Core Viewpoint - The technology sector is experiencing a significant sell-off, particularly in software and semiconductor stocks, leading to discussions about a potential market correction or a "great rotation" into other sectors [2][4]. Market Trends - A rotation is evident in the market, with the S&P equal weight index reaching a new all-time high, contrasting the performance of the S&P 500 [4]. - The tech sector has seen a notable pullback since late October, with major tech stocks peaking around Halloween and subsequently declining [5]. Investment Sentiment - Concerns are rising regarding the AI trade and spending, particularly after Alphabet announced a doubling of its capital expenditures [5][8]. - There is a differentiation in spending among companies, with some like Alphabet maintaining strong cash flow despite increased capex, while others like Meta are facing challenges as their capex impacts cash flow negatively [9]. Economic Indicators - The market is witnessing a shift towards hard assets and defensives, driven by expectations of economic activity accelerating due to fiscal impulses and supportive monetary policy [12][13]. - Recent movements in the dollar have contributed to an unwind in commodities, indicating a more defensive market posture [14]. Volatility and Risk - Increased volatility in other asset classes, including crypto markets, suggests a general risk aversion among investors, with continued weakness in the crypto complex [16][17]. - The S&P 500 is being closely monitored around the 6,800 level, which is significant for potential downside dynamics [18].

Core Viewpoint - The recent gold market pullback, triggered by the announcement of Kevin Warsh as the new Fed Chair, is seen as a healthy correction from overbought conditions, presenting a buying opportunity for investors in precious metals [2][4]. Group 1: Market Dynamics - The gold correction is viewed as a chance for investors to reassess their positions rather than panic [4]. - The announcement of Warsh, perceived as less dovish, may still align with a future interest rate reduction in 2026, as indicated by President Trump [2]. - Crescat's portfolio of undervalued precious and critical metals miners has outperformed gold and silver benchmarks, with Tectonic Metals rising 28% despite a 9% drop in spot gold [3][2]. Group 2: Long-term Trends - The U.S. dollar is believed to be on the verge of a third devaluation wave, following historical precedents during the Great Depression and the end of the Bretton Woods system [6][7]. - Current U.S. debt and deficit levels are at historic highs, with S&P 500 market multiples nearing those of major market peaks in the past [8]. - A significant rotation of global investors into precious metals and resource equities is anticipated, moving away from U.S. megacap tech stocks [9]. Group 3: Central Bank Actions - Since mid-2022, global central banks have been increasing their gold reserves, with net quarterly purchases significantly above the previous decade's average, indicating a long-term trend [25]. - The U.S. dollar's share of global foreign exchange reserves has fallen below 40%, while gold's share has surpassed 30%, marking a historical shift in reserve composition [27][29]. Group 4: Mining Sector Outlook - The performance of senior gold miners in 2025 suggests the beginning of a multi-year cycle, with potential benefits trickling down to junior and development-stage miners [14]. - Major gold miners are currently trading closer to their 10-year averages rather than at peak multiples, indicating room for growth [15]. - The widening spread between gold prices and operating costs is driving profitability, with all-in-sustaining costs for major miners growing at a rate lower than gold price appreciation [18][21]. Group 5: M&A and Exploration - Current M&A activity in the precious metals sector remains below peak levels, suggesting the industry is still in the early stages of strategic re-rating [31]. - There is potential for increased acquisitions of exploration-stage companies, with significant cost differences between exploration and late-stage development projects [33]. - The mining sector is expected to see a favorable backdrop for capital expenditures, driven by rising demand for metals and a structural shortage due to underinvestment [36].

Core Viewpoint - The narrative suggests that 2026 will be a significant year for small-cap stocks, indicating a potential shift in market dynamics favoring smaller companies [1]. Group 1: Investment Strategy - The company emphasizes the importance of a diversified investment approach, combining classic dividend growth stocks with Business Development Companies, REITs, and Closed End Funds to enhance income and total return [1]. - A hybrid investment system is proposed, which aims to achieve total returns comparable to traditional index funds like the S&P 500 while focusing on income generation [1].

Group 1 - Roberts Berzins has over a decade of experience in financial management, assisting top-tier corporates in shaping financial strategies and executing large-scale financings [1] - Significant efforts have been made to institutionalize the REIT framework in Latvia, aimed at boosting the liquidity of pan-Baltic capital markets [1] - Development of national SOE financing guidelines and frameworks for channeling private capital into affordable housing stock has been a focus of policy-level work [1] - Roberts is a CFA Charterholder and holds an ESG investing certificate, with experience from an internship at the Chicago Board of Trade [1] - Active involvement in "thought-leadership" activities supports the development of pan-Baltic capital markets [1]

Market Dynamics - Crypto market struggles to rally because most tokens are held by OG whales and retail investors [1] - Whales, having matured, are selling their holdings after substantial gains, primarily to institutions, as initially intended [1] - Retail investors are sentiment-driven, short-term oriented, emotional, and prone to panic selling [1] - Price movements are contingent on the supply shifting back to long-term holders [1] Investment Strategy - The market is undergoing a "Great Rotation," implying a shift in asset allocation towards long-term holders [1]

Core Insights - A significant shift is occurring in the investment landscape, with gold miners outperforming tech stocks like Nvidia, indicating a migration of capital from overvalued financial assets to undervalued commodities [1][4][6] Group 1: Performance Comparison - Gold miners, tracked by the VanEck Gold Miners ETF (GDX), have surged by 93%, while silver miners, tracked by the Global X Silver Miners ETF (SIL), increased by 90% [3] - In contrast, Nvidia's stock, part of the Magnificent Seven, only rose by 14%, highlighting a stark divergence in performance [3] Group 2: Market Dynamics - The current market environment is characterized by sticky inflation, potential Federal Reserve rate cuts favoring hard assets, and geopolitical tensions driving gold prices towards $4,000 per ounce [4] - The market cap of Nvidia, at $4.34 trillion, significantly overshadows the combined market cap of all copper, gold, and silver producers, suggesting a potential for a painful correction in Nvidia's valuation [4] Group 3: Energy and Future Outlook - Nvidia's growth is hindered by an energy infrastructure that is "50 times smaller" than what is required for mega data centers, raising concerns about its sustainability [5] - Uranium and nuclear stocks, currently undervalued, are positioned as potential future leaders in energy supply, contrasting with Nvidia's high market cap [5] Group 4: Investor Sentiment - Despite gold reaching all-time highs, massive ETF outflows indicate that retail investors have not yet fully engaged, suggesting further upside potential for gold [6] - The prevailing sentiment among savvy traders is to pivot from Nvidia hype towards investing in hard assets like gold, as the market signals potential stagflation and debt crises [6]

Active vs Passive Fund Performance - Actively-managed investment funds have historically struggled to consistently outperform their passive counterparts [1] - The outperformance of US markets in previous years has further intensified this challenge [1] - In 2025, active investment strategies are showing potential signs of resurgence amidst the "Great Rotation" [1]