| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| - | - | - |
Charlie Morris delivered strong performance in 2025 with the Whisky Portfolio returning 39.0% versus FTSE 100's 25.8%, driven by precious metals exposure and global diversification. The manager warns of a US equity bubble with CAPE ratios at 39.8x, the second-highest on record, suggesting poor future returns. A weak dollar benefited global markets, with Europe up 26%, UK 25.8%, and emerging markets 24.3%, while the US lagged at 9.2%. Gold outperformed all major equity markets due to geopolitical concerns and Chinese central bank buying. The strategy emphasizes value investing across geographies, with high conviction in Japan's normalization story and commodity cycle broadening from precious metals to industrial metals, energy, and agriculture. Key positions include reduced precious metals exposure from 38% to 20.6%, healthcare REITs, and quality companies like Nestlé and Barry Callebaut. Consumer sentiment remains at recession levels despite market gains, reinforcing the need for diversified, value-oriented positioning rather than momentum chasing in overvalued US markets.
Global diversification and value-focused investing will outperform concentrated US equity exposure over the long term, with particular opportunities in undervalued markets like Japan, precious metals transitioning to industrial commodities, and high-quality companies trading at attractive valuations.
The manager expects non-US equities to outperform US equities over the longer term, similar to the decade following the dotcom crisis. Precious metals remain strong but are entering a more volatile phase requiring lower position sizes. Japan is expected to deliver strong long-term performance as the bond market normalizes. The commodity cycle is expected to broaden beyond precious metals to industrial metals, energy, and agriculture.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Jan 7 2026 | 2025 Q4 | BARRY.SW, BHMG.L, BRWM.L, DEO, NESN.SW, PHP.L, RCP.L | commodities, diversification, Dollar, global, gold, Japan, Quality, value | - | Gold beat all major equity markets in 2025, driven primarily by geopolitical concerns and record purchases by the People's Bank of China seeking neutral reserve… |
| Oct 5 2025 | 2025 Q3 | - | Bitcoin, gold, Hard assets, inflation, liquidity | - | The letter highlights hard assets as primary beneficiaries of fiscal deficits, monetary expansion, and weakening confidence in fiat systems. Gold, silver, miners, and Bitcoin are… |
| Jul 6 2025 | 2025 Q2 | - | Bitcoin Allocation, global diversification, Gold Exposure, Value Investing, Weak Dollar | - | The Q2 letter highlights a sharp rebound in risk assets following tariff-related volatility, underpinned by a weakening U.S. dollar and continued global money supply expansion.… |
| Apr 16 2025 | 2025 Q1 | - | Global Liquidity, global rotation, Gold Allocation, Monetary Inflation, Portfolio Diversification | - | The letter discusses a macro backdrop dominated by expanding global money supply, persistent fiscal deficits, and declining confidence in fiat currencies, creating tailwinds for real… |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2025 Q4 |
CommoditiesBull market may be in early stages with most commodities 46% below nominal peaks and 73% below inflation-adjusted highs. Commodity-to-equity ratio near historic lows suggests capital starvation. Current cycle appears only one-third complete compared to historical precedent. |
Cycles Capital Valuation Equities |
DollarDollar depreciated -9% against trading partners in 2025, worst year since 2017. De-dollarization trend accelerating as world shifts away from US. Reduced net dollar exposure from 25% to 8% following geopolitical tensions and superpower positioning concerns. |
Depreciation De-dollarization Reserves Geopolitical | |
GoldGold returned +65% in dollars in 2025, driven by broadening demand from central banks, professional and retail investors. Central banks now hold 24% of reserves in gold versus 23% in US Treasuries for the first time. Maintained 12% portfolio allocation throughout the year. |
Central Banks Reserves Diversification Demand | |
JapanJapan offers tremendous value opportunities with one-third of companies trading below book value. Corporate governance reforms, record shareholder returns, and structural changes like unwinding cross-holdings are unlocking value. The investment opportunity is in early innings and could last several years. |
Corporate Governance Value Reforms Shareholder Returns Cross Holdings | |
QualityThe company emphasizes investing in businesses with excellent economics, durable competitive advantages, and high-integrity management. This quality focus is evident in concentrated equity holdings and operating business acquisitions. |
Durable Advantages Management Quality Economic Moats Competitive Position | |
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 |
HardAssets |
|
| 2025 Q2 |
Bitcoin |
|
LiquidityManager extensively discusses liquidity challenges in African frontier markets, explaining how tight ownership structures and limited foreign participation restrict trading volumes. Notes that liquidity varies cyclically and structurally, with potential improvement expected as bull market develops and more investor categories participate. |
Trading Volumes Participation Structural Cyclical | |
ValueThe manager continues to find attractive value opportunities despite expensive markets, purchasing undervalued companies like Centene, GlaxoSmithKline, Carrefour and PayPal trading at low multiples with strong fundamentals. |
Undervalued Low Multiples Contrarian Opportunistic | |
| 2025 Q1 |
InflationInflation has continued to be a persistent feature in Japan and has prompted changes in both corporate and consumer behavior. Importantly, inflation has fed through to corporate earnings and equity performance. Companies that have successfully passed on higher costs to consumers have benefited from improved operating margins. |
Inflation Corporate Earnings Operating Margins Consumer Behavior Cost Pass-through |
LiquidityManager extensively discusses liquidity challenges in African frontier markets, explaining how tight ownership structures and limited foreign participation restrict trading volumes. Notes that liquidity varies cyclically and structurally, with potential improvement expected as bull market develops and more investor categories participate. |
Trading Volumes Participation Structural Cyclical | |
Rotation |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| No Elevator Pitches found | ||||||||||
| TICKER | COMMENTARY |
|---|---|
| BARRY.SW | Barry Callebaut, the Swiss chocolatier, was the most enjoyable note to write in Q4. It was an interesting situation, and a high-quality stock that had been shaken by the surge in cocoa futures. Cocoa prices are now down over 50% from their peak, as reports of better yields and improving disease rates increase. The company has taken steps to insulate itself from a recurrence and is recovering as the cocoa market normalises. |
| BHMG.L | I also highlight BH Macro (BHMG), which has done a good job over the years, delivering healthy returns when things go wrong. We bought in at a discount in 2024, and while not much has happened for them in 2025, it is worth remembering what that can add to a portfolio when it matters. |
| BRWM.L | The BlackRock Mining Trust (BRWM) was a notable performer in 2026, returning 67%, as the mining stocks had their best run since 2016. |
| DEO | Examples include Tidewater, Valaris, Constellation Brands, Diageo and Trex. We have discussed TDW and VAL previously, as well as STZ and DEO here. |
| NESN.SW | We see now as an opportune time to own a company that possesses world-leading brands in consumer categories we believe have a favourable growth outlook in the long run. Nestlé's comprehensive pricing architecture through umbrella brands Nescafé and Nespresso means the portfolio should be well-positioned to capture spending shifts up and down the price ladder. In pet foods, Nestlé also possesses category leaders in its Purina line. We see both coffee and pet care as attractive categories that are more experiential and less commoditised relative to other staples. Over recent quarters, Nestlé was able to deliver positive volume growth in coffee despite pushing through high-single-digit percentage price increases. Scale matters as Nestlé is the world's largest provider of packaged coffee and among the top pet food producers globally. |
| PHP.L | PHP, the healthcare REIT, was another good find. It has stable tenants in the healthcare sector, including hospitals, doctors, and dentists, has a strong balance sheet, and pays a 7% yield even after the gains since being added. |
| RCP.L | Last year, Soda increased exposure to RIT Capital (RCP), which got a boost from its holding in SpaceX, which is expected to IPO this year with a trillion-dollar price tag. This is proof that balanced portfolios can still be interesting. |
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