π QUARTERLY REBALANCE COMPLETE β FULL UPDATE
π The thesis.
US inflation is sticky, the dollar is weak, and capital is rotating out of American assets into Europe and Asia. Commodity prices are running hard on the back of AI infrastructure buildout and the energy transition. I'm positioning for ongoing conflict and potential further escalation in the Gulf β that's my base case, not. The Strait of Hormuz has been closed for weeks and I don't see a quick resolution. I think markets are still underpricing how long this runs. so im positioning ourselves appropriately.
βοΈ What I closed.
LRN was down nearly 40% with nothing pointing to a recovery. CALM had a brilliant run on egg prices but that cycle has clearly turned. VICI, INGR, AMZN and GNW were all cut, underperforming with no real path back in this environment.
Also closed ALL, KR, BRK.B and PAA to make room for better fits.
Trimmed five positions after strong runs β PSLV after a 100% gain, CFFN which had quietly drifted to 8% of the book for a 9% return, plus PARR, SNEX and MFG. All still in the portfolio, just at sensible sizes now.
β What I added.
π’ FRO (Frontline) 4.27%, the most direct expression of the Gulf conflict view. Closed strait means oil reroutes around Africa, voyages triple in length, tanker capacity tightens and freight rates stay elevated. Negative beta β moves independently of the broader market. This trade works as long as the conflict continues.
π΄ FCX (Freeport-McMoRan) 4.28%, copper at near-record prices driven by AI data centres, EVs and post-conflict reconstruction demand. Freeport is the largest publicly traded pure-play copper miner with multiple structural tailwinds behind it.
πΎ MU (Micron) 3.34%, core supplier to NVIDIA's latest AI chips. Guiding for record revenue and margins next quarter. Trades cheaply relative to the growth rate which is the kind of gap I look for.
π JAZZ (Jazz Pharmaceuticals) 3.31%, low beta healthcare anchor. Strong fundamentals and completely uncorrelated to commodities or geopolitics. Does its job quietly.
π₯¬ FDP (Fresh Del Monte) 3.79%, defensive produce with maximum analyst conviction. Non-discretionary demand, insulated from tariff pass-through.
πΈ RELY (Remitly) 3.79%, digital remittances with a near-zero beta. Captures the structural growth of cross-border payments without any exposure to the credit cycle or commodity prices.
π MFC (Manulife) 3.32%, Canadian life insurer replacing Allstate. 4% dividend growing at 10% a year and 36% of earnings from Asia. Better business, better yield.
β KDP (Keurig Dr Pepper) 3.33%, defensive beverages replacing Kroger. Same profile, cleaner valuation, buying into weakness.
π‘οΈ THG (Hanover Insurance) 3.32%, P&C insurer positioned well for a world where war risk repricing is lifting premiums and improving underwriting conditions across the sector.
π¨ HTHT (Huazhu Group) 2.37%, China hospitality recovery with near-zero correlation to US markets. Adds genuine diversification on the China recovery side alongside ZTO.
π How the sectors changed.
πΌ Financials down from 28% to 20%, was the single biggest overweight. Cut the weak names and improved the quality of what remains.
π Consumer Staples up from 12% to 18%, the biggest increase and the most deliberate. In a slow growth, sticky inflation environment these businesses raise prices when costs go up and people keep buying regardless.
β½ Energy down from 18% to 11%, removed pure oil exposure entirely. What remains is more focused and FRO sits in its own shipping sleeve with a completely different risk profile to the oil positions.
π’ Energy/Shipping new at 4.5%, FRO alone. Profits from disrupted oil flows rather than oil prices. Genuinely different from everything else in the energy sleeve.
π΄ Materials new at 4.5%, Copper is at near-record prices and the demand side only gets stronger from here β AI data centres are copper-intensive, the EV transition requires it, and any post-conflict reconstruction in the Middle East runs on it. Freeport is the cleanest way to own that thesis.
πΈ Fintech new at 4%, RELY adds a return stream that isn't tied to any sector cycle. Near-zero beta and a business model that compounds quietly in the background.
π Healthcare new at 3.5%, JAZZ is a specialty pharma company with strong cash generation and very low market sensitivity. Healthcare was a gap in the old portfolio and in a slow growth environment it earns its place. People don't stop needing medication because inflation is high or the dollar is weak.
Holding a cash buffer rather than forcing capital into positions I'm not fully convicted on. BTC stays as a small speculative position. NWG is the one position sitting underwater at β8%, the thesis is unchanged and I'm holding.
Will keep updating as things develop. The Gulf situation is the main variable to watch! ... Show More
Not investment advice. The author may have financial interests in the mentioned instruments.
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