2026: First Quarter Review

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.

2025: Fourth Quarter Review

Portfolio Update 
All portfolio additions this quarter were in Commodities/Mining, with new positions in Ivanhoe Mines (IVPAF), Prospector Metals (PMCOF), and Talon Metals (TLOFF, see here for external in-depth write-up on Talon). Longtime readers will recognize the central theme across OM’s portfolio: supply deficits created by years of under-investment, now colliding with modest demand growth. OM discussed this dynamic in detail ~18 months ago in the context of Uranium, Tin, and Tankers, and it has continued to strengthen.

What has changed is timing. While under-investment has been widespread across commodities for over a decade, it is only now coming to a head as supply deficits begin to emerge, demand increases, and industrial supply chains re-orient. This has been further compounded by a growing recognition that much of global supply for key commodities sits in jurisdictions unfriendly to the West. 

OM’s Commodities/Mining exposure reflects this setup and is focused on high-quality deposits that had secured financing prior to OM’s investment, providing a longer runway toward production.  To better reflect this shift, OM has reclassified Commodities and Tin from a “Theme” to a “Dislocation” for 2026.

Performance and Review
Our Man’s portfolio continued its strong run in the fourth quarter, rising 7.1% though performance was volatile (Oct: +9.2%, Nov: -4.8%, and Dec: +3.0%).  This comfortably outperformed both the S&P 500 TR (+2.7%) and the MSCI World (+3.4%).

The strong final quarter meant the portfolio returned +36.3% for 2025, well ahead of the broader markets (S&P 500 TR: +17.9%; MSCI World: +18.4%).

As a couple of folks have asked, here is the medium-term history of the portfolio:

Fourth Quarter Attribution

Argentina (+476bps) was the largest contributor, recovering roughly two-thirds of its 2025 losses after President Milei’s party performed strongly in the midterms.  This eased concerns that his reform agenda would need to be scaled back. While the position’s performance in 2025 was frustrating, this largely reflected portfolio management errors - most notably not trimming after the outsized gains in 2024 - rather than any material deterioration in the underlying thesis.

UK/European Financials (+200bps) continue to perform strongly, suggesting that the market is not only being driven by the MAG7/AI! The position has contributed positively in each of its nine quarters in the portfolio, with the ADRs of Barclays and NatWest up ~250% (or roughly twice the MAG7). It is a reminder of the excess returns available when stocks are genuinely cheap and paired with changes that the market has yet to fully appreciate. While these names remain relatively inexpensive, they are no longer dislocated. The market now recognizes the earnings benefits of higher rates, leaving the final phase of performance as a rerating driven by more consistent and predictable earnings growth. As a result, OM has moved European Financials from the Dislocation to the Thematic bucket for 2026, and the position is likely to be reduced over time.

Commodities (+149bps) and Tin (+149bps) were beneficiaries of a broader repricing of supply-chain and geopolitical risk. During the quarter, China’s tightening of export controls on rare earth elements served as a reminder of how concentrated—and politically fragile—many commodity supply chains remain. This coincided with growing evidence that years of under-investment are now translating into physical tightness, particularly in smaller markets where incremental demand can have an outsized price impact.  OM suspects many market participants have forgotten how aggressively these smaller markets can move, or haven’t been around long enough to know.

Uranium (-180bps) detracted, largely due to positioning and expectations rather than any deterioration in the longer-term fundamentals. Market optimism around Uranium’s formal inclusion on the US critical minerals list had built into prices, and delays caused by the government shutdown led to disappointment and near-term pressure across the complex.

US Reindustrialization (+21bps) and Idiosyncratic (+47bps) contributed as domestic industrial exposure continued to benefit from resilient US growth and ongoing capital spending tied to reshoring and infrastructure investment. The US Reindustrialization ETF, in particular, extended gains made earlier in the year, ending up over 30%, as mid-cap industrials remained tied to long-term capital expenditure themes rather than cyclical slowdowns.  Smaller gains came from Carbon Credit Allowances (+12bps), Tankers/Shipping (+6bps), and India (+5bps).

China (-54bps) detracted following renewed political tensions with the US, which weighed on sentiment. Chinese equities performed well over 2025, and after a year of improving liquidity there are early signs of economic recovery. After a lost half-decade and with investor interest still limited, Chinese equities may be worth watching in 2026. 

Blockchain/Crypto (-123bps) positions were a disappointment; OM failed to follow his own advice to exit at the end of Q3.   Such an exit would have been near the all-time highs, instead he overthought and overcomplicated the position, based on an extended global liquidity into mid-2026.   Given the sharpness of the descent, OM will look to exit on a bounce during Q1-26.


Portfolio (as at 1/1/26 - all delta and leverage adjusted, as appropriate)
Dislocations: 48.1%
22.4% - Uranium (URNM & URNJ)
8.2% - Argentina (BMA, GGAL, SUPV)
7.2% - Commodities/Mining (LUNMF, TLOFF, PMCOF and IVPAF)
6.0% - Tin (AFMJF, MLXEF and SBWFF)
4.3% - China (KWEB, FXI and JD)

Thematic: 44.1%
11.6% - US Reindustrialization (AIRR)
10.6% - European/UK Financials (BCS, LYG, NWG)
8.2% - Carbon Credit Allowances (KCCA)
7.0% - Shipping/Tankers (STNG, INSW, TNK, DHT and FRO)
3.8% - India (IBN, INDA and SMIN)
2.9% - Blockchain/Crypto (IBIT, ETHE/ETH and BBBY)

Idiosyncratic: 2.6%
2.6% - Equities (JOE)

Shorts/Hedges: 0.0%

Cash: 5.3%

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.