| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| 15.4% | - | 20.3% |
| 2025 |
|---|
| 20.3% |
Standard Wealth delivered 20.3% returns in 2025 as global equity markets surged on record technology earnings. However, the manager advocates caution after three consecutive years of double-digit gains have pushed the S&P 500 to 31.3x trailing P/E versus a 10-year average of 21.6x. With his value investing discipline, new opportunities are scarce at current valuations. Key risks include persistent inflation above the Fed's 2% target for five years and the $520 billion AI infrastructure buildout by Magnificent 7 companies, which may not generate expected $135 billion earnings. The weakening dollar drove strong commodity performance with gold up 67% and silver up 49%. The strategy maintains defensive positioning through allocations to gold, arbitrage, and hedged strategies designed to weather volatility while preserving capital for future opportunities. This uncorrelated approach aims to sidestep market corrections while remaining positioned to capitalize on dislocations when panicked sellers create attractive entry points.
Maintain defensive value investing discipline in historically expensive markets while positioning for volatility through uncorrelated strategies that can capitalize on forced selling opportunities.
The manager recommends a defensive posture given three consecutive years of double-digit gains and historically high valuations. While acknowledging the possibility of continued market strength if AI investments succeed, he positions for potential volatility through uncorrelated strategies that can capitalize on market dislocations.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Jan 8 2026 | 2025 Q4 | - | AI, commodities, Defensive, inflation, risk management, value | - | The manager expresses skepticism about the AI buildout, noting that the Magnificent 7 have a $520 billion capital expenditure program for AI in 2026. He questions whether the required $135 billion in earnings will materialize from this investment, suggesting the market may punish share prices if returns don't meet expectations. Inflation has remained above the Federal Reserve's 2% target for over 5 years. The manager notes some government officials suggest raising the target to 3%, which would benefit debtors like the US government with its $38 trillion debt burden. The debasement trade and weakening US dollar drove strong commodity performance in 2025. Gold rallied 67%, silver gained 49%, copper increased 42%, and platinum jumped 124%. The trend for commodities is higher prices with further gains projected into 2026. The manager maintains a value investing discipline, allocating capital only when sufficiently rewarded for risks taken. With markets at historically high valuations and the S&P 500 trading at 31.3x trailing P/E versus a 10-year average of 21.6x, new opportunities are scarce. |
| 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 |
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 | |
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 | |
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 |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| No Elevator Pitches found | ||||||||||
| TICKER | COMMENTARY |
|---|---|
| No ticker commentary found. | |
| 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 |
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| No industry data available | |||
