| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| - | 1.7% | 1.7% |
Grey Owl's All-Season Strategy delivered +1.7% in Q1 2026 while major indices declined, demonstrating its ability to minimize drawdowns during risk-off periods. The Nasdaq-100 dropped 13% from late January through March, initially catalyzed by decelerating AI earnings before broader equity declines following the US-Israel war against Iran. War drove oil from under $60 to above $115, with commodities gaining 39.9% and gold up 8.6%. The manager maintains a balanced portfolio within an all-season framework but has become less aggressive, increasing fixed income and cash allocations while decreasing gold and commodity positions after significant gains. US equity exposure is weighted toward energy, while global exposure favors Latin America and Asia over Europe. Economic growth is accelerating through mid-2026 with strong corporate earnings, but inflation is reaccelerating. The fragile Iranian ceasefire remains unresolved with continued Strait of Hormuz blockade. The portfolio maintains meaningful inflation protection and market stress hedging while positioning for growth where environmental conditions are most favorable.
Construct an all-season portfolio that minimizes drawdowns, outperforms cash by several hundred basis points annually, and participates meaningfully in risk-on rallies while maintaining balance across different market environments.
The manager expects risk assets to continue performing well while economic acceleration holds, but maintains a balanced portfolio with a cautious bent given the fragile ceasefire with Iran and unresolved geopolitical tensions. The larger fixed income and cash position provides optionality to deploy into weakness.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Apr 22 2026 | 2026 Q1 | - | All-Season, commodities, energy, Geopolitical, gold, inflation, risk management | - | Grey Owl's all-season strategy gained 1.7% in Q1 while markets declined, proving its downside protection during the Iran war-driven selloff. The manager reduced risk after oil surged from $60 to $115, increasing cash and bonds while trimming commodities and gold. Portfolio remains balanced but cautiously positioned given unresolved geopolitical tensions and accelerating inflation. |
| Jan 23 2026 | 2025 Q4 | ACWI, GLD, GSG, IWM, MAGS, SPY, TLT | commodities, Cyclical, diversification, gold, growth, inflation, risk management, small caps | - | Grey Owl All-Season Strategy delivered 11.4% in 2025 while managing downside risk effectively. The manager has repositioned for 2026 growth acceleration, increasing small-cap and commodity exposure while reducing cash from 28% to 16%. Small-caps and commodities are already outperforming with 7.6% and 7.4% YTD gains as market leadership broadens beyond mega-cap technology. |
| Oct 27 2025 | 2025 Q3 | SPX | earnings, interest rates, P/E Ratio, risk premium, S&P 500, valuation | - | The S&P 500's 23.46x P/E reflects an Implied Cost of Equity of 7.4%, placing markets in historically expensive upper valuation bands. Further gains depend on earnings growth rather than multiple expansion, as the cost of equity approaches levels typically associated with market peaks. The framework provides orientation rather than timing signals. |
| Jul 18 2025 | 2025 Q2 | DG, DLTR | All-Seasons, commodities, growth, inflation, Tactical, volatility |
DG DLTR |
Grey Owl's all-seasons strategy outperformed during market volatility with 4.3% first-half return. Portfolio positioned for inflation reacceleration with commodity exposure and inflation-protected securities. Successful tactical trades in dollar stores and Israeli markets. Balanced approach weighted toward commodity producers and European equities. Market signals support continued bull market with improving demand/supply dynamics. |
| Apr 23 2025 | 2025 Q1 | AAPL, AMZN, GOOGL, META, MSFT, NVDA, TSLA | Defensive, gold, inflation, risk management, uncertainty, valuation, volatility | - | Grey Owl outperformed in Q1 with defensive positioning as US equities and Mag7 stocks corrected sharply. Gold was the hero, up 19%. Despite recent declines, valuations remain historically elevated with economic uncertainty persisting. Portfolio maintains defensive stance with mid-teens cash, gold ballast, and selective equity exposure positioned for continued volatility and potential stagflationary pressures. |
| Jan 24 2025 | 2024 Q4 | ACWI, GLD, GSG, SPY, TLT | commodities, Dollar, growth, inflation, rates, volatility | - | Grey Owl maintains constructive all-season positioning as inflation reaccelerates through 2025 first half, transitioning from stagflation to quasi-stagflation. Portfolio emphasizes commodities, large cap US growth equities, and high-yield debt while limiting foreign exposure due to dollar strength. Short-term fundamentals remain bullish despite expected volatility from government borrowing sustainability concerns. |
| Oct 23 2024 | 2024 Q3 | - | All-Season, commodities, emerging markets, gold, inflation, Stagflation | - | Grey Owl positions for stagflation as inflation reaccelerates while growth decelerates. Gold outperformed significantly in Q3, gaining 13.1%. The fund increased commodities exposure and broadened emerging markets allocation while reducing fixed income. Manufacturing remains contracted, jobless claims rise, and inflation indicators suggest reacceleration from September lows. Government spending sustainability concerns persist. |
| Jul 29 2024 | 2024 Q2 | ACWI, GLD, GSG, SPY, TLT | All-Season, gold, India, inflation, Multi-Asset, PMI, volatility | - | Grey Owl's All-Season strategy underperformed in Q2 due to narrow mega-cap rally but maintains constructive positioning with India overweight and gold exposure. Economic deceleration evident across manufacturing and services, though soft landing achieved via government spending. Inflation likely to decelerate near-term before reaccelerating in 2025, requiring dynamic bond management amid increasing market volatility. |
| May 9 2024 | 2024 Q1 | - | All-Season, Bitcoin, commodities, global, growth, inflation, Multi-Asset, PMI | - | Grey Owl delivered 4.3% in Q1 2024 with aggressive positioning across global equities, commodities, and Bitcoin as economic growth returned from 2023 lows. Federal spending 50% above pre-Covid levels drives current expansion while inflation reaccelerates. Despite acknowledging unsustainable debt dynamics creating 'stable disequilibrium,' manager maintains constructive stance given unpredictable timing of any correction. |
| Jan 24 2024 | 2023 Q4 | - | Cash, commodities, Hedging, Macro, Manufacturing, Recession, risk management, Services | - | Grey Owl Capital maintains defensive positioning despite strong markets, citing unsustainable borrowing extending economic cycles artificially. Manufacturing remains contractionary while services weaken, with commercial real estate and venture capital showing structural stress. The fund reduced hedges but keeps large cash positions yielding 5%, adding selective exposure to India, utilities, crypto, and uranium while remaining cautious on timing. |
| Oct 25 2023 | 2023 Q3 | - | Bond Vigilantes, commodities, Consumer Credit, government debt, inflation, Manufacturing, Stagflation | - | Grey Owl maintains defensive positioning amid unsustainable government and consumer borrowing that artificially extends the economic cycle. With inflation reaccelerating and manufacturing contracting, the portfolio emphasizes cash and precious metals while holding modest equity exposure. The manager sees potential stagflation ahead but remains open to adjusting for innovation-driven productivity improvements. |
| Jul 28 2023 | 2023 Q2 | - | - | - | |
| Apr 28 2023 | 2023 Q1 | - | - | - |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2026 Q1 |
OilWar in the Middle East drove oil from under $60 to a peak above $115 before settling near $90. The Strait of Hormuz blockade continues and oil remains well above pre-war levels. The manager increased energy exposure in US equities but has since locked in some gains. |
Oil Energy Middle East Geopolitical Commodities |
GoldGold gained 8.6% in Q1 2026 following the multi-year ramp. The manager decreased gold allocations after the significant gains but maintains it as a haven asset within the all-season framework. |
Gold Haven Assets Inflation Commodities | |
AIThe first month of the Nasdaq-100 drop appeared catalyzed by decelerating earnings for artificial intelligence-linked firms. Equity ownership has crowded into these names, so when they turned, the selling fed on itself. |
AI Technology Nasdaq Crowding | |
InflationHedgeye's CPI model forecasts significant and consistent CPI acceleration. Economic and corporate earnings growth remains strong, and inflation is once again accelerating, creating a backdrop that favors some risk-assets over others. |
Inflation CPI Monetary Policy Rates | |
| 2025 Q4 |
AIAI continued as a major theme with over 300 S&P 500 companies mentioning artificial intelligence on earnings calls. However, scrutiny increased around AI-related revenue circularity, massive capital spending scale, and durability of longer-term returns on investment. Oracle faced concerns about OpenAI backlog concentration risk and significant debt required for datacenter commitments. |
Artificial Intelligence Data Centers Capital Spending Revenue Circularity Infrastructure |
Trade PolicyTrade relations between the U.S. and China remained a key market focus with tensions flaring over tariff escalations and export controls. China dramatically expanded export controls on rare earth minerals while the U.S. threatened 100% tariffs in retaliation. A one-year trade truce was ultimately reached between Presidents Trump and Xi Jinping. |
Tariffs China Export Controls Rare Earth Minerals Trade Relations | |
CryptoCoinbase was added as a new position, viewed as the dominant player in the U.S. cryptocurrency market with over 65% trading volume share. The company benefits from regulatory clarity through the GENIUS Act and anticipated CLARITY Act, boosting institutional adoption. The business model is shifting towards more predictable revenue streams. |
Cryptocurrency Regulatory Clarity Institutional Adoption Trading Volume Revenue Streams | |
InflationInflation moderated with the Consumer Price Index up just 2.7% year-over-year in November, reaching its lowest level since July. However, inflation driven by tariffs is weighing on the do-it-yourself automotive business at O'Reilly Automotive. |
Consumer Price Index Tariffs Automotive DIY Business | |
| 2025 Q3 |
ValuationThe S&P 500 P/E ratio of 23.46x ranks among the highest since 1963, with the Implied Cost of Equity at 7.4% placing markets in the upper valuation bands. Further upside depends more on earnings growth than multiple expansion unless interest rates ease or risk premiums compress. |
P/E Ratio Valuation Cost of Equity Risk Premium Interest Rates |
EarningsWith the Implied Cost of Equity at historic peak levels, earnings growth becomes the key driver of further upside. The analysis shows S&P 500 return potential at various cost of equity levels under forward earnings estimates for the next 3 years. |
Earnings Growth Forward EPS Return Potential Growth Execution | |
RatesInterest rates are directly correlated to P/E multiples, with higher rates placing downward pressure on multiples while lower rates support higher valuations. The current 30-year rate near 4.73% contributes to the elevated cost of equity calculation. |
Interest Rates Risk-Free Rate Monetary Policy Bond Yields | |
| 2025 Q2 |
InflationManager expects inflation to reaccelerate through the back half of 2025, with 5-Year Breakeven climbing since mid-April and CPI projections showing continued acceleration. Portfolio is positioned with inflationary bent including inflation-protected securities and commodity exposure. |
CPI Breakeven Commodities Pricing Reacceleration |
CommoditiesDirect commodity exposure through gold, silver, Bitcoin, and uranium as part of inflationary positioning. Gold was standout performer with 25.9% gain in first half. Portfolio weighted toward commodity producers given inflation expectations. |
Gold Silver Bitcoin Uranium Producers | |
Dollar StoresTactical opportunity in dollar stores as low-cost providers that can raise prices during inflationary environment. Invested in Dollar General and Dollar Tree in early April, with DG sold for 28% gain and DLTR held for ongoing transformation with Family Dollar spinoff. |
Pricing Power Inflation Low-cost Transformation | |
| 2025 Q1 |
GoldGold was the hero during Q1 2025, up 19.0% and serving as the largest position in the portfolio. In periods of uncertainty, particularly stagflationary uncertainty, gold thrives. The position was recently trimmed from low teens to high single digits after the parabolic move, but remains a critical ballast in the portfolio. |
Gold Safe Haven Stagflation Uncertainty Ballast |
InflationThe 5-Year Breakeven rate has been dropping since February, indicating decreasing threat of runaway inflation. However, Hedgeye's CPI projections forecast a reacceleration in the back half of the year. When market participants start to anticipate this reacceleration, securities will react with some winners becoming losers and vice versa. |
Inflation Breakeven CPI Reacceleration Disinflation | |
VolatilityRecent volatility has been significant, particularly in the correction of prominent stocks like Nvidia and the Mag7. The market has exhibited great volatility in April with series of days of urgent selling followed by urgent buying. Downside volatility increased significantly in the three weeks since quarter's end and spread beyond US equities. |
Volatility Correction Market Internals Selling Pressure Turbulence | |
| 2024 Q4 |
InflationManager expects inflation to reaccelerate through first half of 2025, moving from stagflation to quasi-stagflation. 5-Year Breakeven rates point higher though the early fall spike has receded, and monthly inflation nowcast forecasts continued higher consumer price inflation through January. |
Stagflation Breakeven Consumer Prices |
CommoditiesCommodities were the best performing primary asset in Q4 at +3.7%. Portfolio maintains exposure to commodities including crypto and commodity equities as part of constructive positioning amid expected continued inflation. |
Energy Materials Crypto | |
DollarOngoing strength in the US dollar is limiting foreign equity exposure to countries with little US dollar denominated debt and accelerating economies. Dollar strength is a key factor in current positioning decisions. |
Currency Foreign Exchange | |
| 2024 Q3 |
GoldGold was the best performing primary asset class in Q3, up 13.1%, and has acted as a buttress to the portfolio. The forward-gold price continues to point toward increasing, unrelenting inflation. Gold exposure is being maintained as a hedge against stagflationary conditions. |
Gold Inflation Haven Monetary |
CommoditiesThe fund is increasing exposure to commodities for the first time this year as they shift toward assets that perform well in a stagflationary environment. Commodities are positioned to do well alongside gold and equities in the expected economic conditions. |
Commodities Stagflation Inflation Energy | |
InflationInflation is set to reaccelerate as growth remains positive yet slow and decelerating. The 5-Year Breakeven rate shows modest increase in inflation expectations, and Hedgeye's Monthly Inflation Nowcast forecasts September as the cycle low with reacceleration starting in October. |
Inflation Breakeven Monetary Stagflation | |
Emerging marketsThe fund is broadening allocation to emerging markets as part of positioning for stagflationary conditions. Global equities are now broadly trending positive, including large markets of China and Japan. |
Emerging China Global Asia | |
| 2024 Q2 |
GoldGold was the best performing primary asset class in Q2 2024, up 7.6%. The forward-gold price continues to point toward increasing inflation over the longer term, suggesting gold's monetary component remains attractive as an inflation hedge. |
Gold Inflation Monetary |
IndiaIndia continues to outperform economically and via financial markets. India's PMI composite is at 61 and continues to accelerate while US PMIs are contractionary. The portfolio maintains an overweighting toward the Indian market. |
India PMI Emerging Markets | |
InflationDifferent inflation indicators provide distinct outlooks. While near-term comparisons suggest modest deceleration for a quarter, the forward-gold price indicates inflation will reaccelerate as suggested by longer-term indicators. |
Inflation Commodities Rates | |
| 2024 Q1 |
CommoditiesManager significantly increased commodity exposure including gold, energy, and Bitcoin as global economic conditions improved. Commodities reversed negative 2023 performance with +10% returns in Q1 2024. Oil prices have seen significant rebound which feeds into measured inflation with approximately one-month lag. |
Gold Oil Energy Bitcoin Inflation |
InflationInflation is reaccelerating with easy compares for next few quarters. The decrease in commodity prices and 5-year breakevens during Q4 2023 was a headfake. Both commodity prices and 5-year Breakeven Inflation Rate are now increasing, suggesting continued inflation reacceleration. |
CPI Breakevens Commodities Oil Rates | |
CryptoManager added Bitcoin exposure as part of diversified commodity allocation. Bitcoin is referenced alongside the national debt with the phrase 'to infinity and beyond' suggesting both could continue rising indefinitely despite sustainability concerns. |
Bitcoin Digital Assets | |
| 2023 Q4 |
Commercial Real EstateOffice vacancy reached new records with actual occupancy rates showing buildings more than twice as empty as vacancy rates suggest. The cycle is developing slowly as leases have not yet rolled, delaying building owners from confronting lower valuations and income streams. |
Office Vacancy Leases Valuations Occupancy |
Credit StressVenture companies are experiencing the largest death toll since the dot com crash with 1500 companies dying in 2023. An estimated 1200 private companies will exhaust financial reserves by end of 2024 as Covid-era cash cushions run low. |
Venture Startups Cash Reserves Private Companies Financial Stress | |
InflationInflation trends that showed reacceleration in previous quarters have abated. Commodity prices and 5-year breakeven inflation rates have retreated, with energy comprising over 50% of the commodity index and oil near multi-year lows. |
Commodity Prices Breakeven Rates Energy Oil Deflation | |
CryptoThe fund maintains exposure to crypto as part of their idiosyncratic risk-assets allocation alongside other alternative investments. |
Digital Assets Alternative Investments Risk Assets | |
UraniumUranium is held as part of the fund's idiosyncratic risk-assets exposure, representing a commodity play within their diversified alternative allocation. |
Nuclear Commodities Energy Alternative Investments | |
| 2023 Q3 |
InflationManager observes inflation reaccelerating after a temporary pause, with commodity prices and 5-year breakeven inflation rates moving aggressively higher since May. This trend accelerated significantly in recent months, pointing toward a continuation of stagflationary environment for at least the next few quarters. |
Commodities Breakeven Stagflation Rates Energy |
Credit StressBoth government and consumer borrowing have accelerated dramatically, with federal debt increasing over 50% to $32.2 trillion in five years and consumer credit card balance growth at twenty-year highs. For 80% of consumers, Covid-era savings are gone while debt is up, creating unsustainable borrowing patterns. |
Government Debt Consumer Credit Borrowing Savings Sustainability | |
CommoditiesCommodities were the lone positive primary asset class in Q3, gaining 15.5% while equities declined. Manager maintains exposure to commodities and energy producer equities given acceleration in inflation and views commodities as more immediately economically sensitive than equities. |
Energy Inflation Economic Sensitivity Asset Class Performance |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| Jul 18, 2025 | Fund Letters | Grey Owl Capital | DG | Dollar General Corporation | Consumer Discretionary | General Merchandise Stores | Bull | NYSE | consumer staples, discount retail, inflation hedge, Pricing power, Rural Markets, Tactical Trade, Value | Login |
| Jul 18, 2025 | Fund Letters | Grey Owl Capital | DLTR | Dollar Tree, Inc. | Consumer Discretionary | General Merchandise Stores | Bull | NASDAQ | Corporate Spinoff, discount retail, Family Dollar, inflation hedge, Pricing power, transformation, Value | Login |
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