Mott Capital Management

Investor Summary

Michael J. Kramer founded Mott Capital Management in August 2014, bringing over 20 years of industry experience as an analyst, trader, and investment manager. He holds a Master of Science in Investment Management from Pace University and a Certificate in Risk Management from New York University, having passed the Series 65 examination in July 2014. Prior to founding Mott Capital, Kramer gained experience trading US and International equities in high-risk environments for prominent firms including US Trust and Gilder, Gagnon, Howe & Co. His regulatory record shows no disclosed disciplinary events, criminal convictions, or adverse disclosures. Kramer maintains an active presence in financial media through his 'Reading the Markets' platform on Seeking Alpha and regular contributions to Investopedia.com, demonstrating his commitment to investor education and market analysis.

Fund Strategy

Mott Capital Management employs a distinctive thematic growth strategy focused on identifying investment opportunities influenced by everyday life activities, emerging trends, and products gaining popularity in society. The firm's investment philosophy centers on seeking companies that reflect and shape generational and demographic shifts, with particular emphasis on long-term holding periods of 3 to 5 years. This approach combines fundamental financial analysis with technical and options market insights, integrating global macroeconomic analysis and central bank policy impacts into security selection. The strategy maintains a concentrated approach with approximately 20 positions across diverse market capitalizations and sectors while maintaining 25% cash for flexibility and risk management.

ANNUALIZED SINCE INCEPTION	QUARTERLY	YTD
9.59%	-	-4.7%

Executive Summary

Mott Capital Management Thematic Growth Strategy declined 4.7% net in Q2 2026, underperforming the S&P 500's 10.2% total return, marking another quarter of underperformance largely tied to exuberance in semiconductor and AI-related stocks. While the strategy benefited from AI infrastructure focus in 2023-2024, the narrative shifted toward memory chips and semiconductors. Despite underperformance, underlying portfolio businesses continue performing well with strong year-over-year growth. Microsoft Azure and AWS continue growing over 40% and 35% respectively. The manager added Intuit, ServiceNow, and Cboe Global Markets during the quarter, high-quality SaaS businesses with pricing power not easily displaced by AI. Largest holdings Visa and Mastercard began performing well after a weak first half. The manager sold Boston Scientific after two consecutive weak quarters but maintains patience with fundamentally sound businesses. Cash declined to 10-15% as the manager deploys capital into forgotten quality stocks trading at reasonable valuations. While acknowledging S&P 500 overvaluation and high AI concentration risk, the manager believes many good stocks exist outside the AI frenzy and continues building positions for long-term growth.

Core Thesis

The manager maintains conviction in a concentrated portfolio of high-quality growth companies with strong business fundamentals, despite recent underperformance driven by market exuberance in AI and semiconductor stocks, believing patient capital will be rewarded as the market eventually rotates back to fundamentally sound businesses trading at reasonable valuations.

Forward Outlook

The manager believes many investments are positioned in the right areas while some are simply out of favor, which can change quickly. If AI enthusiasm cools, capital could rotate back into current holdings. New additions to the portfolio should help revive upward momentum. While the S&P 500 and NASDAQ 100 may be overvalued with high concentration risk in AI and semiconductors, the manager does not believe the entire market is overvalued and sees many good stocks worth owning that have been forgotten due to AI focus.

Date	Letter	Tickers	Keywords	Pitches	Quick Takes
Aug 10 2026	2026 Q2	AMZN, BSX, CBOE, GOOGL, GRAL, ILMN, INTU, ISRG, MA, MSFT, NOW, V, ZTS	AI, Cloud, growth, payments, SaaS, semiconductors, technology, underperformance	-	Mott Capital underperformed in Q2 2026 as AI and semiconductor exuberance drove markets, but underlying portfolio businesses show strong fundamentals with cloud growth exceeding 35-40%. The manager added high-quality SaaS names like Intuit and ServiceNow while reducing cash to 10-15%, deploying into forgotten quality stocks. Despite near-term headwinds, conviction remains in patient capital being rewarded as markets eventually rotate from AI concentration.
May 11 2026	2026 Q1	AMZN, BSX, GRAIL, INTU, MSFT, OXY, SHOP, UNH	AI, Biotechnology, energy, healthcare, oil, technology, volatility	-	Thematic growth strategy underperformed in volatile Q1 marked by healthcare earnings disappointments and oil price surge from geopolitical tensions. Manager maintains conviction in biotechnology innovation while tactically adjusting energy exposure. Initiated Intuit position at attractive valuations for AI exposure. Forward outlook cautious given narrow market leadership and uncertainty around central bank policy response to rising oil and inflation.
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	Mott Capital underperformed in 2025 due to cautious AI stance amid bubble conditions. Manager reduced tech exposure, rotated into med-tech and energy sectors. Believes market's risk-on speculation will revert to traditional discipline. Positioned defensively for this transition while selectively investing in underperformed areas like energy through Occidental Petroleum.
Nov 10 2025	2025 Q3	AMZN, GOOGL, GRAL, ILMN, MSFT, NVDA, UNH, ZTS	AI, Biotechnology, Capex, healthcare, large cap, technology	-	Kramer's thematic growth strategy underperformed in Q3 as he rotated away from AI-heavy mega-caps due to CapEx spending concerns. He trimmed Alphabet, added healthcare names like UnitedHealth and Grail, and maintains 25% cash. The defensive positioning reflects caution about AI spending sustainability while preserving flexibility to capitalize on emerging opportunities in sectors benefiting from AI differently.
Aug 8 2025	2025 Q2	AAPL, BA, ISRG, MSFT, UNH, ZTS	Defensive, healthcare, Performance, technology, valuation, volatility	MSFT UNH ZTS MSFT UNH ZTS	Mott Capital's defensive positioning led to significant Q2 underperformance despite initial correctness during market downturns. Manager conflicted over Microsoft due to AI valuation concerns and potential commoditization risks. Selectively adding distressed opportunities like UnitedHealth while trimming China-exposed names. Expects volatility return in second half due to fiscal policy and tariff uncertainties.
May 5 2025	2025 Q1	AAPL, AMZN, BA, ILMN, ISRG, MSFT, SHOP	China, earnings, Margins, Portfolio Management, tariffs, technology, Trade Policy, volatility	-	Kramer defensively repositioned his growth portfolio amid Trump tariff volatility, trimming Apple, Intuitive Surgical, and Microsoft to 5% weightings due to China exposure risks. The portfolio underperformed in Q1 (-6.46% vs S&P's -4.27%) but the manager believes markets underestimate ongoing trade policy impacts. Declining earnings estimates and margin compression concerns support his cautious stance.
Mar 2 2025	2024 Q4	AMZN, ILMN, ISRG, MA, MSFT, NVDA, SHOP.TO	AI, Bubble, Cash, growth, risk, technology, Valuations	-	Mott Capital gained 17.85% in Q4 but lagged the S&P 500 due to avoiding Nvidia and AI stocks. Manager views current market as bubble-like with extreme valuations, holding 25% cash while waiting for better opportunities. Strong performers included Shopify, Intuitive Surgical, and Amazon, but overall positioning remains defensive given inflation risks and potential policy uncertainty.
Nov 2 2024	2024 Q3	AAPL, AMZN, BA, GOOGL, ILMN, ISRG, MSFT, SHOP	AI, Cash, earnings, growth, technology, Valuations	BA	Mott Capital's Thematic Growth Portfolio underperformed in Q3 with 9.58% returns versus S&P 500's 22.1%. Manager maintains cautious stance on overvalued markets, holding 25-30% cash. Mixed stock performance with Illumina leading gains at 25% while Boeing declined 16.5%. Concerned about elevated S&P 500 margin estimates and unproven AI investment returns from major tech holdings.
Aug 1 2024	2024 Q2	AAPL, AMZN, BA, CSCO, GILD, GOOGL, ILMN, ISRG, MA, MSFT, NVDA, SHOP, TSLA, V	Concentration, growth, healthcare, Mega Cap, technology, valuation	ILMN	Mott Capital underperformed in Q2 with a cautious stance amid bubble-like market conditions. The concentrated portfolio holds essential mega-cap tech names while maintaining 30% cash. Recent Illumina purchase reflects selective value hunting in AI-healthcare. Manager expects market transition as Fed cuts approach and volatility returns, favoring patient long-term positioning over momentum chasing.
May 8 2024	2024 Q1	AAPL, ADBE, AMZN, BA, GOOGL, ISRG, MA, META, MSFT, NVDA, TSLA, V	AI, growth, inflation, large cap, rates, technology, Valuations	-	Mott Capital underperformed in Q1 with 2.8% returns versus S&P 500's 10.6%, maintaining defensive positioning amid dangerous AI momentum and high valuations. Manager holds elevated cash awaiting better entry points, concerned about Nvidia's market dominance, sticky inflation, and elevated rates. Core holdings include Microsoft, Amazon, and payment processors, positioned for aggressive deployment when valuations improve.
Jan 19 2024	2023 Q4	AAPL, AMZN, BA, GOOGL, ISRG, MA, MDRX, MSFT, SHOP, SPLK, V	Cash, Fed, growth, rates, technology, Valuations	-	Mott Capital's thematic growth strategy returned 26.7% in 2023 through concentrated mega-cap holdings but maintains 35-40% cash amid valuation concerns. The manager sees stocks as expensive relative to bonds and believes markets are mispricing Fed rate cut expectations for 2024, creating potential downside risk requiring defensive positioning.

Date

Letter

Tickers

Keywords

Pitches

Quick Takes

Aug 10 2026

2026 Q2

AMZN, BSX, CBOE, GOOGL, GRAL, ILMN, INTU, ISRG, MA, MSFT, NOW, V, ZTS

AI, Cloud, growth, payments, SaaS, semiconductors, technology, underperformance

Mott Capital underperformed in Q2 2026 as AI and semiconductor exuberance drove markets, but underlying portfolio businesses show strong fundamentals with cloud growth exceeding 35-40%. The manager added high-quality SaaS names like Intuit and ServiceNow while reducing cash to 10-15%, deploying into forgotten quality stocks. Despite near-term headwinds, conviction remains in patient capital being rewarded as markets eventually rotate from AI concentration.

May 11 2026

2026 Q1

AMZN, BSX, GRAIL, INTU, MSFT, OXY, SHOP, UNH

AI, Biotechnology, energy, healthcare, oil, technology, volatility

Thematic growth strategy underperformed in volatile Q1 marked by healthcare earnings disappointments and oil price surge from geopolitical tensions. Manager maintains conviction in biotechnology innovation while tactically adjusting energy exposure. Initiated Intuit position at attractive valuations for AI exposure. Forward outlook cautious given narrow market leadership and uncertainty around central bank policy response to rising oil and inflation.

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

Mott Capital underperformed in 2025 due to cautious AI stance amid bubble conditions. Manager reduced tech exposure, rotated into med-tech and energy sectors. Believes market's risk-on speculation will revert to traditional discipline. Positioned defensively for this transition while selectively investing in underperformed areas like energy through Occidental Petroleum.

Nov 10 2025

2025 Q3

AMZN, GOOGL, GRAL, ILMN, MSFT, NVDA, UNH, ZTS

AI, Biotechnology, Capex, healthcare, large cap, technology

Kramer's thematic growth strategy underperformed in Q3 as he rotated away from AI-heavy mega-caps due to CapEx spending concerns. He trimmed Alphabet, added healthcare names like UnitedHealth and Grail, and maintains 25% cash. The defensive positioning reflects caution about AI spending sustainability while preserving flexibility to capitalize on emerging opportunities in sectors benefiting from AI differently.

Aug 8 2025

2025 Q2

AAPL, BA, ISRG, MSFT, UNH, ZTS

Defensive, healthcare, Performance, technology, valuation, volatility

MSFT
UNH
ZTS
MSFT
UNH
ZTS

Mott Capital's defensive positioning led to significant Q2 underperformance despite initial correctness during market downturns. Manager conflicted over Microsoft due to AI valuation concerns and potential commoditization risks. Selectively adding distressed opportunities like UnitedHealth while trimming China-exposed names. Expects volatility return in second half due to fiscal policy and tariff uncertainties.

May 5 2025

2025 Q1

AAPL, AMZN, BA, ILMN, ISRG, MSFT, SHOP

China, earnings, Margins, Portfolio Management, tariffs, technology, Trade Policy, volatility

Kramer defensively repositioned his growth portfolio amid Trump tariff volatility, trimming Apple, Intuitive Surgical, and Microsoft to 5% weightings due to China exposure risks. The portfolio underperformed in Q1 (-6.46% vs S&P's -4.27%) but the manager believes markets underestimate ongoing trade policy impacts. Declining earnings estimates and margin compression concerns support his cautious stance.

Mar 2 2025

2024 Q4

AMZN, ILMN, ISRG, MA, MSFT, NVDA, SHOP.TO

AI, Bubble, Cash, growth, risk, technology, Valuations

Mott Capital gained 17.85% in Q4 but lagged the S&P 500 due to avoiding Nvidia and AI stocks. Manager views current market as bubble-like with extreme valuations, holding 25% cash while waiting for better opportunities. Strong performers included Shopify, Intuitive Surgical, and Amazon, but overall positioning remains defensive given inflation risks and potential policy uncertainty.

Nov 2 2024

2024 Q3

AAPL, AMZN, BA, GOOGL, ILMN, ISRG, MSFT, SHOP

AI, Cash, earnings, growth, technology, Valuations

Mott Capital's Thematic Growth Portfolio underperformed in Q3 with 9.58% returns versus S&P 500's 22.1%. Manager maintains cautious stance on overvalued markets, holding 25-30% cash. Mixed stock performance with Illumina leading gains at 25% while Boeing declined 16.5%. Concerned about elevated S&P 500 margin estimates and unproven AI investment returns from major tech holdings.

Aug 1 2024

2024 Q2

AAPL, AMZN, BA, CSCO, GILD, GOOGL, ILMN, ISRG, MA, MSFT, NVDA, SHOP, TSLA, V

Concentration, growth, healthcare, Mega Cap, technology, valuation

ILMN

Mott Capital underperformed in Q2 with a cautious stance amid bubble-like market conditions. The concentrated portfolio holds essential mega-cap tech names while maintaining 30% cash. Recent Illumina purchase reflects selective value hunting in AI-healthcare. Manager expects market transition as Fed cuts approach and volatility returns, favoring patient long-term positioning over momentum chasing.

May 8 2024

2024 Q1

AAPL, ADBE, AMZN, BA, GOOGL, ISRG, MA, META, MSFT, NVDA, TSLA, V

AI, growth, inflation, large cap, rates, technology, Valuations

Mott Capital underperformed in Q1 with 2.8% returns versus S&P 500's 10.6%, maintaining defensive positioning amid dangerous AI momentum and high valuations. Manager holds elevated cash awaiting better entry points, concerned about Nvidia's market dominance, sticky inflation, and elevated rates. Core holdings include Microsoft, Amazon, and payment processors, positioned for aggressive deployment when valuations improve.

Jan 19 2024

2023 Q4

AAPL, AMZN, BA, GOOGL, ISRG, MA, MDRX, MSFT, SHOP, SPLK, V

Cash, Fed, growth, rates, technology, Valuations

Mott Capital's thematic growth strategy returned 26.7% in 2023 through concentrated mega-cap holdings but maintains 35-40% cash amid valuation concerns. The manager sees stocks as expensive relative to bonds and believes markets are mispricing Fed rate cut expectations for 2024, creating potential downside risk requiring defensive positioning.

QUARTER	THEMES	TAGS
2026 Q2	AI The manager notes that AI-related stocks, particularly semiconductors and memory chips, drove S&P 500 gains in Q2. The strategy underperformed due to exuberance in AI stocks. The manager benefited from AI infrastructure focus in 2023-2024 but the narrative shifted. Microsoft, Alphabet, and Amazon continue heavy AI infrastructure spending with strong cloud growth.	Semiconductors Memory Cloud Data Centers Infrastructure
	Cloud Microsoft Azure and Amazon Web Services continue exceptional growth, with Azure growing over 40% year-over-year and AWS growing over 35%. The hyperscalers are spending tremendous amounts to maintain and expand positions in AI infrastructure and data center markets while building out product suites.	Azure AWS Data Centers Infrastructure
	Payments Visa and Mastercard, the two largest holdings, have begun performing well after a weak first half. The manager views them as critical components of the global payment system powering e-commerce. Payments are becoming increasingly digital, and card-based purchases should continue growing well into the future, potentially enhanced by AI.	Digital Payments E-commerce Credit Cards
	SaaS The manager bought Intuit and ServiceNow during the quarter, companies watched for years while waiting for opportunity. Both operate software-as-a-service models delivering high growth and strong margins. They are industry leaders with pricing power and are not easily displaced by AI integration. AI could support further growth through data feeds and efficiency tools.	Enterprise Software Pricing Power Growth
	Genomics Illumina shares rose sharply after better-than-expected Q2 results and raised full-year outlook. Grail bounced back from Q1 decline as the market digests the path forward for Galleri cancer screening test. FDA will hold an adcom meeting in late September, which could open paths to approval and Medicare payments.	Biotechnology Diagnostics FDA
	Capital Markets The manager bought Cboe Global Markets, a leading options exchange operator in the United States. Options trading has expanded rapidly in recent years in US financial markets, and Cboe is the market leader. The manager believes options trading will continue to grow and play an increasingly important role in financial markets.	Exchanges Options Trading
2026 Q1	Oil WTI oil prices soared to over $100 per barrel due to the closure of the Strait of Hormuz from U.S.-Iran engagement. The manager reduced Occidental position from 8% to 5% to lock in gains given volatility. Oil supply and demand imbalances are expected to drive prices higher regardless of conflict resolution expectations.	Oil Energy Occidental Geopolitical Volatility
	Biotechnology Grail's cancer screening test failed to meet its endpoint for detecting stage 1 and 2 cancers but still detected more stage 3 cancers. The manager maintains strong conviction in the stock and underlying technology despite the setback, expecting potential rebound with additional data presentation.	Biotechnology Cancer Screening Grail Healthcare
	AI Intuit is positioned to benefit from advancements in AI over time. The manager initiated a position in Intuit after its stock declined significantly, viewing the valuation as more attractive.	AI Software Intuit Technology Valuation
2025 Q4	AI Manager believes AI sector is experiencing bubble-like conditions with excessive debt accumulation and unsustainable CAPEX spending. Software stocks have fallen sharply in 2026 as valuations come back to haunt them and fears of AI cannibalization rise. The manager's cautious approach in 2025 and continued cautious outlook are being validated by recent market sentiment shifts.	Software Valuations Debt CAPEX Bubble
	Energy Manager purchased Occidental Petroleum at the start of 2026, believing oil prices are currently depressed and the energy sector has underperformed significantly. Oil appears to be the only commodity not performing well, and both Occidental and the energy sector haven't performed this poorly versus the S&P 500 since the dot-com bubble.	Oil Commodities Underperformance Value
	Med-tech Manager has been rotating into med-tech stocks to shift exposure into a group that hasn't performed as well as technology but still benefits from ongoing technological trends. Examples include acquisition of Grail and swapping Zoetis for Boston Scientific, though Boston Scientific has fallen sharply following disappointing earnings.	Medical Devices Technology Rotation
2025 Q3	AI Manager expresses concern about heavy AI spending by mega-cap companies, particularly their dramatically increased CapEx investments over the past couple of years. He fears the spending could become an ongoing, perhaps never-ending process given the immense and continually growing demands for computing power and energy to deploy AI tools, potentially weighing on overall cash flow.	Artificial Intelligence CapEx Computing Power Energy
2025 Q2	AI Manager expresses genuine conflict about AI investments, particularly Microsoft, due to valuation concerns and uncertainty about returns on substantial data center spending. Questions whether AI sector will recoup considerable investments and fears AI risks becoming commoditized technology over time without clear differentiation among models.	Data Centers Valuation Technology Investment Returns Commoditization
2025 Q1	Trade Policy President Trump's tariff plan created significant market volatility, with the market underestimating his determination to reshape global trade. The manager believes tariffs will remain above a 10% floor and may be weaponized against China's weakened economy to slow military expansion.	Tariffs China Trade Geopolitical Policy
	AI Microsoft may scale back its Artificial Intelligence spending according to media reports, with potential capital expenditure reductions in fiscal year 2026 that could disappoint markets despite better-than-feared results and solid guidance.	Microsoft Capex Technology Cloud Investment
2024 Q4	AI Manager is skeptical of AI-related stock valuations, comparing the current environment to the 2000 dot-com bubble. Questions whether AI growth expectations will materialize quickly enough to justify current pricing, particularly for Nvidia which trades at very high valuations.	Nvidia Bubble Valuations Growth Technology
	E-commerce Shopify was the top performer in the portfolio during Q4, surging over 30% after delivering better-than-expected quarterly results. The strong performance helped narrow the gap between the strategy's performance and the S&P 500.	Shopify Growth Results Performance
2024 Q3	AI Technology companies including Apple, Alphabet, Microsoft, and Amazon have indicated plans to increase AI spending in 2025 to stay competitive. However, the payoff from these AI investments has not materialized yet, and the market has started examining AI spending more closely since mid-July.	Artificial Intelligence Technology Spending Investment Competition
	Earnings S&P 500 earnings estimates are being revised downward for 2024 and 2025 due to overestimated gross margin estimates and the impact of a strong dollar on earnings. Margin estimates starting at 13.8% for 2025 appear historically high and unlikely to be achieved, potentially reducing expected growth rates.	Estimates Margins Revisions Growth Valuations
2024 Q2	AI Rapid advancements in AI applications will likely support healthcare companies making meaningful advances in formulary and product development. The market has seen significant rotation into mega-cap stocks primarily led by Nvidia, creating substantial divergences across the market.	Healthcare Nvidia Technology
	Biotechnology Manager learned hard lessons from biotech investments in early 2014 when future growth was already priced in. Illumina was purchased as a blood diagnostics company with AI applications potential, and the portfolio received Grail shares developing early cancer detection technology.	Diagnostics Cancer Grail Illumina
2024 Q1	AI The market is being dangerously driven by an Artificial Intelligence momentum trade with Nvidia as the primary beneficiary. Many companies are spending heavily on AI but aren't necessarily seeing revenue benefits, while only a handful like Nvidia are actually profiting. The AI rally appears momentum-based and questionable for continuation.	Nvidia Momentum Revenue Spending Chips
	Inflation Inflation remains sticky in the mid-3% range, which likely means rates will remain higher for an extended period. The velocity of money is rising as nominal GDP growth outpaces money supply growth, which creates inflationary pressure and keeps bond yields elevated.	Sticky Rates Velocity GDP Yields
	Rates Interest rates are at their highest levels in decades and likely to remain elevated. The risk-free rate around 4.5% creates challenging conditions for equity valuations, with bond yields potentially continuing to rise due to money velocity dynamics.	Treasury Risk-free Elevated Yields Decades
2023 Q4	Growth The composite focuses on thematic growth investing with a long-term approach, owning mega-cap growth names like Apple, Microsoft, Alphabet, and Amazon. The strategy has benefited from the rally in mega-cap growth stocks in 2023.	Mega Cap Technology Long Term Quality Thematic
	Rates Interest rates surged in 2023 with the 10-year Treasury climbing to around 4% from 3.7%. The market is betting on aggressive Fed rate cuts in 2024, but the manager believes the Fed will deliver fewer cuts than priced in.	Fed Treasury Rate Cuts Monetary Policy
	Inflation The portfolio owns Visa and Mastercard as inflation hedges since their fees rise as prices rise. The strategy considers inflation protection in positioning decisions.	Hedging Payments Pricing Power

QUARTER

THEMES

AI

The manager notes that AI-related stocks, particularly semiconductors and memory chips, drove S&P 500 gains in Q2. The strategy underperformed due to exuberance in AI stocks. The manager benefited from AI infrastructure focus in 2023-2024 but the narrative shifted. Microsoft, Alphabet, and Amazon continue heavy AI infrastructure spending with strong cloud growth.

Semiconductors Memory Cloud Data Centers Infrastructure

Cloud

Microsoft Azure and Amazon Web Services continue exceptional growth, with Azure growing over 40% year-over-year and AWS growing over 35%. The hyperscalers are spending tremendous amounts to maintain and expand positions in AI infrastructure and data center markets while building out product suites.

Azure AWS Data Centers Infrastructure

Payments

Visa and Mastercard, the two largest holdings, have begun performing well after a weak first half. The manager views them as critical components of the global payment system powering e-commerce. Payments are becoming increasingly digital, and card-based purchases should continue growing well into the future, potentially enhanced by AI.

Digital Payments E-commerce Credit Cards

SaaS

The manager bought Intuit and ServiceNow during the quarter, companies watched for years while waiting for opportunity. Both operate software-as-a-service models delivering high growth and strong margins. They are industry leaders with pricing power and are not easily displaced by AI integration. AI could support further growth through data feeds and efficiency tools.

Enterprise Software Pricing Power Growth

Genomics

Illumina shares rose sharply after better-than-expected Q2 results and raised full-year outlook. Grail bounced back from Q1 decline as the market digests the path forward for Galleri cancer screening test. FDA will hold an adcom meeting in late September, which could open paths to approval and Medicare payments.

Biotechnology Diagnostics FDA

Capital Markets

The manager bought Cboe Global Markets, a leading options exchange operator in the United States. Options trading has expanded rapidly in recent years in US financial markets, and Cboe is the market leader. The manager believes options trading will continue to grow and play an increasingly important role in financial markets.

Exchanges Options Trading

2026 Q1

Oil

WTI oil prices soared to over $100 per barrel due to the closure of the Strait of Hormuz from U.S.-Iran engagement. The manager reduced Occidental position from 8% to 5% to lock in gains given volatility. Oil supply and demand imbalances are expected to drive prices higher regardless of conflict resolution expectations.

Oil Energy Occidental Geopolitical Volatility

Biotechnology

Grail's cancer screening test failed to meet its endpoint for detecting stage 1 and 2 cancers but still detected more stage 3 cancers. The manager maintains strong conviction in the stock and underlying technology despite the setback, expecting potential rebound with additional data presentation.

Biotechnology Cancer Screening Grail Healthcare

AI

Intuit is positioned to benefit from advancements in AI over time. The manager initiated a position in Intuit after its stock declined significantly, viewing the valuation as more attractive.

AI Software Intuit Technology Valuation

2025 Q4

AI

Manager believes AI sector is experiencing bubble-like conditions with excessive debt accumulation and unsustainable CAPEX spending. Software stocks have fallen sharply in 2026 as valuations come back to haunt them and fears of AI cannibalization rise. The manager's cautious approach in 2025 and continued cautious outlook are being validated by recent market sentiment shifts.

Software Valuations Debt CAPEX Bubble

Energy

Manager purchased Occidental Petroleum at the start of 2026, believing oil prices are currently depressed and the energy sector has underperformed significantly. Oil appears to be the only commodity not performing well, and both Occidental and the energy sector haven't performed this poorly versus the S&P 500 since the dot-com bubble.

Oil Commodities Underperformance Value

Med-tech

Manager has been rotating into med-tech stocks to shift exposure into a group that hasn't performed as well as technology but still benefits from ongoing technological trends. Examples include acquisition of Grail and swapping Zoetis for Boston Scientific, though Boston Scientific has fallen sharply following disappointing earnings.

Medical Devices Technology Rotation

2025 Q3

AI

Manager expresses concern about heavy AI spending by mega-cap companies, particularly their dramatically increased CapEx investments over the past couple of years. He fears the spending could become an ongoing, perhaps never-ending process given the immense and continually growing demands for computing power and energy to deploy AI tools, potentially weighing on overall cash flow.

Artificial Intelligence CapEx Computing Power Energy

2025 Q2

AI

Manager expresses genuine conflict about AI investments, particularly Microsoft, due to valuation concerns and uncertainty about returns on substantial data center spending. Questions whether AI sector will recoup considerable investments and fears AI risks becoming commoditized technology over time without clear differentiation among models.

Data Centers Valuation Technology Investment Returns Commoditization

2025 Q1

Trade Policy

President Trump's tariff plan created significant market volatility, with the market underestimating his determination to reshape global trade. The manager believes tariffs will remain above a 10% floor and may be weaponized against China's weakened economy to slow military expansion.

Tariffs China Trade Geopolitical Policy

AI

Microsoft may scale back its Artificial Intelligence spending according to media reports, with potential capital expenditure reductions in fiscal year 2026 that could disappoint markets despite better-than-feared results and solid guidance.

Microsoft Capex Technology Cloud Investment

2024 Q4

AI

Manager is skeptical of AI-related stock valuations, comparing the current environment to the 2000 dot-com bubble. Questions whether AI growth expectations will materialize quickly enough to justify current pricing, particularly for Nvidia which trades at very high valuations.

Nvidia Bubble Valuations Growth Technology

E-commerce

Shopify was the top performer in the portfolio during Q4, surging over 30% after delivering better-than-expected quarterly results. The strong performance helped narrow the gap between the strategy's performance and the S&P 500.

Shopify Growth Results Performance

2024 Q3

AI

Technology companies including Apple, Alphabet, Microsoft, and Amazon have indicated plans to increase AI spending in 2025 to stay competitive. However, the payoff from these AI investments has not materialized yet, and the market has started examining AI spending more closely since mid-July.

Artificial Intelligence Technology Spending Investment Competition

Earnings

S&P 500 earnings estimates are being revised downward for 2024 and 2025 due to overestimated gross margin estimates and the impact of a strong dollar on earnings. Margin estimates starting at 13.8% for 2025 appear historically high and unlikely to be achieved, potentially reducing expected growth rates.

Estimates Margins Revisions Growth Valuations

2024 Q2

AI

Rapid advancements in AI applications will likely support healthcare companies making meaningful advances in formulary and product development. The market has seen significant rotation into mega-cap stocks primarily led by Nvidia, creating substantial divergences across the market.

Healthcare Nvidia Technology

Biotechnology

Manager learned hard lessons from biotech investments in early 2014 when future growth was already priced in. Illumina was purchased as a blood diagnostics company with AI applications potential, and the portfolio received Grail shares developing early cancer detection technology.

Diagnostics Cancer Grail Illumina

2024 Q1

AI

The market is being dangerously driven by an Artificial Intelligence momentum trade with Nvidia as the primary beneficiary. Many companies are spending heavily on AI but aren't necessarily seeing revenue benefits, while only a handful like Nvidia are actually profiting. The AI rally appears momentum-based and questionable for continuation.

Nvidia Momentum Revenue Spending Chips

Inflation

Inflation remains sticky in the mid-3% range, which likely means rates will remain higher for an extended period. The velocity of money is rising as nominal GDP growth outpaces money supply growth, which creates inflationary pressure and keeps bond yields elevated.

Sticky Rates Velocity GDP Yields

Rates

Interest rates are at their highest levels in decades and likely to remain elevated. The risk-free rate around 4.5% creates challenging conditions for equity valuations, with bond yields potentially continuing to rise due to money velocity dynamics.

Treasury Risk-free Elevated Yields Decades

2023 Q4

Growth

The composite focuses on thematic growth investing with a long-term approach, owning mega-cap growth names like Apple, Microsoft, Alphabet, and Amazon. The strategy has benefited from the rally in mega-cap growth stocks in 2023.

Mega Cap Technology Long Term Quality Thematic

Rates

Interest rates surged in 2023 with the 10-year Treasury climbing to around 4% from 3.7%. The market is betting on aggressive Fed rate cuts in 2024, but the manager believes the Fed will deliver fewer cuts than priced in.

Fed Treasury Rate Cuts Monetary Policy

Inflation

The portfolio owns Visa and Mastercard as inflation hedges since their fees rise as prices rise. The strategy considers inflation protection in positioning decisions.

Hedging Payments Pricing Power

Date	Pitch Type	Author	Ticker	Company	Industry	Sub Industry	Bull / Bear	Exchange	Keywords	Action
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
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
Aug 8, 2025	Fund Letters	Mott Capital Management	MSFT	Microsoft Corporation	Information Technology	Systems Software	Neutral	NASDAQ	AI, capital expenditure, Cloud computing, Commoditization, data centers, Software, technology, valuation	Login
Aug 8, 2025	Fund Letters	Mott Capital Management	UNH	UnitedHealth Group Incorporated	Health Care	Managed Health Care	Bull	NYSE	CEO change, contrarian, defensive, health insurance, healthcare, managed care, turnaround, Value	Login
Aug 8, 2025	Fund Letters	Mott Capital Management	ZTS	Zoetis Inc.	Health Care	Pharmaceuticals	Bull	NYSE	Animal Health, Demographics, healthcare, Pet Ownership, pharmaceuticals, undervalued, Value, Veterinary	Login
Nov 2, 2024	Fund Letters	Mott Capital Management	BA	The Boeing Company	Industrials	Aerospace & Defense	Bull	NYSE	Aerospace, Commercial Aviation, duopoly, Equity, Order Backlog, turnaround	Login
Aug 1, 2024	Fund Letters	Mott Capital Management	ILMN	Illumina Inc	Health Care	Life Sciences Tools & Services	Bull	NASDAQ	AI applications, Biotech, Cancer Detection, diagnostics, Genomics, Healthcare Technology, life sciences, turnaround, Value Investment	Login

Date

Pitch Type

Author

Ticker

Company

Industry

Sub Industry

Bull / Bear

Exchange

Keywords

Action

Feb 23, 2026

Fund Letters

Michael J. Kramer

MSFT

Microsoft Corporation

Information Technology

Systems Software

Bear

NASDAQ

CapEx, debt, monetization, platform, Risk, Software, valuation

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

Aug 8, 2025

Fund Letters

Michael J. Kramer

MSFT

Microsoft Corporation

Information Technology

Systems Software

Bear

NASDAQ

AI, CapEx, cloud, Competition, valuation

Aug 8, 2025

Fund Letters

Michael J. Kramer

UNH

UnitedHealth Group Inc.

Health Care

Managed Health Care

Bull

NASDAQ

healthcare, Insurance, scale, turnaround, valuation

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

Aug 8, 2025

Fund Letters

Mott Capital Management

MSFT

Microsoft Corporation

Information Technology

Systems Software

Neutral

NASDAQ

AI, capital expenditure, Cloud computing, Commoditization, data centers, Software, technology, valuation

Aug 8, 2025

Fund Letters

Mott Capital Management

UNH

UnitedHealth Group Incorporated

Health Care

Managed Health Care

Bull

NYSE

CEO change, contrarian, defensive, health insurance, healthcare, managed care, turnaround, Value

Aug 8, 2025

Fund Letters

Mott Capital Management

ZTS

Zoetis Inc.

Health Care

Pharmaceuticals

Bull

NYSE

Animal Health, Demographics, healthcare, Pet Ownership, pharmaceuticals, undervalued, Value, Veterinary

Nov 2, 2024

Fund Letters

Mott Capital Management

The Boeing Company

Industrials

Aerospace & Defense

Bull

NYSE

Aerospace, Commercial Aviation, duopoly, Equity, Order Backlog, turnaround

Aug 1, 2024

Fund Letters

Mott Capital Management

ILMN

Illumina Inc

Health Care

Life Sciences Tools & Services

Bull

NASDAQ

AI applications, Biotech, Cancer Detection, diagnostics, Genomics, Healthcare Technology, life sciences, turnaround, Value Investment

TICKER	COMMENTARY
MSFT	Microsoft, Alphabet, and Amazon are all spending tremendous amounts of money to maintain and expand their positions in AI infrastructure and data center markets. They also continue to build out their own suites of products. Microsoft Azure and Amazon Web Services continue to grow exceptionally well, with Azure growth at more than 40% year over year and AWS growth at more than 35%.
GOOGL	Microsoft, Alphabet, and Amazon are all spending tremendous amounts of money to maintain and expand their positions in AI infrastructure and data center markets. They also continue to build out their own suites of products.
AMZN	Microsoft, Alphabet, and Amazon are all spending tremendous amounts of money to maintain and expand their positions in AI infrastructure and data center markets. They also continue to build out their own suites of products. Microsoft Azure and Amazon Web Services continue to grow exceptionally well, with Azure growth at more than 40% year over year and AWS growth at more than 35%.
ILMN	Illumina shares rose sharply after the company reported better-than-expected second-quarter results and raised its full-year outlook.
ISRG	Intuitive Surgical shares fell sharply after the company reported solid results but issued softer-than-expected procedure-growth guidance.
GRAL	Grail has bounced back from its sharp decline in the first quarter, as the market begins to digest the path forward for Galleri, the company's cancer screening test. Additionally, it recently announced that the FDA will hold an adcom meeting for the test in late September. If the meeting goes well and the panel votes in favor of Galleri, it could open a path to not only FDA approval but potential entry for Medicare payments, which would be a big win for the company.
V	Additionally, our two largest holdings, Visa and Mastercard, have finally begun to perform well after a weak first half of the year. I continue to believe that these two companies are critical components of the global payment system and help power e-commerce. Regardless of trends in AI, I believe they will remain valuable and important in the future. Payments are becoming increasingly digital, and purchases made using debit and credit cards should continue to grow well into the future; AI may only help enhance that as more transactions move away from traditional methods.
MA	Additionally, our two largest holdings, Visa and Mastercard, have finally begun to perform well after a weak first half of the year. I continue to believe that these two companies are critical components of the global payment system and help power e-commerce. Regardless of trends in AI, I believe they will remain valuable and important in the future. Payments are becoming increasingly digital, and purchases made using debit and credit cards should continue to grow well into the future; AI may only help enhance that as more transactions move away from traditional methods.
INTU	During the quarter, I bought shares of Intuit, ServiceNow, and Cboe Global Markets for the strategy. These are companies I have watched for years while waiting for an opportunity to buy them because they have strong businesses and play integral roles in their industries. Intuit and ServiceNow operate software-as-a-service business models that deliver high growth rates and strong margins. Both are industry leaders with pricing power and, in my view, are not easily displaced by integration of AI. If implemented effectively, I also believe AI could support further growth, as customers may pay for access to data feeds and tools that improve information flow and efficiency.
NOW	During the quarter, I bought shares of Intuit, ServiceNow, and Cboe Global Markets for the strategy. These are companies I have watched for years while waiting for an opportunity to buy them because they have strong businesses and play integral roles in their industries. Intuit and ServiceNow operate software-as-a-service business models that deliver high growth rates and strong margins. Both are industry leaders with pricing power and, in my view, are not easily displaced by integration of AI. If implemented effectively, I also believe AI could support further growth, as customers may pay for access to data feeds and tools that improve information flow and efficiency.
CBOE	During the quarter, I bought shares of Intuit, ServiceNow, and Cboe Global Markets for the strategy. These are companies I have watched for years while waiting for an opportunity to buy them because they have strong businesses and play integral roles in their industries. Cboe Global Markets is a leading options exchange operator in the United States. Options trading has expanded rapidly in recent years in US financial markets, and Cboe is the leader in the market. I believe options trading will continue to grow and play an increasingly important role in financial markets.
ZTS	Overall, when an investment thesis does not work—as was the case with Zoetis in late 2025 and Boston Scientific in 2026—and the stock price is falling while the business appears to be struggling, it makes sense to sell and move on.
BSX	In the case of Boston Scientific, we sold this stock this quarter after the company reported its second weak quarter in a row. One weak quarter can happen to any company, but two consecutive weak quarters can change the investment thesis. At that point, it is often best to cut one's losses and move on. Unfortunately, those losses hurt near-term performance.

TICKER

COMMENTARY

MSFT

Microsoft, Alphabet, and Amazon are all spending tremendous amounts of money to maintain and expand their positions in AI infrastructure and data center markets. They also continue to build out their own suites of products. Microsoft Azure and Amazon Web Services continue to grow exceptionally well, with Azure growth at more than 40% year over year and AWS growth at more than 35%.

GOOGL

AMZN

ILMN

Illumina shares rose sharply after the company reported better-than-expected second-quarter results and raised its full-year outlook.

ISRG

Intuitive Surgical shares fell sharply after the company reported solid results but issued softer-than-expected procedure-growth guidance.

GRAL

Grail has bounced back from its sharp decline in the first quarter, as the market begins to digest the path forward for Galleri, the company's cancer screening test. Additionally, it recently announced that the FDA will hold an adcom meeting for the test in late September. If the meeting goes well and the panel votes in favor of Galleri, it could open a path to not only FDA approval but potential entry for Medicare payments, which would be a big win for the company.

Additionally, our two largest holdings, Visa and Mastercard, have finally begun to perform well after a weak first half of the year. I continue to believe that these two companies are critical components of the global payment system and help power e-commerce. Regardless of trends in AI, I believe they will remain valuable and important in the future. Payments are becoming increasingly digital, and purchases made using debit and credit cards should continue to grow well into the future; AI may only help enhance that as more transactions move away from traditional methods.

INTU

During the quarter, I bought shares of Intuit, ServiceNow, and Cboe Global Markets for the strategy. These are companies I have watched for years while waiting for an opportunity to buy them because they have strong businesses and play integral roles in their industries. Intuit and ServiceNow operate software-as-a-service business models that deliver high growth rates and strong margins. Both are industry leaders with pricing power and, in my view, are not easily displaced by integration of AI. If implemented effectively, I also believe AI could support further growth, as customers may pay for access to data feeds and tools that improve information flow and efficiency.

NOW

CBOE

During the quarter, I bought shares of Intuit, ServiceNow, and Cboe Global Markets for the strategy. These are companies I have watched for years while waiting for an opportunity to buy them because they have strong businesses and play integral roles in their industries. Cboe Global Markets is a leading options exchange operator in the United States. Options trading has expanded rapidly in recent years in US financial markets, and Cboe is the leader in the market. I believe options trading will continue to grow and play an increasingly important role in financial markets.

ZTS

Overall, when an investment thesis does not work—as was the case with Zoetis in late 2025 and Boston Scientific in 2026—and the stock price is falling while the business appears to be struggling, it makes sense to sell and move on.

BSX

In the case of Boston Scientific, we sold this stock this quarter after the company reported its second weak quarter in a row. One weak quarter can happen to any company, but two consecutive weak quarters can change the investment thesis. At that point, it is often best to cut one's losses and move on. Unfortunately, those losses hurt near-term performance.

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Ticker	Put/Call	Amount Sold	Shares Sold	% Change	Weight %	Status
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Shares Sold

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Industry	Prev Quarter %	Current Quarter %	Change
No industry data available

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Prev Quarter %

Current Quarter %

Change

No industry data available

Investment Summary

Investor Summary

Fund Strategy

FUND PERFORMANCE AS OF 30th June 2026

Investor Letters

Latest Executive Summary:

Executive Summary

Core Thesis

Forward Outlook

Investment Themes

AI

Cloud

Payments

SaaS

Genomics

Capital Markets

Oil

Biotechnology

AI

AI

Energy

Med-tech

AI

AI

Trade Policy

AI

AI

E-commerce

AI

Earnings

AI

Biotechnology

AI

Inflation

Rates

Growth

Rates

Inflation

Investor Pitches

Current Portfolio as of ( 30th June 2026 )

Key Risks identified by Manager:

Key catalysts include:

Portfolio Implications

Ticker Commentary

Michael J. Kramer Top Holdings

Recent Buys (13F)

Recent Sells (13F)

13F Sector Summary

Portfolio Distribution

Latest 13D & 13G Filings

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