risks are still there.

Hope you enjoyed this midweek update. A short one, but I wanted to share what’s been on my mind.

Let me know in the comments if you enjoy these “thinking out loud” pieces. I’d love to hear your feedback.

Arctic

As I write this, ES futures are up 0.62%, NQ is up 0.97%, and oil is down 2.43%.

It looks like some pressure is coming off markets as we see signs of de-escalation. This week, I find Iran’s president flying to New York for the UN General Assembly particularly encouraging. Yes, it’s a UN assembly, but what matters to me is where it’s taking place. Why would you fly into enemy territory in the middle of a war if you weren’t interested in ending it?

To me, it’s a clear signal of de-escalation, and the market seems to be reading it the same way. As I write, some pressure is also coming off the bond market, and things look in place for the next leg of the rally.

As I said last week, I’m still bullish on hyperscalers. They’ve been punished for something they probably shouldn’t have been. That said, I’m not going to repeat all the arguments. If you want to read them, you can go back to last week’s article.

This week, I want to talk about two things.

First, I’m not a crypto guy, but the reality is that crypto has become an established asset class with significant institutional participation. Bitcoin volumes spike during market hours and decline after the close.

Last week, a vote on the CLARITY Act failed by a single vote. The legislation aims to clarify how digital assets are classified as securities or digital commodities, and whether they fall under the SEC or the CFTC. I don’t think this vote necessarily stops it from becoming law. My expectation is that it passes in a subsequent round. That would reduce regulatory uncertainty around crypto assets, which could be particularly good for companies like Coinbase and Circle.

At the same time, the SEC announced a five-year exemption to facilitate tokenised stock trading. According to Reuters:

• Eligible platforms and liquidity providers would get relief from certain registration requirements.

• Tokens must preserve actual shareholder rights, including dividends and voting.

• Companies must be notified before listing and can object.

In my view, this was huge. Coinbase, which could be one of the biggest beneficiaries, was up 11% on Friday.

I bought that rip.

The whole crypto industry had been left for dead for a while, and expectations are low. To me, that creates the conditions for an aggressive move higher.

The opportunity for Coinbase in tokenised assets is huge. The US is a trading nation, and I’m sure plenty of people with money inside the crypto and stablecoin ecosystem would like to trade stocks without leaving it. I think this opportunity is underrated, especially for Coinbase, and the market is sleeping on it. The stock could re-rate higher as the market starts pricing it in.

For those of you who prefer small caps, there’s also Securitize ($SECZ), which stands to benefit. It already ripped 21% on Friday. It’s a much smaller, more specialised company.

I went for Coinbase because I think scale works in its favour, giving it more ways to benefit from this. If tokenised stocks become available on Coinbase, I’d expect plenty of people to trade them there. Over the past few decades, we’ve seen how much distribution matters in business. And here, I think Coinbase has the advantage over $SECZ.

With pressure from oil easing, I expect a slow grind higher this week. While the UN meetings are taking place in New York, I think further attacks in the Middle East are less likely. That would give investors room to do what they do best: bid up stocks.

From here, I’m bullish on crypto, especially Coinbase, and on hyperscalers. I think semis will also get a bid, although I don’t want to touch them up here. I feel the market sniffed something out in June. But I think the rally can continue with or without semis, so I’d rather look for opportunities elsewhere.

Finally, I want to tell you about something I’m building. I like thematic investing, and I’m working on a tool to make it easier for me and all my subscribers. I don’t want to say too much until it’s ready for you, but I’m excited about it.

A like and restack would be appreciated. Thanks a lot.

Arctic

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But first, a quick catch-up.

The Saudi pipeline attack is another escalation, and how long the disruption lasts matters. I wouldn’t dismiss it. Still, I don’t want every article to become the same conversation about Iran and oil. My view hasn’t changed much: I’m bullish over the medium term, but uncomfortable with the risks.

I feel similarly about rates. One or two hikes don’t necessarily kill the bull market. Inflation becoming persistent enough to force a long hiking cycle would worry me much more. I’m watching that, but I don’t want to invest as if the worst outcome is already certain.

This weekend also brought Dario’s call to slow frontier AI development, with support from Sam and Elon. That could put pressure on semis in the short term. We’ll see how markets react.

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The market is an evolving beast, and I get the feeling its appetite is starting to change.

What interests me right now?

Hyperscalers. Not particularly exciting, I know.

Amazon, Google, Microsoft and Meta.

I feel like we’ve become comfortable buying the companies selling AI infrastructure while worrying about the companies paying for it. That makes sense up to a point. The suppliers get their revenues now; their customers have to prove the return later.

But I’m starting to wonder whether the next opportunity is on the other side of that trade.

Last week I saw a thesis on X that stayed with me. What if the rush to build data centers was partly a rush to get connected to the grid before those connections became much harder to obtain?

The power bottleneck is real. The International Energy Agency (IEA) estimates that grid constraints could delay around 20% of planned data-center capacity by 2030 unless they are addressed. IEA

What if hyperscalers saw this coming and decided to build as much as they could, as quickly as they could?

I don’t know whether that explains their decisions. But it makes sense to me. A working connection becomes much more valuable when the next company has to wait years for one.

This is where the investment idea gets interesting.

If new capacity becomes harder to add, spending growth could eventually slow. Meanwhile, the infrastructure already built could keep generating more revenue as customers use it. That would give cash flow a chance to catch up.

What I’m looking for is evidence that the money already spent is starting to earn its return.

At the end of the day, that is what we ask businesses to do: reinvest their profits well. Yet sometimes I feel we are treating AI spending with the same suspicion we had towards Meta’s metaverse spending in 2022.

I understood the skepticism then. But compute feels different to me. There are already customers paying for it and companies using it to improve businesses that make money today. That doesn’t justify any amount of capex, but it gives us something concrete to judge.

Amazon, Google and Microsoft interest me because they can sell that compute to customers they already serve. Meta interests me more as a direct application of AI: better recommendations, better advertising results and potentially better efficiency.

If Meta can keep turning AI improvements into profits, that would be an encouraging sign for the broader investment cycle. Not proof that every project works, but something more useful than another impressive demo.

Amazon and Google also have Trainium and TPUs. I wouldn’t assume those chips are more efficient than Nvidia’s for every task. But being able to design hardware around your own workloads could become more valuable when power is scarce. Getting more useful work from the same electricity is another way to grow.

I’m not saying these stocks are automatically cheap, or that semis need to fall. For the index, the better outcome would be semis holding up while hyperscalers start getting more credit for the returns on their spending.

That is one way I can see the S&P 500 moving towards 8,000.

I still struggle to find the overlooked opportunities I used to find in smaller companies. Maybe that is making me more cautious. But I also don’t want to ignore an opportunity just because everyone already knows the ticker.

For now, these are the names I want to spend more time on. Not the most exciting conclusion after a weekend thinking about markets, but it is the honest one.

All the best,
Arctic

P.S. If you enjoyed this one, a like or restack would mean a lot. Thanks for helping me get the letter going again.

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As I write this, S&P 500 futures are down 0.56% following the PPI release and renewed US–Iran tensions. WTI crude is up around 4%, approaching $100 a barrel again for the first time since May. There’s still no clear path out of the conflict, and it feels like investors are getting nervous. Understandably.

Trading hasn’t been easy this year. If anything, it’s been a reminder that you can get the bigger picture right and still have a pretty rough time making money from it.

On one side, we have several risks that deserve attention.

The yen carry trade unwind. My read is that it has been relatively orderly so far, without the broader disruption people feared. But it’s something I’m watching. Orderly doesn’t mean finished.

The Iran war and rising costs. Oil and diesel are the obvious ones. Fertilizer supply and the potential knock-on effects on agricultural prices worry me too. If diesel stays expensive for long enough, the pressure can spread through transport, manufacturing and eventually the prices consumers pay.

Private credit. The argument you hear is that some of the risky lending that used to sit inside banks has migrated into less transparent parts of the financial system. Higher rates expose weak borrowers, and the concern is that individual problems could eventually become connected.

I don’t know whether that becomes a broader default cycle. I’m not treating private credit as “2008 all over again.” But I’m not comfortable dismissing it either.

Then, on the other side, we have AI.

Everyone knows the argument by now. But knowing it doesn’t mean we’ve understood its scale.

I believe AI could be more transformative than the internet. That’s a big claim, and it’s my conviction rather than something I can prove today. But it’s the reason I remain constructive on the longer-term picture.

I also think that without the Iran war, the S&P 500 and Nasdaq would be materially higher. We can’t know that counterfactual, but that’s my view.

This rally has changed

In 2024, we went through what felt to me like the most speculative phase of the AI trade.

I remember watching speculative shitcos with barely any revenue flying. Having the right story could be enough. Many of those names have since come back down to earth.

From summer 2025 through April this year, the semiconductor rally felt different. There was still excitement, obviously, but there were also earnings behind it. In a lot of cases, earnings growth gave the move something real to stand on.

That doesn’t mean every semiconductor stock is cheap. It means I don’t think we can dismiss the whole move as hype.

At the same time, long semis and short software seemed to become one of the defining trades, particularly among the pod shops.

Software was dead. AI was going to destroy it. Nobody wanted to own it.

Until some earnings started showing more resilience than the narrative suggested, and parts of the sector started finding a floor.

For me, that captured something about this year: price creates narratives.

When a sector falls, we become very good at explaining why it deserves to fall forever. When it starts recovering, suddenly we discover the reasons it might survive.

I’m not immune to this. Nobody is. But I try to notice when a changing price is doing more work than changing fundamentals.

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So where does that leave us?

Somewhere uncomfortable.

We have what I think could be an enormous, lasting investment cycle driven by AI. Alongside it, we have a conflict that can damage growth, push inflation higher and make life harder for the Fed.

Both can be true. AI can be transformational while the stocks attached to it have a terrible few months.

I’m not going to tell you exactly how this plays out. I don’t know. And anyone pretending to know probably deserves a bit more scrutiny.

But I do have a working theory.

I think the costs of a prolonged war eventually create pressure for some kind of resolution. My base case is that both the US and Iran have reasons to find a way out.

The midterms complicate that. One possibility I consider is that Iran sees political leverage in keeping pressure on Trump ahead of the election. The other side of that argument is that a president facing less immediate electoral pressure afterward could become less predictable.

That is speculation about incentives, not knowledge of what either government is thinking. I could be wrong about their priorities, their willingness to compromise, or their ability to reach an agreement.

And even if both sides would benefit from an exit, it doesn’t mean they manage to find one.

Still, my base case is that we get enough de-escalation for the market to put more weight back on earnings and the AI investment cycle.

The more damaging scenario is a prolonged conflict: expensive energy feeds into the wider economy, inflation becomes harder to contain, and the Fed responds with further tightening.

That would put real pressure on my bullish view. Strong technology doesn’t make valuations or financing costs irrelevant.

I put less weight on that scenario today. But the incentives I see are a reason for my view, not a guarantee that it works.

Today’s PPI fits that uncomfortable picture. Headline producer prices rose 0.4% in August, taking the annual rate to 5.4%. Energy drove much of the increase in goods prices. But core PPI, excluding food and energy, rose 0.2%, below the 0.3% expected. So there’s something for both sides here: renewed energy pressure for the bears, a softer underlying monthly reading for the bulls. BLS, Trading Economics.

For me, this doesn’t change the thesis much. It reinforces why the duration of the energy shock matters. If it fades, there’s more room for earnings and AI to drive the conversation again. If it persists, the question becomes how much businesses can absorb before passing costs on or taking a hit to margins. One softer core number helps, but it isn’t enough to get comfortable.

Where I stand

I’m leaning bullish, with the expectation that the path could be ugly.

Between now and the midterms, I think we could have sharp moves in both directions. My working target remains 8,000 on the S&P 500, although I’m much less confident about the timing than the direction.

I also sense a lot of fear. That doesn’t prove investors are underpositioned. You can sound worried and still be fully invested. But if cautious sentiment is backed by cautious positioning, a better outcome could force people to chase.

The things that would make me reconsider are fairly straightforward: a conflict that keeps escalating, inflation spreading well beyond energy, or AI earnings and spending failing to support expectations.

I want to keep testing those things, rather than find a new excuse to stay bullish every week.

For now, I think the longer-term opportunity wins out. We may be watching one of the biggest technological shifts of our lives, and I don’t want to lose sight of that every time the market gets uncomfortable.

But I don’t want to confuse conviction with certainty either.

That’s where my head is right now.

Arctic

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I’m calling for the TOP in GOLD.

First of all, this is not financial advice and I am probably wrong. These are just my views at the moment, and they could change tomorrow if new events come into play.

That said, let’s dig in.

Why do I think we are close to the TOP in GOLD?
Let me start with the main reasons gold h…

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• “Stocks are expensive, we’re in a bubble.”

• “Trump is doing crazy, even unconstitutional things.”

• “Inflation is ticking up again.”

Everything sounds bearish… yet the market keeps climbing.

My view

We’ve just lived through one of the most hated rallies in recent memory. Since the April lows, the market stag…

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• Revenues: 0% growth

• Company Losing market share

• Company Burning a ton of cash

• Company at a -60% Drawdown

• Yet, there is one big catalyst which people is hating

• Positioning is the most bearish ever

Despite all the negativity, I’m targeting a 2× to 8× return on this options bet.

Let’s dive in.

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• Valuation: Trades at 13.32x PE.

• Balance Sheet: SAR 715M in NCAV.

• Cashflows: Strong FCF generation.

• Potential: Long term high quality compounder.

• Ideal For: Open-minded, aggressive value investors.

• Narrative: Riding the Vision 2030 wave.

While value investing can be found in a wide array of forms, in this write-up I come back to the traditional PE view of value investing.

I think I’ve found a great company, at a great valuation, with a great narrative for the future. This combination, I’m sure, will excite a lot of you.

While it’s quite a straightforward thesis, it’s very compelling, and there’s a real chance for Saudi companies to become a strong thematic in the coming years, as Vision 2030 government spending starts flowing into corporate profits.

It’s not a risk-free investment, but the risk-reward, in my view, is quite compelling.

I was looking for something different, and I’ve found it.

Hope you all like it.

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In today’s thesis you will find:

• Uncorrelated Trade Idea for 2025

• Potential: 2x to 3x in 2025

• Basket of the Highest Quality Companies

• Clear Catalyst to Unfold This Year

Before proceeding, If you’re thinking about signing up for Seeking Alpha, you can do it through this link: Seeking Alpha. It helps me keep writing content like this. Thank you for the support!

Seeking Alpha Offer

Before diving into today’s thesis, I want to share an update on my Q1 2025 performance and portfolio positioning.

Q1 2025 Portfolio Update

As of March 18, my portfolio is up 11.2% in 2025, and I’m very proud of this performance, especially following an exceptional 2024. The gains have primarily come from my TLT call options, which I bought when TLT was around $87, and a few S&P put options, which I purchased when the index was at all-time highs as an insurance. At that time, I thought that the economy and market perspectives were weak at those valuations. After one of the fastest declines in the S&P’s history, I took profits on the put options, locking in gains while keeping my portfolio positioned for further opportunities.

Currently, my TLT call options make up approximately 45% of my portfolio, while the other half consists of a highly diversified basket of stocks. My top stock positions are:

• Innoviz Technologies: This week, I bought back into the stock as it’s trading at an extremely attractive valuation following a major pullback. My average price is $0.68.

• nLIGHT: One of my latest investment theses. The stock has held up well during the recent market pullback. My average price is $11.

• Talkspace: A long-term holding that I remain confident in for a strong 2025. Average purchasing price of 1.78$.

• Aside from these three stocks, I also hold 16 other companies in my portfolio.

I'm excited about how my portfolio is coming together and will continue to monitor opportunities as they arise. Right now, I believe it's well-diversified, with my TLT position acting as a hedge against downturns while my stock picks provide exposure to the upside of economic growth. Right now, I’m holding more stocks than ever, aiming for diversification not just across companies, but also across industries as uncertainty unfolds.

What excites me most is that TLT isn’t just a defensive play. It has its own bullish thesis. This means that, in my view, the entire portfolio is positioned to push higher in the mid-term, balancing both protection and upside potential.

Let’s dive in today’s thesis.

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While I am, and will always be, a micro-investor focused on fundamentally sound small-cap companies, this idea takes a completely different perspective from what you are used to.

As an investor, flexibility is one of the most valuable traits you can develop. We are currently in a challenging market environment:

• Uncertainty surrounding Trump’s policies and their potential impact on the U.S. economy.

• Market valuations are high, limiting upside potential in U.S. stocks.

Given this perspective, I am looking for alternative opportunities, as I don’t see much upside in U.S. equities, nor in other geographies. Yes, Europe’s valuations are much lower than those in the U.S., but several structural headwinds make the investment landscape less attractive:

• A slowing European economy and lack of innovation compared to other regions.

• Uncertainty around Trump’s trade policies and their potential negative impact on Europe’s economic ecosystem.

For these reasons, I don’t expect Europe to thrive in the near term. Instead, I find Japan particularly interesting, as growth appears to be returning after a prolonged period of deflation and stagnation. While I may cover some Japanese companies in future articles, this time, my focus is on other types of assets.

This February article is intended to offer a fresh perspective on the markets and encourage investors to explore opportunities beyond traditional asset classes, and to be clear, I’m not referring to crypto.

Let’s dive in.

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With markets running hot recently, many suggest that opportunities have dried up. However, I’ve identified what I believe to be a significant opportunity for investors. This investment checks all the boxes for a great opportunity:

1. Sustainable Growth

2. Reasonable Valuation

3. An exciting narrative that will capture investor interest.

Currently, most investors overlook this company, viewing it as a "boring commercial laser company." What they fail to see is its high-growth potential in Aerospace and Defense technology. But they won’t miss it for long.

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• Achieving a 25x Return through Options

• Thought Process Behind the Trade

• Blending Value Investing Fundamentals with thematic investing

First and foremost, I want to share the reason behind writing this article:

To inspire young and small value investors to carve out their own unique path in investing. 

There are countless approaches to…

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Over recent years, investments in technology and innovative stocks have been criticized by traditional value investors. In my view, this perspective is misguided.

Innovation is what creates wealth for society and expands opportunities for everyone. This is an indisputable truth.

During the last century, the industrial revolution set the stage for unprecedented progress, and since then innovation has continually propelled our societies forward in ways once unimaginable. It creates excitement, drives humanity ahead, and enriches our shared experience. Without it, not only would value investors suffer, but entire societies would struggle. Hunger and conflict could return as resources become increasingly scarce for a rapidly growing population.

That said, not every valuation is justified simply by the promise of innovation. I still consider myself a value investor, and proper valuation remains essential when analyzing any stock. Yet, if you combine a fair valuation with forward-thinking technology, genuine innovation, robust growth, and positive investor sentiment, I believe you can achieve the greatest rewards.

Let’s now embark in the deep dive.

I hope you find it inspiring, and remember:

True innovation is what will ultimately sustain and uplift us all.

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• Growth: 5-year Revenue CAGR of 22%

• Profitability: Profitable and cash-flow positive

• Investor Sentiment: Depressed under Trump victory.

• Valuation: 3.6x fordward P/FCF

• Potential: 50% CAGR through 2027.

• Tailwinds: Rising energy demand driven by AI growth.

• Challenges: Revenue drop in 2024. Poised for rapid recovery.

What fascinates me most about investing is the chance to uncover the hidden mechanisms driving the world forward. And right now, AI stands as the single most transformative force shaping the society we live in. Its potential is undeniable, but as a value investor, I’ve found that most AI-related stocks are overpriced, leaving few opportunities for long-term gains.

In this article, I’ll introduce you to a groundbreaking investment idea, a company uniquely positioned to thrive in AI’s surging energy demands. It’s a gem that balances future-proof potential with a compelling valuation that even value investors can appreciate.

Through this deep dive, I’ve uncovered a fascinating connection between AI’s growth and its ripple effects on the energy sector, and I’m confident you’ll gain valuable insights into an overlooked opportunity poised for significant returns. Join me as we explore this transformative moment and discover the potential it holds.

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• Put Option Macro play: A hedge with 3-4x potential

• Portfolio breakdown: An harmonically planned portfolio designed to navigate any market environment

• 2.5-year CAGR of 20.43%: How I’m working towards my 25% target.

• Actionable insights on high-potential investments and portfolio management tips.

Dear readers,

As I sit here reflecting on the journey of my portfolio, I realise that an investment portfolio is much like a living, breathing entity. It grows, adapts, and evolves. It tells a story, one that’s carefully written with each decision, each stock, each theme. And now, I’m excited to share the first chapter of this story with you, my valued subscribers, as part of my new quarterly portfolio updates.

But before we dive in, let me clarify: this is not financial advice. It’s simply a glimpse into my world, my thoughts on the markets, and what I’m doing with my own money. Please treat this as my personal view, not advice.

Why Portfolio Updates?

I've come to realise that a portfolio is like a well-prepared dish, a carefully crafted recipe that requires balance, attention, and intentionality. Every component plays a role, and each has a purpose. I’m happy to say that, after years of refining, I now see my portfolio as a well-told story, where each piece contributes to the whole.

Let’s begin with the update.

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I hope this update finds you well. A few weeks ago, RA International Group released its H1 2024 results along with details of several new contract awards. In this short article, I will provide an overview of these key developments.

Before we begin, if you haven't yet reviewed the company's investment thesis, please refer to this article:

Before proceeding, If you’re thinking about signing up for Seeking Alpha, you can do it through this link: Seeking Alpha. It helps me keep writing content like this. Thank you for the support!

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Let’s dive into the H1 2024 results.

Revenues have remained stable throughout the year. The company has successfully retained its existing clients and is actively working to strengthen relationships with governments and organisations to secure new contracts. They are currently pursuing several open bids, focusing on expanding existing agreements and developing opportunities with new clients. Additionally, their first project for the U.S. Navy has been completed, and further contracts from the U.S. Navy are anticipated in the near future.

The key takeaway from these results is the decline in the profit margin, which fell to 8.2%, down from 17.6% in H2 2023 and 11.8% in H1 2023. While this is not an encouraging development, in my view, it is not alarmingly negative. It's important to note that RA International typically experiences weaker performance in the first half of the year due to seasonality. This trend was also evident in 2023, where H2 profit margins were significantly higher than H1. However, it’s true that this year’s H1 margin is lower than the previous year’s H1.

Up until 2023, RA International was navigating the significant challenges posed by the Mozambique incident, which had a considerable impact on the company. In my opinion, this year marks a return to normal operations, allowing the company to refocus on strengthening relationships, securing new contracts, and, most importantly, investing in its own growth.

If you examine the return on capital employed (ROCE) from before the Mozambique incident, the figures were notably strong. The image below highlights the company’s impressive ROCE during that period.

ROCE is a crucial metric for evaluating how efficiently a company generates returns from its capital investments. A ROCE of 20% indicates that for every $100 of capital employed (including both debt and equity), the company produces $20 in operating profit before interest and taxes. Generally, the higher the ROCE, the more effectively a company can reinvest its profits to fuel further growth in its operating earnings.

In my opinion, this half-year period highlights RA International’s substantial investment in its growth. While this has led to a short-term dip in profitability, I believe it will fuel stronger returns in the medium term. Given the company's strong ROCE before the Mozambique incident, I’m confident in RA International's current strategy of reinvesting capital to drive future profits, after all, this is a fundamental approach for most successful companies.

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It's often said that investors should be emotionless, but I believe that's FALSE.

I’m sharing this id…

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