| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| - | - | - |
The market gained approximately 14% in Q2 2026 despite persistent inflation, high energy prices, and geopolitical concerns. The quarter's biggest story was the SpaceX IPO, which debuted at $135 and closed at $161.11, pushing valuation above $2 trillion and making Elon Musk the first paper trillionaire. Shares later rose above $200 before retreating to $170 by quarter-end, with volatility driven by limited supply (only 5% of shares available publicly). Additional mega-IPOs from Anthropic and OpenAI may follow, with OpenAI targeting a $1 trillion opening despite aggressive spending and uncertain profitability. The manager uses this moment to distinguish between speculation—betting on binary outcomes determined by unknowable factors—and long-term investing focused on achieving life goals through diversified portfolios. The SpaceX valuation is characterized as highly speculative, based on technologies that don't yet exist. The manager emphasizes staying disciplined and avoiding dependence on correctly predicting which moonshot succeeds, maintaining focus on goal-based portfolio construction regardless of headline-grabbing opportunities.
The manager advocates for disciplined, diversified portfolio construction aligned with time horizon and risk tolerance over speculative participation in high-profile IPOs, arguing that most investors should focus on maximizing the odds of achieving life goals rather than striking it rich on binary bets.
The manager expects additional mega-IPOs from AI leaders Anthropic and OpenAI to potentially follow SpaceX, though recent weakness among tech stocks may delay these offerings. The tone is cautious and educational, emphasizing that there will always be another much-ballyhooed investment opportunity, but the focus should remain on disciplined portfolio construction for long-term goal achievement rather than chasing speculative opportunities.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Jul 7 2026 | 2026 Q2 | SPACEX | diversification, Investment Philosophy, IPOs, risk management, Speculation | - | This wealth management firm uses the SpaceX IPO—which surged to a $2 trillion valuation before retreating—to warn clients against speculation. The manager distinguishes between chasing binary moonshot bets and building diversified portfolios for life goals. With mega-IPOs from OpenAI and Anthropic potentially coming, the message is clear: stay disciplined and don't let financial futures depend on predicting which speculative opportunity succeeds. |
| Apr 7 2026 | 2026 Q1 | - | energy, Geopolitical, Markets, materials, technology, volatility | - | Q1 2026 markets declined on AI disruption fears and Middle East tensions, with US indices falling 3-7% while Canadian markets gained 3.33%. Energy led sector performance while Technology lagged. Economic growth disappointed but inflation remained controlled. Continued volatility expected though historical data shows significant market declines are relatively rare occurrences. |
| Dec 30 2025 | 2025 Q4 | - | AI, Bubble, diversification, portfolio, risk management, technology | - | The manager addresses AI bubble concerns by advocating diversification over market timing. While big tech spends $400 billion on AI infrastructure, concentration risk exists with Magnificent Seven representing 35% of S&P 500. Rather than predicting bubbles, investors should maintain diversified portfolios across asset classes and geographies to withstand changing market leadership. |
| Oct 14 2025 | 2025 Q3 | - | AI, Federal Reserve, Rate Cuts, rebalancing, technology, Valuations | - | Fed rate cuts and Powell's valuation warnings create mixed signals, but historical data shows timing markets based on valuations fails. Tech stocks trade at 30x earnings on AI optimism while other sectors remain reasonably valued. Systematic rebalancing maintains proper allocation regardless of market levels, avoiding the costly mistake of selling expensive stocks that often get more expensive. |
| Jul 8 2025 | 2025 Q2 | - | AI, inflation, Markets, rates, tariffs, technology, Trade Policy | - | Markets surged in Q2 2025 with S&P 500 up 10.57% and Nasdaq gaining 17.75%, led by Technology's 22.64% advance. Trade policy volatility created initial turbulence but AI-related stocks and tariff pause drove recovery. Economic data showed mixed signals with GDP contraction and weak consumer spending offset by strong durable goods orders. |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2026 Q2 |
IPOsThe letter extensively discusses the SpaceX IPO, which debuted at $135 and closed at $161.11, pushing valuation above $2 trillion. The IPO experienced volatility due to limited share supply (only 5% available to public). Additional mega-IPOs from Anthropic and OpenAI are anticipated, with OpenAI targeting a $1 trillion opening despite aggressive spending and uncertain profitability. |
SpaceX Mega-IPOs Valuation Supply |
SpeculationThe manager contrasts speculation with long-term investing, defining speculation as betting on outcomes determined by chance or unknowable factors with binary results. The SpaceX valuation is characterized as highly speculative, based on judgments about what the company might become decades from now using technologies that don't yet exist. The manager cautions against depending on correctly predicting which moonshot succeeds. |
Risk Binary Outcomes Moonshots Unknowable | |
| 2026 Q1 |
AIArtificial intelligence concerns disrupted markets in February as investors feared AI would reset business models across industries. Traders grew concerned about AI's potential to disrupt a wide swath of industries, prompting reassessment of valuations in affected sectors. |
Technology Disruption Valuations Business Models Sectors |
| 2025 Q4 |
AIAI investment boom compared to dot-com bubble with $400 billion in big tech spending for 2025 and $3 trillion infrastructure costs through 2028. Questions raised about whether technology will provide enough value to justify massive investments, citing OpenAI's $500 billion data center project against only $13 billion in 2025 revenue. |
Artificial Intelligence Technology Infrastructure Capex |
DiversificationEmphasized as key tool to navigate uncertainty and market leadership changes. Historical example shows small-cap and international stocks outperformed during dot-com bust when large growth stocks declined over 25%. Portfolio diversification across asset classes, sectors, company sizes and geographies recommended to balance risk and potential reward. |
Portfolio Risk Management Asset Allocation International | |
| 2025 Q3 |
RatesThe Federal Reserve cut rates by 0.25% in September, which typically makes equity investors optimistic as lower rates reduce borrowing costs and boost economic activity. However, Fed Chair Powell's subsequent comments about elevated equity valuations created mixed signals for investors. |
Interest Rates Federal Reserve Monetary Policy Rate Cuts |
AITech stocks have risen significantly on investor optimism about AI's potential to drive future earnings. The technology sector's elevated P/E ratio of over 30 reflects this AI-driven enthusiasm compared to other sectors trading in the teens. |
Artificial Intelligence Technology Earnings Growth Valuations | |
| 2025 Q2 |
Trade PolicyThe White House's new trade policy began in earnest on April 2, causing initial market volatility with global markets reacting negatively to tariff updates. A 90-day pause on specific tariffs announced April 9 led to the S&P 500's largest one-day gain in 17 years. Continued tariff discussions between the U.S. and China remained a key market driver throughout the quarter. |
Tariffs China Policy Volatility Trade |
AIArtificial intelligence-related stocks provided underlying strength to the market rally in June. A well-received quarterly corporate report from a mega-cap AI chipmaker helped drive market sentiment. The recovery in AI-related stocks contributed to both the S&P 500 and Nasdaq hitting all-time highs during the quarter. |
Chipmaker Technology Rally Growth Innovation |
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