| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| - | - | - |
2025 defied widespread bearish predictions as markets climbed a historic wall of worry to deliver nearly 18% returns. Despite consensus fears of stagflation from Trump's policies, aggressive tariffs, and an AI bubble burst, the market staged a resilient broad-based rally. The year's defining moment came in April when Trump's reciprocal tariffs triggered panic, but a subsequent 90-day policy pause created a relief rally that turned the correction into a bear trap. The rally was supported by a soft landing transitioning to steady expansion, accelerating corporate earnings, and Federal Reserve rate cuts starting in September. The manager extensively analyzes AI as potentially being in a bubble phase, comparing it to historical technology revolutions, while warning against 50-year mortgages as debt traps disguised as affordability solutions. Looking ahead, Claret maintains their disciplined approach of buying diversified, well-managed companies with positive free cash flow at reasonable prices, while finding high yield bonds attractive at current levels above 8%.
Despite widespread bearish sentiment and predictions of stagflation in 2025, markets delivered robust double-digit returns through a soft landing that transitioned into steady expansion, proving that market sentiment is not market destiny and rewarding investors who maintained discipline through volatility.
The manager expresses cautious optimism for 2026, maintaining their disciplined investment philosophy of buying diversified, well-managed companies with positive free cash flow at reasonable prices. They emphasize being selective, prudent, and patient, while noting that high yield bonds offer attractive risk/reward opportunities at current yield levels above 8%.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Jan 15 2026 | 2025 Q4 | - | AI, Bubble, inflation, Markets, Mortgage, Rally, rates, Trade Policy | - | The letter extensively discusses AI as potentially being in a bubble phase, comparing it to historical technology bubbles. The manager notes excessive investor optimism around… |
| Oct 17 2025 | 2025 Q3 | - | Artificial Intelligence, Bubbles, Market Risk, technology, Valuations | NVDA | Claret compares todays AI enthusiasm to the dot-com bubble, noting that while valuations appear stretched, the profitability and fundamentals of modern tech leaders justify some… |
| Jul 11 2025 | 2025 Q2 | - | fundamentals, long-term, Sentiment, valuation, volatility | - | The letter argues that short-term market volatility driven by tariffs, geopolitics, and headlines should be ignored in favor of long-term fundamentals. Claret emphasizes that economic… |
| Apr 11 2025 | 2025 Q1 | - | - | - | - |
| Jan 15 2025 | 2024 Q4 | - | - | - | - |
| Oct 18 2024 | 2024 Q3 | - | - | - | - |
| Jul 31 2024 | 2024 Q2 | - | - | - | - |
| May 8 2024 | 2024 Q1 | DJT, MSTR | - | - | - |
| Dec 1 2024 | 2023 Q4 | - | - | - | - |
| Nov 10 2023 | 2023 Q3 | - | - | - | - |
| Jul 18 2023 | 2023 Q2 | - | - | - | - |
| Apr 13 2023 | 2023 Q1 | - | - | - | - |
| Jan 31 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 |
MortgageFalling interest rates and federal support for housing should drive a continued rebound in mortgage origination volumes, which should benefit mortgage originators and credit bureaus. FICO launched its new Direct Licensing Program for mortgage lending, which provides greater flexibility to monetize its intellectual property. |
Mortgage Origination Housing Credit Scoring Lending Real Estate | |
Trade PolicyRecent tariff policies continued to negatively impact U.S. consumers and companies throughout the year. However, international companies have been finding new trade arrangements and growth opportunities, benefiting from shifts in global trade patterns as the new U.S. administration alters terms of international cooperation. |
Tariffs International Growth Cooperation Impact | |
| 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 |
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 |
VolatilityManager emphasizes volatility as a structural feature of markets, noting that rare events occur far more frequently than expected. April's volatility event validated their convexity approach, with systematic monetization during stress periods. December saw compressed volatility with VIX hitting year lows, creating buying opportunities despite short-term costs. |
VIX Implied Volatility Realized Volatility Convexity Options |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| Oct 17, 2025 | Fund Letters | Alain Chung | NVDA | NVIDIA Corporation | Information Technology | Semiconductors | Bull | NASDAQ | AI, Bubble, growth, innovation, semiconductors, valuation | Login |
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|---|---|
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