Sondre Flateraaker @Flaten: "Market Recap – Wednesday, December..."

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Market Recap – Wednesday, December 10th One of the hardest skills to master in investing is the discipline to do absolutely nothing for long stretches of time. I have said this many times, but it bears repeating. Charlie Munger put it simply: “The big money is not in the buying and selling, but in the waiting.” Warren Buffett echoed the same idea: “The stock market is a no called strike game. You don’t have to swing at everything. You can wait for your pitch.” In markets like this, cash is king and patience is a strategy, not a lack of one. There are seasons to accumulate, seasons to trim, and seasons to sit still. Right now we are in that third category. Geopolitical tensions continue to rise across the Indo Pacific. South Korea reported that it scrambled fighter jets overnight after seven Russian aircraft and two Chinese aircraft entered and exited the Korea Air Defence Identification Zone. The intrusions took place around 01:00 GMT and lasted roughly an hour off the country’s east and south coasts. This comes only days after increased Chinese air activity near Japan. These are exactly the types of events that reinforce our long term defense and security thesis. A major tailwind for our space holdings arrived yesterday. SpaceX is reportedly preparing for a public offering in 2026 targeting a valuation of approximately 1.5 trillion dollars and raising well above 30 billion dollars. This is a rising tide moment for the entire space sector. Historically when a category leader IPOs or reprices higher, investors begin seeking the “next best” publicly listed exposure. $RKLB (Rocket Lab Corp) , which is our second largest position, stands to benefit meaningfully as capital flows into the broader space ecosystem. $DRS (Leonardo Drs Inc) announced a Memorandum of Intent with the Ministry of Defense of Saudi Arabia to explore opportunities for ground combat vehicles and soldier systems under the country’s Vision 2030 modernization plan. Even though the details are early, this is another signal that Middle Eastern defense spending is accelerating and increasingly multi directional, not just toward American primes. $ETN (Eaton Corp PLC) received an upgrade to Outperform at Wolfe Research with a new target of 413 dollars. The analyst expects 2026 to bring a powerful combination of backlog conversion and easing cyclical headwinds, and noted that Eaton’s valuation has become attractive relative to its growth. This lines up with everything we have discussed regarding the AI driven data center buildout. Eaton remains one of the cleanest pick and shovel exposures to the structural power requirements of the AI era. $IBM (International Business Machines Corporation (IBM)) also received a price target increase from Stifel to 325 dollars following its 11 billion dollar acquisition of Confluent. The analyst highlighted IBM’s historical strength in scaling enterprise focused acquisitions and noted the significant synergy potential. As we have said before, IBM is quietly becoming the infrastructural backbone for quantum computing and advanced enterprise AI ecosystems. $PLTR (Palantir Technologies Inc.) delivered another major government win. The United States Navy has announced a 448 million dollar strategic investment into the Shipbuilding Operating System to modernize the industrial base with real time AI enabled decision making across the supply chain. Palantir’s software will power ShipOS, creating full visibility for every stakeholder from the assembly floor to leadership. This is the same operating system vision that has won contracts with the United States Army, the United Kingdom’s NHS, Hyundai Heavy Industries and multiple classified programs. What is also notable is the language from the Secretary of the Navy describing this as a transformational shift in how America builds warships. When a software company becomes the operating system of the defense industrial base, the market typically takes years to fully price in that reality. Rocket Lab, Palantir, Eaton, and IBM continue to show why they form the backbone of our innovation and national security allocations. For now market structure remains choppy and the option flow today reflects a defensive stance with 65.8% bearish premium versus 34.2% bullish. I am continuing to monitor positioning and macro signals closely, but the long term thesis is unchanged: defense, autonomy, space, semiconductors, and mission critical software remain multi year structural winners. I will keep you updated as new data arrives. Than you for the read and see you when The Market Opens!