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3 MAJOR THEMES IN 2025
Underestimated AI Impact and Infrastructure Spending; The transformative power of AI over the next 3-4 years remains vastly underestimated - this is not a bubble, but a fundamental reshaping of the economy. Traditional economic cycles are becoming obsolete as AI enables companies to scale through technology rather than workforce expansion. Massive infrastructure buildout (spanning AI, EVs, and crypto) will require capital market funding on a scale comparable to the Industrial Revolution. This transformation will be funded through both public and private markets.
Rethinking Traditional Investment Approach; Traditional investment frameworks, including the 60/40 portfolio model are dead. The market is shifting from broad asset allocation to thematic factor investing, requiring more dynamic portfolio management as historical trends become less reliable. Investors must focus on company-specific opportunities rather than regional exposure, reflecting the S&P 500's increasingly concentrated nature. This environment demands a pro-risk stance, particularly in U.S. markets, as the AI theme broadens beyond tech. Static allocations and traditional portfolio construction methods don’t work.
Higher Interest Rates, USD and Inflation; A new paradigm of persistently higher rates and inflation is here, driven by policies focusing on deregulation, tax relief, and tech innovation. The U.S. economy shows resilience even with higher rates, supported by broad earnings growth beyond just AI. Global economic fragmentation is accelerating, particularly in U.S.-China competition. Supply chain reorganization accelerate these trends.
4. Bitcoin Higher in 2025 (probably beating most asset classes again.)
Positioning:
Increased overweight U.S. equities
Underweight long-term U.S. Treasuries
Positive on infrastructure
Risk Factors:
New political leadership driving policy volatility
Spike in long-term bond yields
Real War
Key changes needed:
More emphasis on tactical views vs long-term allocations
Active portfolio management
Company-specific rather than general index investing
We will produce more equity research later in the week.
Bitcoin vol and equity correlation heading lower over time.
Illiquid Assets: Sealed Trading Card Products are going way higher.
Sealed collector’s Magic The Gathering (LOTR)
Pokemon Prismatic Evolutions (if you can get your hands on it)
Flesh and Blood Welcome to Rathe Sealed First Edition Alpha Print
Classic graded video games (Halo 2, FF7, WoW)
Return always wants its risk payment.
NOT INVESTMENT ADVICE. Only for entertainment.
