Ending February 27, 2026

The Members Message 

Bull or Bear - We Don’t Care

One of the questions we received from the Masterclass was are we bullish or bearish? It depends. Bullish or bearish on what and over what timeframe?

Most of us inhabit the present and so we tend to think in terms of what’s cheap/expensive now. But investing is about what happens over time. 

So if I say I am bullish this should be reflected in my allocation as in “I’m bullish on gold” and so you would expect me to have a higher allocation to gold. But then I say “I’m bearish overall”. What?

Well it depends on the asset and the correlation to other asset classes. So gold is considered a hedge so when stocks fall gold will do well. That makes sense because these asset classes - stocks and gold - are broadly uncorrelated . This smooths out the volatility which means losing less when the market falls because your gold allocation is rising. 

So are we bullish or bearish? 

I don’t care because it doesn’t matter. What matters is my allocation mix and how I think about time. 

I can be bullish because I am hedged for a big negative swing but I can be bullish because I understand how my portfolio responds to market movements and the mix and weighting of the different asset classes. 

Try not to think in terms of bullish or bearish. It doesn’t really help. A last example.

Last week I opened a short position via put options on the NASDAQ. So I’m bearish, right? Well kind of, but I am also long in other markets that are correlated to the US. If the US falls, it is more than likely that these other markets that I am invested in will fall as well. If that happens my short put options will rise in value making the unrealised losses less painful. 

It’s about how I think about investing over time, not in the present moment and how I manage my portfolio allocations not because I am bullish or bearish.   

You don’t get profits for being right about bullish or bearish, you get them from managing your portfolio over time and the mix between the different asset classes. 

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Weekly Video Review 

Geopolitics

1. Iran is still on the boil. War is very likely. 
2. Trump lost on tariffs - ah, not so fast. 
3. Mexico challenges the drug cartels.

The Oz Economy

From the article:

“Today, household debt is at near-record highs.”

And it most likely can not continue at the same rate. 

Defaulting is not the issue. For investors, the issue is the fall in prices which results in lower and negative returns over the life of the investment. Just because you can pay "the gap", doesn't mean you are making money. 

How much debt households had when interest rates were 17 per c... Aussie households are carrying almost three times as much debt as they were in 1990, most of it housing. This is magnifying the impact of... www.smh.com.au

The ASX

The ASX (XAO) starts the week at 9,333, holding near recent highs after a strong run through the first part of the year.

From a Total Money Management lens, this is a market that remains supported, but not without growing tension under the surface. Momentum is still positive, breadth has improved compared to earlier in the year, and capital continues to rotate rather than exit. That is a healthy sign.

At the same time, valuations across parts of the index are stretched, particularly in areas that have led the move. This does not mean an immediate pullback is required, but it does mean forward returns are likely to be more uneven and more dependent on discipline than enthusiasm.

The key focus here is risk management, not prediction. In environments like this, portfolios tend to benefit from:

• Clear position sizing

• Respecting volatility rather than fighting it

• Letting winners run, but trimming where exposure has become outsized

• Being patient with new capital rather than forcing entries

In short, the trend remains intact, but the margin for error is narrowing. This is a market that rewards process, not bravado.

Lesson of the Week

Special Topics - Issues we are following

 

Private Credit

Private credit and private equity are where the cockroaches are hiding. This has the potential to be a catalyst for stockmarket panic.  

Private equity stocks tumble as Blue Owl restricts fund redemp... Investing.com -- Shares of major private investment managers fell sharply on Thursday as Blue Owl Capital's decision to permanently restr... au.finance.yahoo.com

 

Artificial Intelligence

The longer this goes on, the more nervous we become. AI is failing to live up to expectations because the tech bros have talked it up too much. The economics is also struggling to show investors that there are profits to ne made. none of these companies have a competitive advantage or moat as Buffett calls them. 

 

Rare Earths/Precious Metals

 As we mentioned in last week's podcast,(around 13.30 minutes), the rare earth story will unfold over a decade, so there is a long runway of opportunties. But make no mistake, the Western countries will not allow themselves to be hostage to China's strangehold. Expect other industries to follow (medicines will be next). 

It always involves debt, it's going to be really, really ugly Join Steve Moriarty, Tom Hill, and Jacob Senior as they unpack the world of investing-from market moves and strategies to timeless princi... www.youtube.com

This is why the global trading system has changed and wont be returning to the days of yore.