| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| 10.5% | - | 12.0% |
| 2025 | 2024 |
|---|---|
| 12.0% | 17.9% |
Mott Capital Management's Thematic Growth Strategy gained 11.98% in 2025, underperforming the S&P 500's 17.88% return. Manager Michael Kramer attributes this to his cautious stance on what he views as an AI bubble characterized by excessive debt accumulation and unsustainable CAPEX spending by major technology companies. The strategy reduced Microsoft exposure by half due to AI-related risks and valuation concerns. Kramer rotated into med-tech stocks and initiated a position in Occidental Petroleum, viewing energy as a contrarian opportunity given its worst relative performance since the dot-com bubble. He believes oil prices are depressed and expects the market's risk-on attitude to revert to more traditional discipline. The portfolio maintains defensive positioning while selectively deploying capital in underperformed sectors. Kramer acknowledges the significant disappointment of 2025 underperformance but believes his positioning is appropriate for an expected market reversion to historical norms.
The market's 2025 AI-driven rally represents unsustainable speculation that will revert to more traditional valuation discipline, creating opportunities in underperformed sectors like energy while requiring defensive positioning in overvalued technology.
Manager expects market to revert from current risk-on speculation to more cautious, traditionally structured outlook. Positioned defensively for this transition while maintaining selective exposure to underperforming sectors like energy.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Feb 23 2026 | 2025 Q4 | AAPL, AMZN, BRK-A, BSX, GOOGL, GRAIL, META, MSFT, ORCL, OXY, ZTS | AI, Debt, energy, Rotation, technology, underperformance, valuation |
MSFT OXY |
Manager expresses significant concerns about AI bubble conditions, citing excessive debt accumulation and CAPEX spending by major tech companies. Believes AI fears are being realized… |
| Nov 10 2025 | 2025 Q3 | - | AI spending, Capex, cash flow, mega-cap tech, Rotation | - | Mega-cap technology firms continue expanding capital expenditures to support AI computing needs, raising concerns about long-term cash-flow pressure and sustainability of returns. The manager has… |
| Aug 8 2025 | 2025 Q2 | UNH, ZTS | Artificial Intelligence, earnings momentum, Sentiment, software, technology |
MSFT UNH ZTS |
The letter focuses on secular technology trends including AI, software platforms, and digital transformation. Management highlights earnings revisions, product cycles, and sentiment shifts as key… |
| May 5 2025 | 2025 Q1 | - | - | - | - |
| Mar 2 2025 | 2024 Q4 | - | - | - | - |
| Nov 2 2024 | 2024 Q3 | BA | - | - | - |
| Aug 1 2024 | 2024 Q2 | BA, ILMN, MA, V | - | - | - |
| May 8 2024 | 2024 Q1 | AAPL, AMZN, BA, NVDA | - | - | - |
| Jan 19 2024 | 2023 Q4 | - | - | - | - |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2025 Q4 |
AIThe extended federal government shutdown added volatility during what was otherwise a risk-on environment, with a mid-quarter shift in market behavior for AI-related equities as the exuberant narrative evolved to one more balanced in assessing the technology's enormous potential against staggering capital spending plans and high expectations. The team initiated a position in Credo Technology as a more diversified way to gain exposure to strong trends in AI-connectivity. |
Connectivity Semiconductors Infrastructure Capital Spending |
EnergyEnergy plays a critical role in AI infrastructure economics, with data centers becoming major electricity consumers. Rising power costs compress margins while grid constraints and regulatory scrutiny influence deployment timelines. The manager emphasizes that unlike software-driven growth, AI compute cannot be scaled independently of physical energy reality. |
Data Centers Grid Power Infrastructure Utilities | |
| 2025 Q3 |
Special SituationsPortfolio heavily focused on merger arbitrage, sales processes, and corporate actions including Golden Entertainment PropCo OpCo split, Sotherly Hotels buyout with preferred conversion arbitrage, and Mount Logan Capital tender offer. |
Merger Arbitrage Sales Process Tender Offer Corporate Actions Conversion |
| 2025 Q2 |
Technology |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| Aug 8, 2025 | Fund Letters | Michael J. Kramer | MSFT | Microsoft Corporation | Information Technology | Systems Software | Bear | NASDAQ | AI, CapEx, cloud, Competition, valuation | Login |
| Aug 8, 2025 | Fund Letters | Michael J. Kramer | UNH | UnitedHealth Group Inc. | Health Care | Managed Health Care | Bull | NASDAQ | healthcare, Insurance, scale, turnaround, valuation | Login |
| Aug 8, 2025 | Fund Letters | Michael J. Kramer | ZTS | Zoetis Inc. | Health Care | Pharmaceuticals | Bull | New York Stock Exchange | growth, Margins, Pets, pharmaceuticals, secular trends | Login |
| Feb 23, 2026 | Fund Letters | Michael J. Kramer | MSFT | Microsoft Corporation | Information Technology | Systems Software | Bear | NASDAQ | CapEx, debt, monetization, platform, Risk, Software, valuation | Login |
| Feb 23, 2026 | Fund Letters | Michael J. Kramer | OXY | Occidental Petroleum Corporation | Energy | Oil & Gas Exploration & Production | Bull | New York Stock Exchange | commodity, Cyclicality, energy, Float, Mean Reversion, oil, Ownership | Login |
| TICKER | COMMENTARY |
|---|---|
| AAPL | AAPL shares rose in 4Q25 following better-than-feared iPhone 17 sell-through trends and stronger Services momentum. The company reported that early adoption of its on-device AI features exceeded internal expectations, particularly in North America and Europe, where attach rates for Pro models remained elevated. Wearables also returned to growth, helped by new health features and improved battery life. |
| AMZN | This quarter, we took profits in our hyperscaler portfolio companies (Amazon and Google) and increased our position in NVIDIA. |
| BRK-A | Miles mentioned that he had been a long-term shareholder of Berkshire Hathaway and had never sold his shares. Over roughly twenty-five years, his investment compounded at about 10.9% annually. The first dollar he invested became approximately thirteen dollars. Since around 1990, Berkshire has only marginally outperformed the S&P 500. By Buffett's own historical standards, this period could be described as mediocre. And yet, admiration for Buffett has not faded—if anything, it has intensified. |
| BSX | However, Boston Scientific has fallen sharply following an earnings report on February 4 that missed expectations. |
| GOOGL | In the third quarter, Google, Kairos Power, and the Tennessee Valley Authority announced a major collaboration centered on a novel power purchase agreement. Google followed this announcement with another significant step forward. On October 27, Google and NextEra Energy announced plans to restart the Duane Arnold Energy Center. |
| META | On January 9, Meta Platforms unveiled a new agreement with Vistra—the largest generator of competitive electricity in the United States—as well as with TerraPower and Oklo. The announcement builds on Meta's agreement last year with Constellation Energy and positions the company to become one of the largest corporate purchasers of nuclear-generated electricity in the United States. |
| MSFT | MSFT was a detractor in 4Q25 following its fiscal first-quarter 2026 earnings report released on October 29. While results were better than expected operationally, investor reaction was driven by guidance and capital expenditure intensity rather than headline performance. Revenue grew 17% year-over-year, exceeding consensus expectations, and Azure revenue increased 39% year-over-year, also ahead of estimates. However, management guided to a sequential deceleration in Azure growth in fiscal Q2, signaling some moderation after a period of exceptional demand. |
| ORCL | Investor enthusiasm for Oracle's stock in calendar year 2025 was initially driven by several multi-billion-dollar contracts it signed with leading AI companies, including OpenAI and Meta. However, in Q4 sentiment for ORCL's growth prospects shifted to skepticism, as investors began to scrutinize the return profile of the substantial capital investments required to support the approximately $500 billion of contracts signed by Oracle. Given the widening range of potential outcomes associated with Oracle's elevated capital needs, we reduced our position in ORCL during Q4. |
| OXY | The largest detractors were Lennar Corp (LEN), U-Haul Holdings (UHAL/B), and Occidental Petroleum (OXY). |
| ZTS | ZTS: $6B authorized August 2024; $1.5B used as of September 2025 |
| Ticker | Put/Call | Amount Bought | Shares Bought | % Change | Weight % |
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