Portfolio Update
Our Man made minor adjustments to the portfolio in the final days of the month, taking profits in Uranium (trimming both the Uranium Miners ETF and the Uranium Junior Miners ETF, reducing exposure by approximately 550bps) and in European/UK Financials (trimming Barclays and NatWest, reducing exposure by about 200bps).
He also added a small position in Commodities through Ivanhoe Mines (IVPAF), though that came on the first day of the fourth quarter.
Performance and Review
Our Man’s portfolio continued its strong run through the third quarter, posting gains in each month (July: +1.2%, August: +5.3%, and September: +6.6%) for a total quarterly return of +13.7%. This comfortably outperformed both the S&P 500 TR (+8.1%) and the MSCI World (+7.5%).
The portfolio’s strong performance over the past two quarters brought its year-to-date return to +27.3% at the end of Q3, well ahead of the broader markets (S&P 500 TR: +14.8%; MSCI World: +14.6%).
As a couple of folks have asked, here is the history of the portfolio over the last few years:
Third Quarter Attribution
The biggest driver of performance was Uranium, which contributed +825bps during the quarter. The impact reflected both the size of the position - peaking at 32% before being trimmed on the final day of the month - and its roughly 30% price gain. The position has nearly doubled since OM added to it in April, as it has become widely recognized that the rapid expansion of AI data centers will require significant additional power generation capacity, with nuclear energy a key component. Fundamentals remain strong: the demand-supply imbalance was underscored at the World Nuclear Symposium, while U.S. policy support continued to build, with the Administration encouraging domestic uranium production and signaling an intent to establish a strategic uranium reserve. Technical factors also provided tailwinds, as several financial vehicles (SPUT, YCA, etc.) that purchase physical uranium raised capital and were active buyers in the market, helping to lift spot prices. OM remains comfortable with the current position size while these supportive dynamics persist but expects to trim further during Q4.
Reindustrialization of the US (+220bps) also performed strongly, supported by the ongoing localization of supply chains and the substantial power and electrical infrastructure buildout driven by AI-related data center construction. The theme of localization is well captured by economist Marvin Barth (excerpted below, from Seriously Marvin).
“Long before protectionism, Covid and security concerns accelerated the process, technology began unwinding globalization. Automation allows production to move closer to consumer, obviating extended supply chains. Localization of production is reshaping trade, capex and relative growth. It has driven higher real interest rates, supercharged US earnings, and a decade of emerging market underperformance.”
Other notable contributors included Shipping (+197bps), Tin (+127bps), Blockchain/Crypto (+111bps), Carbon (+92bps), China (+84bps), European Financials (+84bps), and Commodities (+52bps). Among these, Tin and Carbon merit particular mention. Tin remains one of the most attractive risk-reward opportunities in the portfolio; its primary use as the “glue” in making semiconductors comes amid tightening supply, while Alphamin Resources - the industry leader - trades at over a 20% free cash flow yield. California Carbon Allowances (CCAs) rallied after the state reauthorized and extended its Cap-and-Invest program through 2045, removing significant uncertainty. Although regulatory details remain pending, the direction of travel is clear. With CCAs trading near their floor price - which rises by inflation + 5% annually - the setup remains highly asymmetric.
The only significant detractor was Argentina, which fell sharply and detracted -397bps. After a strong first 18 months under President Javier Milei, Argentina encountered its first meaningful setback. Despite an initial devaluation and a crawling peg to the U.S. dollar, the peso weakened sharply through Q2 and Q3, prompting the central bank to use most of its reserves to slow the decline. Investor sentiment deteriorated further after Milei’s party underperformed in a regional election, raising concerns that his reform agenda could be weakened if the upcoming late-October midterms go poorly. However, the currency and equities partially recovered after the U.S. reaffirmed its support for the Milei government, announcing a $20 billion swap line and signaling a willingness to provide material further assistance. While election outcomes remain uncertain, OM believes market sentiment has swung too far negative and is comfortable maintaining the current position, with potential to increase post-election. The “original sin” was not realizing some of the exceptional (and still material) gains earlier in the year.
The positions in Idiosyncratic Equities (+10bps) and India (-35bps) had a limited impact on the portfolio.
Portfolio (as at 09/30/25 - all delta and leverage adjusted, as appropriate)
Dislocations: 45.5%
26.8% - Uranium (URNM & URNJ)
9.4% - European/UK Financials (BCS, LYG, NWG)
5.3% - China (KWEB, FXI and JD)
4.1% - Argentina (BMA, GGAL, SUPV)
Thematic: 43.6%
12.2% - US Reindustrialization (AIRR)
8.9% - Carbon Credit Allowances (KCCA)
7.5% - Shipping/Tankers (STNG, INSW, TNK, DHT and FRO)
5.1% - Tin (AFMJF, MLXEF and SBWFF)
4.0% - India (IBN, INDA and SMIN)
4.4% - Blockchain/Crypto (IBIT, ETHE/ETH and OSTK)
1.5% - Commodities/Mining (LUNMF)
Idiosyncratic: 2.3%
2.3% - Equities (JOE)
Shorts/Hedges: 0.0%
Cash: 8.5%
Disclaimer: Nothing above should be considered investment advice or a recommendation to buy or sell any security. While Our Man is invested in all of the securities mentioned, that alone is a terrible reason for anyone else to be. Our Man also holds some cash and a few other positions (of negligible value). Investors should always do their own work and make decisions based on their own circumstances, objectives, and risk tolerance—and not because Our Man happened to mention something here.
