| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| - | - | - |
Horizon Kinetics' Q2 2026 commentary emphasizes the power of long-term compounding and the critical importance of time horizons in value realization. The manager maintains conviction in securities exchanges despite 22-38% share price declines, viewing them as resilient century-old businesses now trading at valuations not seen since 2008 while demonstrating superior profit margins and earnings growth. The firm has reduced precious metals royalty positions due to valuation concerns, with companies trading at 2x NAV creating multiple compression risk. Bitcoin remains a core holding with the manager projecting $150,000-$270,000 by the April 2028 halving based on production costs and network value modeling. Land investments including TPL, PrairieSky, and LandBridge are highlighted for their perpetual compounding potential and inflation-beneficiary characteristics. The manager expresses significant concern about AI data center hyperscalers, noting deteriorating business models with the Mag 7 trading at 150x run-rate free cash flow. The commentary stresses that breaking compounding chains through premature selling, even for seemingly better opportunities, often results in lower long-term returns due to the non-linear nature of value accumulation over time.
The manager's core thesis centers on identifying rare business models capable of sustaining long-term financial compounding over extended time horizons, with particular focus on asset-light businesses like securities exchanges, royalty companies, and land holdings that possess economic persistence and pricing power. The manager emphasizes that the extraordinary benefits of compounding are non-linear and accelerate in later stages, requiring patient capital and resistance to breaking the compounding chain through premature selling. Key portfolio themes include securities exchanges as century-old resilient businesses now trading at crisis-era valuations, Bitcoin as programmed money with predictable supply dynamics and network value growth, land as perpetual assets with shrinking per-capita supply, and positioning for the structural shift from disinflation to inflation through hard commodity exposure.
The manager maintains a patient, long-term oriented stance focused on allowing compounding to work over extended time horizons. While acknowledging near-term volatility across holdings including exchanges, Bitcoin, and land-based investments, the manager expresses confidence that understanding the time function of compounding and maintaining discipline will lead to superior outcomes. The manager sees structural opportunities in the shift from disinflation to inflation, the expansion of blockchain-based financial infrastructure, and the persistent undervaluation of asset-light businesses with long-duration revenue streams. The tone is measured and analytical, emphasizing the importance of business model analysis and fundamental valuation over short-term price movements.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Jul 1 2026 | 2026 Q2 | AMZN, AN, CBOE, CME, ICE, MIAX, NDAQ, PAG, PSK.TO, TPL | Bitcoin, Compounding, Exchanges, Land, long-term, royalties, Time horizon, valuation | - | Horizon Kinetics maintains long-term conviction in compounding assets despite near-term volatility. Securities exchanges trade at crisis-era valuations while demonstrating resilient business models. Bitcoin remains on track for $150,000-$270,000 by 2028 halving. Land holdings offer perpetual compounding and inflation protection. Precious metals royalties reduced on valuation concerns. AI hyperscalers face deteriorating economics at extreme multiples. Patient capital and understanding time's role in compounding remain essential to capturing value. |
| May 8 2026 | 2026 Q1 | AAPL, AB, ALS.TO, AMLP, CSCO, HE, INTC, LNG, MIAX, MSFT, TPG, WPM | AI, CLO, commodities, energy, income, infrastructure, private credit, royalties | - | Horizon Kinetics positions in permanent, rare assets benefiting from market structure discounts. Their royalty holdings are benefiting from the commodities recovery that began in 2025. The firm emphasizes income strategies including CLO investments and highlights how AI infrastructure demands are driving massive requirements for physical resources like steel, copper, and natural gas. |
| Jan 11 2026 | 2025 Q4 | AAPL, AMD, AMZN, AVGO, GOOGL, ICE, LB, META, MIAX, MSFT, NVDA, ORCL, STR, TPL, VNOM, WTTR | AI, Compounding, energy, Exchanges, long-term, private markets, value, water | - | Horizon Kinetics avoids AI-IT stocks while investing in their infrastructure beneficiaries - companies controlling water, natural gas, and land for data centers. Core holdings include exchanges, Permian Basin assets, and high-ROE businesses. The firm sees AI sector contradictions creating opportunities in resource-controlling companies with minimal index presence but critical roles in the buildout. |
| Oct 27 2025 | 2025 Q3 | ALS.TO, CLF, EME, FCX, FNV, LB, LNG, MCD, MOS, MSB, NEM, NRG, NTR, NVDA, SBR, SJT, TRC, WBI, WPM, XOM | AI, DataCenters, Exchanges, gold, inflation, Natural Gas, Scarcity, water |
WPM CN ALS CN SJT MESABI WPM CN ALS CN SJT MESABI |
Horizon Kinetics sidesteps index concentration by investing in securities exchanges, royalty companies, and resource-related assets benefiting from localized inflation. AI datacenter boom drives unprecedented demand for electricity, natural gas, and water. Strategy emphasizes asset-light vehicles capturing commodity price increases without operational risks, positioning for supply-demand imbalances in strategic resources. |
| Aug 7 2025 | 2025 Q2 | 0388.HK, 6544.T, AAPL, AB, AMZN, CME, CVX, FCX, GOOGL, LSEG.L, MA, META, MSFT, NEM, NRG, NVDA, TPL, TREE, TSLA, V, XOM | AI, Data centers, ETFs, gold, Indexation, Japan, Owner-Operators, Scarcity |
6544 JP AB 6544.T |
Indexation has failed over 25 years with S&P 500 ETFs returning only 8% versus gold's 10%. AI threatens Magnificent 7 dominance through competitive disruption. Japan's owner-operator companies offer uncorrelated growth in protected markets with limited competition. Scarcity investing beats unlimited ETF share issuance. Active management positioned to outperform indexes going forward. |
| May 5 2025 | 2025 Q1 | ARIS, GEV, HE, JPM, META, NUE, NVDA, SJT, TPL | AI, commodities, Data centers, energy, infrastructure, Natural Gas, technology, water |
ARIS SJT HE |
Horizon Kinetics capitalizes on AI-driven data center boom by owning resource suppliers rather than technology consumers. Massive infrastructure spending creates unprecedented demand for natural gas, water, and steel while indexation concentrates capital in consumers. Portfolio includes water, energy royalties, and distressed utilities positioned for recovery. Strategy exploits supply/demand imbalances in limiting-factor commodities essential for data center expansion. |
| Jan 28 2025 | 2024 Q4 | AAPL | AI, crypto, Data centers, energy, infrastructure, nuclear, technology, water | - | Horizon Kinetics argues AI and computation create unprecedented energy and water demands that conventional portfolios ignore. Data centers require 3x their rated power capacity, while thermal generation consumes massive water quantities. The firm concentrates in energy and water resources as critical inputs for technology growth, expecting capital flows to shift once resource constraints imposed by physics become apparent to investors. |
| Oct 31 2024 | 2024 Q3 | AAPL, AMZN, BIDU, CMCM, FANG, GOOGL, HWT.UL, META, MSFT, NVDA, OXY, PXD, TPG, TSLA, XOM | AI, China, Data centers, energy, infrastructure, Natural Gas, oil, technology | - | AI data centers require massive physical infrastructure, creating opportunities in Permian Basin land and energy assets while traditional tech faces Chinese competition and valuation risks. Federal debt trajectory appears unsustainable. The manager favors hard asset beneficiaries over direct tech ownership to participate in AI boom. |
| Jul 27 2024 | 2024 Q2 | AAPL, AMZN, GOOGL, HAL, LB, META, MSFT, NVDA, SLB, SPY, TPL, TSLA, WPM | AI, China, commodities, energy, geopolitics, Indexation, inflation, technology | LB | The 30-year disinflationary cycle supporting U.S. market dominance is ending as China becomes a direct competitor and commodity supply constraints emerge. ETF indexation has created dangerous concentration risks while AI growth faces critical power infrastructure challenges. The firm positions in Permian Basin hard assets to capitalize on AI's energy requirements and the reversal of historical growth drivers. |
| May 18 2024 | 2024 Q1 | AAPL, AMAT, AVGO, BRK-A, CMGI, CSCO, GBTC, GLW, INTC, LLY, META, MSB, MSFT, MU, NVDA, SBR, TPL, V | Bitcoin, Bubble, Compounding, Concentration, long-term, royalties, technology, valuation | - | Horizon Kinetics warns that technology sector concentration at 40% creates bubble-level risk while demonstrating superior long-term returns through patient compounding in asset-light businesses and commodity royalties. Their concentrated approach has generated escape velocity in positions like Texas Pacific Land and Bitcoin, achieving decades-long outperformance while avoiding overvalued technology stocks priced for perfection. |
| Jan 27 2024 | 2023 Q4 | AAPL, ADM, AMD, AMZN, AN, AVGO, BCHG, BMS.L, CKN.L, CRM, EXP, GBTC, GOOGL, MSFT, NVDA, ORCL, PAG, QCOM, TPL, TSLA | BRICS, China, commodities, crypto, Indexation, inflation, technology, valuation | - | Horizon Kinetics positions for era change as China transitions from subcontractor to competitor and BRICS expansion threatens dollar dominance. Portfolio emphasizes scarce assets including commodity royalties, exchanges, and crypto. Bitcoin ETF approval signals institutional acceptance while Chinese tech competition threatens US valuations. Strategic focus on inflation beneficiaries with minimal reinvestment needs. |
| Oct 11 2023 | 2023 Q3 | - | - | - | This document is a Dropbox error page indicating a deleted file, not an actual fund commentary. It contains only HTML/JavaScript code with no investment content, performance data, or portfolio analysis. No fund information can be extracted from this technical error page. |
| Jul 20 2023 | 2023 Q2 | AAPL, AMZN, BSX IND, CMS, MSFT, PEP | - | - | |
| Apr 5 2023 | 2023 Q1 | CVEO, TPL | - | - | |
| Jan 20 2023 | 2022 Q4 | - | - | - | |
| Oct 10 2022 | 2022 Q3 | ALS CN, LIF CN, PCH, RYN, TPL | - | - |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2026 Q2 |
CompoundingThe manager emphasizes the power of long-term financial compounding and the necessity of maintaining an unbroken chain of growth over extended time horizons. Using mathematical models and real-world examples like Amazon and Bitcoin, the letter demonstrates how value accumulation accelerates non-linearly over time, with the majority of gains occurring in the final stages of the compounding period. The manager stresses that breaking the compounding chain through premature selling, even to pursue seemingly better opportunities, often results in lower long-term returns due to taxes and the time required for new positions to compound. |
Long-term Time horizon Growth Patience Value creation |
ExchangesThe manager views securities exchanges as resilient, high-quality businesses with exceptional staying power, citing their ability to adapt to and benefit from technological, financial, and political disruptions over more than a century. Despite recent share price declines of 22-38% due to regulatory concerns around perpetual futures and prediction markets, the manager sees these as non-threatening developments and notes that exchanges are expanding into blockchain-based products, 24/7 trading, and tokenization. The manager highlights that exchanges are currently trading at valuations not seen since the 2008 financial crisis despite superior profit margins and earnings growth. |
Capital Markets Resilience Blockchain Regulation Valuation | |
BitcoinThe manager maintains a bullish long-term thesis on Bitcoin, viewing its periodic price declines as expected and consistent with its programmed supply dynamics and network value growth. Using both production cost analysis and power law modeling based on Metcalfe's Law, the manager projects Bitcoin could reach $150,000-$270,000 by the April 2028 halving. The manager emphasizes Bitcoin's unique properties as a programmed money with fixed supply and predictable cost increases, positioning it as a hedge against fiat currency debasement, while acknowledging that understanding the time function of compounding is essential to avoid premature selling during volatility. |
Crypto Network effects Supply dynamics Inflation hedge Halving | |
LandThe manager views land as the longest-lived of assets with perpetual compounding potential, highlighting investments in Texas Pacific Land, PrairieSky, and LandBridge. The manager emphasizes land's unique characteristics including shrinking per-capita supply due to population growth, ability to be repurposed for higher uses, and potential for passive revenue growth through royalty-like structures. PrairieSky is specifically praised for doubling its acres per share over 12 years while tripling total acreage, and LandBridge is highlighted for its water handling contracts with built-in inflation escalators and potential for data center development on powered land. |
Perpetuity Royalties Water Data Centers Inflation | |
ETFsThe manager distinguishes between John Bogle's original indexation philosophy, which they support, and the modern ETF industry's distortions. While critical of how massive ETF flows have created artificial bifurcation between included and excluded companies and concentrated capital in mega-cap tech stocks, the manager sees opportunity in these distortions. They have launched their own active ETFs to provide differentiated exposure (like the Inflation Beneficiaries ETF) and access to otherwise inaccessible markets (like Japan small caps), viewing ETFs as valuable tools when used appropriately rather than categorically rejecting them. |
Indexation Market structure Active management Inflation Japan | |
Gold RoyaltiesThe manager has reduced or sold precious metals royalty positions due to valuation concerns, despite acknowledging these as excellent businesses. The investment thesis was based on acquiring advantageous contracts during the 2015 gold price trough when mines operated below production costs, but with gold now comfortably above all-in-sustaining costs, new contracts lack the same earnings power and optionality. The manager notes that companies like Wheaton and Franco-Nevada now trade at 2x NAV with analyst discount rates of only 3-5%, compared to the 15%+ rates the companies themselves negotiate, creating risk of multiple compression that could overwhelm earnings growth. |
Gold Valuation Mining Commodities Risk/reward | |
AIThe manager expresses significant concern about AI data center hyperscalers, describing their business model as rapidly deteriorating. Four of the Magnificent 7 are identified as having problematic economics, with two showing negative free cash flow and one trading at 700x free cash flow. The manager notes the group trades at 150x run-rate free cash flow and highlights $108 billion in annual stock-based compensation across the Mag 7. A dedicated roundtable was held to discuss the deteriorating business model, and the manager questions whether 49% of U.S. GDP truly comes from information technology as the S&P 500 weighting suggests. |
Data Centers Valuation Free cash flow Mag 7 Bubble | |
InflationThe manager sees a structural shift from the disinflationary era to an inflationary one, particularly in hard commodities including oil, natural gas, iron ore, copper, and electrification metals. The manager notes that most equity investors lack countervailing exposure to commodity price inflation risk, with S&P 500 constituents representing only 0.57% weight in inflation-beneficiary holdings. The Inflation Beneficiaries ETF is positioned as both a completion fund and superior inflation hedge compared to traditional mining and chemicals companies, designed to benefit from the looming supply/demand imbalance shift and localized inflation in individual resources. |
Commodities Hard assets Supply/demand Hedging Resources | |
| 2026 Q1 |
CommoditiesThe manager discusses the recovery in commodities that began last year, first visible in gold, silver, copper, and fertilizer. They highlight their royalty holdings including Wheaton Precious Metals, Texas Pacific Land Corp., and Altius Minerals as beneficiaries of this cyclical reversal after a decade-long downturn. |
Gold Silver Copper Fertilizer Royalties |
AIThe manager describes AI as part of today's phenomenon alongside IT, noting that AI datacenter power demand has energized electric utilities to expand output at a 3% annual rate. They emphasize the massive physical infrastructure requirements behind seemingly weightless digital services, including enormous amounts of steel, copper, natural gas, and water. |
Data Centers Infrastructure Power Semiconductors | |
Energy TransitionThe commentary discusses how AI-scale datacenters require mind-boggling volumes of natural gas and water to operate, with companies building their own power supply when they can't wait in line. The manager notes that datacenter power demand has driven utilities to expand output for the first time in 20 years. |
Data Centers Natural Gas Power Infrastructure | |
ETFsThe manager provides extensive historical context on ETF growth following the dot-com bubble, noting how money poured out of actively managed mutual funds into indexed ETFs. They describe ETFs as a better mousetrap that could be traded midday like stocks, cheaper and with no sales commissions, leading to $5 trillion in iShares ETF assets. |
Indexation Passive Investing Market Structure | |
Private CreditThe manager details their CLO strategy focused on AAA and AA rated tranches, explaining how CLOs allow ownership of diversified floating-rate first lien corporate loans. They emphasize that AAA and AA tranches have never experienced a default and offer yields comparable to 5-year corporate bonds without duration risk. |
CLO Floating Rate Credit Quality Income | |
RatesThe manager discusses the Great Yield Famine from 2008-2022 when zero-interest rate policy devastated income investors, with 1-year Treasury yields below 0.5% for over 60% of trading days. They note that with 5- and 10-year Treasuries now at and above 4%, clients are inquiring about better income strategies. |
Interest Rates Income Treasury Yield | |
| 2025 Q4 |
ValueHorizon Kinetics practices long-horizon value investing focused on making time work for investors through unbroken compounding. They seek companies with high sustainable returns on equity and protection from price competition and technological obsolescence, allowing for informed indifference to short-term volatility. |
Value Investing Compounding Long Term ROE Margin of Safety |
Private CreditThe firm has expanded into private market investments as natural extensions of their value philosophy, participating in securities exchanges, royalty funds, and strategic investments. These private opportunities often offer superior valuations compared to public markets and align with their long-term approach. |
Private Markets Securities Exchanges Royalty Funds Strategic Investments | |
Data CentersHorizon Kinetics views the AI boom as fundamentally a data center boom and positions in companies that control necessary limiting factors like natural gas, water, and land rather than the technology companies themselves. They believe these resource providers will benefit from 99-year lease structures without capital expenditure requirements. |
AI Infrastructure Resource Control Limiting Factors Power Generation | |
Natural GasNatural gas is identified as a critical limiting factor for AI infrastructure buildout, specifically for electric power generation for data centers. The firm seeks companies controlling these resources in locations with overlapping access to water and land, creating geographic scarcity value. |
Power Generation Energy Infrastructure Geographic Scarcity | |
WaterWater access is highlighted as both a necessity for oil production in the Permian Basin and for cooling power plants supporting data centers. The firm has invested in WaterBridge Infrastructure, which handles produced water disposal and benefits from strategic land positions. |
Water Infrastructure Permian Basin Produced Water Cooling | |
AIWhile avoiding AI technology companies due to competitive spending pressures and valuation concerns, Horizon Kinetics invests in economic beneficiaries of the AI boom. They highlight a logical inconsistency in Wall Street forecasts between chip makers and their customers regarding capital expenditure sustainability. |
Technology Avoidance Economic Beneficiaries Capital Expenditure Valuation Risk | |
OilThe firm maintains exposure to Permian Basin oil assets through land ownership and royalty investments, including partnerships with industry veterans like Bud Brigham. Oil production generates significant produced water requiring disposal infrastructure, creating complementary business opportunities. |
Permian Basin Royalty Investments Land Ownership Produced Water | |
| 2025 Q3 |
ExchangesSecurities exchanges sit atop market action like casino croupiers, collecting spreads and benefiting from volatility while remaining indifferent to market fashions. They have extraordinary ability to let products compound without impediment and minimal capital investment requirements to support new volume levels. |
Trading Derivatives Volume Infrastructure Platforms |
Natural GasNatural gas faces a supply-demand inflection driven by AI datacenter power requirements. Domestic consumption has been anemic but datacenter buildout requiring 200-300 megawatts each will create unprecedented electricity demand, with natural gas as the fuel of choice for baseload power generation. |
Power Generation Datacenters LNG Infrastructure Demand | |
GoldGold represents localized inflation with 145% price rise over three years despite no generalized inflation. Supply constraints from reduced mining capex, declining ore grades, and ESG restrictions combine with ETF demand to create structural imbalance favoring royalty companies over miners. |
Mining Royalties Supply Constraints ETF Demand Inflation Hedge | |
WaterWater is the world's scarcest critical commodity with only 0.5% of global water being available fresh water. AI datacenters require enormous water volumes for thermal power plants, creating opportunities in water handling and infrastructure companies, particularly in resource-rich areas like the Permian Basin. |
Scarcity Infrastructure Datacenters Power Plants Resource Management | |
AIAI datacenter boom creates unprecedented demand for electricity, natural gas, and water resources. Individual AI datacenters consume 200-300 megawatts, equivalent to powering 15,000-20,000 people, driving massive infrastructure requirements and localized resource scarcity. |
Datacenters Power Demand Infrastructure Resource Requirements Technology | |
PotashPotash demand driven by inexorable factors including rising global population, increasing food demand, and declining per-capita arable land. Supply concentrated in Canada with 95% of US needs imported, creating opportunities in royalty companies with exposure to strategic commodity producers. |
Fertilizers Agriculture Food Security Supply Concentration Royalties | |
| 2025 Q2 |
AIAI poses competitive threats to the Magnificent 7 companies through creative destruction. OpenAI's ChatGPT could provide competition to Google's search engine, while Sora Video Generator threatens YouTube's content model. The Private Mag 7 companies represent significant competitive risks to the Public Mag 7. |
ChatGPT OpenAI Competition Search Video |
ETFsETF indexation has failed to deliver expected returns over 25 years, with most regional indexes underperforming the presumed 10% base annual return. The S&P 500 ETF returned only 8% since inception, while bond ETFs delivered negative real returns after taxes and inflation. |
Indexation Returns Underperformance Passive Allocation | |
JapanJapan presents unique investment opportunities through owner-operator companies that have outperformed the broader Japanese market. The entrepreneur layer of Japanese companies offers uncorrelated growth potential due to limited competition and protective barriers against both domestic and foreign competitors. |
Owner-operators Entrepreneurs Domestic Growth Barriers | |
GoldGold achieved a 10% since-inception return over 20 years, outperforming most equity indexes. The 25-year annualized return of gold since May 2000 is 10.4%, contradicting modern portfolio theory as no index configuration has been able to outperform simply holding metal in a fund. |
Outperformance Scarcity Inflation Portfolio Theory | |
ScarcityScarcity investing is the diametric opposite of ETF investing, which requires unlimited new share issuance. Bitcoin exemplifies scarcity value with its fixed 21 million coin limit, while ETFs officially reject scarcity by constantly issuing new shares for any volume of new money. |
Bitcoin Supply Dilution Value Limited | |
Data CentersAI data center expansion is super-sizing growth rates across industries, particularly electric utilities. The $500 billion Stargate data center project and similar ventures are dragging cloud computing companies from asset-light models back into asset-intensive, cyclical businesses. |
Expansion Infrastructure Utilities Investment Cyclical | |
| 2025 Q1 |
AIExplosive spending by major IT companies on data centers amid mass adoption of artificial intelligence. Meta spending $60-65 billion on data center construction this year, 50% above 2024. Data center buildout has potential to be greatest deployment of private investment capital in history. |
Data Centers Large Language Models High Performance Computing GPU Processing Power |
Data CentersData center electricity needs projected to increase 50% to nearly triple between 2023 and 2028. Size quoted in power draw, not square feet. Meta's 1.3 million processing units would draw power equivalent to Rhode Island or Hawaii. |
Electricity Demand Power Infrastructure Server Capacity Energy Consumption Grid Load | |
Natural GasNatural gas is fuel of choice for data center power generation. US electricity generation from natural gas more than doubled while coal declined two-thirds. Critical limiting factor for data center expansion with inelastic demand characteristics. |
Power Generation Thermal Power Energy Infrastructure Commodity Supply Pipeline Capacity | |
WaterWater essential for steam turbines in thermal power plants and cooling data centers. No substitute available. Permian Basin water infrastructure critical for both energy production and emerging data center development. |
Cooling Systems Steam Generation Infrastructure Resource Scarcity Industrial Water | |
SteelData centers require large quantities of steel for campus buildings, server racks, security caging, and infrastructure equipment. Nucor purchased data center infrastructure manufacturer and created Nucor Data Systems subsidiary to participate in growth. |
Construction Materials Infrastructure Manufacturing Industrial Demand Building Components | |
CommoditiesData center expansion will impact commodity demand and pricing for steel, copper, natural gas, and water. Pending supply/demand imbalance with extreme characteristics that investors should pay attention to. |
Supply Demand Resource Constraints Hard Assets Industrial Metals Energy Resources | |
| 2024 Q4 |
CryptoBitcoin achieved institutional acceptance with SEC approval of Bitcoin ETFs, accumulating over $110 billion in assets within 12 months. The development of cryptocurrency lending markets and natural interest rates could establish crypto as a legitimate alternative to fiat currencies. Staking rewards in cryptocurrencies like Solana (6.24%) and Ethereum (3.08%) provide yield mechanisms that could drive further adoption. |
Bitcoin ETFs Staking Lending Arbitrage |
AIArtificial intelligence represents extremely high-order computation requiring vast amounts of electric power. Large language models like ChatGPT consume significantly more energy than simple searches, with energy requirements increasing as data accumulation grows. Modern scientific development creates unprecedented processing requirements, particularly in pharmaceutical research requiring molecular-level analysis. |
Computation Energy Processing ChatGPT Pharmaceuticals | |
Data CentersData centers require enormous power generation capacity due to thermodynamic inefficiencies, with a typical 1.54 power usage effectiveness ratio meaning 54% more power than equipment consumption. A 1 GW data center actually requires 3.08 GW of generation capacity when accounting for backup power and inefficiencies. This creates massive infrastructure demands for continuous operation. |
Power Generation Efficiency Infrastructure Capacity | |
WaterWater emerges as the critical scarce resource for modern computation, as thermal power generation requires enormous quantities for steam production. A single 870 MW nuclear plant uses 504,000 gallons per minute, with significant evaporation losses. Conventional portfolios lack meaningful water exposure despite technology companies' critical dependence on this resource. |
Thermal Generation Scarcity Technology Resource | |
NuclearNuclear power represents a key thermal generation source for data center requirements, though it faces the same water consumption challenges as other thermal plants. Nuclear facilities require constant cooling and steam generation, making water availability a critical constraint for expanding nuclear capacity to meet AI and computing demands. |
Thermal Cooling Steam Capacity Computing | |
Energy TransitionWind and solar offer advantages by avoiding water consumption requirements of thermal generation, but face load variability challenges requiring 60 Hz frequency stability. These sources must be supplemented with continuously dispatchable power running in background, meaning traditional generation remains necessary even with substantial renewable capacity. |
Renewables Variability Frequency Dispatchable Grid | |
| 2024 Q3 |
AIAI data centers require massive electric power consumption, with exascale facilities consuming as much electricity as small countries. The AI boom is driving unprecedented capital expenditure by tech giants, with Microsoft, Meta, and Alphabet spending over $370 billion in five years. AI applications are expanding rapidly across industries, creating endless use cases and driving demand for physical infrastructure. |
Data Centers Cloud Semiconductors Energy |
Data CentersHyperscale data centers have grown at 20% annually, with AI-era exascale facilities requiring vastly more power and resources than traditional centers. These facilities need hundreds to thousands of acres, massive water cooling systems, and power equivalent to supporting 500,000 households. Private equity is aggressively funding this infrastructure buildout. |
AI Cloud Energy Infrastructure Spending | |
Natural GasThe Permian Basin produces excess natural gas that often trades at negative prices due to pipeline constraints. New pipeline capacity coming online should normalize pricing and boost royalty revenues. Natural gas is the default fuel for powering AI data centers given nuclear limitations and coal phase-outs. |
Oil Energy Pipelines Utilities | |
OilMajor consolidation is occurring in the Permian Basin with over $100 billion in acquisitions in the past year, including ExxonMobil's $64 billion Pioneer purchase. Strategic investors are acquiring reserves at current prices while institutional investors remain underweight energy at only 3.3% of S&P 500. |
Natural Gas Energy Exploration & Production Midstream | |
ChinaChinese technology companies are developing competitive products including Huawei's tri-fold smartphone and AI chips comparable to NVIDIA's H100. China's technological capabilities now rival high-level U.S. capabilities in government-selected strategic markets, creating pricing and substitution risks for U.S. tech giants. |
Semiconductors AI Trade Policy Smartphones | |
InflationRising disaster relief costs, federal debt service, and infrastructure demands are creating inflationary pressures. Federal interest expense is crowding out discretionary spending, while billion-dollar weather disasters are increasing in frequency and requiring larger appropriations. |
Rates Infrastructure Spending Commodities Dollar | |
| 2024 Q2 |
AIAI technology represents a massive growth opportunity but faces critical infrastructure constraints, particularly electric power requirements. The H100 AI chips alone might require 0.5% of total U.S. electricity production, with next-generation chips requiring even more power. This creates both challenges for AI companies and opportunities for energy infrastructure providers. |
Data Centers Electric Power Infrastructure Growth Technology |
ETFsETF indexation has fundamentally altered market structure over 30 years, creating concentration risk and distorting sector weightings. The top 10 S&P 500 positions now represent 38% of the index, with 75% of Russell 3000 constituents having effectively zero weight. This concentration creates systemic vulnerabilities. |
Indexation Concentration Market Structure Passive Investing Risk | |
ChinaChina poses an existential threat to U.S. market dominance through technological advancement and economic competition. Despite representing 33% of global GDP, China has only 2.8% weight in global equity indexes. China is moving from low-margin manufacturing to direct competition with U.S. companies in high-value sectors. |
Geopolitical Risk Competition Technology Economic Power Market Share | |
Natural GasNatural gas emerges as the critical solution for AI's power requirements, particularly in the Permian Basin where abundant gas production alongside oil creates unique opportunities. Data centers can generate their own power using cheap natural gas, solving both cost and reliability issues. |
Energy Power Generation Infrastructure Cost Advantage Supply | |
InflationThe disinflationary forces of the past 30 years are reversing, with commodity supply constraints, rising labor costs, and geopolitical tensions creating new inflationary pressures. The era of cheap commodities and labor arbitrage is ending, threatening corporate profit margins. |
Commodities Supply Constraints Labor Costs Profit Margins Economic Cycle | |
Critical MineralsSupply constraints in critical minerals, particularly rare earth elements controlled by China, create strategic vulnerabilities for U.S. technology companies. Decades of underinvestment in mining capacity coincides with surging demand from electrification and technology sectors. |
Supply Chain Geopolitical Risk Mining Technology Dependence Strategic Materials | |
| 2024 Q1 |
AIThe letter discusses AI chips and their impact on technology stocks, particularly noting how AI chip technology has driven recent outperformance in companies like Nvidia and Micron. The manager views AI as part of the current technology bubble similar to previous cycles. |
Artificial Intelligence Chips Nvidia Technology Bubble |
CryptoBitcoin and cryptocurrency are presented as successful technology investments, with Bitcoin described as the ultimate Information Technology investment. The manager discusses blockchain technology's transformative potential across business applications and their blockchain development ETF. |
Bitcoin Blockchain Cryptocurrency Technology Digital | |
SemiconductorsExtensive discussion of semiconductor companies including historical analysis of Micron Technology and current AI chip dynamics. The manager analyzes semiconductor pricing cycles, competition, and valuation risks in the current market environment. |
Memory DRAM Chips Pricing Cycles | |
ExchangesSecurities exchanges are highlighted as natural beneficiaries of cryptocurrency legitimization and blockchain adoption. The manager views regulated exchanges as gateways for institutional-grade cryptocurrency assets with limited competition and strong positioning for tokenization trends. |
Trading Regulation Infrastructure Tokenization Derivatives | |
| 2023 Q4 |
CryptoBitcoin ETF approval represents institutional acceptance and convergence with traditional financial system. Flash loans and lending markets create new revenue opportunities for ETF providers. Bitcoin Cash offers leveraged exposure to cryptocurrency appreciation potential. |
Bitcoin ETF Flash Loans Institutional Lending |
ChinaChina has transitioned from manufacturing subcontractor to direct global competitor in technology. BYD outselling Tesla and Huawei's Mate 60 competing with iPhone demonstrate China's technological capabilities and threat to US tech dominance. |
Technology Competition Manufacturing Semiconductors Global | |
InflationMultiple inflationary vectors emerging from BRICS expansion, supply chain disruptions, and end of 40-year disinflationary era. De-dollarization threatens US ability to export inflation while commodity prices face upward pressure. |
BRICS Commodities Currency Supply Chain Monetary | |
CommoditiesRoyalty companies provide direct exposure to hard assets without operational expenses. These businesses benefit from rising commodity prices while maintaining high profit margins and compounding characteristics. |
Royalties Hard Assets Pricing Power Margins Compounding | |
Capital MarketsSecurities exchanges benefit from both monetary inflation and commodity-related trading activity. These businesses generate high returns with minimal reinvestment needs and benefit from increasing cryptocurrency trading volumes. |
Exchanges Trading Volumes Returns Infrastructure |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| Oct 27, 2025 | Fund Letters | Murray Stahl | WPM CN | Wheaton Precious Metals | Materials | Precious Metals & Mining | Bull | TSX | cashflow, compounding, efficiency, Gold, inflation, inflation hedge, Royalty | Login |
| Oct 27, 2025 | Fund Letters | Murray Stahl | ALS CN | Altius Minerals | Materials | Diversified Metals & Mining | Bull | TSX | Copper, diversification, inflation, Potash, renewables, Resources, Royalty | Login |
| Oct 27, 2025 | Fund Letters | Murray Stahl | SJT | San Juan Basin Royalty Trust | Energy | Oil & Gas Exploration & Production | Bull | NYSE | contrarian, Distribution, natural gas, recovery, Reserves, Royalty, yield | Login |
| Oct 27, 2025 | Fund Letters | Murray Stahl | MESABI | Mesabi Trust | Materials | Iron & Steel | Bull | NYSE | arbitration, inflation, Iron, materials, Royalty, Steel, valuation | Login |
| Oct 27, 2025 | Fund Letters | Murray Stahl | WPM CN | Wheaton Precious Metals | Materials | Precious Metals & Mining | Bull | NYSE | cashflow, compounding, efficiency, Gold, inflation, inflation hedge, Royalty | Login |
| Oct 27, 2025 | Fund Letters | Murray Stahl | ALS CN | Altius Minerals | Materials | Diversified Metals & Mining | Bull | NYSE | Copper, diversification, inflation, Potash, renewables, Resources, Royalty | Login |
| Oct 27, 2025 | Fund Letters | Murray Stahl | SJT | San Juan Basin Royalty Trust | Energy | Oil & Gas Exploration & Production | Bull | NYSE | contrarian, Distribution, natural gas, recovery, Reserves, Royalty, yield | Login |
| Oct 27, 2025 | Fund Letters | Murray Stahl | MESABI | Mesabi Trust | Materials | Iron & Steel | Bull | NYSE | arbitration, inflation, Iron, materials, Royalty, Steel, valuation | Login |
| Aug 7, 2025 | Fund Letters | Murray Stahl | 6544 JP | Japan Elevator Service Holdings Co.,Ltd. | Industrials | Specialty Business Services | Bull | New York Stock Exchange | compounding, Elevators, Japan, Maintenance, Margins, services | Login |
| Aug 7, 2025 | Fund Letters | Murray Stahl | AB | AllianceBernstein Holding L.P. | Financials | Capital Markets | Bull | New York Stock Exchange | Assetmanagement, dividends, Fees, Income, Inflows, valuation | Login |
| Aug 1, 2025 | Fund Letters | Horizon Kinetics | 6544.T | Japan Elevator Service Holdings Co Ltd | Industrials | Commercial Services & Supplies | Bull | Tokyo Stock Exchange | domestic economy, Elevator Maintenance, growth, Japan, market share expansion, operational efficiency, Owner operator, recurring revenue, Service Provider, technology innovation | Login |
| Apr 1, 2025 | Fund Letters | Horizon Kinetics | ARIS | Aris Water Solutions | Energy | Oil & Gas Equipment & Services | Bull | NASDAQ | data centers, Disposal Wells, energy, Equity, oilfield services, Permian Basin, Pipeline infrastructure, Recycling, Wastewater Management, Water infrastructure | Login |
| Apr 1, 2025 | Fund Letters | Horizon Kinetics | SJT | San Juan Basin Royalty Trust | Energy | Oil & Gas Exploration & Production | Bull | NYSE | Coalbed Methane, data centers, dividend suspension, energy, Equity, LNG Export, natural gas, Royalty trust, San Juan Basin, Time Arbitrage | Login |
| Apr 1, 2025 | Fund Letters | Horizon Kinetics | HE | Hawaiian Electric Industries | Utilities | Electric Utilities | Bull | NYSE | Crisis Recovery, dividend suspension, Electric Utility, Equity, Hawaii, regulated utility, Time Arbitrage, Wildfire Settlement | Login |
| Jul 1, 2024 | Fund Letters | Horizon Kinetics | LB | LandBridge Company | Energy | Oil, Gas & Consumable Fuels | Bull | NYSE | AI infrastructure, data centers, energy infrastructure, Gas Royalties, growth, Hard assets, Land Ownership, mineral rights, Monopolistic, Oil Royalties, Permian Basin, Surface Rights, Water Management | Login |
| TICKER | COMMENTARY |
|---|---|
| TPL | In the past eight years, TPL has declined by between 40% and 53% on four separate occasions. Despite those dizzying drops, the shares today are up 4-fold from their high of eight years ago. That was the idea—land, not oil—in the original buy recommendation for Texas Pacific Land Trust over 30 years ago: to own the internal, frictionless compounding benefits of share repurchases to increase the per-share acres held. In just the past eight years, TPL has declined by between 40% and 53% on four separate occasions. Despite those dizzying drops, the shares today are up 4-fold from their high of eight years ago. |
| ICE | Intercontinental Exchange's (ICE) first quarter revenues were much higher than in 2025, its operating margin was higher still, and per-share net income even higher. The same rising revenue and expanding operating margins relationship is apparent in the full-year 2025 results. The revenue expansion for the year is only 6%, but the end result—inclusive of a 33% after-tax net profit margin—is a double-digit per-share earnings growth rate. The year's 14% increase in per-share earnings is essentially equal to the 20-year annualized increase of 15%. ICE owns 17% of Polymarket, which it purchased in late 2025 for $1 billion. It added another $600 million to its investment this March. The NYSE division of ICE is exploring a blockchain-based settlement capability that would allow 24/7 trading on the New York Stock Exchange. At over $11 billion, the two smallest-cap companies in the S&P 500 are larger than Penske and have weights of 0.1% and 0.0%. |
| MIAX | MIAX, which hasn't yet achieved full scale economies, reported 40% higher revenues in its March 2026 quarter, and free cash flow was more than 2x higher. MIAX has actually done better than the other securities exchanges, and it's no lower now than it was a few months ago. |
| AMZN | Amazon's capital spending for AI data centers is rising dramatically, it has just about transitioned from free-cash-flow positive to negative, and it's begun to engage in large-scale borrowing. These are changes from its prior business profile and capital allocation practice. Will these changes conspire to degrade the rate of its actual future financial progress or its long-term valuation multiple (from the current-year P/E ratio of 36x)? These are the closing weekly share prices of Amazon.com from its very first week of trading in May 1997 through April 2026, all 1,512 prices. At 50% of the way from inception to the present, bitcoin's price was only 6% of the recent price level; for Amazon it was 5%. At the 75% time mark, bitcoin's price was 47% of the recent level; for Amazon the time and price figures were 80% and 50%. |
| PSK.TO | PrairieSky, the subject of one of the roundtable topic questions, is a land and royalty company that has done just that. In the 12 years since its IPO, even while more than tripling its acreage from 5 million to 18 million acres, it managed to double its acres per share. That's about 6% annually, in addition to whatever revenue and earnings growth it managed to achieve. That astoundingly large and largely unexploited land portfolio, which sprawls along a roughly 750-mile axis across three Canadian provinces, gives PrairieSky the advantage of not having to reinvest profits in additional royalty contracts. Its large cash flow budget is fully available to pay dividends, repurchase shares, and make expansion-type land acquisitions. |
| AN | Why would a company that increased its per-share earnings since 2000 by 13.7% a year trade at 11x net income? AutoNation has repurchased 58% of its shares via free cash flow in the past 5 years, (which is entirely the wrong direction relative to the expanding trading liquidity needs of ETF organizers). |
| PAG | Why would another company that increased its 15-year earnings per share by 14% trade at a P/E of 11x? Penske's inside-ownership is over 50%, so the float-adjusted market cap is only half that $11 billion. Another 20% of Penske's shares is held by a Japanese company, Mitsui, so Penske's float, despite an $11 billion market value, is more like $3 billion. And Penske has bought back 18% of its shares in the past 5 years. Last week, subsequent to the writing of this paragraph, Penske Automotive—the publicly traded company—received an offer from the privately held Penske Corporation and Mitsui & Co. to buy the remaining 17% of the shares they don't yet own. |
| CME | In mid-June, the CME filed a suit against the CFTC. It was triggered by the CFTC's May 29 approval of an application by Kalshi, the event or prediction market firm—think YES-NO wagers on sports, economic or political events—to list and trade a bitcoin perpetual in the U.S. as a futures contract. The CME asserted that the approval contravened various procedural and definitional rules, including that the current Chair of the CFTC is the only member of what is supposed to be a five-person commission, and especially around the definition of swaps. The CME has already introduced, earlier this year, 24/7 cryptocurrency futures and options. It is also just launched 24/7 mini Gold futures and plans to launch 24/7 Oil futures by the end of August. And also single-stock futures, which are another means for retail investors to use margin or leverage—using less capital to control a larger position. And prediction markets partnerships with FanDuel and FutureSports. The valuations of Intercontinental Exchange and CME Group haven't been this low in the 17 years since the Great Financial Crisis. |
| CBOE | CBOE submitted a proposal to the SEC to launch near 24/5 U.S. equity trading by the end of the year. CBOE hasn't been this inexpensive in three to five years. |
| NDAQ | This March, the SEC approved a Nasdaq proposal to allow certain stocks to trade and settle in token form through the DTCC, the dominant U.S. clearing and settlement entity. |
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