Investor Summary
Fund Strategy
FUND PERFORMANCE AS OF 31st December 2025
| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| - | - | - |
| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| - | - | - |
St. James Investment Company warns of extreme market overvaluation across multiple metrics, with the S&P 500 trading at 25x P/E and price-to-sales ratios at record highs above tech bubble levels. The manager argues that passive investing through ETFs has created dangerous herding effects, with over 50% of US equity assets in passive vehicles that buy stocks regardless of fundamentals. Artificial intelligence enthusiasm has further inflated valuations, with Nvidia trading at 23x sales despite limited investment edge. Corporate profits remain elevated due to massive government deficits and household overconsumption, creating systemic vulnerability. The manager draws parallels to Irving Fisher's 1929 optimism and warns that synchronized passive outflows could amplify market volatility during downturns. While acknowledging that expensive markets can persist longer than expected, the firm advocates for defensive positioning and identifies value opportunities in energy and consumer staples sectors. The outlook emphasizes capital preservation over growth, suggesting investors should assign higher probability to market cycle tops than new bull market beginnings.
Current market conditions reflect extreme overvaluation driven by passive investing herding effects and AI enthusiasm, creating significant downside risk with limited upside potential, warranting defensive positioning and focus on value-oriented opportunities in energy and consumer staples sectors.
Manager suggests rational investors should assign higher probability to market cycle top forming than to new bull market beginning. Recommends becoming more fearful and less greedy out of prudence and desire to preserve capital. Notes that while stocks can remain expensive for extended periods, current valuations suggest limited upside potential and potentially significant downside risk.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Jan 5 2026 | 2025 Q4 | NVDA | AI, Bubble, ETFs, Market Risk, Passive investing, Probability, Valuations, value | - | Manager discusses artificial intelligence as a current market obsession, noting that there is no edge to investing in AI stocks when Nvidia trades at 23x… |
| Oct 5 2025 | 2025 Q3 | - | China, Data centers, Debt, Passive ETFs, valuation |
NVDA MSFT ASML |
The letter critiques speculative excess driven by passive flows, AI enthusiasm, and elevated valuations. It contrasts momentum-driven markets with fundamental value investing rooted in cash… |
| Jul 3 2025 | 2025 Q2 | - | AI, Bubbles, Capital discipline, Speculation, valuation | - | The letter warns against speculative excess and capital market myopia, drawing parallels between historical technology bubbles and todays AI and data center boom. Management emphasizes… |
| Apr 3 2025 | 2025 Q1 | - | - | - | - |
| Jan 4 2025 | 2024 Q4 | MSTR | - | - | - |
| Sep 27 2024 | 2024 Q3 | - | - | - | - |
| Jul 3 2024 | 2024 Q2 | - | - | - | - |
| Apr 17 2024 | 2024 Q1 | - | - | - | - |
| Mar 1 2024 | 2023 Q4 | - | - | - | - |
| Oct 10 2023 | 2023 Q3 | - | - | - | - |
| Jun 7 2023 | 2023 Q2 | - | - | - | - |
| May 4 2023 | 2023 Q1 | - | - | - | - |
| Dec 1 2023 | 2022 Q4 | - | - | - | - |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2025 Q4 |
AIAI has been integrated into RGA's research process through tools like NotebookLM, Gems in Gemini, and Claude Code. The firm views AI as a force multiplier for human judgment rather than a replacement, emphasizing the Kasparov Law principle. They believe the market narrative around AI displacement is swinging to unhelpful extremes, creating investment opportunities. |
Machine Learning Automation Software Productivity Innovation |
ETFsThe fund's strategy focuses on closed-end funds rather than ETFs, but operates in the broader fund ecosystem. They compare performance against closed-end fund indices and utilize various fund structures in their investment approach. |
Closed-End Funds Fund Discounts Fund Selection Alternative Structures | |
ValuationsEquity valuations remain elevated with the S&P 500 trading near 23x forward earnings, well above its long-term average of 15.6x. High valuations may increase market sensitivity to earnings disappointments and tend to constrain longer-term returns, reinforcing the importance of selectivity. |
Multiples Premium Earnings Risk Selectivity | |
ValueManager emphasizes investing in controlled companies trading at significant discounts to NAV, with European holding companies showing discounts of 30-68%. The strategy focuses on securities mispricing where real value exists, contrasting with overvalued technology stocks. |
Discounts NAV Mispricing Undervalued Controlled | |
| 2025 Q3 |
AIAI has been integrated into RGA's research process through tools like NotebookLM, Gems in Gemini, and Claude Code. The firm views AI as a force multiplier for human judgment rather than a replacement, emphasizing the Kasparov Law principle. They believe the market narrative around AI displacement is swinging to unhelpful extremes, creating investment opportunities. |
Machine Learning Automation Software Productivity Innovation |
Passive |
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ValuationAI-related companies continue to command premium valuations while other sectors remain reasonably priced. This valuation divide continues to guide investment activity, with the fund remaining wary of companies trading at exceedingly high valuations that imply exceptional multi-year earnings growth. |
Premium Divide Discipline Stretched Reasonable | |
| 2025 Q2 |
SpeculationMarkets are experiencing extreme speculation with vibe investing replacing fundamental analysis. Assets are priced on fantastical stories rather than cash flows, with leveraged ETFs, retail options trading, and story stocks reaching bubble-like levels. This madness can only end in disaster. |
Bubble Options Leverage Stories Excess |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| Oct 5, 2025 | Fund Letters | Robert J. Mark | NVDA | NVIDIA Corp. | Information Technology | Semiconductors | Bear | NASDAQ | — | Login |
| Oct 5, 2025 | Fund Letters | Robert J. Mark | MSFT | Microsoft Corp. | Information Technology | System Software | Bear | NASDAQ | AI, cloud, Software, Speculation, valuation | Login |
| Oct 5, 2025 | Fund Letters | Robert J. Mark | ASML | ASML Holding NV | Information Technology | Semiconductor Equipment | Bear | - | AI, Cyclicals, Equipment, semiconductors, valuation | Login |
| TICKER | COMMENTARY |
|---|---|
| NVDA | AI bellwether NVIDIA's very strong set of earnings in late November helped the AI theme re-assert its dominance when investors breathed a sigh of relief following the results. |
| Ticker | Put/Call | Amount Bought | Shares Bought | % Change | Weight % |
|---|---|---|---|---|---|
| No Recent Buys Data | |||||
| Ticker | Put/Call | Amount Sold | Shares Sold | % Change | Weight % | Status |
|---|---|---|---|---|---|---|
| No Recent Sells Data | ||||||
| Industry | Prev Quarter % | Current Quarter % | Change |
|---|---|---|---|
| No industry data available | |||