To The Moon

A portfolio equals structure and activity. Structure is the framework: constraints, risk limits, sector allocations, and opportunity set. Activity is the continual revision of beliefs as new information arrives. Remove structure and you have speculation. Remove activity and you have a time capsule of yesterday’s convictions about a world the market has already left behind. For investors, the war in Iran ended on March 31st; they rarely wait for diplomatic closure. The Trump administration has not just once said it is negotiating an end to the conflict—it has said so repeatedly, inconsistently, and often alongside threats of escalation, roughly 6–10 distinct times since March 24, turning it into the Boy who cried Peace. For investors trying to forecast inflation, monetary policy or, for ext

We are ~12 weeks into the Hormuz closure and everyone is still talking about oil and how the energy shock is driving inflation. Two more supply shocks hide in the shadow of Hormuz: Urea, a key input into fertilizers, has already repriced sharply at $850/mt in April, up ~80% since February, and helium, a non‑substitutable process gas for semiconductors fabs - no high‑purity helium means yield loss or tool downtime. Fertilizer is the faster channel, already repricing and feeding into the next planting cycle, reinforcing second‑round inflation pressures. For helium, if disruption persists, even modest curtailments feed through with a lag given ~6‑month semiconductor lead times, pushing any chip supply shock into Q4. For inflation, energy was the first punch, fertilizer the second—helium is th

American voters were promised peace in Ukraine and no more foreign wars. So far, the administration has managed neither. It has been unable to pour oil on troubled waters in Ukraine, or water on troubled oil in Hormuz after its own foreign policy helped set it alight. The promise of peace and stability abroad was perhaps too lofty for contentment and the approach too chaotic for achievement. On the narrower test of regime change, the administration may now be 0-for-3: Venezuela, Iran, and Cuba. Meanwhile, the costs at home are mounting. Last week was dominated by the first of three planned Trump-Xi meetings. With the wars in Ukraine and Iran still imposing heavy economic costs, investors feared the administration’s doctrine of Peace through Strength could slide into Peace through Compromis

Summer-like volume in April suggests the outsized rally in US equities (99th percentile for the S&P 500) was driven by a minority of optimistic investors, firmly believing in their own heads—not the place that counts most, but important nevertheless—that negotiations between the US and Iran would succeed and Hormuz would soon reopen for business as usual. Those investors were in the middle of downward dog when they saw Trump’s Truth Social post: “TOTALLY UNACCEPTABLE.” Does it matter whether what we remember really happened? Or only that it mattered enough to be remembered? In the current US-Iran conflict, both sides are living proof that those are not the same thing. The US carries a tabulated memory of June 2025 and 28 February 2026: facilities damaged, the nuclear timeline set back,

Negotiators are, by definition, pullers of strings who work behind the scenes. Yet, despite both sides dispatching their éminence grise to Islamabad, a deal between the US and Iran remains elusive. Hormuz, that narrow oesophagus through which the world has, for decades, gorged itself on oil, remains dangerously clogged. The Trump administration tells anyone who asks – and plenty who don’t – that the blockade is working and that this vital organ will soon be back to normal with both function (traffic) and form (freedom of navigation) fully restored as Iran, it insists, is about to cave. For its part, Iran’s parliament warns to expect function to return, but not form. Hormuz, it insists, will not be born again: freedom of navigation will return, but as pay-to-play. The stalemate reflects the

Last week ended with investor sentiment still bearish in four markets, negative in another five, and neutral in Asia ex-Japan. The war in Iran, now entering its ninth week with a peace deal still out of reach, continues to dominate investor sentiment—though there are signs of bearish fatigue. President Trump tweeted that Iran had offered “a lot, but not enough”, while Iran’s Foreign Minister Abbas Araghchi said he does not believe the US is “truly serious about diplomacy”. The two sides remain far apart, each insisting the other’s plan has all the hallmarks of an indecent proposal. For investors, a win in Iran is not about reaching for the stars—it’s about fixing the roof (pun intended). Over the past two weeks, the drivers of bearishness have been easing. In the Gulf, headlines shifted fr

Welcome to week eight of Operation Epic Fury. To recap, while March – a month aptly named after the God of War – was defined by its bombing campaigns and consecutive escalations, April has thus far been about diplomacy as the Trump administration scrambles to restore the Strait of Hormuz to its pre-war factory setting. For investors, there has never been a more ambiguous war, goal-wise, end-wise, or otherwise. Bearish ROOF Scores across most markets since mid-February reflected the implementation of flight-to-safety strategies by the majority of investors. In March, each time they dared to step back into the market thinking the latest Presidential Tweet had cleared the uncertainty, they found the risk premium still wedged in place, like the sword in the stone. Only a contrarian, mightily r

Most people spend all their time worrying about the future or chasing the past. Investors, spend all of their time chasing the future or worrying about the past. Was our initial forecasts correct? Have circumstances changed? Should we rebalance? Could the future be different than what we thought it would be? For investors, the past is a funny thing. It has such power over future performance. Such sway. It’s shifty too. It morphs and changes with every news headline, even though in theory it should be set in stone. In investments, the past is all perspective. Investing follows a simple process. First investors forecast where returns will come from as best they can. They then construct a portfolio loading on these expected sources of return as much as possible given the constraints in their

Identifying investor sentiment is a bit like inferring the presence of an exoplanet we can’t see directly. Astronomers look for small gravitational distortions - or “wobbles” - in the paths of objects they can observe and whose orbital fields they’ve already mapped. Likewise, we can’t observe investors’ strategies directly, so to infer whether investors are positioning bullishly or bearishly, we look for comparable “distortions”: active returns in sector portfolios we can observe and whose factor exposures we’ve already mapped, classifying sectors as risk-tolerant or risk-averse. When a risk-averse sector rises as the market falls, it suggests investors are rushing to safety. According to those “wobbles,” Global Developed ex-US investors have been implementing bearish strategies for 39 con

The conflict in the Middle East remains the focal point as investors try to assess how far the latest oil shock will propagate through the global economy. Since the war began, a steady fog of misinformation has obscured the line between theatre and reality - on both sides. But the economic bill is becoming harder to overlook. Higher energy prices are feeding directly into inflation expectations, squeezing consumers, lifting transport and input costs, and further narrowing already constrained central‑bank policy paths. At the same time, signs of slowing activity are becoming more visible. Consumer sentiment data released last week showed a further deterioration in household confidence, reinforcing concerns that higher energy prices are already weighing on spending intentions. Attention now