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| Quarter | Letter Date | Fund Name | QTD | YTD | Tickers | Themes | Quick Take |
|---|---|---|---|---|---|---|---|
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"Berman Capital Group returned 5.31% in Q1 2026, driven by energy longs like Tidewater, Vista Energy, and Borr Drilling. The fund temporarily de-grossed in March due to extreme geopolitical uncertainty from the Iran war."
Berman Capital Group returned 5.31% net of fees in the first quarter of 2026. Performance was primarily driven by long energy positions, including Tidewater, Vista Energy, and Borr Drilling, alongside Nexa Resources, which was temporarily trimmed during a silver short squeeze before being rebuilt in March. Geopolitical conflict in Iran dominated the quarter, leading to extreme volatility that prompted the fund to de-gross its portfolio to preserve capital. The manager expects severe, long-lasting consequences from the historic 13 million barrels per day oil supply disruption, projecting Brent crude to remain well over $100 per barrel even under optimistic scenarios, and potentially reaching $150 to $175. While broader equity markets remain overly optimistic about a swift resolution, the fund perceives a heightened risk of global recession and cost inflation, particularly impacting mining valuations. However, as the probability distribution of macroeconomic outcomes narrowed in April, the manager has begun selectively increasing risk exposure.
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Algorithmic conviction, macroeconomic posture, and risk appetite signals extracted from this quarterly letter with qualitative explanations.
Market Conviction
A score of 0.65 indicates moderate conviction. While the manager presents clear structural arguments regarding the energy crisis, they also outline highly divergent macro scenarios and chose to step aside by de-grossing the book in March, demonstrating a preference for optionality over holding through volatility.
Growth Outlook
The score is 0.25 (Cautious). The manager warns of severe macroeconomic headwinds, argues that equity markets are pricing in a 'truly delusional outcome,' and outlines the threat of a major global recession.
Risk Appetite
The score of 0.50 reflects a balanced posture. Despite lowering risk and raising cash in March, the manager has started adding exposure back in April, representing a neutral-to-balanced current risk-on profile.
Capital Deployment
The score is set to 0.45 to reflect a net neutral to slightly cautious deployment stance. The manager explicitly states that they de-grossed the portfolio in March due to extreme volatility, though they began selectively buying back Nexa Resources and adding risk back in April.
Forward Guidance
A score of 0.75 is assigned because the manager notes they are actively putting on more risk in the portfolio as April has progressed and the 'cone of probability' has narrowed, indicating a clear bias to act on emerging visibility.
Language Signal
The language signal is 0.25, leaning strongly bearish. The document is heavily populated with risk-focused terminology, highlighting potential 'worst-case' recessions, market 'delusions', supply shocks, and operational cost inflation.
Perceived Risk
The perceived risk is scored at 0.90. The manager provides a detailed analysis of systemic threats, stating that severe economic damage is 'effectively unavoidable' and outlining extreme tail-risk scenarios including $250 Brent crude and global recessions.
Opportunity Density
Opportunity density is scored at 0.50. The manager notes that depending on the day, asset classes like mining looked either 'profoundly cheap or absurdly overvalued,' indicating that compelling long opportunities are highly conditional on macro paths.
Time Horizon
A score of 0.50 is assigned as the primary thesis is medium-term. It is highly dependent on near-term geopolitical catalysts (such as the resolution of the conflict by July or August) and immediate physical supply chain dynamics.
