Portfolio Update
- After an extended period without the anticipated rebound, OM exited substantially all Blockchain exposure (with Bitcoin at approximately ~$75K). While the position was given time to recover, that near-term bounce did not materialize as expected and OM exited. OM may look to re-enter at more attractive levels should a broader market dislocation occur.
- OM also exited almost all the India exposure. The decision reflects relative opportunity set considerations rather than concerns with the underlying thesis, with similar investments (notably Brazil) offering more compelling risk/reward at this stage.
- Following a strong start to the year, OM trimmed its US Reindustrialization exposure after it reached approximately ~12% of NAV. The theme remains core, supported by continued momentum in domestic industrial policy and infrastructure investment. However, given strong performance and elevated positioning, partial de-risking was appropriate. The portfolio retains meaningful exposure.
Cash now sits at ~15% of NAV. Despite this, the portfolio remains positioned for volatility, with a meaningful allocation to dislocation-driven and commodity-linked exposures.
Performance and Review
Our Man’s portfolio rose +4.0% during the first quarter, outperforming the S&P 500 TR (-4.3%) and the MSCI World (-3.2%). However, performance was marked by elevated volatility; with strong gains in January (+13.2%) and February (+1.6%) followed by a sharp pullback March (-9.6%).
The volatility reflected the underlying positioning—particularly exposure to commodities and US Reindustrialization—both of which are sensitive to shifts in sentiment and risk appetite. Early strength provided an opportunity to reduce exposure selectively, though OM could have been more aggressive (e.g. Uranium).
The medium-term history of the portfolio is below:
First Quarter Attribution
The first quarter was unusual and, at times, chaotic. January in particular saw a near indiscriminate rally across most positions, with the notable exceptions of Blockchain/Crypto and India. That kind of broad price action across the portfolio is typically not sustainable and, in OM’s experience, is better used to reduce risk than chase further upside.
Uranium (+347bps) and US Reindustrialization (+147bps) were the primary drivers of performance.
Uranium continues to reflect a structural supply-demand imbalance. Demand is increasingly supported by reactor life extensions and new project pipelines, while market pricing still assumes a relatively efficient supply response that has yet to show signs of materializing at scale. The disconnect remains in expectations rather than fundamentals.
US Reindustrialization reflects a broader policy-driven shift toward domestic capacity rebuilding. Markets continue to underweight the durability of this trend, treating decades of deindustrialization as structurally irreversible rather than a policy choice. That gap between perception and policy trajectory remains the core driver of returns, though it also increases sensitivity to sentiment shifts.
Elsewhere, Tin (+10bps) and broader Commodities (-9bps) ended the quarter roughly flat, but not without significant volatility along the way.
Shipping/Tankers (+374bps) was again a meaningful contributor during a time of uncertainty in the oil markets. Disruptions in key transit routes—most notably around the Strait of Hormuz—have increased effective shipping distances and constrained effective supply, pushing rates higher. We’ve seen versions of this before: when routes become inefficient, short-term tanker earnings can move well beyond even best-case assumptions. The question is always duration. These conditions don’t persist indefinitely, but they also don’t normalize quickly. In the interim, capital allocation discipline across the sector has improved, with a greater share of earnings being returned to shareholders. Valuations reflect reasonable normalized earnings, though the position is expected to naturally decline over time as dividends are realized
The Idiosyncratic Equity position in JOE contributed +16bps.
Losses were broadly distributed, with the largest detractors coming from European/UK Financials (-131bps), Argentina (-126bps), and China (-44bps). The common factor was rising macroeconomic uncertainty, compounded by geopolitical risk, including US/Israel-Iran tensions and ongoing US-China frictions (e.g. the postponed Trump-Xi meeting didn’t help sentiment).
Carbon Credit Allowances (-98bps) were again a detractor. While the regulatory direction remains supportive over the medium term, the sizable impacts were pushed further into 2028, later than expected. This timing shift weighed on near-term pricing, despite reinforcing the longer-term supply tightness thesis. At current levels, prices are approaching the regulatory floor price, which should limit downside. The upside case depends on whether CARB successfully implements the changes in a timely manner over the next ~6 months. The obvious risk is political—energy affordability is an easy place for pressure to build, particularly if broader geopolitical issues persist – though Governor Newsom is incentivized to encourage implementation before his term ends.
The India (-19bps) and Blockchain/Crypto (-69bps) were largely crystallized in early February as the positions were exited.
Portfolio (as at 1/1/26 - all delta and leverage adjusted, as appropriate)
Dislocations: 47.5%
24.6% - Uranium (URNM & URNJ)
6.8% - Commodities/Mining (LUNMF, TLOFF, PMCOF and IVPAF)
6.6% - Argentina (BMA, GGAL, SUPV)
5.8% - Tin (AFMJF, MLXEF and SBWFF)
3.7% - China (KWEB, FXI and JD)
Thematic: 35.5%
10.0% - Shipping/Tankers (STNG, INSW, TNK, DHT and FRO)
9.1% - US Reindustrialization (AIRR)
8.8% - European/UK Financials (BCS, LYG, NWG)
6.9% - Carbon Credit Allowances (KCCA)
<1.0% each in residual Blockchain/Crypto and India
Idiosyncratic: 2.6%
2.6% - Equities (JOE)
Shorts/Hedges: 0.0%
Cash: 14.3%
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.
