“Thinking is hard, but it is valuable. Feeling is easy, but it is expensive.”

— Rick Rule

Not financial, investment, legal, or tax advice. Please read our full Disclaimer on the Disclaimer page. Accessible via the provided link and via the homepage menu. Continued reading constitutes your agreement to its terms.

Before any investment, ask yourself: If I am correct, how much can I gain? If I am wrong, how much can I lose?

That is why Rick Rule says, “Buy hate, sell love.” Buy what everyone hates – it is cheap. Even in a worst‑case scenario, you cannot lose much. Sell what everyone loves – it is probably as high as it gets.

Jim Rogers and Rick Rule shoot for multi‑year, multi‑baggers (five times your money or more). Jim Rogers and Rick Rule share below the themes they think will make a lot of money in the years to come, and in the case of Rick Rule, he also mentions 26 specific companies to be considered.

Jim Rogers co‑founded the Quantum Fund with George Soros. He later rode a motorcycle around the world. His superpower: when everyone agrees, he gets very careful. Right now, everyone says not to worry. The stock market is near all‑time highs. Rogers is not buying it. He is still investing, but carefully.

Rick Rule started as a credit analyst. He looks at the US government like a company. The official debt is $40 trillion. Unfunded promises (Social Security, Medicare, pensions) add roughly another $120 trillion in today’s dollars. Total: $160 trillion. All American citizens combined have about $172 trillion in wealth.

One can quibble about the numbers. The US is not a private company, and those obligations can be changed by law. But number quibbling aside, we are not in a great financial place.

The most politically palatable way to reduce that burden is to inflate the debt away — drive up inflation so much that debt as a percentage of GDP shrinks significantly over the next 10 years. That is why Rick Rule expects the dollar to lose roughly 75% of its purchasing power over the next ten years, repeating the 1970s.

Rick Rule (Interview 2, 1:40): “I think the next 10 years will see a fairly precipitous decline in the absolute purchasing power of the US dollar. Specifically, I think that we’ll emulate the ugly track record of the 1970s where the US dollar lost 75% of its purchasing power.”

What does that mean for stocks? Jim Rogers expects a slow bleed – down a little each month until your portfolio is cut in half. Rick Rule puts a greater than 20% chance on a 50% or greater stock market correction. Berkshire also expecting a stock market correction at some point now holds around $400 billion in cash – its highest cash balance ever. $400 billion - that is roughly half a trillion US dollars.

None of this means “stop investing.” But it does call for discernment.

Think about the upside potential. Think about the downside potential. Are you buying with cash or on margin (leveraged)? If the market were to go down 50%, could you ride it out, or would you be wiped out? Again, invest—but consider the downside.

Essentially – have downside risk mitigation: Drive your car, but wear the seatbelt. Ride your motorcycle, but wear the helmet.

Given Rick’s perspective on the US dollar over the next 10 years, why has gold come down (and why is that good news)? Gold recently hit an all‑time high near $5,300 per ounce and has pulled back to roughly $4,400. Why? As per Rick, interest rates went up, strengthening the dollar. Rick Rule calls this temporary – the Federal Reserve will have to cut rates again. When that happens, gold will take off.

Both men hope gold goes lower so they can buy more.

10 Year Gold Price History

Source: https://goldprice.org/gold-price-history.html

Jim Rogers (Interview 1, 1:59): “Gold and silver are at all‑time highs, so I am not buying now. But if they go down, I hope I am smart enough to buy more.”

Rick Rule (Interview 2, 0:29): “I hope the gold price goes lower. I’d like to acquire more.”

That is long‑term thinking.

Chapter 2: The Strait of Hormuz – The Chokehold; How to Educate Yourself in Oil as per Rick Rule; and the 10 Rick Rule & Jim Rogers’ Investment Themes (Opportunities) Beyond Oil

Most news reports say 20% of the world’s oil goes through the Strait of Hormuz. That is true for total oil, but the number that matters is different.

Rick Rule (Interview 3, 25:33): “When people talk about the fact that 20% of the world’s [oil supply] goes through the Strait of Hormuz, they ignore a much more important statistic: 55% of the world’s export crude goes through the Strait of Hormuz. 20% implies much less difficulty than 55% implies.”

More than half of all the exported oil that travels by sea passes through that tiny strip of water. That is not a minor disruption – it is a chokehold on the global economy. And the oil industry has been underinvesting in maintenance – over a billion dollars a day for years.

A billion dollars a day. Every day. For three years. That is not a small number.

Rick Rule (Interview 2, 8:13): “If you want to illustrate that, you look at the national oil companies of Mexico, PEMEX, and Venezuela, PDVSA. Both of those countries are sitting on massive reserves of oil, and both of them have seen their productive capabilities fall by 80%. That’s what deferred sustaining capital does to you over time.”

That is what happens when you skip maintenance. It works fine for a while. Then it does not. That is why Rick Rule recommended buying oil companies way before the Iran war.

Source: https://www.britannica.com/place/Hormuz

Even if the conflict ends tomorrow, the supply problem remains and takes years to fix.

Rick Rule’s advice on oil stocks (based on Interview 3, 47:13): If you already own oil stocks, sit tight – do not add more until you see how the Strait resolves. If you own no oil stocks, start building a long‑term position. Even if prices crash short‑term (e.g., due to a peace treaty), by 2030 the supply problems will push prices back up. Use a five‑year time horizon.

How to educate yourself on oil and gas (per Rick Rule). Rick Rule says most people lose money because they do not do the homework. They buy stories. They buy hype. They do not buy facts. Here are two places to start your oil education.

Rick Rule (Interview 3, Time Code: 8:24): ”If I had to narrow myself down to two sources, I would say the Oil and Gas Investor and the Oil and Gas Journal.”

Oil Education 1 of 2 - Oil and Gas Investor by Hart Publications (https://www.hartenergy.com/subscribe/)

Rick Rule used to write for them thirty-five years ago. It costs about $300 a year. This is where the investment part of the oil and gas industry talks to itself. Not to the public. Not to the news. To each other. You get to listen in.

Oil Education 2 of 2 - Oil and Gas Journal (https://www.ogj.com/)

Rick Rule says it will take you about six months to really understand what you are looking at. But once you get it, you will read news releases differently. You will catch things that other investors miss.

You do not need an MBA to be a good natural resources investor. You just need to do the work. Most people do not. That will be your advantage.

The 10 Big Investment Themes Mentioned by Rick Rule and/or Jim Rogers

1. Copper is everywhere

Copper is in wires, electric vehicles, and AI data centers – and no new mines have been found in thirty years. Growing demand meets insufficient supply for decades. That is horrible if you need to buy copper but great if you are a copper investor – long term. (Both men agree.)

2. Uranium is the overlooked play

The Strait crisis has restarted the conversation about energy security, similar to 1973. The last time the world worried this much about energy security was 1973. That Arab oil embargo led France and Japan to build huge nuclear power plants. Those plants need uranium. (Both men agree.)

3. Mining stocks give you leverage over physical metals

When gold goes up 10%, a good mining stock might go up 20‑30%. Jim Rogers buys physical gold because he is lazy, as he put it. But he says if you are willing to work, mining stocks will make you much more money. (Both men agree.)

4. Government theft is guaranteed

When commodity prices go up, governments come for the money. Sometimes they nationalize mines. Sometimes they just pass an “excess profits tax.” Either way, part or all of the money is gone.

Rick Rule said it bluntly as follows (Interview 2, 14:08): “Money stolen from us by white people in English through the legislature is just as gone as money that’s stolen from us in tropical Africa by people who don’t look like us and maybe take the money by more traditional methods.”

Plan for at least half of any mining project’s value to end up with the host government. Whether that government is in California or Congo. Do not be surprised when it happens. Build it into your calculations. A case in point: the Netherlands recently passed a version of unrealized capital gains tax on assets like stocks and crypto. Desperate times, desperate moves – be it Congo, the Netherlands, or California.

(Mentioned by Rick Rule only)

5. Japan is the risk nobody is watching

Japan has two big problems: its population has been shrinking for twenty years, and its debt keeps going up. Jim Rogers says this will be serious for Japan and serious for the world. Japan is a major economy. When they sneeze, the world catches a cold.

Jim Rogers (Interview 1, 15:27): “Japan has serious problems. They have had population declines for 15 or 20 years, declines in population and debt going up higher and higher every day. The Japanese situation, if it continues, is going to be very serious for Japan and therefore for the world because Japan is such a major economy.”

(Mentioned by Jim Rogers only)

6. Think global – way global

Jim Rogers is still bullish on his stock investments in areas most people haven’t heard of or visited. More about that in the paid section. (Mentioned by Jim Rogers only)

7. Agriculture and fertilizer are in trouble

The Strait disruption affects fertilizer shipments, meaning higher food prices. (Both men agree.)

8. Farmland is a forever asset

The world has needed it for thousands of years. Rick Rule does not directly talk about farmland as an asset class, but he does talk about water rights attached to farmland. He recommends two California farming companies primarily for their water rights. So he is adjacent to this theme, even if he does not say “buy farmland” directly. More about it in the paid section. (Both men agree.)

9. The US dollar will lose purchasing power for ten years

Rick Rule’s base case is a 75% decline, with gold holding its value. (Mentioned by Rick Rule only)

10. Cash is ammunition

Both men hold large cash positions so they can buy when others are forced to sell. (Both men agree.)

Chapter 3: How to Think About Risk – The Vizsla Teaser

This is the most unusual investment opportunity story Rick Rule shared. It is also the most dangerous – and it illustrates exactly how he thinks about one of his more high-risk investment ideas. We discuss the companies he mentioned – from established, low-risk major miners to high-risk miners (like this one) – in more detail below.

Rick Rule (Interview 2, 26:16): “If you can afford to take more risk, if you can subject yourself to more volatility, and if you’re willing to do the work, then you can come down the quality trail a fair bit. One stock that I regard as potentially severely undervalued is Vizsla Silver.”

Vizsla Silver (VZLA) owns one of the best undeveloped silver deposits in the world – in Sinaloa, Mexico. The problem: a drug cartel runs Sinaloa. The cartel kidnapped and murdered ten of Vizsla’s workers. The stock got crushed.

Here is what no press release will say. Every successful mining company in Sinaloa has an informal arrangement with the cartel. Vizsla had one with El Chapo’s regime (the local cartel). But El Chapo was arrested, and now there is a civil war for control of the cartel. Bodies are dropping.

The Mexican government wants Vizsla to succeed – they gave the company an unsecured $10 million credit line – but the government cannot provide security in Sinaloa. The cartel has more guns and more fighters. So Vizsla waits. When the cartel war ends, one side will win – and Vizsla will quietly make a new arrangement, as it can’t publicly announce that it has an arrangement with the local cartel. You have to watch for subtle signs: work resuming, a feasibility study starting, engineers going back in.

(The full Vizsla analysis – with all the risks and homework – is in Chapter 5.)

Rick Rule’s General Investment Tips

The three mistakes that ruin resource investors. Rick Rule has seen them over and over.

• Mistake one: not enough quality names – people chase speculation and ignore boring senior companies. Boring is good.

• Mistake two: too many names – if you own fifty stocks, you cannot follow fifty. Own ten or twelve that you really understand.

• Mistake three: wrong time horizon – you buy a stock based on a five‑year thesis, then panic when it goes down after five weeks. Do not do that.

On holding senior miners for the long term (5 to 10 years):

Rick Rule said (Interview 3, 21:49–22:31): “I am of the belief that over the next 10 years, as a consequence of the U.S. dollar losing 75% of its purchasing power, the nominal price of gold will do very well. As the nominal price of gold does well, I think the shares of the best of the best senior mining companies will do well too. I’m not looking to sell my senior gold shares anytime soon. I believe that they have at least a five‑year run, and much more likely a ten‑year run.”

You now have the framework, the themes, and a taste of how Rick Rule and Jim Rogers think.

In the following sections, we will cover the following:

Chapter 4: Rick Rule’s Core Portfolio (Low to Mid Risk) – 6 Companies

Chapter 5: Rick Rule’s Speculative Edge – High Risk, High Reward – 7 Companies

Chapter 6: Energy, Water, Uranium, and Copper – 13 Companies (Rick Rule)

Chapter 7: Jim Rogers’ 9 Investment Opportunities Playbook

Chapter 8: Summary and the 3 Video Interviews Used for This Article

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“The first casualty when war comes is truth.”

— U.S. Senator Hiram Johnson (1929)

Not financial, investment, legal, or tax advice. Please read our full Disclaimer on the Disclaimer page. Accessible via the provided link and via the homepage menu. Continued reading constitutes your agreement to its terms.

Investing during a war is hard.

When the war can tip the whole global economy into a recession, it is even harder.

Why?

Because once the shooting starts, everyone starts lying. That is not a cheap shot at politicians. It is just how war works. A war is fought on three fronts. There is the shooting war — the one we see on the news. There is the economic war, where each side tries to cripple the other while shielding its own economy. And there is the psychological war, where leaders try to keep their own citizens hopeful and supportive of the war while spreading doubt in the enemy’s mind. All three fronts produce a thick fog of propaganda.

When the US fights a country that cannot shake the global economy — as awful as that sounds — investors can mostly ignore the war. But the Iran war is not one of those wars. It has the power — real power — to send the global economy into a tailspin.

Chapter 1: The Crisis the Headlines Miss

And while a large part of the media still pretends that taking 20% of global oil supply off the market is no big deal, a number of oil experts highlight that we are just papering it over through record‑high US SPR (Strategic Petroleum Reserve) oil reserve releases.

Those releases are estimated to run near empty in July this year.

According to those oil experts – like Art Berman and others - we are entering uncharted and scary territories. Those same experts add a sobering detail. Even if peace broke out tomorrow, it would still take many months, deep into 2027 if not 2028, to get back to some level of pre‑war oil production and export.

Source: https://oilprice.com/Energy/Oil-Prices/Supermajor-Warns-Oil-Prices-Could-Hit-160-Within-Weeks.html

Maybe the SVP of Exxon and the CEO of Chevron are incorrect (in the article above) and the soothing voices in our media are correct—the heavens will open and the missing oil will just magically appear in time. Color me doubtful, though.

Having said that, no one knows the future, and ultimately, reality will be the final judge in the second half of 2026. But these three legendary investors just voted with their wallets. All three belong to the same investor tribe – deep value investors.

Seth Klarman – Baupost Group

Greg Abel (Buffett’s successor) – Berkshire Hathaway

Mohnish Pabrai – Dalal Street, LLC

Their latest SEC portfolio filings (13F), showing their portfolios as of March 31, 2026, are the first public snapshots since the Iran war began on February 28, 2026. They reveal exactly how the smart money repositioned its investments.

We will focus on the big changes and the top ten positions of each investor. We will learn to think like them. Let’s start with the most concentrated and perhaps the boldest bet of them all — Mohnish Pabrai.

One more thing (before we jump to Mohnish Pabrai) – The Fringe Finance Report is neither perma-bullish nor perma-bearish on the general US stock market. It is responsive to the data. If the world changes, the view changes. Can we get things wrong? Sure. But we try to read the room as honestly as we can.

• Pre-war (despite high valuations, because of all the money printing / M2 growth): Bullish.

• Post-war (Iran conflict, SPR draining, impact on world economy, narrative machine in full swing): Bearish.

Chapter 2: Mohnish Pabrai’s All‑In Energy Bet

Mohnish Pabrai is an Indian-American billionaire investor, businessman, and philanthropist known for value investing, living in Texas. He is known for having said he “shamelessly clones” Warren Buffett’s investment approach. He also is famous for having paid $650,100 (shared with Guy Spier) to have a charity lunch with Warren Buffett back in June 2008.

He runs a hedge fund called Dalal Street, which this chapter is based on. In addition, Pabrai serves as the portfolio manager of the Pabrai Wagons ETF (WAGN), an actively managed, long-only ETF listed on the NYSE that focuses on small- and mid-cap companies. For investors who appreciate his approach, this ETF offers a convenient way to gain exposure. For do-it-yourself investors, reviewing the ETF’s publicly available holdings can also provide useful inspiration.

Here is an 8-minute interview with Mohnish Pabrai, where he explains why he bid $650K to have lunch with Warren Buffett and how that led to a friendship with Charlie Munger.

“I attribute almost all of my net worth to using Warren Buffett’s intellectual property without paying royalties. So I felt like I owed him a big tuition bill.”

— Mohnish Pabrai, on why he bid $650,100 for lunch with Buffett

Pabrai runs a razor‑focused portfolio. At the end of March, his public stock holdings totaled roughly $423 million. Almost every dollar sat in three names. That kind of concentration screams conviction. In a world suddenly starved of energy, his conviction landed on two things: metallurgical coal and deepwater oil rigs. These are all concentrated bets in coal and energy/cyclical sectors, consistent with Pabrai’s value investing approach focusing on undervalued small-to-medium capitalization companies. His Dalal portfolio value was approximately $423 million based on the latest reporting.

Mohnish Pabrai – Dalal Street – Total Portfolio as of March 31, 2026

Source: SEC Report 13F

The Changes

Pabrai did not overhaul his portfolio. He dug in deeper.

He bought a tiny 0.6% more Warrior Met Coal. He added 6.8% to Alpha Metallurgical Resources. He trimmed Transocean by nearly 25%, yet it remained a colossal 32% of the portfolio. And he completely sold out of Valaris, a fellow offshore driller, dumping every share. The message was clear: he wanted more coal, and he wanted to concentrate his offshore bet into one name — Transocean.

The Companies

Source: https://stockanalysis.com/stocks/hcc/

Warrior Met Coal (HCC): This company mines a special type of coal in Alabama. It is not the coal used to make electricity. It is “met coal,” which is a required ingredient for making steel. Without met coal, you can’t build bridges, skyscrapers, or tanks. Warrior is a low‑cost producer, so it still makes money even when coal prices fall. When prices shoot up, the company makes a huge amount of cash.

Source: https://stockanalysis.com/stocks/amr/

Alpha Metallurgical Resources (AMR): This company also mines met coal. Its mines are in Central Appalachia. Like Warrior, it sells high‑quality coal to steel mills around the world. Both companies ship a lot of their coal to other countries. In a wartime economy, having a local source of steel‑making ingredients becomes a big strategic advantage.

Source: https://stockanalysis.com/stocks/rig/

Transocean (RIG): This is the world’s largest offshore drilling contractor. It owns a fleet of rigs that drill in very deep water or harsh environments. These rigs do not pump oil. Instead, oil companies like Chevron or Shell pay Transocean to drill wells for them. Daily rental rates for the rigs go up and down with the price of oil. When oil prices are high and exploration activity is booming, drilling becomes extremely profitable. Specifically, a company like Chevron rents an entire offshore drilling platform (rig) plus crew and services for a set period (typically 1–5 years) to drill a specific well or series of wells.

The Reasoning

Pabrai is not making a gentle bet on energy. He is making an all‑or‑nothing bet on a prolonged supply crisis. The Iran war choked off a huge slice of global oil. The SPR releases hid that for a while. By July, the Band‑Aid rips off. If the world is short on oil, two things happen. First, the price of oil surges. Offshore rigs like Transocean’s become the most wanted tools on the planet. Second, nations scramble to secure the physical stuff: steel, infrastructure, defense materials. That requires met coal.

Pabrai likely sees Warrior Met Coal and Alpha Metallurgical as deeply undervalued claims on a scarce resource. Both produce coal in politically stable America. In a recessionary war, steel demand for military and essential construction holds up better than consumer goods. He trimmed Transocean perhaps to free up cash, but kept a massive stake because if oil goes to $150 or $200, Transocean rig day rates could skyrocket.

This is wartime value investing. It is the same logic Buffett used in 2008 when he bought railroads and pipelines. Own the physical arteries of the economy. When paper assets panic, steel, coal, and rigs do not vanish. Pabrai is saying, with almost his entire portfolio, that the physical world still matters. And right now, it matters a lot.

In the following sections, we will cover the following:

Chapter 3: Seth Klarman — Building a Fortress and Buying Fear

Chapter 4: Berkshire Hathaway — The Great Cash Harvest and a Surprising Bet

Chapter 5: Three Roads Through the Fog — Key Investor Takeaways

Pabrai went all-in on coal. Klarman built a fortress. Here’s what that fortress looks like — and why Abel (Buffett’s successor) is sitting on a growing pile of cash.

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“AI is one of the greatest wealth-building events in history — provided you survive the panic selling, the hype cycles, and the 40% drawdowns”

— Unknown

Not financial, investment, legal, or tax advice. Please read our full Disclaimer on the Disclaimer page. Accessible via the provided link and via the homepage menu. Continued reading constitutes your agreement to its terms.

These are great times to be an investor. Wealth-building opportunities are everywhere. At the same time, market stresses are increasing and valuations are reaching sky-high levels. That makes portfolio protections—like put options—more important than ever.

Looking beyond any potential short-term crashes, however, we live in an era of endless money printing. Anything that can’t be printed—gold, silver, oil, gas, and companies with pricing power—is destined to perform well over the long term. These are old-world industries.

Then there are the new-world industries. Think of the early 2000s dot-com boom—but on steroids. Over the next 30 years, AI will transform our business world in ways we can’t yet fully imagine. A lot of money can be made. The trick is not to fall for the hype and to really understand what you’re doing. If you apply the lessons from the dot-com era, many of today’s AI winners won’t survive, and some of the famous AI companies of the future may not even exist yet.

Now add in a new, multi-polar world where AI has become a matter of national security. AI development and success are now heavily supported by governments around the world. The U.S. government doesn’t want to lose the AI race to China—and China doesn’t want to lose either.

This changing world also creates another major long-term opportunity: rare earth-related investments. The U.S. government wants to become independent from China on rare earths—a journey expected to take about a decade.

But let’s come back to AI. This space is constantly evolving. So it’s a great investment in yourself and your net asset value long-term, not just to pick a few AI-themed companies and be done with it, but to truly grasp the AI space now—and keep tracking how it changes. The more you know, the more you see. And the earlier you’ll spot great AI investment opportunities.

In Chapter 2, we share a framework for thinking about this space.

As for who to learn from: there are the usual legendary investors—Chris Hohn, Seth Klarman, Bill Ackman, and others. But there’s also a new kid on the block: a 24‑year‑old AI prodigy, Leopold Aschenbrenner. He made a name for himself by growing an AI-focused portfolio from $225 million to $5.5 billion in just one year.

We covered his prior SEC 13F report as of December 31, 2025 here.

Leopold’s latest SEC 13F filing—showing his portfolio changes as of March 31, 2026—was just released. And he changed a lot. Notably, he’s using many put options, which has confused many people.

To clear up the confusion, we’ve explained how to read options (calls and puts) in SEC 13F reports. If you don’t understand them, you could lose a lot of money—because you might completely misinterpret what he actually did. It certainly confused a lot of reporters who ran with misleading headlines. We explain how to read reported calls and puts in SEC 13F reports in Chapter 1 below.

Chapter 1: Leopold’s Largest Position Is a $2 Billion Put on VanEck Semiconductor ETF (SMH). Or Is It?

The Core SEC 13F Reporting Problem

The SEC 13F form was designed for plain stocks. If you own 100 shares of a company, you report 100 shares at the current market price. Simple. Options were added later, but the SEC did not change the reporting logic. When you buy a put or a call, here is what you must report:

• First, you report the number of shares the option controls. One contract equals 100 shares. If you buy 10 contracts, you write down 1,000 shares.

• Second, you report the market value as the current stock price multiplied by those shares. You do not report what you actually paid for the option. You do not report the option’s own market value. You report the value of the shares it controls.

This makes a cheap option look enormous. A put costing a few million dollars can show up as a two billion dollar position on paper.

The SEC 13F report was designed to show economic exposure, not cash spent. The SEC wants to know how many shares a manager controls or has the right to buy or sell. For a put option, the economic exposure is the notional value of the underlying shares. The premium paid for the option or the current market value of the option is considered too unimportant to report.

What Leopold Actually Did

Leopold did not spend two billion dollars on VanEck Semiconductor ETF (SMH) puts. He bought put options that give him the right to sell about 5.3 million shares of SMH. SMH was trading at roughly 383 dollars per share on March 31st. Multiply those together and you get the two billion dollar figure. That is the value of the shares the puts control, not the cash he put at risk.

The actual cost depends on 2 things the 13F report never reveals: the strike price of the put and the expiration date of the put. Since we cannot know those exactly, we have to estimate.

Ballparking the Real Option Cost

For a manager like Leopold, most put purchases are probably slightly out of the money with a moderate amount of runway—say, expiring around January 2027, giving him roughly nine to ten months from the time of purchase. In a volatile sector like semiconductors, that kind of protection usually costs somewhere between 5 and 10 percent of the notional value, with 7.5 percent as a reasonable midpoint.

Applying that to the SMH position: At 5 percent, the premium paid was roughly 102 million dollars. At 7.5 percent, roughly 153 million dollars. At 10 percent, roughly 204 million dollars. The midpoint estimate is around 153 million dollars. That is real money, but it is about 7.5 percent of the two billion dollar headline number. The media sees a two billion dollar bet. The reality is a roughly 153 million dollar bet. Still a lot of money, but a whole lot less than the reported two billion dollar number. Please note that this is just a rough ballpark estimate. Longer-dated or in-the-money puts would cost more; shorter-dated or deep out-of-the-money would cost less. Without the actual strike prices and expiration dates, we cannot know the exact figure — but this midpoint is far better than the $2 billion headline.

In the table below, focusing just on the put on SMH (VanEck Semiconductor ETF) based on the nominal amount, it sounds like Leopold spent $2 billion USD to bet on SMH going down. That would be a huge bet — by far his largest position as per his 13F report. Thus, the “Ranking by Nominal Market Value” would be #1, representing 14.94% of his total investments.

However, once you convert it based on the above assumptions to what he actually paid for it — about $153 million — the bet is still large, but not enormous.

You can see this in the “Ranking by Option Adjusted Market Value,” where the portfolio ranking drops to #7, or only 3.34% of his total investments.

That difference matters a lot and changes the picture completely, as shown in the table below.

Table Showing Leopold’s Put on SMH Position as of March 31, 2026

Source: SEC Report 13F

How This Changes the Top 10

If you look at the 13F at face value, the top 10 list is dominated by puts. That makes it seem like Leopold bet most of his money against semiconductors. But that SEC 13F top 10 list is a mirage. It ranks positions by notional value, not by the cash he actually put at risk. Once you swap notional value for estimated cash deployed, the ranking flips, and the real picture emerges.

Normally, when a 13F has only a handful of small options, this distortion doesn’t matter. You can ignore it. But here, options are the dominant positions. Ignoring the distortion would mean completely misreading where Leopold’s money actually went.

Leopold’s Portfolio - The Media’s Top 10: A Crash-Fiction Movie

By now, you’ve seen the headlines: “AI Prodigy Bets $2 Billion Against Semiconductors.” “Leopold Aschenbrenner Prepares for Crash.”

They’re wrong. And if you believe them, you’ll miss the real story — because most of the media didn’t do the correction we just walked through (actual purchase price vs. nominal amount).

Add up the notional value of all his puts across all 42 investments, and you’d calculate that 61.85% of his portfolio is in puts. That looks like a bet on a huge AI crash.

That would be terrifying. It would also be completely wrong.

More about that — and how to read Leopold’s portfolio correctly — is in Chapter 3 below.

Chapter 2: The AI Industry in a Nutshell

AI investing can be complex, and it is easy to get lost in the ever-evolving AI investment universe. Here is The Fringe Finance Report’s 5-bucket view that can serve as a useful mental model. Is it perfect? No. But it reduces the noise.

Bucket 1 – The Engine – The Actual AI Itself: The hardware and foundational software that run AI: chips (GPUs, CPUs, TPUs, tensor cores), memory, storage, optical links, and data. The constraint here isn’t innovation—it’s supply and power.

Bucket 2 – Physical AI Infrastructure – Where the AI Lives (aka the Pick and Shovel Strategy): AI factories have extremely high requirements. Using normal commercial buildings or factories is out of the question. Solutions range from converting former Bitcoin mining facilities to building AI factories from scratch. Old-world example: Wall Street firms once abandoned Lower Manhattan (the actual Wall Street) for Midtown because the old buildings couldn’t handle computers. Same dynamic, new hardware. This is quickly becoming the real bottleneck of AI.

Bucket 3 – Specialty Providers – AI as a Service (AaaS): Companies that bundle Buckets 1 and 2 into a neat service for those who won’t build their own. Think of it as AI as a Service. All you need to bring are your AI programs and data. This is where AI gets democratized—and commoditized.

Bucket 4 – AI Beneficiaries – Cost Cutting and Widening Economic Moats: Brick-and-mortar companies that use AI to slash costs and widen moats. AI shows up quietly in earnings before headlines.

Bucket 5 – Hybrids: Mega-cap companies whose CapEx funds the whole ecosystem and that operate in more than one of the above buckets. They don’t just participate—they shape the entire AI ecosystem.

The AI Investment Universe in 5 Buckets

Image Credit: Leslie Paul Oosten (@lesoosten1) created the above amazing “AI Investment Universe in 5 Buckets” image after reading our Chapter 2 content above, which I had shared earlier on Substack Notes.

Chapter 3: What Leopold Is Actually Betting On (Not What the Headlines Scream)

By now, you’ve seen the headlines: “AI Prodigy Bets $2 Billion Against Semiconductors.” “Leopold Aschenbrenner Prepares for AI Crash.”

They’re wrong. And if you believe them, you’ll miss the real story.

Here’s the problem: most reporters read an SEC 13F file the same way you’d read a grocery receipt. They see a big number next to “Put on SMH” and assume that’s what Leopold spent. It’s not. As we walked through in Chapter 1, a put option that controls $2 billion worth of puts costs only about $150 million in real cash.

So what did Leopold actually do with his money? Let’s compare the fake top 10 (what the media reports) with the real top 10 (what Leopold likely paid).

Chapter 3.1: The Media’s Top 10: A Crash-Fiction Movie

Below is how most outlets reported Leopold’s portfolio as of March 31, 2026. They rank every position by notional value — the total value of shares controlled, not cash spent.

Table Showing Leopold’s Top 10 Holdings as of March 31, 2026 – By Notional Market Value

Source: SEC Report 13F

If you stopped here, you’d think Leopold was preparing for the end of AI. Puts dominate five of the top seven spots — and seven of the top 10 overall. Add up the notional value of all his puts across all 42 investments, and you’d calculate that 61.85% of his portfolio is in puts. That looks like a bet on a huge AI crash.

That would be terrifying. It would also be completely wrong.

Why? Because again, a put option doesn’t mean he spent that money. It means he controls that many shares. The cash he risked is much smaller — typically 5–10% of the notional value, as we estimated in Chapter 1.

So let’s fix the numbers.

In the following sections, we will cover the following:

• Chapter 3.2: Leopold’s Real Top 10 & Is Leopold AI Bullish or Bearish?

• Chapter 4: Leopold’s AI Bucket 5 — The Hybrids: Why Leopold Doesn’t Invest Here

• Chapter 5: Leopold’s AI Bucket 4 (AI Beneficiaries): The Quiet Cost-Cutters Leopold Mostly Walked Away From

• Chapter 6: Leopold’s AI Bucket 3 (AI Infrastructure as a Service)

• Chapter 7: Leopold’s AI Bucket 2 (The Pick and Shovel Strategy Hybrids)

• Chapter 8: Leopold’s AI Bucket 1 (The Engine – The Actual AI Itself)

• Chapter 9: Key Takeaways: What Leopold Did & Lessons For Your Portfolio

This is a long article—over 7,000 words—covering all 42 of Leopold’s investments. It’s not about quick stock tips. Instead, it explains how Leopold thinks, what he focuses on, and the logic behind his moves. The 42 investments are broken into 5 AI-related groups. Why? Because a small bet today can turn into a big winner tomorrow.

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“There are no certainties about the future only probabilities.”

— Unknown

Not financial, investment, legal, or tax advice. Please read our full Disclaimer on the Disclaimer page. Accessible via the provided link and via the homepage menu. Continued reading constitutes your agreement to its terms.

The Norwegian Government Pension Fund Global (GPFG), or “Oil Fund,” is the world’s largest sovereign wealth fund, with over US$2.1 trillion in assets as of December 2025. About US$1.5 trillion are in global equity investments. The rest is in fixed income, real estate, and infrastructure.

Norway did well economically but wasn’t a wealthy country until massive oil reserves were discovered in the 1960s. After building out the oil industry, in 1990, Norway decided to establish a sovereign wealth fund (a fancy term for the country’s investment fund), called the Norwegian Government Pension Fund Global (GPFG).

It is massively successful. So successful that I want to repeat something: this fund is now the world’s largest sovereign wealth fund. That is no small accomplishment for a country of roughly 5.6 million people. To put that in perspective, the Washington, D.C., metro area has a population of about 5.6 million.

So, for every man, woman, and child in Norway, the GPFG holds about US$375,000 in assets.

To put that in perspective, a family of four would theoretically have ~$1.5 million in the fund on their behalf. This is one of the highest sovereign wealth fund per capita ratios in the world.

The Fringe Finance Report covered this wealth fund first in February 2025. If you want to read more about the background of this wealth fund, we covered it in the original article, which you can read here.

This fund publishes its list of global investments twice a year, sometime during Q1 and sometime during Q3. For us investors, that’s a rare treat. We get to see in detail where this truly global investor—with extremely smart people—invests worldwide. That angle—worldwide—was always interesting, but it has become extra interesting in this changing world of ours. This world of ours is changing so rapidly with so many moving variables that it can be tempting to assume the future looks like the past. But nothing could be further from the truth. In Chapters 1 through 4, we provide an organized approach on how to structure one’s thoughts about the future—given the many, many moving variables.

We’ll get to what the fund actually owns in Chapter 5. First, we need to understand the world it’s investing into.

Having said that, let’s jump into that strange new world of ours—and see how we can profit from it as investors.

Chapter 1: The New Macro Reality — The Known Knowns

Norway’s Government Pension Fund Global isn’t just a big investment account. It’s a promise. Built from the country’s oil wealth, its job is to turn a resource that will eventually run out into a permanent source of wealth for future generations. With over $2 trillion, it owns a small piece of nearly every major public company on Earth. Its time horizon isn’t measured in quarters or even decades—it’s measured in generations.

But even the most patient investor has to ask: What kind of world are we investing in?

As of early 2026, the answer is complicated. For about forty years, investors operated in a relatively stable environment: interest rates generally fell, global trade expanded, and U.S. leadership provided a kind of anchor. That era is ending. What’s replacing it is more complex, more volatile, and far less predictable.

So how do we think clearly about uncertainty? One useful framework comes from an unexpected source: a 2002 press briefing by then-U.S. Secretary of Defense Donald Rumsfeld. When asked about evidence linking Iraq to weapons of mass destruction, he offered a simple but powerful way to categorize knowledge:

“There are known knowns. There are things we know we know. We also know there are known unknowns; that is to say, we know there are some things we do not know. But there are also unknown unknowns—the ones we don’t know we don’t know.”

— U.S. Secretary of Defense Donald Rumsfeld 2002

Later thinkers added a fourth category: unknown knowns— Things we understand (know) on some level but ignore or dismiss. These are often blind spots—such as dismissing a risk because “it hasn’t happened to us yet.”

I know, at first, it makes your head hurt. What is this?

But stay with me. This is a really good thought model once you let it sink in.

Image source: https://www.theschoolofknowledge.net/p/the-rumsfeld-matrix-explained

Let’s walk through each category as it applies to the global investment landscape.

A word of caution: the future is never certain. There are only probabilities, not certainties. But some probabilities are so high that we treat them as certain—the known knowns.

Chapter 1.1: Known Knowns: The Structural Certainties

These aren’t guarantees. But there’s strong evidence behind them, enough that a long-term investor can build a strategy around them. In simple terms, if you could jump 10 years into the future, this is where we’d most likely end up. This section is less about how we get there and more about where we finish.

Fiscal dominance in the United States is a known known.

Macroeconomic analyst Lyn Alden defines fiscal dominance as a situation where a government’s debt and deficits become so large that the central bank can no longer set interest rates solely to control inflation. Instead, it must keep rates low enough to ensure the government can service its debt.

The U.S. federal debt now exceeds $39 trillion. Annual deficits run above $2 trillion even during economic expansions. Interest payments on the debt now surpass the entire defense budget.

Here’s how “melting the debt” works: inflation helps reduce the burden of debt without actually paying it off. As prices and wages go up, the economy grows in dollar terms—that’s GDP. Even if total debt keeps rising, it becomes smaller compared to the size of the economy (GDP), if the economy keeps growing faster. The key number is debt as a percentage of GDP. If that percentage goes down, the debt becomes more manageable—not because it was paid off, but because the economy grew bigger around it. Everything gets more expensive. But given the size of the debt and political realities, we have no other choice. And we are already on that path.

The Fringe Finance Report covered Lyn Alden’s fiscal dominance theory back in July 2025, in the article called “How Smart Investors Get Rich From Inflation (While Everyone Else Suffers)” in Chapter 2 “Fiscal Dominance – We Lost Control.”

The dollar’s reserve currency status provides a buffer.

Even with big deficits and rising debt, the U.S. dollar has a unique advantage: it is the world’s main reserve currency. It means global demand for dollars stays strong. Central banks hold dollars. Trade is priced in dollars. Investors buy U.S. assets for safety. It’s being eroded mainly by our actions—we’ll get into that more below—but for now, it’s still holding strong – although on a slow, long-term decline as reserve currency. It is still going very strong as a trading currency.

This demand lowers borrowing costs for the U.S. government. This doesn’t mean the dollar can’t lose value over time. It does mean the decline is likely to be gradual, not sudden. A trend, not a cliff.

The long-term erosion of the dollar’s purchasing power is a known known.

Legendary gold and silver investor Rick Rule draws a direct parallel to the 1970s, when U.S. inflation erased a lot of the dollar’s purchasing power over a single decade. He expects history to rhyme, with the dollar losing about 75% of its purchasing power over the next ten years—not through a sudden crash, but through persistent inflation that steadily outpaces official targets.

What changes is what a dollar can actually buy: a barrel of oil, a month of rent, or groceries. In a nutshell, everything becomes more expensive, so the same $100 buys less and less. The dollar will likely still do well versus other major Western currencies like the EU, UK, or Japan, as they face similar issues. But like those currencies, the same dollar amount will still buy you less over time.

Here is what we said in the above-mentioned article:

Source: https://ffus.substack.com/p/how-smart-investors-get-rich-from

AI adoption is a known known.

Here’s what we know: AI will change how we work, produce, and compete over the next 10, 20, and 30 years. More about this further below.

Global demographic trends are a known known.

Across most developed nations, birth rates have fallen below the replacement level of about 2.1 children per woman. It is 2.1 because 2 children are needed to replace the parents once they die to keep the population the same, and the 0.1 is to make up for early deaths like accidents. In South Korea, for example, the birth rate is a horrible 0.8. I wish I could say South Korea is a bad example, but unfortunately not. Populations are aging. Workforces are shrinking. Pension and healthcare systems face rising pressure. This isn’t a short-term cycle. It’s a structural shift. Fewer workers supporting more retirees means slower economic growth, higher taxes or deficits, and more competition for labor.

For investors, this favors companies that can raise prices, automate tasks, or serve aging populations. It also adds to inflationary pressure over time, as labor becomes scarcer and wages rise. Maybe AI can help offset that inflationary trend. But the low birthrate is a global problem for the developed world. However, Africa has currently the highest birth rate in the world at 4.1 while everyone else is hovering around 2.1 or lower (most are lower).

The shift to a multipolar world is a known known.

For decades after the Cold War, the world operated under a single dominant power: the United States. That order supported a global system built for efficiency: just-in-time supply chains, open trade routes, and clear rules.

That era is ending. We are moving into a multipolar world, where the U.S., China, Russia, the EU, India, and others compete for influence and resources. Each is trying to secure access to critical materials like chips, energy, minerals, and rare earth elements.

• Rare earths are a perfect example. These 17 metals or so are essential for smartphones, electric vehicles, and fighter jets. For years, China controlled most of the mining and processing. Now, other countries are racing to build their own supply chains—not because it’s cheaper, but because relying on a single source is too risky.

• Energy security follows the same logic. The conflict in the Middle East (Iran war) has reminded the world that oil supplies can be cut off without warning. That has renewed interest in uranium. Uranium packs an enormous amount of energy into a small space. A single fuel pellet holds as much energy as a ton of coal. A warehouse full of uranium can power a city for decades. After Fukushima in 2011, many countries stepped back from nuclear power. But when the choice is between no electricity—or accepting the risks of modern nuclear technology—the math changes.

The result is higher costs for everyone. Just-in-time gives way to just-in-case. For a long-term investor, this means the old playbook—globalization equals lower costs—no longer applies universally.

We covered the shift to a multi-polar world in August 2025 in an article called “A Strange New World – And How To Make Money From It.”

Elevated geopolitical tension is a structural feature.

As the famous Prussian war strategist Carl von Clausewitz wrote, “War is politics by other means.” In a multipolar world, competition between major powers doesn’t disappear—it shifts form. Economic pressure, cyber operations, proxy conflicts, and military posturing become tools of statecraft.

Recent conflicts in Ukraine and the Middle East are not isolated events. They are symptoms of a broader realignment. Potential flashpoints—Taiwan, the South China Sea, the Arctic, Eastern Europe—carry similar risks. For investors, this means political risk is no longer a side note. It is central to asset allocation, security selection, and risk management. That means for the time being, many countries will spend more on their military.

We just talked about the known knowns — things about the future that are so likely we can treat them as certain. The path to that future may be smooth or rough, but the outcome is almost guaranteed.

In the next chapter, we move on to the known unknowns — things we know will happen at some point in the next 10 years, maybe more than once, but we do not know exactly when.

Chapter 2: The Uncertain Path — The Known Unknowns

These are things we know we cannot predict. In investing, they aren’t reasons for paralysis—they’re invitations to prepare for a range of outcomes. Allow me to be morbid for a second. A known known is that we will all die—eventually. A known unknown is the question of when and how. Hopefully of old age, far, far in the future—but we don’t know. That is a known unknown.

Are we overdue for a recession or stock market crash?

The S&P 500 has been in a bull market for more than a decade. Historically, that length of time without a major downturn is unusual. Many investors feel we are “due” for a correction. Legendary investors seem to agree. Jim Rogers has long warned of a major market reset. Warren Buffett’s Berkshire Hathaway has held record levels of cash—over $300 billion in early 2026—waiting for better opportunities. Even aggressive investors like Rick Rule, who typically favors hard assets, has noted the value of holding dry powder when valuations look stretched.

• If history holds, a stock market crash and/or recession should happen at some point. When? We don’t know. From a pure valuation perspective, though, the U.S. stock market looks very expensive.

• But here’s the twist: in an age of fiscal dominance, maybe the old rules don’t apply. If governments and central banks are committed to keeping markets stable to protect their own borrowing costs, maybe downturns are shallower, shorter, or delayed. The Turkish stock market offers a cautionary example: as the lira lost value, local stocks rose in nominal terms. Investors who held equities preserved purchasing power—even as the currency fell.

• So is this time different? Maybe. But “this time is different” are four of the most dangerous words in investing. History doesn’t repeat, but it often rhymes. The safe approach isn’t to bet everything on a new paradigm. It’s to prepare for both possibilities: a continued melt-up driven by liquidity, or a sharp correction when sentiment shifts.

Rick Rule recently increased his cash holdings significantly. This isn’t his preference, but he believes there is now more than a 20% chance of a stock market crash exceeding 50%. He notes that holding cash is expensive: Treasury bills pay just under 4%, while he estimates real inflation, not CPI inflation, at around 8%. That means each year he holds cash, he loses about 4% in purchasing power. If a market crash happens, the move will pay off. If not, the cost will be the lost purchasing power.

The timing and path of the dollar’s decline is a known unknown.

That the dollar will lose purchasing power over a decade is a known known. But will it happen smoothly? Or in sudden jumps? A crisis could speed things up. Or it could be so slow you barely notice until you look back. We can’t time this. So we prepare for both.

The path of AI adoption—and who wins—is a known unknown.

That AI will transform the economy is a known known. But we don’t know how we get there, which companies will lead, or which business models will survive. The dot-com boom is a guide. The internet did transform the economy—just not how most expected in 1999. Many hyped companies failed. A few quiet winners changed everything.

• Adding uncertainty: AI is now a national security issue. In a multipolar world, the U.S., China, and others will pour money into AI—regardless of short-term returns. This speeds development but adds political risk. Regulations, export controls, and tech decoupling could reshape the landscape overnight.

• For investors: AI is too important to ignore. But concentration is risky. The destination is clear. The journey is not.

US Treasury OFAC sanctions risk in a multipolar world is a known unknown.

In a world of competing powers, economic tools like sanctions are used more often—and with less warning. For U.S. investors, this creates a specific risk: even foreign stocks traded on U.S. exchanges can be forced to be sold, or frozen with no clear end date. The Office of Foreign Assets Control (OFAC) makes these decisions based on foreign policy goals—not the financial impact on U.S. investors.

When elephants fight, the grass gets trampled. U.S. investors holding foreign assets—even when purchased through their U.S. broker at U.S. stock exchanges—can be caught in the crossfire. Good luck getting your money back.

Real-world examples:

• In 2021, China Mobile was delisted from U.S. stock exchanges due to executive orders. Investors had to sell, often at a loss.

• In 2022, Russian stocks trading on U.S. stock exchanges were frozen due to an executive order. No trading. No exit. No timeline for resolution to this date (4 years later).

In neither case did U.S. investors travel to China or Russia to buy local securities. Their “mistake” was believing that foreign securities approved by the SEC and purchased through U.S. brokers on U.S. exchanges couldn’t simply be outlawed overnight by presidential order—without compensation. However, that is the reality.

We know this risk exists. We don’t know when it will strike next, or which holdings will be affected. That uncertainty demands diversification, careful jurisdictional analysis, and humility about what we can control.

Geopolitical conflicts and policy responses are known unknowns.

We know the Strait of Hormuz faces disruption. We know energy prices can spike. We know governments will intervene in crises. We know it will likely be bad, but don’t know how bad, as we don’t know how it will resolve. Next week? A bigger war that will keep the Strait closed until next year? Or even longer? No one knows. The vulnerability isn’t just oil — it’s the boring stuff we never think about - until it breaks: the global supply machine. And this won’t be the last conflict in the next 10 years.

What is important to note is that many of these conflicts can be seen as proxy wars with other large powers in this multipolar world of ours. Ukraine is a proxy war with Russia. Iran is a proxy war with BRICS, as Iran is a member. Taiwan is a proxy war with China. Note that we have few, if any, wars that don’t involve the other emerging large powers. Sadly, during times of global power shifts, that is more normal than not.

Now we know what will likely happen (the known knowns) – the destination. We know that the path to that destination will depend on things that will likely happen, but we don’t know when (the known unknowns). Let’s take a look at the assumptions we stopped questioning—the unknown knowns. Our blind spots. And let’s also look at the unknown unknowns—the black swan events—like COVID.

Chapter 3: Blind Spots, Black Swans, and Preparing for the Future

Chapter 3.1: Unknown Knowns: Things we understand (know) on some level but ignore or dismiss.

“U.S. Treasuries are always safe in a crisis.” Maybe not anymore.

For decades, investors fled to U.S. Treasury bonds in times of stress. But in a world of fiscal dominance—where the sovereign borrower is also a source of instability—this assumption may no longer hold. Early signs: when Middle East tensions rose in 2026, 10-year Treasury yields went up, not down. If bonds stop being a safe haven, many portfolio strategies would need rethinking.

And the 2022 sanctions on Russia changed the game globally. When the U.S. froze Russian central bank assets—including U.S. Treasury holdings—it sent a clear message: if Treasuries can be frozen when held by Russia—the world’s largest country and a nuclear superpower—then any country is potentially at risk. This wasn’t a panic. It was a quiet but sustained shift. Central banks from China to allies like Poland have been steadily increasing their gold holdings ever since. Not a run for the exit, but a continuous repositioning toward assets that can’t be frozen by a foreign government.

“Global diversification protects me.” Maybe less than we think.

Norway’s fund owns 7,200+ companies across 60 countries. Diversification looks at correlation numbers. However, what is often overlooked is that correlation is a living, breathing thing. During calm times, assets that seem uncorrelated may in a crisis become very correlated all of a sudden. During the 2007-2008 financial meltdown, stocks, bonds, commodities, and emerging markets fell all at once. Correlation isn’t a fixed number in a spreadsheet. It changes with fear, liquidity, and policy. It is alive.

“The U.S. security umbrella guarantees the system — the dollar, the trade routes, the rules.”

For decades, the unspoken assumption was that American hard power stood behind the global financial order. The U.S. Navy kept sea lanes open, the U.S. military enforced red lines, and the dollar’s reserve status drew strength from the belief that the U.S. could — and would — defend the system against catastrophic disruption. That assumption meant energy flowed, trade contracts were honored, and foreign central banks could accumulate dollar reserves without questioning the physical security of the assets behind them.

It is no longer safe to assume this. The 2022 freeze of Russian central bank reserves — including U.S. Treasuries — demonstrated that financial assets held in the U.S. system could be weaponized overnight, even against a nuclear superpower. It was a precision strike aimed at Moscow. It became a slow-acting poison for the dollar’s credibility, as central banks from Beijing to Warsaw quietly shifted reserves into gold, an asset no foreign government can freeze. Then the Iran conflict drove the point home physically. Drones and cheap anti-ship missiles revealed that the U.S. Navy — still formidable — is touchable in certain scenarios. Forward bases in the Middle East proved vulnerable. The Strait of Hormuz, the world’s most critical energy chokepoint, could not be reliably kept open.

The message to allies and adversaries alike was unmistakable: the guarantor of last resort cannot always guarantee. When hard power is perceived as finite (still powerful, but not all powerful any longer), the premium embedded in dollar assets — the assumption of unshakable stability — begins to erode. Not in a single crash. Nothing dramatic. But steadily, and structurally, slowly over time. As an American, this is not something I want, but as equity investors we need to operate in the world that is, not the world that we want it to be.

“This time is different for tech valuations.” Are we sure?

Today’s tech leaders are profitable and cash-rich—unlike the dot-com era. But market concentration now exceeds 2000 bubble levels. Believing “this time is different” is exactly the kind of assumption the unknown knowns category warns us to question.

Chapter 3.2: Unknown Unknowns: The Unforeseeable (The Black Swan)

By definition, these are events we cannot anticipate: a pandemic from an unexpected source, a technological breakthrough that upends industries, a geopolitical shift that redraws alliances.

The 2020 COVID-19 pandemic is a perfect example. No major model predicted a global shutdown starting from a wet market in Wuhan. Yet within months, borders closed, supply chains broke, and central banks unleashed unprecedented stimulus. Markets plunged, then roared back. Entire industries—travel, offices, retail—were reshaped overnight. That’s an unknown unknown: not just surprising, but transformative.

The only responsible posture is humility and a margin of safety. A portfolio that is robust across a wide range of known scenarios is more likely to survive the unknown ones.

What we can observe: unknown unknowns cluster around periods of rapid change. The current moment—shifting alliances, record debt, AI revolution, fragmented trade—is precisely when surprises are most likely. Thinking in decades, not quarters, isn’t a luxury. It’s essential.

Chapter 3.3: A Probability Space, Not a Prediction

The Rumsfeld framework separates four categories of knowledge: what we know will happen in the long term (known knowns), what will happen but we don’t know when or how (known unknowns), “facts” that are no longer true (unknown knowns), and black swan events like COVID (unknown unknowns).

So why use a probability space at all? Why not just pick the most likely outcome and go all-in? Because the future doesn’t work that way. Because no one can predict the future. The best we can do is to think what the potential future could be and create a portfolio that will do well in all scenarios.

Below are four future scenarios: Default Base Case, Alternative Base Case, Along the Way, and The Surprise Nobody Saw Coming.

Given the above, for the US, the Default Base Case is the likely long-term scenario. But if the Iran war turns ugly and becomes a long war—or if something similar happens in the future—the Alternative Base Case becomes possible. Once resolved (if resolved), we should default back to the Default Base Case.

Then there are two wild card scenarios that, if history is any guide, will happen at some point—though we don’t know when. Recessions, stock market crashes, wars, and events like COVID fall into this bucket. These are: Along the Way: Sudden Drop, Then Quick Bounce (The “Panic & Rescue”) and The Surprise Nobody Saw Coming (The “Curveball”).

1. The Default Base Case: Prices Go Up, But Your Money Buys Less (The “Slow Squeeze”)

• What Actually Happens: Governments let inflation run a bit high to make debt easier to handle. Stock prices and asset prices rise in dollar terms, but your paycheck doesn’t stretch as far. Supply chains get more expensive. AI and tech keep growing. The dollar weakens slowly, not suddenly.

• What This Means for Stock Investors: Companies that can raise prices (brands, essentials, energy) do better than those that can’t. Gold, commodities, and uranium tend to hold value. Bonds lose real value. Cash loses purchasing power. Own things that can’t be printed.

2. The Alternative Base Case: High Prices + Slow Growth (The “Stuck Economy”)

• What Actually Happens: Energy prices stay high due to conflict or supply issues. Inflation stays elevated. Economic growth is weak. Central banks are stuck: raise rates and hurt growth, or cut rates and fuel inflation. AI investment continues, but profits get squeezed.

• What This Means for Stock Investors: Energy, commodities, and uranium stocks may outperform. Companies with strong pricing power survive. Active management and flexibility matter more.

3. Along the Way: Sudden Drop, Then Quick Bounce (The “Panic & Rescue”)

• What Actually Happens: A shock hits—a war flare-up, a bank problem, a geopolitical surprise. Markets drop fast. Everything falls together, even gold. Central banks and governments step in with support. Markets recover, often led by hard assets.

• What This Means for Stock Investors: Keep some cash ready so you’re not forced to sell at the bottom. Gold, miners, and energy stocks often bounce back fastest. Diversification may not protect you during the drop—but it helps during the recovery.

4. The Surprise Nobody Saw Coming (The “Curveball”)

• What Actually Happens: Something outside our current thinking happens: a major cyberattack on financial systems, a new pandemic, a sudden tech breakthrough, or an unexpected geopolitical shift.

• What This Means for Stock Investors: No model predicts this. The only defense is true diversification (across assets, regions, and strategies) and keeping a margin of safety—cash, optionality, humility.

Chapter 4: Chapters 1 through 3 in A Nutshell – The Next 10 Years

The Next 10 Years in 5 Bullets

1. Fiscal dominance + aging demographics → Persistent inflation. Your cash and bonds slowly leak value.

The U.S. debt is too big to repay honestly. The math is clear: the only politically survivable way out is to let inflation run hot, year after year. Prices rise, wages rise, the economy grows in dollar terms, and the debt shrinks relative to the pie. That’s “melting the debt.” At the same time, the developed world is aging fast. Fewer workers, more retirees. Labor gets scarcer. Wages get pushed up. More inflationary fuel.

2. Multipolar world → Higher costs, less trust in Treasuries. Central banks buy gold.

The old global order ran on efficiency: open borders, just-in-time supply chains, the U.S. as a security umbrella. That era is ending. We’re in a world of great-power competition. Supply chains are rebuilt just-in-case—energy, chips, rare earths. Redundancy costs money.

3. Geopolitical tension → Sudden shocks (energy spikes, market panics) followed by policy rescues (money printing) that feed more inflation.

In a multipolar world, friction isn’t a bug. It’s a feature. Ukraine, the Middle East, Taiwan—not isolated events, but symptoms of a structural realignment. For investors, that means energy and supply shocks are now permanent. A flare-up closes the Strait of Hormuz, oil spikes, markets sell off overnight. Central banks, trapped by high debt, ride to the rescue with liquidity. That feeds the inflation engine again. It’s a loop: shock, panic, rescue, more inflation.

4. AI → A productivity wild card, but trapped inside national security politics. No clear winners yet.

AI will reshape the economy over the next 10, 20, 30 years. That we know. How? We don’t know. It could offset aging demographics and cool inflation with a productivity surge. Or it could cause an AI spending boom and a tech bubble that doesn’t really help the real economy. The extra catch: AI is now a national security priority. Governments pour money into it no matter what the returns are. Like the dot-com revolution of the early 2000s, AI will change a lot, but we don’t know how yet.

5. The bottom line → Own hard assets. Keep dry powder.

Put it all together, and the likeliest destination is the “Slow Squeeze”: asset prices rise in dollar terms, but your purchasing power steadily leaks away. Hard assets—gold, commodities, uranium, companies with pricing power—preserve real wealth. Bonds and cash slowly bleed value. Along the way, there will be panics where even gold gets sold in the scramble for liquidity. That’s when dry powder matters. And hanging over everything are the unknown unknowns—curveballs you can’t predict, only prepare for.

The One Behavioral Trap to Avoid - FOMO

Over the next 10 years, there will be moments when everyone around you is piling into whatever is rallying—tech after a breakthrough, gold during a panic, crypto on hype. The FOMO will be real. The discipline to stick with a humble, robust portfolio—owning tangible assets you understand, keeping a margin of safety—is what separates those who preserve wealth from those who chase and crash. At least if you need to do FOMO, limit the size to amounts you can afford to lose.

Now, let’s see what Norway’s $2.1 trillion fund actually owns.

In the following sections, we will cover the following:

• Chapter 5: Inside Norway’s $2.1 Trillion Wealth Machine - Where the Money Actually Goes — The Full Picture

• Chapter 6: The Art of Exclusion — Known Unknowns and the Risks the Fund Refuses to Take

• Chapter 7: The American Elephant — The Unknown Knowns in the U.S. Concentration

• Chapter 8: The Forgotten Corners — Known Unknowns and the Countries the Fund Got Right

• Chapter 9: The Investor’s Playbook — What You Can Steal from the World’s Largest Wealth Fund

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“There are two questions that investors have to ask themselves. First, can technology stocks power this market higher? Second, will the war in Iran bring everything tumbling down? Neither question has an easy answer.”

— Don Durrett @dondurrett (May 1, 2026)

Not financial, investment, legal, or tax advice. Please read our full Disclaimer on the Disclaimer page. Accessible via the provided link and via the homepage menu. Continued reading constitutes your agreement to its terms.

Louis-Vincent Gave isn’t just another Wall Street or London analyst. He was born and raised in France, but he’s the CEO and founding partner of Gavekal Research, a firm based in Hong Kong. He’s lived and worked there for over twenty years, and he’s a smart, legendary voice.

Last week’s article talked about Lyn Alden, who brings a no-excuses, no-nonsense engineer’s attitude to investing. In the same way, Louis-Vincent Gave brings a global, non-sentimental, non-“my country is best” attitude to investing. No one knows the future, but listening to smart people doesn’t hurt. That doesn’t mean you have to agree with them. It just means asking: do they have a point?

In the coming week, we’ll start covering the investment moves of legendary investors. The latest 13F SEC report—showing what they owned as of March 31, 2026—will be available soon.

Before we come back to Louis-Vincent Gave and his remarkable insights, let’s just set the table a bit.

The hyper-legendary investor Warren Buffett reminded all of us in a recent interview not to give in to hubris. He said:

“I don’t have any ability to predict what stocks will do next week or next month. I will buy them if they’re cheap.” — Warren Buffett (March 2026 Interview)

With that in mind, I started this article with a quote from fellow Substack publisher Don Durrett. He perfectly summed up the two big questions facing anyone invested in the U.S. stock market:

• First, can tech stocks power this market higher?

• Second, will the war in Iran bring everything tumbling down?

Can technology stocks power this market higher?

When you look at some of the AI stocks that helped 24-year-old AI prodigy and investor Leopold Aschenbrenner grow his portfolio from $225M to 5.5 billion in a year, many of those P/E ratios are now in three-digit land. The Fringe Finance Report covered his portfolio choices and investment ideas back on April 26, 2026, here.

First, many people believe—and I agree—that AI is on the path to becoming the next industrial revolution. It will change the way we do business in ways we can’t even predict. Almost like a more intense version of the dot-com revolution that started in the early 2000s and completely changed businesses.

Second, if you read the history of the dot-com revolution, it completely changed businesses, but as an investor, it was not an easy ride. Many early dot-com darlings are now dead and buried. Many had extreme three-digit P/E ratios that people explained away with “this time it’s different”—before they came crashing down.

My point is this: it seems to me that the AI revolution, like the dot-com revolution before it, is not something to miss as an investor. But investing in that space will be a rollercoaster, with many ups and downs along the way. And there will be many “winners” that do great for a while before disappearing.

Will the war in Iran bring everything tumbling down?

There’s only one metric that matters here: Is the Strait of Hormuz open? The answer is no.

Taking 20% of global oil production offline—with all the ripple effects on the global economy, from straight oil to food fertilizers and everything else—is no laughing matter. The U.S. administration has relied heavily on the oil PR game (”peace just around the corner”) to keep the market and the paper oil market (futures) somewhat calm. They’ve also released a lot from our SPR (Strategic Petroleum Reserve) oil reserves. But that can’t go on forever.

How will it unfold? I don’t know.

But when you listen to the three sides in their own words: The U.S. believes it won and wants a settlement on its terms. Iran believes it won and wants a settlement on its terms. The U.S. definition of winning is that its military has destroyed a lot of Iran’s military assets. Iran’s definition of winning is that it’s still standing and can still keep the Strait of Hormuz closed with its drones and missiles—launched from anywhere inside the very large Iran (Iran is the size of four Californias). Then there’s the third party, Israel, which still wants the war to go on because it sees Iran as an existential risk.

All to say, they can’t all be right. And unless there’s a shared reality, a quick resolution seems unlikely. But miracles can happen, and I sure hope one happens here.

As Don Durrett said correctly, neither the AI question nor the Iran war question has an easy answer.

With that said, let’s go back to Gave to get his perspective. This may be hard to hear for an American like me, but he’s a smart, successful guy, and his insight—like Lyn Alden’s insights—is extremely helpful.

Chapter 1: The Crisis Nobody Saw Coming (But China Prepared For) and The Importance of Resilience

If you had told the broader investment community five years ago that China would enter the next major global crisis—like this current Iran war—better positioned than almost any other major economy, most portfolio managers would have disagreed. But reality has a way of quietly tearing down consensus views, especially when those views ignore the quiet, unglamorous work of strategic preparation. It’s like hitting the gym for years in a serious way. It’s not glamorous, but it’s a game changer. That is strategic preparation. That is resilience.

Gave comments:

Louis-Vincent Gave (Interview – 25:35): “China comes into this crisis, I think, better prepared than pretty much anybody out there, mostly through luck.”

“Luck” here means the unintended consequences of geopolitical challenges. The shift started about eight years ago, when Washington restricted semiconductor exports to Beijing. China didn’t just treat it as a one-off trade fight. Its policymakers saw it as a system-wide warning shot. If critical technology could be used as a weapon, then food, energy, fertilizers, and industrial supplies could be next. Their response wasn’t just words. It was action. Billions in domestic savings got pulled from consumer industries and real estate speculation and poured into industrial capacity, supply chain backups, and strategic stockpiles.

Source: https://www.cnn.com/2018/10/30/tech/trade-war-fujian-jinhua

Gave remarks:

Louis-Vincent Gave (Interview - 21:56): “The reason China has all this is because 8 years ago the US told China no more semiconductors. And China thought, ‘Oh my god, they can block us from this. They can block us from anything. We better store up on everything.’ So they stored up on everything. So China comes into this inventories loaded up.”

We are talking about huge strategic reserves in China. When the Iran War conflict disrupts shipping corridors and fertilizer exports, the world feels the immediate pinch. China, however, operates from a position of structural insulation.

Louis-Vincent Gave (Interview - 21:50): “China today has more oil in storage than the rest of the world combined. It has more natural gas in storage than the rest of Asia combined. It has more fertilizer in storage than the rest of the world combined.”

Basically, China decided it needs big reserves of everything that people and companies in China require. This is the extreme, country-level version of what happened during COVID, when lots of consumers started stockpiling household goods and food because they didn’t trust supermarkets to have them when needed. Those consumers shifted from just-in-time buying to building up a cushion of supplies. China has been doing the same thing at the country level for the past eight years.

Source: https://nypost.com/2021/10/20/supply-chain-crisis-sparks-hoarding-in-parts-of-the-us/

Gave explains:

Louis-Vincent Gave (Interview - 26:40): “And and so all of China’s savings, which happened to be massive, it’s it’s by now a big economy and with a very high savings rate, all of China’s savings were redirected essentially into building up national resiliency.”

This matters for investors because it changes how economic shocks move across borders. In the past, a supply disruption in the Middle East would ripple through Asian manufacturing hubs, cause inflation to spike, and force central banks there to raise rates defensively. Today, that chain is broken. China’s inventory stockpiles absorb the first hit, buying time for its own policymakers to adjust. Meanwhile, nearby countries scramble to lock down supplies.

Chapter 2: It Isn’t Debt-to-GDP, but Who Owns the Debt

Conventional debt analysis relies a lot on debt-to-GDP ratios to figure out a country’s risk. Gave dismisses this as a structural illusion. Comparing a stock measure (total debt) to a flow measure (one year’s economic output) tells you very little about real funding vulnerability. What matters way more is who holds the debt, and whether local savings can buy up new debt without relying on foreign money that might flee.

US Debt to GDP Graph

Source: https://fred.stlouisfed.org/series/GFDEGDQ188S

Gave notes:

Louis-Vincent Gave (Interview - 14:18): “What always matters is the percentage of bonds owned by foreigners. This is a guide of whether domestic savings are enough to essentially keep governments going along.”

When you shift your focus to foreign ownership ratios, the vulnerability map changes completely. Several advanced economies stand out—not because their total debt is unsustainably high, but because their funding depends too much on outside investors. A sudden change in global risk appetite, a shift in tax policy, or even just investors rotating their money elsewhere can cause big swings in yields for markets that look perfectly fine on paper.

Gave explains:

• Louis-Vincent Gave (Interview - 14:47): “China is a prime example of this today. China has fairly low taxes, but has the lowest bond yield in the world because Chinese people save a lot and all the savings go into government bonds and so Chinese government gets to borrow cheaper than anybody and and as long as you borrow from your own citizens you can keep that going forever.”

• Louis-Vincent Gave (Interview - 15:25): “Today there are three countries that stand out that borrow disproportionately from foreigners. One is ..the UK. The other is mine, France, and the third is the United States. These are the three countries that essentially depend on the kindness of strangers to keep the lights on. That doesn’t mean that that stops, but it means that all of a sudden you are vulnerable.”

The United Kingdom, France, and the United States fall into this risky category.

Foreign investors fund too much of the government debt of UK, France and the US, creating a hidden weakness to geopolitical changes and currency shifts. When bond yields rise in the UK despite inflation looking stable, it’s not necessarily because the economy is weak. It’s often because foreign investors are moving their money elsewhere. When markets price in French political uncertainty before a presidential election, the pressure doesn’t come from French savers pulling out. It comes from foreign investors rethinking how long they want to hold that debt. This matters for building a portfolio because it means developed market government bonds are no longer a simple, no-brainer place to park your money.

The bigger takeaway is that traditional safe havens are being redefined. Investors who built portfolios assuming U.S. Treasuries would always be there to provide cash during a crisis are finding out that liquidity has strings attached. We explore that more in the next chapter.

Chapter 3: The Two 80-Year Assumptions That Just Broke

For decades, institutional portfolio construction rested on two quietly accepted premises that rarely made it into strategy decks or investor presentations. They were as obvious as the air outside—so obvious they didn’t need to be said. And to be fair, for a long time after 1945—the end of World War II—that was true. But as any history buff knows, nothing lasts forever.

Assumption 1: US Treasury securities represented the ultimate liquid safe asset

The logic was simple: in a crisis, you sell Treasuries to buy real resources. Whether you were a central bank managing a currency peg, a big company securing cash to operate, or an emerging market government funding infrastructure projects, the assumption was the same—deep dollar markets meant US Treasuries could always be turned into physical commodities like oil, grain, or metals.

Louis-Vincent Gave (Interview - 19:10): “That assumption essentially broke down with the Russia Ukraine war. When we seized Russia’s Treasuries, we said you you only get access to Treasuries if we say you do. We being the Western world and really being the United States. So, that was the first assumption and and the response to this. Everybody turned around and said, ‘Fine, then I’m going to buy gold instead.’ And so central banks became huge buyers of gold. Gold prices tripled.”

The message was clear. Dollar-denominated reserves aren’t automatically safe anymore. They’re only safe if your geopolitical actions stay within an “acceptable” range as judged by the U.S. government. The immediate response from reserve managers around the world was predictable. Central banks sped up their gold buying. Gold prices went up accordingly, reflecting a system-wide reassessment of what counts as a truly untouchable reserve asset. But gold alone doesn’t fix the physical resource problem. You can’t turn gold bars into crude oil. Turning financial assets into real goods still requires working global trade routes.

That brings us to the second broken assumption.

Assumption 2: The United States Navy guaranteed the free flow of those commodities across global shipping lanes

The second premise was just as unexamined for decades: the United States Navy guaranteed the free flow of goods across global shipping lanes. The idea that any force, any country, could successfully take on the U.S. Navy was unimaginable. It was lunacy.

And yet, it happened. Why?

The answer is the eternal arms race. Technology made the once-untouchable U.S. Navy touchable. Is that new? No. It’s part of the endless arms race. An arms race happens when one side’s new weapon makes the other side’s old weapon less effective—for example, machine guns made cavalry charges useless, and cannons made castles obsolete. Cheap drone technology and cheap missile technology have made the U.S. Navy touchable now. The proof is that the U.S. Navy has not forced open the Strait of Hormuz, the way it would have back in the 1990s.

• Louis-Vincent Gave (Interview - 17:45): “And you’re seeing this today in the Persian Gulf where the US Navy cannot be within a thousand miles of Iran.”

• Louis-Vincent Gave (Interview - 20:09): “If the US Navy can no longer control the seaways, what’s the point of spending all this money on defense? I’m much better off buying $50,000 drones and $80,000 ballistic missiles from China.”

For generations, maritime security worked under an unspoken guarantee that the United States would keep the sea lanes open. Disruptions happened, but they were temporary and local. The recent conflict in the Middle East (Iran War) has exposed how insecure that guarantee now really is.

Louis-Vincent Gave (Interview - 19:39): “The second assumption was by buying gold is I can transform my gold into oil or into food or into fertilizer whenever I need because the US Navy controls the world’s seaways. Because I can always have my stuff my fertilizer delivered by the US Navy. That assumption has just been destroyed.”

Implication 1: The global appeal of US Treasuries is less than before 2022

I’m not saying doom and gloom, but I am saying it’s complicated. A lot of people like to think in binary terms—”All is well. We’re number one” or “We’re doomed. The U.S. is finished.” I’m saying neither. I’m saying that thanks to our policy choices, U.S. Treasuries, while still very useful, now come with an asterisk: safe unless the U.S. government doesn’t like you anymore. If you were the treasurer of a foreign government, you’d be reckless not to factor that in. That will mean higher interest rates on US Treasuries, which is bad news for the country, but a good thing for US investors buying US Treasuries.

Implication 2: What it means for US defense sector investors

For investors, this means that defense sector exposure requires surgical precision, not just a blanket index fund. Companies making legacy platforms face structural margin pressure as procurement priorities shift. Meanwhile, firms that specialize in asymmetric defense tech, autonomous systems, and resilient infrastructure are pulling in a lot of capital. The defense sector isn’t dying. It’s mutating, and portfolio managers who miss the mutation will be left holding obsolete stuff.

Louis-Vincent Gave (Interview - 16:14): “I’ve actually been bearish defense stocks for a little bit. My take is that warfare has changed massively. I think Ukraine uh was a prime a first example of this and then the Red Sea and the Houthis was a second and now we obviously have a third element of this [Iran war]. The reality is that in the since World War II every effort by every military was first and foremost to control the sky. If you if you control the sky, then chances are you’re going to control the battlefield. And controlling the sky was an extremely extremely expensive proposition. You know, fighter planes cost a fortune, satellites cost a fortune. And with the Ukraine war, we found out that actually controlling the sky cost a few tens of thousands of dollars. The drone warfare has completely upended um the the military equation. It’s all of a sudden why pay $275 million US for an F-35 plane. And not only the controlling the skies, but the the delivery of firepower um has also been upended. With a $50,000 drone, you can now sink a billion dollar battleship. So that that equation. And to take down the $50,000 drone, you need a $2 million Patriot missiles. So that the spending has become so asymmetric. And you’re seeing this today in the Persian Gulf where the US Navy cannot be within a thousand miles of Iran.”

Optimization vs. Flexibility

The broader investment lesson goes beyond defense stocks. It applies to how we build portfolios in an era where old correlations are breaking down. When safe assets can be frozen, when shipping lanes can be contested, when the economics of war can flip overnight, the old way of investing becomes dangerously inadequate. Optimization alone is not enough. Optimization works great ONLY if you know what the future looks like. For example, if you build a house from scratch, you can optimize if you control the future—how your house will look. But in an extreme case, if the zoning office in your neighborhood keeps changing its mind and disallows what was allowed yesterday, flexibility is more important. That is the world right now. Flexibility is critical. You can’t optimize because you don’t know the future structure of the world.

For better or worse, we are living in a time of immense change. Some changes we like, some we may not. That’s just the nature of change. We talked above about the big geopolitical changes.

Below, we’ll cover Gave’s perspective on AI and China in more detail, and how investors can profit from it in a smart way. In the following sections, we will cover the following:

• Chapter 4: The Four-Prism Framework for Evaluating Any Market

• Chapter 5: China’s Structural Advantage: Beyond the Headlines

• Chapter 6: The End of Asset‑Light: AI’s Infrastructure Imperative

• Chapter 7: The Louis-Vincent Gave Interview Used for This Article

• Chapter 8: Building a Resilient Portfolio: Specific Recommendations

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“Economists often get away with saying, ‘My theory would have worked except for [some excuse].’

Engineers can’t say, ‘My new engine would have worked except for [some excuse].’

That kind of mental rigor makes engineers a valuable voice in finance.”

— Unknown

Not financial, investment, legal, or tax advice. Please read our full Disclaimer on the Disclaimer page. Accessible via the provided link and via the homepage menu. Continued reading constitutes your agreement to its terms.

If you’ve spent any time in macro-finance circles over the last decade, you’ve probably heard the name Lyn Alden. But here’s what you might not know: she didn’t come up through the traditional Wall Street pipeline. Instead, Alden started as an electrical engineer working in aviation systems—a background that turns out to be surprisingly relevant when you’re trying to understand how complex systems interact.

The following content is based on two interviews (Interview 1 and Interview 2) that Lyn Alden gave late last month (April 2026). I’ve included links to all two interviews further below (Chapter 7) in this article.

I am not an engineer. I am a lifelong finance professional who learned that many great-sounding theories written by other finance professionals and economists didn’t work in reality. They were never road-tested and were written by people accustomed to leaving themselves so many excuses and provisos that the usefulness of the great-sounding theories was very limited, to be polite.

That is why Lyn Alden—an engineer by background—is such a breath of fresh air in the macro-finance investment circle. The market took note, and she has become famous over the last 10 years or so—deservedly. Very deservedly.

Here is Lyn Alden’s profile as per her website:

“She has a bachelor’s degree in electrical engineering (Penn State) and a master’s degree in engineering management (Rowan University). From 2009 to 2021 she was an electrical engineer, and then subsequently the head engineer and system integrator at the Federal Aviation Administration’s Cockpit Simulation Facility. In 2016 she founded the research firm Lyn Alden Investment Strategy, which provides investment research for retail and institutional investors. It started as a side hobby to express her lifelong interest in investing, but soon became so large that she left her engineering work to focus on it full time.”

Source: https://www.lynalden.com/about-lyn-alden/

What can her systems thinking reveal about endless money printing, dilution, gold, silver, bitcoin, other hard assets, and AI’s wildcard based on some recent interviews of her? Let’s unpack it.

Chapter 1: The Necessity of the Dilution Game, Hard Assets to Protect You, and How Energy Crisis and Major Wars Can Increase the Pain

Let’s start with a number that’s hard to wrap your head around. In 1913, when the Federal Reserve was created, the United States had roughly $19 billion in broad money circulating. That worked out to about $200 per person. Today? We’re looking at over $22 trillion in broad money—more than a thousand times the original amount. On a per-person basis, that’s roughly $65,000, or about 325 times more than a century ago. These figures compound at around 6% annually.

It’s understandable to feel stunned. But as Lyn explains, the raw numbers only tell part of the story—and the pain they create isn’t distributed evenly.

Why Debasement Keeps Happening (And Why It’s Hard to Stop)

Before we get to where the pain lands, it helps to understand why the dilution continues in the first place. It’s not an accident or a conspiracy. It’s structural. Our system runs on debt—government debt, corporate debt, household debt. When you have more promises to pay than you have base money to back them, the path of least resistance is to create more money rather than force widespread defaults.

Add to that political incentives: short election cycles reward policies that boost consumption today, even if they weaken purchasing power tomorrow. And then there’s demographics: an aging population means more claims on resources (pensions, healthcare) with fewer workers to support them.

Here is what Lyn Alden says about this topic:

Lyn (Interview 1 - 8:10): “I think all the signs point to continued debasement. This phase we have way worse demographics than back then [referring to the 1940s and 1950s]. And just a bunch of other factors are different. I think we are more in that persistent debasement camp.”

In short: the system is designed to grow the money supply because the alternative—deflation in a highly indebted world—risks cascading defaults and deep recessions. So debasement isn’t a bug. It’s a feature. The question isn’t if it continues, but how its effects are distributed.

Where the Pain Lands (And What Makes It Worse)

Here’s the part the title references: debasement doesn’t hurt everyone equally, and certain shocks can amplify the discomfort. Here is what Lyn Alden says:

Lyn (Interview 1 - 8:21): “With the caveat that if you avoid major energy crises at least over prolonged periods of time, if you avoid the most extreme types of war, basically things that really destroy productivity, then you can make that process feel less painful…”

Lyn Alden didn’t mention it in this interview, but she might as well be describing the present moment. As of this writing, the US-Israel-Iran war that began in February 2026 has closed the Strait of Hormuz, choking off roughly 20% of global oil flows. A fragile ceasefire is in place, but the blockade continues. No off-ramp is in sight. When Alden warns that avoiding major wars and energy disruptions ‘make the process feel less painful,’ this is exactly what she means — and we are watching it unfold in real time. Diplomacy could, of course, work. But none of the three involved parties—the US, Israel, and Iran—thinks they are losing, so while I am hopeful, I am not holding my breath for a quick resolution.

Think of it this way: when money supply grows but productivity keeps rising, we can absorb some of the inflation. More goods and services chase more money, so prices rise moderately. But when productivity gets hit—by war disrupting supply chains, or an energy crisis making production far more expensive—the same amount of money chases fewer goods. Prices spike. Wages lag. The “dilution” feels much sharper. So the pain of debasement isn’t just about the number of dollars in circulation. It’s about what those dollars can actually buy—and that depends heavily on whether the real economy is functioning smoothly or under stress.

The Inflation Illusion: Why CPI Doesn’t Tell the Whole Story

Here is what Lyn Alden says about the consumer price index:

Lyn (Interview 1 - 10:09): “These numbers often come out bigger than you would expect at starting point. I think a lot of that is because people are trained to think about inflation through the CPI or through prices going up. But when you look at something like over a century of time, you have these cumulative productivity increases that actually do a lot to disguise the debasement.”

We’re taught to measure inflation by the Consumer Price Index (CPI)—a basket of everyday goods. But that basket changes over time, and it misses the assets where debasement shows up most clearly. On a side note, that is why legendary investor Rick Rule likes to call the CPI, the ‘CP Lie’.

Look at how unevenly prices have moved over the past two decades.

Price Changes of Consumer Goods and Services from 2000 to 2022

What can make the growth of the money supply confusing is, as explained above, that it doesn’t impact all sectors equally. For example, the image below from Visual Capitalist shows the price changes of consumer goods and services from 2000 to 2022; it shows that hospital services and college tuition and fees went up by almost 200%, whereas cellphone service prices decreased by 50%. However, and that is critical, all that money growth has to go somewhere, and just because you can’t see it doesn’t mean it isn’t going somewhere. Historically, it has shown up in certain services (like healthcare) and in hard assets.

Source: https://www.visualcapitalist.com/inflation-chart-tracks-price-changes-us-goods-services/

Lyn Alden had this to say about grain versus gold prices:

Lyn (Interview 1 - 11:18): “Over the long arc of time, grain prices because we are fairly good at making more grain when there are shortages of it or after a season or two, you do not really see grain prices keeping up anywhere near close to the growth of money supply. Whereas gold prices… actually does keep roughly in line.”

Scarce assets—gold, silver, high-quality real estate, art, and so on —don’t benefit from productivity gains in the same way. You can’t automate a beachfront lot. So when new money enters the system, it bids up these items first and most persistently.

Lyn (Interview 1 - 12:45): “That is where a lot of that debasement shows up and where you do see those price increases that keep in line with those huge numbers.”

If you don’t own hard assets that can absorb monetary expansion, you’re effectively watching your purchasing power dilute—even if your paycheck stays the same.

The Losing Wage Treadmill – The Vicious Cycle

This brings us to wages. While asset prices have surged, everyday wages haven’t kept pace. That disconnect is why many people feel like they’re running just to stay in place.

The host comments in the interview:

Host (Interview 1 - 12:57): “Scarce things have gone up and have dramatically risen in value and price. But one thing that has not for sure are everyday wages for the everyday person. Which is really why, if you do not hold assets in this country, especially scarce assets, you feel like you are just running in place.”

Central banks target 2% inflation, framing it as healthy for growth. But Lyn notes that in a less indebted, more equity-based system, modest price declines driven by productivity could actually be beneficial.

Lyn Alden says:

Lyn (Interview 1 - 14:18): “When you have deflation in a more equity based system… it is good for prices to go down. It is good that, for example, televisions cost the same as they did 20 years ago because we have benefited from Moore’s law [simplified, more technology at lower prices] and just way better productivity over time that help keep a lot of those prices down.”

The problem isn’t falling prices per se—it’s that our current system is built on debt. Deflation makes debt harder to repay, which is why policymakers aggressively target inflation. But that policy has side effects.

Lyn Alden explains:

Lyn (Interview 1 - 16:25): “Anytime a business sets prices, anytime an employee has negotiated with an employer to be paid a certain number of units [dollars] over a certain amount of time, the government can put their thumb on the scale and just create a lot more of those units [dollars] which means that everybody who has those contracts in place has to now renegotiate to try to keep up with the debasement that is happening.”

Your income, not just your savings, gets debased. And if you’re not actively renegotiating—changing jobs, demanding raises, adjusting contracts—you fall behind.

The System Rewards Those Already on the Scarce Winning Asset Treadmill -The Virtuous Cycle

Once you own scarce assets, the system starts working for you. Borrowing becomes cheaper. Leverage amplifies returns. But getting to that point—from zero to one—is the hard part.

Lyn (Interview 1 - 20:40): “The hardest part is going from zero to one in a sense that once you have assets, you are more the beneficiary of the system… Once you get on that asset treadmill, the system really rewards that and gets that flywheel going. The hardest part of course is when people are starting a position where they do not have a ton of assets, they have to invest in themselves in terms of education or training. They usually have to grind really hard…”

This isn’t about blaming individuals. It’s about recognizing that the rules of the game favor those who already have skin in it. If you’re starting from scratch, the path requires discipline: boost your savings rate, invest in skills, and gradually allocate to assets with scarcity characteristics. It is hard, but it is the only way out of the losing Wage Vicious Cycle.

The Geopolitical Shift: Gold’s Quiet Return

While individuals navigate this landscape, central banks are making their own adjustments. Since 2009, global central banks have been steadily increasing their gold reserves—a trend that accelerated after the 2008 financial crisis.

Lyn Alden stated the following:

• Host (Interview 1 - 22:57): “Central banks globally have been increasing their gold reserves since 2009… You argue that since 2008 central banks have been moving quietly toward this multi-polar neutral reserve system. Is gold in fact the neutral reserve asset the world is starting to converge on?”

• Lyn (Interview 1 - 23:36): “Yes… What makes the current system different is that the treasury security is the actual unit that the reserves are based around. It is not tied to precious metals in any direct way… Then when you had the global financial crisis [in 2008] and the aftermath of all that, you started to see a gradual change where central banks were no longer reducing their tonnage of gold in aggregate. They started over many years gradually increase their tonnage of gold.”

This isn’t nostalgia. It’s pragmatism. Gold offers two things that fiat reserves can’t: resistance to debasement, and protection against asset freezes. The 2022 Russia asset freezes and seizures were a shock to the global financial system.

Lyn Alden explains:

Lyn (Interview 1 - 28:40): “Asset seizures and asset confiscations and freezes, that is a tool where the more you use it, generally speaking the less powerful that tool is going to be. For example, when the US does it to a tiny pool of reserves in Afghanistan, the rest of the world looks at that and says I do not really care about that. That makes sense. But when you do it to something like Russia, a much bigger entity, there are a lot of players in the world that say, well, if they are going to do this quite a bit, I have to be careful about how much of my reserves I hold in treasuries.… One is we can diversify… That is why a lot of them will say well, no one can just freeze my gold unless they are going to invade and take my gold, which is expensive and politically costly to do. It really puts more sovereignty back in the country.”

In a more fragmented, multipolar world, self-custody of reserves becomes a strategic priority. Gold fits that need.

The Fringe Finance Report covered the opportunities in the Gold and Silver market as far back as 2024. Here is one example from March 2025: “Legendary Gold and Silver Investor Rick Rule: “You have no excuse, not to make a million or two, in this market. Rick Rule shares which 22 mining stocks he owns in 2025.”

Building on what Lyn Alden had shared, it is worthwhile to ponder how much the world has changed. From a US perspective we entered a strange new world.

• In the 1990s, US sanctions meant financial death. US military intervention meant defeat.

• In 2022, Russia survived our sanctions. In 2026, Iran has so far survived our military forces. Both countries survived, not thrived, but survived nonetheless.

We, the US, are still powerful—but no longer all‑powerful. That changes the global investment landscape.

Why Countries Still Hold Fiat Reserves

If gold is so great, why do countries still hold dollars, euros, or yen?

Here is Lyn Alden’s answer:

Lyn (interview 1 - 30:58): “Good question. There are two big variables there. One is existing political relationships and tradition… The other one is the vast majority of cross-border debts are denominated in dollars… The central bank says we want to hold some dollars on hand because that matches the liabilities that a lot of our place has.”

In short: liquidity and liability matching. If a country’s banks and corporations owe dollars, holding dollar reserves helps manage short-term volatility. Gold is a long-term store; fiat is a short-term tool. Most central banks hold both, in evolving proportions.

A Brief Note on Bitcoin

Some wonder if Bitcoin could eventually serve as a neutral, digital reserve asset. It has attributes that align with that role: fixed supply, censorship resistance, fast settlement. But it remains small relative to global capital markets and highly volatile.

As Lyn Alden says:

Lyn (Interview 1 - 35:28): “Right now it is a 17-year-old asset… even on its best day it is still fairly small in the global sea of capital.”

For central banks managing trillions in reserves, stability and liquidity are non-negotiable. Bitcoin may find a place in sovereign wealth funds first—long-term investment vehicles that can tolerate volatility—before becoming a core reserve asset. It’s worth watching, but not something most institutions can rely on today.

So, What Can You Do?

This isn’t a call to panic. It’s an invitation to understand the game being played—and to position yourself accordingly.

1. Recognize that not all inflation is equal. Scarce assets tend to preserve value; abundant goods do not.

2. Think beyond your paycheck. Wage growth alone rarely outpaces monetary expansion. Asset ownership matters.

3. Start where you are. You don’t need to own gold bars or waterfront property tomorrow. Focus on building savings, acquiring knowledge, and gradually allocating to assets with scarcity characteristics.

4. Stay aware of macro risks. Energy shocks, geopolitical conflict, or productivity collapses can amplify the pain of debasement. Diversification isn’t just financial—it’s about resilience.

The dilution game isn’t new. But understanding it? That’s power. Real power. And in a world of expanding money, finite resources, and occasional shocks that disrupt productivity, that understanding might be the scarcest asset of all.

But what happens when a deflationary technology wave making goods and services cheaper collides with a system built for perpetual inflation? That’s where AI enters the picture.

Chapter 2: AI Isn’t Magic & the AI Investment Universe in 5 Buckets

Let’s start with the elephant in the room: artificial intelligence. The narrative has swung wildly over the past few years, from “AI will replace every job in 18 months” to “it’s just another dot-com bubble.” Alden’s take sits firmly in the productive middle, grounded in engineering reality rather than venture capital hype.

The key insight—and this is where many investors get tripped up—is that AI’s biggest near-term impact isn’t in replacing humans wholesale. It’s in changing the ratio. One knowledge worker, augmented by AI agents, can now handle the workload that previously required three or five. That doesn’t necessarily mean mass layoffs tomorrow. It means slower hiring. Tighter budgets.

Here is what she says:

Lyn (Interview 2 - 2:54): “I think that right now what we’re seeing in the US economy and more broadly is you don’t see a lot of firings from AI-related reasons but you kind of see a slowdown of hiring.”

This is critical for investors to internalize. Markets price the future, not the present. If the market believes that enterprise software companies will need to sell 20% fewer seats in three years because each seat is now more powerful, those stocks will adjust today—even if current earnings look perfectly fine. The disconnect between current fundamentals and future expectations is where the volatility comes from.

Lyn’s engineering background gives her a useful lens here. She doesn’t get dazzled by demos. She asks: What’s the actual workflow? Where are the bottlenecks? What breaks (what starts failing first) at scale? And perhaps most importantly: What’s the energy cost?

Lyn (Interview 2 – 6:23): “The human brain as powerful as it is, it’s still as powerful as most supercomputers—runs on 20 watts roughly which is insane. It’s like a third of an incandescent light bulb. Whereas an equivalent amount of kind of processing power the best way we estimate it still takes megawatts. So we’re off by something like an order of [a factor of] magnitude of a million or nearly a million.”

That gap matters. It means that portable, real-time AI—robots walking around your house, drones delivering packages in complex environments, self-driving cars navigating edge cases (i.e., abnormal situations)—is still fundamentally harder than data-center AI. The constraints aren’t just algorithmic. They’re physical. Energy requirements.

This is the kind of grounded thinking that’s rare in tech commentary. And it has direct implications for investors. If you’re betting on humanoid robots replacing warehouse workers by 2027, you’re probably too early. If you’re betting on AI agents automating back-office tasks in financial services, healthcare, or legal, you’re probably on the right track.

The AI Investment Universe in 5 Buckets

Image Credit: Leslie Paul Oosten (@lesoosten1) created the above amazing “AI Investment Universe in 5 Buckets” image after reading the below content, which I had shared earlier on Substack Notes.

Stepping back a bit, what is interesting to note, is that Lyn is focusing here on real world impact of AI on the US economy. She is thus focusing on bucket 4 (see below). Most AI investing discussions focus on models. The reality is broader—and far more investable. It is easy to get lost in the ever-evolving AI investment universe. Here is a 5-bucket view that can serve as a useful mental model. Is it perfect? No. But it reduces the noise.

🪣 Bucket 1 – The Engine – The Actual AI Itself: The hardware and foundational software that run AI: chips (GPUs, CPUs, TPUs, tensor cores), memory, storage, optical links, and data. The constraint here isn’t innovation—it’s supply and power.

🪣 Bucket 2 – Physical AI Infrastructure – Where the AI Lives (aka the Pick and Shovel Strategy): AI factories have extremely high requirements. Using normal commercial buildings or factories is out of the question. Solutions range from converting former Bitcoin mining facilities to building AI factories from scratch. Old-world example: Wall Street firms once abandoned Lower Manhattan (the actual Wall Street) for Midtown because the old buildings couldn’t handle computers. Same dynamic, new hardware. This is quickly becoming the real bottleneck of AI.

🪣 Bucket 3 – Specialty Providers – AI as a Service (AaaS): Companies that bundle Buckets 1 and 2 into a neat service for those who won’t build their own. Think of it as AI as a Service. All you need to bring are your AI programs and data. This is where AI gets democratized—and commoditized.

🪣 Bucket 4 – AI Beneficiaries – Cost Cutting and Widening Economic Moats: Brick-and-mortar companies that use AI to slash costs and widen moats. AI shows up quietly in earnings before headlines.

🪣 Bucket 5 – Hybrids: Mega-cap companies whose CapEx funds the whole ecosystem and that operate in more than one of the above buckets. They don’t just participate—they shape the entire AI ecosystem.

Lyn is focusing more on the real-world impact of AI companies on existing companies, as she wants to stay grounded on what factually will be changing. By comparison, other people like Leopold Aschenbrenner or Chris Camillo focus mainly on Bucket 2 and, in the case of Chris also on Bucket 4.

“He Grew $225M to $5.5B in a Year: The 24-Year-Old AI Prodigy / Investor You Should Be Watching - Leopold Aschenbrenner and his Top 10 Investments”

“How Legendary Retail Investor Chris Camillo Turned $84,000 into $42 Million. And Why He Says AI Changes Everything”

Now let’s go deeper into Bucket 4—the real-economy companies using AI to cut costs and reshape labor.

In the following sections, we will cover the following:

• Chapter 3: The White-Collar AI Automation Wave

• Chapter 4: Why Software Stocks Are Getting Revalued

• Chapter 5: The Backend Efficiency Trade—Where the Real AI Alpha Might Be

• Chapter 6: The Dilution Framework—Your New Investment Compass

• Chapter 7: The 2 Recent Lyn Alden Interviews Used for This Article

• Chapter 8: Positioning for the Next Five Years—Actionable Signals to Watch

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“Do you have the patience to wait until your mud settles and the water is clear?”

— Lao Tzu, Tao Te Ching (around 400 BC)

Not financial, investment, legal, or tax advice. Please read our full Disclaimer on the Disclaimer page. Accessible via the provided link and via the homepage menu. Continued reading constitutes your agreement to its terms.

Usually, when we talk about legendary investors, we mean people who’ve spent decades in the market and built a reputation as all-time greats. You’d recognize the names: Jim Rogers, Rick Rule, Warren Buffett, David Tepper, Bill Ackman, Seth Klarman, Chris Hohn, Eric Sprott — the list goes on.

Every once in a while, though, we also spotlight people who aren’t yet seen as part of that elite club but are exceptional investors worth paying attention to. One example is Chris Camillo, the legendary retail investor who turned $84,000 into $42 million. We covered his story here:

Another fresh addition is a remarkable 24-year-old German-born wunderkind. He graduated from Columbia University at 19, only to be fired from OpenAI about a year later because his vision for AI didn’t align with the company’s. He then convinced backers who shared his AI foresight to fund an investment fund called Situation Awareness LP. That fund grew from $225 million in late 2024 to $5.5 billion by Q4 2025. Beyond impressive.

Today’s article looks at who he is, his latest investment moves, and what we can learn from him as investors.

Chapter 1: The 24-Year-Old AI Prodigy - Leopold Aschenbrenner - Who Saw AI’s Trillion-Dollar Buildout Coming — and Bet the Farm on It

A 24-year-old turning $225 million into $5.5 billion in roughly a year sounds like a finance fairy tale. But the story behind Leopold Aschenbrenner isn’t really about money. It’s about a young man who looked at where artificial intelligence is going, took it more seriously than almost anyone else, and acted on what he saw.

So who is he? Leopold grew up in Germany and was clearly ahead of the curve from the start. He graduated from Columbia University as the top student — valedictorian — when he was just 19. After a self-described “interesting gap year,” he joined OpenAI, the company behind ChatGPT. Specifically, he worked on the team that was trying to make sure future AI systems stay safe and aligned with human values.

Now he runs his own investment firm, backed by some of the biggest names in tech. But to understand why his fund performed so well, you need to understand his view of the world. And it starts with a very simple idea: AI isn’t just a clever computer program. It’s more like building a massive power plant or a skyscraper.

The trillion-dollar cluster, explained simply

Most of us picture AI as a piece of software that lives on a server somewhere. Leopold wants you to picture it as an industrial project. Training the most advanced AI models requires enormous buildings full of computer chips, cooled by giant air conditioning systems, using as much electricity as a small town.

And if you look at the past ten years, the size of these projects has been growing like clockwork. Each new generation uses about five times more computing power than the last. Follow that trend forward and by the end of this decade, a single training run could require a facility costing a trillion dollars and using more than 20% of all the electricity produced in the United States.

That sounds crazy, but Leopold points out that big tech companies already spend billions on data centers, and the numbers keep rising. The real question isn’t whether it’s technically possible. It’s whether we can build it fast enough.

From quick answers to real coworkers

Right now, AI models like ChatGPT are great at fast, one-shot answers. You ask a question, you get a reply. But they’re not great at the kind of slow, careful thinking that real work demands. Leopold calls this being “hobbled.”

He explains it with a simple comparison. When ChatGPT answers you, it’s like a human blurting out whatever comes to mind in the first three minutes. Now imagine the same system could think for the equivalent of a few months — reading, taking notes, trying things out, making mistakes, and learning from them. That would be like a remote employee you can assign a whole project to, not just a chatbot you fire questions at.

Leopold believes that unlocking this ability isn’t something that will take decades. The raw understanding is already there from reading the entire internet. Teaching the models to slow down and think more deeply is a hard problem, but not an impossible one. He expects to see models that work more like a remote coworker by around 2027 or 2028.

Why this matters for the whole world

Here’s where Leopold’s thinking goes beyond the usual tech optimism. He believes that once AI reaches that level — once it can replace skilled remote workers and generate hundreds of billions in revenue — the world’s governments will finally pay attention. And the reaction will be intense. A country that builds truly superhuman AI first could gain an enormous military and economic lead — the kind of advantage that might decide the global order for decades.

If you want to learn more about him, his outlook, and how he thinks, there’s a great 4-hour, 32-minute interview on YouTube from June 4, 2024. It might be deeper than most people need to go, but for the curious mind it’s a fascinating window into how this 24-year-old AI prodigy and investor sees the world.

Chapter 2: The AI Ecosystem As Leopold Sees It

Think of today’s AI not as a clever app on your phone, but as a massive industrial project. Training the most powerful AI models is like building a huge factory — it requires enormous buildings, a mind-boggling amount of electricity, special cooling systems, super-fast roads for data, and specialized machinery. Leopold’s portfolio reads like a shopping list for exactly that: the physical “backstage” stuff AI cannot run without. He isn’t betting on which AI chatbot will win. He’s betting on the boring, essential infrastructure every AI project will desperately need.

He’s following a classic “picks and shovels” strategy.

Instead of digging for gold himself, he’s selling the shovels, jeans, and food to all the miners. In AI terms:

• The big bottleneck isn’t writing AI software — it’s finding enough power, cooling, data center space, networking gear, and fast storage to run it.

• Standard power grids and office buildings can’t keep up with AI’s insane appetite. So he invests in companies that solve this with ready-made, industrial-scale solutions.

• Many of his picks repurpose existing infrastructure (old bitcoin mines) to get AI facilities online in months rather than years.

• He’s concentrating his money into a few high-conviction bets and using call options on some names to get more exposure with less cash upfront — a sign he’s very confident and financially savvy.

In short: he believes the AI buildout is the real gold rush, and he wants to own the power plants, the warehouses, the highways, and the fuel lines — not the apps.

Chapter 3: Inside the $5.5 Billion Bet: Why Leopold’s Portfolio Reads Like a Blueprint for AI’s Physical Bottlenecks

Leopold Aschenbrenner runs a fairly concentrated portfolio—just 29 investments as of December 31, 2025 (his latest 13F filing with the SEC). The top ten positions account for 85.98% of the total portfolio.

His Q4 2025 portfolio reads like a very clear bet on the physical bottlenecks of AI: power, cooling, data centers, networking, and storage, rather than just the obvious chip names. He also appears to be rotating capital into a smaller number of high-conviction positions, with several new names entering the top ten and some previous hedges or legacy positions getting replaced.

A quick word on how 13F filings work: these quarterly SEC reports only show the number of shares held and their market value as of the last day of the quarter. They don’t tell you when a stock was bought or at what price. So, for example, if at the end of September 2025 the report shows 0 shares of company XYZ, and 2 million shares at the end of December 2025, all you can say is that the purchase happened sometime between October 1, 2025 and December 31, 2025.

To estimate how a position performed while being conservative, one common approach is to assume the shares were bought at the highest price reached between October 1, 2025 and December 31, 2025. You’d then compare that price to today’s share price (April 23, 2026) to get a rough sense of how the investment may have done. Of course, you won’t know whether he still owned those shares on April 23, 2026 until the SEC 13F report for Q2 2026 is published.

Leopold’s Number 1 Investment

Leopold’s number-one investment, picked up in Q4 2025, has nearly doubled as of April 23, 2026. Interestingly, that same unusual AI bet is also the top AI pick of legendary retail investor Chris Camillo—the guy who famously turned $84,000 into $42 million. We covered Camillo’s take on this stock, behind the paywall, in an article published on December 7, 2025. Here is the link again:

I guess smart people think alike.

In the following sections, we will cover the following:

• Chapter 3 (CONTINUED): Inside the $5.5 Billion Bet: Why Leopold’s Portfolio Reads Like a Blueprint for AI’s Physical Bottlenecks

• Chapter 4: Top 10 Investments – The 3 New Investments: Still Great Opportunities to Follow?

• Chapter 5: Top 10 Investments – This 1 Unchanged Investment: Still on the Table for Copycat Investors?

• Chapter 6: Top 10 Investments – The 6 Rising Investments (Share Counts Up From 20% to a Whopping 816%): Still Opportunities for Investors?

• Chapter 7: Key Takeaways for AI Investors

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“The only risk the individual can control is between the ears:

work (which most people don’t want to do),

patience (which most people don’t have), and tenacity.

Most of the extraordinary speculative gains in my career—10 baggers, 20 baggers, 100 baggers—required five to six years. In almost every 10-bagger I’ve enjoyed, during some period, the stock declined by 50%.”

— Rick Rule (April 2026)

Not financial, investment, legal, or tax advice. Please read our full Disclaimer on the Disclaimer page. Accessible via the provided link and via the homepage menu. Continued reading constitutes your agreement to its terms.

Let’s rewind to mid-January 2026. Silver was around $115. The retail crowd was euphoric. Silver had ripped higher in a near-vertical line to about $115, and the internet was buzzing. That’s exactly when Rick Rule, the legendary natural resources investor, stood up at the Vancouver Resource Investment Conference and dropped a bomb: he had sold 80% of his physical silver.

The following content is based on three interviews (Interview 1, Interview 2, and Interview 3) that Rick Rule gave within the last week. I’ve included links to all three interviews further below in this article.

Chapter 1: The $115 Silver Sale & The Hate Mail

Why did Rick Rule sell the majority of his silver while it was booming in January?

It wasn’t because he suddenly hated the metal. In fact, he doesn’t. He is still bullish on silver equities. It was pure discipline.

Here is what he says about the sale:

“I bought silver originally [years ago] because silver was hated. When it ceased to be hated, the reason to own it in my account went away... The decision was made easier for me because there was a hyperbolic up move in silver, what you Canadians call a hockey stick graph. I’ve learned that the backside of a hockey stick graph is just as steep as the front side, but it’s a lot less fun if you happen to be long.” — Rick Rule, Interview 2, Timestamp 25:28

Silver Price History

Rick saw the chart going parabolic—touching levels near $115 an ounce (depending on the spot/futures spread at the peak). He did the math and realized silver mining stocks were pricing in silver at $45, while the metal itself was nearly double that. To him, the risk/reward had flipped. He took his chips off the physical table and redeployed them: 50% into silver stocks, 25% into oil stocks (excellent timing, as it turned out), and 25% into physical gold as a permanent savings hedge. (Interview 3, Timestamp 4:32)

Hate Mail

We know what happened next. Within weeks, silver cratered, eventually finding a floor around $75. Rick’s “hockey stick” theory was vindicated almost immediately. But being right and being popular are two very different things. He apparently received many angry emails and comments:

“I’m sure you’ve gotten a ton of emails about it... For me it was [the right decision]. I think it’s important to differentiate that all investment considerations need to be personal.” — Rick Rule, Interview 3, Timestamp 1:35 & 2:04

The Core Lesson: When Legendary Investors like Rick Rule Get Out, Staying Might Not Be Wise

The flood of angry emails—what Rick might call “hate mail”—came from the crowd that bought at the top of that parabolic spike. They saw the $115 print and thought it was the new floor, not the blow-off top. Rick, on the other hand, saw a party that had gotten a little too loud and decided to call an Uber.

That is really relevant now, as Rick Rule just shared another warning.

Chapter 2: Cash, Cash, and Cash

If you listen to Rick’s interviews this week, you’ll notice a recurring, almost jarring, theme: he’s hoarding cash. But we need to be precise about what “cash” means to a credit market veteran like Rick.

Here is what he says:

“Cash to me is certificates of deposit, money market funds, very short-term US government treasury obligations, and gold.” — Rick Rule, Interview 3, Timestamp 25:43

This is an important distinction. He is explicitly in T-Bills and money markets—assets that will be there when the market seizes up. He’s not chasing an extra 50 basis points of yield in some shaky corporate paper. He wants the boring stuff. The stuff that settles instantly.

On a side note, Rick Rule is much more generous than Warren Buffett regarding where he feels it is safe to park his cash. Last week, we covered what legendary investor Warren Buffett said, per below, about his significant cash reserves:

“We will always have cash, and we’ll have Treasury bills. We won’t have money market funds. We didn’t have them in 2008. We won’t have commercial paper in 2008.” – Warren Buffett, Timestamp 31:39

Warren Buffett’s perspective on cash and his compelling reasoning were covered in last week’s article called “Warren Buffett on the Iran War, Investment Opportunities, Portfolio Changes, Cash Pile, and What His Successor Greg Abel Bought.”

The “Lazy” Allocation – Too Much Cash?

Rick Rule is self-aware enough to know that if a financial planner looked at his balance sheet right now, they’d have a heart attack over the “cash drag.” They’d call it an inefficient, lazy balance sheet. And Rick would agree with them—then he’d ignore them entirely.

He comments:

“I see. I have what is in a historical context too much liquidity in my portfolio. A financial planner—or frankly a Rick Rule looking at my portfolio two years ago—would have said, ‘You have too much liquidity [cash]. You have a lazy balance sheet.’ Right now, lazy feels just right.” — Rick Rule, Interview 2, Timestamp 23:30

He’s raising liquidity to a level that feels excessive. He’s selling the “losers” and even trimming some winners, not because he thinks gold stocks are expensive (he actually thinks the small-cap gold miners are cheap), but because of a specific, low-probability-but-high-impact risk he sees brewing in the credit markets.

The Real Cost: A Cheap Option Premium

Now, the elephant in the room: Inflation. Holding cash in a world where Rick believes real inflation is 8% (while T-Bills yield 4%) means you are guaranteed to lose purchasing power, as he acknowledges as follows:

“I’m getting paid something like 4% on my liquidity in a currency where I believe I’m losing 8% of my purchasing power. Arithmetically I’m not making 4%, I’m losing 4%. I regard the 4% that I’m losing in real yield as being an option payment—an option premium—to preserve my liquidity in case that liquidity comes in handy.” — Rick Rule, Interview 2, Timestamp 14:08 & 15:30

This is a masterclass in portfolio management psychology. He is willingly paying a 4% annual “premium” for the option to act decisively if the market breaks. It’s insurance. You hate paying the premium on your car insurance every month, but you’re awfully glad you did when the fender gets bent.

The 2008 Echo: A Preview

So, what is Rick insuring against? He’s worried about a very specific “black swan” lurking in the portfolios of yield-starved retirees: High-Yield (Junk) Bond ETFs. More about this in detail, in the next Chapter.

Possibility, Not Probability

When pressed further on his cash hoarding due to ETF concerns, he provides a longer, very explicit disclaimer to ensure viewers don’t misinterpret his caution as a forecast of doom, as follows:

• “I think this is a possibility rather than a probability, but the outcome is dire.” - Rick Rule, Interview 1, Timestamp 4:35 - 5:39

• “I’m not saying this is going to occur. I’m not even going to say it’s a probability, but it’s a strong enough possibility and the penalty for failure is high enough that I’m building liquidity.” — Rick Rule, Interview 2, Timestamp 14:08 - 15:30

In addition, Rick Rule now believes that there is more than a 20% probability of a 50% decline or more in the equity market, and that only those with liquidity (cash) will be able to take advantage of it. However, those who need to sell equity investments to pay their margin debt or living expenses will lose a lot of money by being taken advantage of.

He says:

“Anybody who is in the equities markets who isn’t prepared for a 50% decline shouldn’t be in equity markets. I’ve been in equity markets for a very long time. I think there’s a less than 50% chance of it occurring, but I think there’s a more than 20% chance of it occurring. And if it occurs, I’m afraid it gets underway in earnest. The difference between taking advantage of a liquidity squeeze and being taken advantage of in a liquidity squeeze is simply liquidity.” — Rick Rule, Interview 2, Timestamp 24:11

The Core Lesson: You Need Cash To Buy When Everything Is On Sale

When Rick Rule sells, that is not something a wise investor should dismiss. Does he know the future? Of course not. No one does. But he was correct in mid-January when he sold the majority of silver. And now is building up cash to a very high level. The lesson here is clear: You don’t hold dry powder because you hate making money. You hold dry powder so that when the sellers become forced sellers—when they’re puking assets to meet margin calls or fund redemptions—you are the only buyer in town. That’s how 2009 became the best year of Rick’s career. He’s positioning for a potential repeat, even if it means looking a little “lazy” in the meantime.

Chapter 3: The Junk Bond “Bank Run” Scenario

While everyone is watching the price of oil or the Fed’s next move on interest rates, Rick Rule is staring intently at a part of the market that most retail investors think is “safe” simply because it trades easily on their phone app: High-Yield Bond ETFs. To Rick, these products represent a structural flaw that could turn a credit slowdown into a full-blown liquidity crisis. High-yield bonds—or junk bonds—are like the corporate or government version of a person with a bad credit score. If they borrow money, they have to pay much higher interest, because there’s a bigger risk they might default. Great if they pay on time all the way to the end. Horrible if they don’t.

He comments:

“I’m not an economist. I’m a credit guy. But I would suggest to you that if we weren’t already in a recession, this [Iran] conflict has tipped us into a global recession.” — Rick Rule, Interview 1, Timestamp 3:26

The problem isn’t the ETF structure itself; it’s the mismatch between the wrapper and the contents. Rick Rule continues to say:

“What scares me is the proliferation of high-yield, junk bond ETFs. Trillions of dollars of these things trade... If news reports of credit weakness cause redemptions in these liquid ETFs, you will learn that while the ETFs are liquid, the bonds in the portfolio are illiquid.” — Rick Rule, Interview 1, Timestamp 5:39

Let’s unpack that. These ETFs, you can buy it or sell it with the click of a button. That is liquidity. However, the actual bonds that the ETF holds—the debt of struggling companies—are not traded on a bright, shiny exchange. They are traded “Over-The-Counter” (OTC) between big institutions. In a panic, finding a buyer for a specific junk bond issued by a company you’ve never heard of is like trying to sell your neighbor’s used couch in the middle of a hurricane. That is illiquidity.

He adds:

“I think they’re mostly owned by ‘Moms and Pops’ chasing yield with no idea about underlying credit quality... They’re owned by people who I inelegantly term ‘yield Ma and Pa investors’ who are chasing 150 or 200 extra basis points in yield with no knowledge of the credit risks that they’re running.” — Rick Rule, Interview 1, Timestamp 5:39 & Interview 2, Timestamp 16:00

These investors have been trained by the market to believe that if they want their money back, they just hit “Sell.” But in a credit event, the ETF manager becomes a forced seller of assets that have no natural buyers. This is where the analogy gets dark.

Rick Rule explains:

“Remember, ETFs don’t have FDIC insurance. This is a bank run with no guarantee... If you have disintermediation, if the Mas and Pas that own these ETFs go to redeem them, the managers who run the ETFs may be unable to sell the bonds that would fund the redemptions. There you would get a run on the bank with no FDIC.” — Rick Rule, Interview 1, Timestamp 7:12 & Interview 2, Timestamp 16:00

When you deposit money in a savings account, the FDIC (up to a limit) guarantees you’ll get it back even if the bank fails. With a junk bond ETF, there is no such backstop.

The 2008 Echo

This is not a new phenomenon for Rick. He sees the same hubris that existed in the Collateralized Debt Obligation (CDO) market before the 2008 crash: the belief that financial engineering can turn a pile of risky, illiquid loans into a safe, liquid security.

Rick remarks:

“It reminds me of nothing so much as the air in the CDO market before the 2008 real estate credit collapse. Repeat again, I’m not forecasting a credit collapse. I’m just saying that the possibility of it is high enough and the penalty for failure of it is high enough that I personally am building liquidity.” — Rick Rule, Interview 2, Timestamp 16:00

He reiterates the “possibility, not probability” framework here. He’s not wearing a board that says “The End is Near.” He’s simply observing that the plumbing of the credit market has a critical weak spot. If retail sentiment turns sour and those redemptions start, the sell-off won’t be orderly.

Right now, you have a big, clear choice to make about your money.

• Option 1: Stay All-In - Keep all your money in stocks even though prices are at record highs. This is risky because there are signs of trouble in other areas (like loans and oil). If the stock market crashes, you could lose a lot of value.

• Option 2: Build Up Your Cash - Start setting more money aside in cash right now. Yes, you miss out if the market keeps going up a little more. BUT if the market does crash, you will have the cash ready to buy great companies when they are on sale for cheap. And, of course, if you purchased on margin, de-risking by moving from margin to cash might be a wise move.

• Bottom Line: Holding more cash right now is like insurance. It protects you from losing a ton of money in a crash, and it gives you the power to go shopping when everything is discounted.

The nice thing about having a lot of cash and being patient is that you can focus on your shopping list with strategic waiting. Take inspiration from legendary investors, like Rick Rule’s “13 Companies Rick Owns/Is Watching,” which we cover in the next chapter. Do your homework. Figure out how much upside a stock would have if you bought it today. Then ask: how much would it drop in a market crash? And what would your return be if you waited and bought it then instead of now? That makes strategic waiting a lot easier to handle.

• This isn’t “I’m doing nothing, just chilling.”

• It is “I’m actively waiting, getting my shopping list ready to jump in when nobody has money and everything’s on sale.”

In the following sections, we will cover the following:

Chapter 4: Rick Rule’s “Buy List” — 13 Companies Rick Owns/Is Watching

Chapter 5: The Oil Shock & The $40 Lie

Chapter 6: Copper’s “30 Years of Sin” & The $250 Billion Math

Chapter 7: Key Takeaways for Investors

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“The first casualty of war is the truth.”

— Aeschylus (525–456 BC)

Not financial, investment, legal, or tax advice. Please read our full Disclaimer on the Disclaimer page. Accessible via the provided link and via the homepage menu. Continued reading constitutes your agreement to its terms.

Late last month—March 2026—Warren Buffett did an interview that lasted over an hour. In it, he shared his thoughts on life after stepping down as CEO of Berkshire Hathaway, what he thinks of his successor Greg Abel, his continued involvement with Berkshire Hathaway, Berkshire’s cash position and why he prefers T-bills for Berkshire’s cash position, why the recent S&P market correction was nothing in his eyes and what he is waiting for, a recent acquisition, his time horizon, his prediction on the stock market and his investment approach, the Federal Reserve Bank and inflation, the banking system and the importance of liquidity, and what he called the Cathedral and the Casino.

Also included in this article are the changes to his portfolio (top 10), as per the latest SEC 13F filings.

Chapter 1: “This Is Nothing.” Why Buffett Is Yawning at the Correction

If you were hoping Buffett would call the recent market pullback a generational buying opportunity, prepare for a cold shower. The interviewer pointed out that both the Dow Jones Industrial Average and the Nasdaq Composite had entered correction territory, marking the worst quarterly performance for stocks in roughly four years.

Here is what Buffett said (timestamp - 15:42):

”No. Three times since I’ve taken over Berkshire it’s gone down more than 50%. I mean if you look at the markets, the worst probably was the 2000 and ‘08 period, although there was that one Monday when you had 21% in a day. I mean, this is nothing. I mean it. If they are 5 or 6% cheaper, that doesn’t…we aren’t in it to make 5 or 6%.”

Let that sink in for a moment. The man who built a legendary fortune by deploying capital when others were paralyzed by fear is telling us—in plain English—that the current dip doesn’t even register on his radar.

To repeat, here is what Buffett said: “If they are 5 or 6% cheaper, that doesn’t…we aren’t in it to make 5 or 6%.” In other words, he feels that while stocks may go up further, given how highly valued the stock market, he’d rather wait owning T-bills and buy when there is a fire sale and stocks are cheap.

Buffett said (timestamp - 19:13):

“I don’t have any ability to predict what stocks will do next week or next month. I will buy them if they’re cheap.”

Chapter 2: The Cash Fortress Keeps Growing

Berkshire Hathaway’s cash position has been a topic of intense speculation for years. At what point does all that idle liquidity become a drag? Why isn’t he putting it to work?

Buffett said (timestamp – 13:10):

“I don’t know the exact number, but it’s not much different than before. So it’s probably north of 350 billion in cash and treasury bills... We bought 17 billion this week.”

He confirmed that Berkshire is likely the largest single owner of U.S. Treasury bills in the world—a designation that would have been unthinkable for an equity-focused conglomerate in decades past. But these aren’t ordinary times. Buffett is earning a safe, competitive yield on the safest instrument the world has ever known, all while preserving dry powder for the moment when real fear grips the market.

Buffett said (timestamp – 13:10):

“Berkshire is the largest owner of T bills.”

There’s always the question: how much cash should the average investor hold?

If you follow Buffett’s approach, the answer would be around 55%. Sure, you might miss out if the stock market goes up. But if there’s a major correction and you don’t have cash ready, you’ll miss the chance to buy when everything’s on fire sale. That’s how Buffett would think about it.

This doesn’t mean that Buffett expects a major stock market correction around the corner. As he said above, “I don’t have any ability to predict what stocks will do next week or next month. I will buy them if they’re cheap.”

Chapter 3: Buffett on the Iran War & Other Experts

The interviewer asked Buffett about the Iran war, but he chose to limit his response to the danger of nuclear weapons and the micro—meaning which part of the investment portfolio benefits. More about that further below.

Beyond that, Buffett only said (timestamp – 38:20):

“But that doesn’t mean I can go around predicting what will happen next. I don’t know what’s going to happen tomorrow over there.”

It is interesting to note what Buffett didn’t mention. No word on a potential oil crisis, with potentially 20% of global oil supply offline—in the worst case, for years. No word on other related commodities that would be impacted in a prolonged conflict, like fertilizer shortages, which would result in a global food shortage. But I guess that’s his choice, and at 95 years of age, he probably didn’t want to be dragged into a political firestorm. But, Buffett’s silence here isn’t ignorance—it’s the ultimate act of circle of competence discipline. He’s telling us that if you can’t predict the war’s path, you don’t structure your portfolio around the war. Just make sure your portfolio can survive—or even thrive—either way.

Let’s see what other experts say. Before I go there, just a few words on what I aim to do and not to do. First, I am not arguing pro or con Democrats or Republicans. My focus is solely pro-Money. Second, I am not making an argument about whether this war makes sense or not. It has started, and it is what it is. My focus is, again, solely pro-Money to judge the impact on the world economy and thus investments if this continues. Third, I am not making a judgment as to who I think should win the war. My focus is, again, pro-Money to judge what the capabilities of the different parties are, with the sole focus to determine if this is a long or short war. And of course, when we talk about the future, let’s keep in mind there are no certainties about the future—only probabilities. Having said all that, let’s see what the experts are saying.

Chapter 3.1: Professor John Mearsheimer

John Mearsheimer is a professor and a top realist scholar at the University of Chicago; he is a West Point grad and an Air Force vet turned professor. He is well known for his no-nonsense straight talk, and one can find him all over the internet and on TV.

Here is what Professor Mearsheimer said in a recent interview (timestamp - 2:49):

• “Well, I think, Alexander, the situation that President Trump faces is pretty straightforward.”

• “Number one, he can’t go up the escalation ladder and win, because the Iranians can beat him or stymie him at every turn. He just has no way of escalating and winning this war.”

• “At the same time, he has no exit option. There’s no way he can get out that won’t leave him in a situation where it looks like the United States has been defeated. I mean, there is an exit option if you want to accept defeat, but for him to accept defeat at this point is politically impossible.”

• “So, if you can’t put an end to the war, and you can’t go up the escalation ladder and dominate—where does that leave you? It leaves you in a quagmire. It reminds me a lot of the Vietnam War.”

Why would he say Vietnam War? He served in the US military from 1970 to 1975 (around the end of the Vietnam War), after graduating from West Point. We dropped more bombs on Vietnam than we dropped during World War II (in Europe & the Pacific) and still didn’t win. This isn’t to say that our military is not powerful; it is. But every power has limits—including our military power.

Chapter 3.2: Professor Robert Pape

He is a professor at the University of Chicago who has devoted his career to international security issues, from the Vietnam War era to current conflicts such as the Iran war, and he has advised the White House and U.S. military leaders under multiple administrations from both parties.

Professor Pape—even before the current Iran war—has been writing about what he calls the escalation trap. Here’s what he means.

• You start with limited strikes to force the enemy to back down. It doesn’t work, so you hit harder thinking more force will do it.

• Enemy fights back smarter—widens the battlefield (missiles, proxies, oil routes).

• Now you’re stuck: escalate to “win” (risking quagmire/ground war) or pull back, looking weak at home. No easy way out.

• Think of it like an escalator that gets you to worse and worse places by default, unless you choose to get off—and with ever higher political costs.

• That’s why the Vietnam War dragged on so long, long after everyone knew it couldn’t be won.

• Because politically it felt “smarter” to let it run until everyone at home was exhausted, than to admit we made a mistake, call it quits, and get attacked at home as weaklings.

Here is what Professor Pape said recently based on his X posts and Substack article:

Professor Robert Pape warns Trump is already stuck in an Iran escalation trap. The recent “ceasefire pause”? Pape calls it a revelation: the US threw overwhelming force at Iran and still couldn’t dictate terms. That’s the real power shift.

• Step-by-step failure: 40+ days of escalating strikes, targets, threats—expecting compliance, got chaos. “Bombing to lose,” not win.

• No clean exit: Escalate (risk ground quagmire) or stop (admit defeat, look weak). Each move narrows options; politics/psychology makes retreat costlier.

• Iran’s new power play: Iran doesn’t need to conquer—it wins by disrupting critical systems like the Hormuz Strait and global oil flows. This creates massive uncertainty that hurts everyone. Risk becomes the new control—Iran holds the threat, so it calls the shots. Allies see US weakness, starts hedging bets (making side deals), and America’s global power slips away.

• Watch for: Ground forces positioning, Hormuz disruptions, and nuclear rhetoric spikes.

Bottom line: Ceasefire reveals the trap, and disruption beats domination. Iran emerges stronger; US faces Vietnam-style exhaustion if it drags on. This is a pure structural shift, and not by leadership choice.

Sources:

https://substack.com/@professorrobertpape/p-193671046

Chapter 3.3: Martin Armstrong

Martin Armstrong is a market forecaster known for his broad, cycle-based view of history, politics, and finance. He argues that markets, governments, and even wars move in recurring patterns, and he often ties major geopolitical events to shifts in capital, confidence, and systemic risk. He is the creator of Socrates, his AI computing model that crunches massive historical data to predict market turns, wars, and political shifts based on repeating cycles.

Here is what Armstrong said on X recently:

• “The computer [Socrates] does not show this [Iran war] is ending. So buckle up.”

• “Our computer is projecting very high volatility going into June and July for the Iran war.”

• “Last year I reported stagflation in the U.S., but depression in Europe. Many people asked how it could be so different. Now we see: we only get 3% of our energy from the Middle East; Europe, it’s their lifeblood.”

Sources:

Chapter 3.4: Global Recession or Depression Risk – Iran War & MAD — Economic Edition

Every U.S. war since 1945 has shared one thing: none truly threatened our homeland. We avoided direct conflict with nuclear powers, and non-nuclear opponents lacked the means to harm the U.S. or the world in a significant way.

This war is different. Before the ceasefire, Iran showed it could strike our allies in the Gulf (UAE, Saudi Arabia, Qatar, etc.) and Israel with precision drones and missiles. Its warning was clear—if we destroy its oil and energy infrastructure, it will target our Gulf allies’ facilities in return. A temporary closure of the Strait of Hormuz would already remove roughly 20% of global oil supply, but the widespread destruction of the Gulf’s oil production would be far worse. Rebuilding those facilities could take years, crippling the global economy and potentially triggering a depression on the scale of 1929.

For the first time in decades, an adversary has the power to hit us—and the world—where it hurts most: economically.

The logic of deterrence isn’t new. For those who remember the Cold War with the Soviet Union, this brings back memories of our doctrine at the time: MAD (Mutually Assured Destruction). That policy said, “Sure, you can destroy us with your nukes, but 30 minutes later, you’ll join us.” Horrible times, for sure. This time, we have MAD — Economic Edition.

Chapter 3.5: What does this all mean? Doom and Gloom?

No. Every problem has a solution—no exceptions. The problem is that often the solution—like with this Iran war or any other problem—requires something hard, uncomfortable, ego-bruising, and deeply unpopular.

That’s why many people and countries don’t escape their problems. They pick the short-term easy and fun path that leads to long-term disaster, instead of the short-term brutal and humiliating path that brings long-term success. Human nature is complex, and our default settings often don’t serve us well in today’s world.

So, while we are now on an escalator going up to nowhere good, our policymakers can still get off. It is a choice.

And as mentioned in the article called “Rick Rule on Iran and 4 Companies He Endorses, Plus Klarman & Tepper’s Latest Portfolio Moves (Top 5)” from 2 weeks ago, as you assess the Iran war situation – ignore who claims who “won.”

From an investor perspective, in this Iran war, there is only one question that matters: Is the Strait of Hormuz open?

In the following sections, we will cover the following:

Chapter 4: The Greg Abel Era Has Officially Begun

Chapter 5: Buffett’s View on Reserve Currency, Fragile Financial System, Liquidity, and Treasury Bills (T-bills)

Chapter 6: Berkshire’s Top 10 Positions & Changes vs. Prior Quarter

Chapter 7: Recent Major Acquisition by Berkshire

Chapter 8: Key Takeaways for Investors – What to Do Now

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“War is merely the continuation of politics by other means.”

— Carl von Clausewitz

Not financial, investment, legal, or tax advice. Please read our full Disclaimer on the Disclaimer page. Accessible via the provided link and via the homepage menu. Continued reading constitutes your agreement to its terms.

A lot is happening in the world that impacts investments—even if you invest solely within the U.S. The Iran war, like the Ukraine war before it, has significant implications from a pure investor perspective that a prudent investor cannot afford to ignore.

The challenge for Western investors in times like these is that thinking clearly is far from easy, due to several psychological factors:

• Normalcy bias – We all assume that what has been will continue, naysayers notwithstanding.

• Home bias – We want our country to win and do well, and we struggle to imagine that this might not always hold true.

• Confirmation bias – We selectively absorb news, often subconsciously: anything that confirms our existing beliefs is accepted, while contradictory information is dismissed.

Overcoming these biases is not about being unpatriotic or pessimistic. It’s about separating investment discipline from emotion—which is critical since your money is at stake.

Consider an example from daily life. You may feel passionate about your favorite football or baseball team and make fun of anyone who doubts they will win. Fair enough—nothing wrong with that.

But what if you were told—as a thought experiment—that your investment portfolio’s return would depend on picking which team would win? At that point, the prudent investor, painful as it may be, would set aside their emotions and try to choose the winning team from a cold, hard, logical perspective—like Star Trek’s Spock would.

The same logic applies to the Iran war and the next geopolitical shock. Your personal hopes or loyalties won’t move markets. And only clear-eyed analysis will show where the market will go. As we all know, being a successful investor is not easy. We need to go where cold-eyed logic takes us (almost as if we were space aliens trying to invest on Earth), and leave our emotions behind.

This may be uncomfortable—very uncomfortable—but unless you are a member of the select group setting national policy, national policy (including foreign policy, geopolitics, and wars) is like the weather to us. We may hope for sunshine and a blue sky, but if the best weather forecast shows rain, rain, and more rain—like it or not—we need to adjust. Or we can ignore it and get wet. Our choice. Your choice.

Now let’s apply that framework.

Chapter 1: A Strange New World - The Long-Term Trend

Two trends are unfolding for investors to consider. One is slow‑motion, long‑term, and easy to ignore. The other is short‑to‑medium-term, fast, and impossible to miss – like the current Iran war. Both are emotionally uncomfortable to accept. But they are real.

Let’s dive in.

The slow‑motion trend

These are the hardest things to see. In 1900, the British Empire seemed invincible. The British Empire was so vast—from Canada to Africa, the Middle East, India, Singapore, and Australia—that it was always daytime somewhere within its territories. That’s how the expression “The sun never sets on the British Empire” was born.

A few smart British leaders realized the world was changing and tried desperately behind the scenes to avoid it. They failed. By 1956, the UK needed an IMF bailout to avoid financial collapse.

Reading history, you might think, “How could they not see that coming? It was obvious.” But hindsight is 20/20. Back in 1900, if someone had warned about the decline of the British Empire, most people would’ve replied, “The Empire has lasted 300+ years. It has faced many challenges. This will be no different.” That opinion would have been the majority view. Reasonable. And dead wrong.

Today, the United States faces a similar inflection point — not collapse, but a relative shift in global power that most Americans do not want to see. That is the long term trend.

Emotions vs. logic

We, the Fringe Finance Report, covered this slow‑motion trend back in August 2025 in an article called “A Strange New World – And How To Make Money From It.” The title is inspired by Aldous Huxley’s Brave New World. Here is what I wrote then:

“It’s very easy to get emotionally invested in these conversations. I want my country—the US—to do well. I’m emotionally attached to the US, just as others are to their home countries. But as an investor—focused on making money—it’s important to put emotions aside and analyze the situation logically.”

That article explored how the world has fundamentally changed, known to some but unknown to many, and how to profit from that change while protecting your money.

From the long term to the immediate

That slow‑motion shift is the background. The Iran war is the foreground — a sharp, near‑term shock that could accelerate or derail the longer trend. Understanding both is the only way to protect your portfolio.

In last week’s article, “Rick Rule on Iran and 4 Companies He Endorses, Plus Klarman & Tepper’s Latest Portfolio Moves,” I analyzed the war. Now, with President Trump’s April 1, 2026 speech, we have new data. Time to update the implications — and the upside and downside probabilities for your investments.

With that long‑term frame in mind, let’s turn to the immediate crisis, the Iran war. Chapter 2 decodes Trump’s speech – reading between the lines – and what JP Morgan’s Jamie Dimon’s warning means for your portfolio.

Chapter 2: Decoding Trump’s April 1st Speech – Iran, War, and JP Morgan’s Warning for Your Portfolio

The Iran war differs from recent conflicts, whether small (Libya, Syria) or large (Afghanistan, Iraq). Iran can hurt the U.S. and Europe in material ways that the others couldn’t. While none of these countries—including Iran—could beat us in a direct fight (e.g., Navy against Navy), Iran doesn’t need to win that way. It just needs to hurt our wallets (higher oil prices, a recession, and a stock market crash), and it has the capability to do so.

Like in the first Rocky movie (1976), Rocky didn’t win either. His “winning” was just still standing at the end against champion Apollo. Add Iran’s mountainous terrain (4 times the size of California), new weapons (drones, hypersonic missiles), and years of preparation (underground factories and storage). All Iran has to do is control the Strait of Hormuz—and with it, 20% of the world’s oil.

If we attack Iran, Iran can’t reach the US mainland. But as long as it keeps standing, it can hit our Middle East allies’ oil and gas facilities (Israel, UAE, Saudi Arabia, Qatar, Bahrain, Kuwait) in retaliation. As we hit Iran and Iran hits our allies, those facilities get damaged. Experts say repairs take many years. During that time, 20% of oil production is offline. You don’t need to be Einstein to see what that does to oil prices, inflation, company profits, the economy (recession), and the stock market (crash).

So Iran can’t hit the US mainland, but it can hit the global economy—and thus our wallets.

You might say none of that will happen. The US will win clearly. Our allies’ facilities won’t be damaged. We’ll force open the Strait. Fair enough. I don’t know the future.

But what if that’s not true? What would that do to your portfolio, and do you want to run the risk?

Latest status on the Iran war, factoring in President Trump’s speech on April 1, 2026

Status as of April 2, 2026: The administration claims near‑total military victory within weeks, but the speech’s open‑ended language (“continue until objectives fully achieved”) and its downgrading of the Strait of Hormuz imply the conflict is far from over — and that economic pain (higher oil prices, recession risk) is being reframed as patriotic sacrifice rather than a reason to stop.

Chapter 2.1: Trump’s Key Points – April 1, 2026 Speech

Analyzing political or corporate speech is fun once you know how to read it. For example, corporations may often say, “Executive XYZ is leaving the company to pursue other opportunities,” or “Executive XYZ is leaving the company to spend more time with his family.” That all sounds nice, but the plain-English version of that is, “Executive XYZ got fired.”

Let’s do the same with President Trump’s speech—first the main stated points and then (reading between the lines) what it really means.

Trump’s Main Points as Stated on April 1, 2026

• Operation Epic Fury against Iran began one month ago.

• Core objectives: dismantle Iran’s ability to threaten America or project power abroad. The US is “nearing completion.”

• U.S. military has destroyed Iran’s navy and air force. Their ability to launch missiles and drones is dramatically curtailed. We are going to hit them extremely hard over the next two to three weeks.

• 13 U.S. service members have died. Now, we must honor them by completing the mission for which they gave their lives. I have made clear from the beginning of Operation Epic Fury that we will continue until our objectives are fully achieved.

• Rising gasoline prices here at home (short-term increases) have been entirely the result of the Iranian regime launching attacks against commercial oil tankers and neighboring countries that have nothing to do with the conflict.

• To countries that can’t get fuel, Trump had 2 suggestions:

  • Number one, buy oil from the United States of America; we have plenty.

  • Number two, build up some delayed courage… Go to the Strait (of Hormuz) and just take it. Protect it.

• Discussions are ongoing, but the U.S. holds “all the cards.”

• Trump concludes America is on the cusp of ending Iran’s threat forever.

Source: https://www.whitehouse.gov/releases/2026/04/president-trump-delivers-powerful-primetime-address-on-operation-epic-fury/

Chapter 2.2: Trump’s Implied Points – Reading Between the Lines

Here is an example of why reading between the lines is so important.

In Shakespeare’s Richard III, Richard wants to be king and plans to kill anyone in his way. Richard manipulated the King to imprison his brother Clarence – unbeknownst to Clarence. As Clarence is led to jail, he asks Richard for help. Richard promises (Act 1, Scene 1) in plain English, “Your jail time won’t last long. I’ll set you free, or lie to get you out. Just be patient.” Clarence is relieved. But Richard had secretly arranged for Clarence to be murdered in prison. Richard didn’t lie—Clarence’s jail time really didn’t last long. The moral of that story: Always read between the lines. The stated words may not mean what you think they mean.

Let’s apply that frame of mind to Trump’s speech.

Insight 1: The Iran conflict is open‑ended despite a “2–3 week” wrapper.

The speech promises intense strikes for 2–3 weeks, but also says “continue until our objectives are fully achieved” and “13 U.S. service members have died. Now, we must honor them by completing the mission for which they gave their lives” — with no definition of “fully achieved.”

• Implication: The administration is selling a short, victorious war to the public while preserving the ability to fight for months or years. If Iran does not collapse, “2–3 weeks” becomes “as long as it takes.” Also, that number 13 is implausibly low given the scale of destruction described. Official casualty figures in war are often underreported or delayed. But whether the true number is 13 or higher, the administration’s reported low death toll makes an open‑ended conflict more politically tolerable at home, not less.

Insight 2: The Strait of Hormuz is being deliberately downgraded from a global necessity to an optional asset.

This is huge. Historically, the Strait of Hormuz is the world’s most important oil chokepoint (20% of global petroleum passes through it). Any threat to it has always triggered major power intervention. He is now saying it is no longer a US concern. Trump tells other nations, “Buy oil from the United States” or “go to the Strait and just take it.”

• Implication: This is a radical shift: the U.S. is stepping back from its post-WWII role as global sea lane protector. The Strait is downgraded from “critical to world economy” to “someone else’s problem.” It also implies that the U.S. expects to become the world’s dominant oil supplier, using the war to break Iranian and possibly other OPEC competitors. Fair enough. But if you remove 20% of supply of anything (oil, beef, milk, whatever), prices will need to go up to arrive at a new supply/demand balance (microeconomics 101).

Insight 3: Domestic economic pain (rising gas prices) is acknowledged but minimized.

By blaming Iran for oil price spikes, Trump admits a real economic cost to Americans, but also shifts the blame to Iran and not as a consequence of the US/Israel attack on Iran.

• Implication: Trump does not apologize for rising gas prices. He does not promise they will go back down soon. Instead, he blames Iran and then moves on — without offering a concrete plan to lower prices. By saying “the United States has never been better prepared economically to confront this threat,” he signals that Americans can absorb higher prices. The implied message: Real patriots accept temporary economic pain for national security. This reframes the war’s domestic cost from a political liability into a loyalty test. If you complain about gas prices, you are prioritizing your wallet over stopping a nuclear Iran. It also pre-emptively neutralizes political attacks: any future price spike is not a failure of the war but a badge of sacrifice. The administration is not just bracing for public impatience — it is actively normalizing higher energy costs as a patriotic duty, which gives them permission to prolong the conflict without economic backlash, as long as they maintain the framing of noble sacrifice.

Here’s an interesting relevant interview with JP Morgan’s CEO. On March 31, 2026, Jamie Dimon said:

“It is much more important that this [Iran war] be successfully completed than what the market does.” (Time stamp - 1:33).

In other words, even if markets (oil, stocks) crash, the Iran war matters more. Since Dimon spoke one day before President Trump’s speech, this is likely part of the administration’s PR message.

Like it or not, the Trump administration is clearly prioritizing the Iran war over the markets (oil, stocks, and so on). That’s a very important signal for us investors. It doesn’t mean the administration is rooting for higher oil prices and a stock market crash, but if it were to happen – from their perspective – the Iran war has priority. And while the administration is surely hoping for a quick win, it is also clearly laying the groundwork for a long war.

Insight 4: “Discussions are ongoing” with “US having all the cards” implies unconditional surrender — no real negotiation.

• Implication: No diplomatic off‑ramp for Iran. Iran is expected to capitulate completely. If it does not, the war continues indefinitely — and the Strait downgrade means the U.S. feels no pressure to restore global oil flows quickly.

What does that all mean?

By downgrading the Strait of Hormuz to an optional route, the speech signals a fundamental restructuring of global energy security. The United States is no longer the guarantor of freedom of navigation. Instead, it is becoming an energy exporter that benefits from chaos in the Persian Gulf.

The war against Iran is not just about nuclear weapons; it is about breaking a major oil competitor and forcing the world to buy American energy, while shedding the strategic burden of patrolling the Strait. The “2–3 weeks” wrapper is political cover for what could be a long, open‑ended conflict — but the Strait downgrade is the tell that the U.S. is prepared to live with that conflict for as long as it takes. Economic pain – like much higher oil prices and so on due to 20% less oil supply - is framed as the price we all need to pay, downgraded as immaterial, and as Iran’s fault.

My reading of the Trump speech is not isolated. Here is what a non‑partisan national security expert, Professor Robert Pape of the University of Chicago, concludes from the same address:

Chapter 2.3: Professor Robert Pape’s Take

I talked about Professor Pape in last week’s article. He is a famous professor at the University of Chicago who has devoted his career to international security issues, from the Vietnam War era to current conflicts such as the Iran war, and he has advised the White House and U.S. military leaders under multiple administrations from both parties.

Here is his take from his X account:

• Tonight’s speech by Donald Trump was framed as “mission nearly complete.” But listen carefully — the substance points the other way: This is not de-escalation. It’s controlled escalation.

• He claims victory — while extending the war. Says “core objectives” are nearly done. Says the war could continue 2–3 more weeks. Translation: Victory rhetoric + no clear end date = war continuation.

• He keeps escalation options open. Prior threats include strikes on critical infrastructure like power plants. Continued bombardment until strategic compliance (Hormuz, etc.). That’s not winding down. That’s raising the ceiling of destruction if Iran resists.

• “Honor the dead by completing the mission.” This is the key line. That framing locks in political commitment and raises the cost of stopping early. Classic mechanism: Casualties → moral obligation → longer war

• The contradiction at the core of the speech. He is simultaneously saying, “We’ve basically won.” “We need more time.” “We may escalate further.” Mixed signals about the endgame. That is not strategy clarity. That is strategic drift under pressure.

• Bottom line. This speech does not describe the end of a war. It is a leader trying to declare success while preserving freedom to escalate. That combination historically produces longer wars, not shorter ones.

Source:

Pape’s analysis confirms what the speech’s own contradictions imply: the administration is framing victory while preparing for a longer war. For investors, that means the economic pain (higher oil prices, potential market volatility) is not temporary. It is structural to the administration’s strategy. Keep that in mind as we turn to Jim Rogers’ latest insights and the portfolio moves of Ackman and Hohn.

In the following sections, we will cover the following:

Chapter 3: Jim Rogers’ Latest – Iran War & His Investment Focus

Chapter 4: Bill Ackman (Pershing Square) Top 5 Positions & Changes vs. Prior Quarter

Chapter 5: Chris Hohn (TCI) Top 5 Positions & Changes vs. Prior Quarter

Chapter 6: Key Takeaways for Investors – What to Do Now

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“You don’t need to predict the future (who can?), you just need to be positioned to make money either way.”

— Unknown

Not financial, investment, legal, or tax advice. Please read our full Disclaimer on the Disclaimer page. Accessible via the provided link and via the homepage menu. Continued reading constitutes your agreement to its terms.

Imagine you live in Florida close to the beach, and a Category 5 hurricane is heading toward where you live. A Category 5 hurricane is the strongest there is. It is devastating. Somehow, though, this topic has become political. Your governor (if you are a Democrat, assume he is a Democrat; if you are a Republican, assume he is a Republican) tells you not to worry: “The weather models are all overblown; I’ve got it handled.” If you are in tribal mode (our default setting), you might say, “Ehh, it is going to be fine. Nothing to worry about.”

However, what if you are wrong? I am not saying you are. But what if? Do you have a game plan, or will you be a sitting duck? And if you are wrong, will your governor make you whole (pay for damages) because you listened to him? Of course not.

That same dynamic—trusting the tribe instead of preparing for the worst—applies to geopolitical risks like the one brewing in the Strait of Hormuz (Iran war). According to experts, if the Strait of Hormuz stays closed for much longer—given that 20% of the global oil supply comes from there—the economic impact will be catastrophic. Once you factor in the destroyed oil infrastructure, it’s even worse. Rick Rule shares his perspective about that further below.

If that were to happen, what is your game plan? I am not hitting the panic button, but I am saying that the impact would be catastrophic on your investments. You might say, “I trust the folks in Washington. It won’t happen.” Fair enough. I don’t know the future.

However, what if you are wrong? I am not saying you are. But what if? Do you have a game plan, or will you be a sitting duck? And if you are wrong, will the folks in Washington make you whole (pay for damages) because you listened to them? Of course not.

Please note—just to be clear—I am not making a political statement, pro or con Democrat or Republican. I am just making a pro-money statement.

Having set the table, let’s go ahead and get started with the article.

Chapter 1: The Iran War, the Strait of Hormuz, and the Military Situation

In the following YouTube interview dated March 25, 2026, Luke Gromen makes the following key points:

• The status of the Strait of Hormuz is the sole factor determining the severity of the current crisis. He argues that if the strait remains closed for another two to four weeks, it will trigger an economic catastrophe, commenting:

  “Um, for me, the only thing that matters is Hormuz—is it open or closed? And I think there’s some... look, if Hormuz is still closed in two to three weeks, four weeks, um, it’s going to be the worst economic crisis in anybody alive’s career. Um, it will be the worst of COVID and the worst of the Great Financial Crisis combined.”- (Timestamp - 2:02)

• He emphasizes that markets are dangerously complacent about this risk.

  “And the markets to me are just way too... they’re astonishingly complacent about this. Um, so I don’t know. I think I’m hopeful ultimately we pull back. But again, we have two to three weeks before supply chains really start breaking down.” - (Timestamp - 35:52)

• Gromen contends that the US military faces a no-win scenario in attempting to forcibly reopen the strait.

  “I’m going to defer to the war fighters I’ve talked to about this, including some former Navy people that used to sail in those waters. It is so narrow you can only go single file, right? So, we’re not sending destroyers in there right now because they’d be sitting ducks.” - (Timestamp - 27:37)

Energy Crisis Will Not Be Resolved Quickly if War Ends, IEA (International Energy Agency) Chief Warns

The above NY Times article says:

“March 23, 2026 - The energy crisis caused by the Iran war is worse than the combined effect of the oil shocks in the 1970s, the leader of the International Energy Agency said on Monday, warning that it would take time to resolve even if the war were to end soon.”

Source: https://www.nytimes.com/2026/03/23/world/middleeast/energy-crisis-iea-warning.html

Trump Team Examines What Oil as High as $200 a Barrel Would Mean

Source: https://news.bloomberglaw.com/environment-and-energy/trump-team-examines-what-oil-as-high-as-200-a-barrel-would-mean?context=search&index=0

Based on a recent YouTube interview—shared in full further below—legendary investor Rick Rule, who started investing in the oil industry a few months ago based on a long-term bullish view on oil, said the following about the Iran war and the Strait of Hormuz.

• (Timestamp - 20:37): “What the oil market did is it gave me the move that I had expected in 2029 in 2026. I’m also not convinced that the war either will or will not end soon. If the war does not end soon, you’re going to see a real move in oil.”

• (Timestamp - 21:01): “There has been enough floating inventory in the world that we have been able, despite the fact that half the world’s export crude flows through the Strait of Hormuz, to keep the planes flying and the cars running. But that’s now starting to come to a halt. You are starting to see airlines ground planes. You are starting to see countries discuss banning driving on certain days of the week.”

Rick Rule then moves on and talks about how the oil/gas situation is much worse than reported.

• (Timestamp - 21:37): “There are other economic things that we need to talk about that we focus on oil, and we talk about near-term price disruptions in liquefied natural gas. Two of the biggest producers in the world are respectively Qatar and Iran. The Israelis took out effectively Kharg Island, which is the Iranian LNG export facility. And in retaliation, the Iranians took out about 25% of Qatari capacity.”

• (Timestamp - 22:15): “This will take, according to recent estimates, between 2 and 5 years to fix, assuming that there isn’t more damage that takes place. About 40% of the world’s export LNG moves through the Strait. And beyond the fact that it isn’t moving, probably 25 to 30% of their productive capacity is on fire, has been destroyed. That’ll have an impact.”

• (Timestamp - 23:21): “I don’t know in the near term what the impacts might be because I don’t know the duration of the war, but I do know that if the war goes on, we’re going to have to recalibrate an awful lot of our investment decisions.”

Goldman Sachs Lifts U.S. Recession Probability to 30%

Source: https://www.wsj.com/livecoverage/stock-market-today-dow-sp-500-nasdaq-03-23-2026/card/goldman-sachs-lifts-u-s-recession-probability-to-30--igjRj59JwbISm4Gz8p0u?gaa_at=eafs&gaa_n=AWEtsqccoK5AFE_w1rzmBDKPX2vuFJj6aXvss-jiStRx1trvJgG07JDQ_LZj75MOWyw%3D&gaa_ts=69c46974&gaa_sig=w2O5xQM-72zJzt047LA0U-X8kR3svJbtJsQbM7PNYUMYl37Jz8jDzYGpOZ2O72rccMlQZYRIlD93eBW1suLbBw%3D%3D

I won’t go deep into military strategy and its implications, as that is another deep topic by itself. If you are interested in the overlap of military, politics, and economics, one good source is Professor Robert Pape. He is a professor at the University of Chicago who has devoted his career to international security issues, from the Vietnam War era to current conflicts such as the Iran war, and he has advised the White House and U.S. military leaders under multiple administrations from both parties.

A very good recent interview with him is a two-hour interview on the YouTube channel “TRIGGERnometry.” There are also many other recent video interviews with him available on YouTube.

If you venture down that rabbit hole—which can be very helpful for investors—it is important never to underestimate one’s opponent, whether in business or in war. The hyper-famous Chinese strategist Sun Tzu (around 500 BC) wrote a short but powerful book, The Art of War. In it, there is a quote that is relevant here: “If you know the enemy and know yourself, you need not fear the result of a hundred battles. If you know yourself but not the enemy, for every victory gained you will also suffer a defeat. If you know neither the enemy nor yourself, you will succumb in every battle.”

No one knows the future. But the above conversations now discuss potential futures—such as a Category 5 economic hurricane—that we did not have to consider before the Iran war. Hopefully, we all luck out, the war ends one way or another soon, and the impact on the global oil and gas supply turns out to be minimal. Then we can all breathe a collective sigh of relief.

From an investor perspective, in this Iran war, there is only one question that matters: Is the Strait of Hormuz open?

And if the Strait of Hormuz is open, how much of the oil and gas infrastructure in the Middle East (Kuwait, Bahrain, UAE, Qatar, Iran, Saudi Arabia, Oman, Iraq) has been destroyed, and how long will it take to return to pre‑war production levels?

The full analysis, including Rick Rule’s four specific companies that he recommends, is available below. Also included below are the latest portfolio moves of legendary investors Seth Klarman & David Tepper.

In the following sections, we will cover the following:

Chapter 2: Rick Rule and the Art of Buying When Others Are Selling

Chapter 3: Rick Rule’s Shopping List—4 Stocks to Buy, Plus Copper and Uranium

Chapter 4: Seth Klarman (Baupost Group) Top 5 Positions & Changes vs. Prior Quarter

Chapter 5: David Tepper (Appaloosa) Top 5 Positions & Changes vs. Prior Quarter

Chapter 6: Key Takeaways for Investors

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“There are no certainties, only probabilities.”

— Robert Rubin (paraphrased & shortened)

Not financial, investment, legal, or tax advice. Please read our full Disclaimer on the Disclaimer page. Accessible via the provided link and via the homepage menu. Continued reading constitutes your agreement to its terms.

For gold and silver investors, the past two months have been particularly eventful. We saw new highs in late January 2026, followed by a relatively sharp decline in March 2026.

Here is my hypothesis on the recent volatility.

In December 2024, legendary investor Jim Rogers said, “Everybody should own gold and silver. If I were buying one today, I would buy silver because it’s cheaper.” At the time, we covered this in detail in our article “Jim Rogers Buys Silver.”

Since then, here’s how both metals have performed:

• Gold: December 2024 – $2,670 → January 2026 – $5,340 → March 2026 – $4,570

• Silver: December 2024 – $30 → January 2026 – $115 → March 2026 – $67

It’s important to emphasize that none of the long‑term bullish cases for gold and silver have changed, which we covered in more depth in prior articles. As legendary investor Rick Rule often says, “This is a 10‑year trend.”

Still, even the strongest long‑term trend can be interrupted by unexpected shocks. It’s like arriving at a dream beach resort—only to have a typhoon ruin your entire stay. The resort is still wonderful, but the storm certainly disrupts your plans. I remain bullish on gold, silver, and the miners over the long term, despite short‑term turbulence.

Chapter 1: The Iran War and “There Are No Certainties, Only Probabilities”

The major wildcard right now is the developing situation in Iran — the “Iran adventure.”

I’m not predicting doom, but the conflict has changed the probability landscape. The set of possible futures has expanded. To explain what that means, consider an example: if you stay home and do nothing, your chance of becoming a successful entrepreneur is zero. But if you take action, the outcome of becoming a successful entrepreneur becomes possible — not guaranteed, but possible. Your actions have changed your future probability landscape.

Conflicts can have this same “possibility effect,” but on the downside. A direct war involving a nuclear power like Russia or China could go catastrophically wrong. Similarly, given that around 20% of the world’s oil and gas production comes from the Middle East, a regional conflict in Iran has the potential—not the certainty—to disrupt the global economy on a massive scale.

I have no idea how this particular crisis will unfold. I hope for a quick resolution. But the worst‑case scenario is now a genuine possibility.

At the beginning of the article, I summarized Robert Rubin’s famous quote to “There are no certainties, only probabilities.” His full quote is:

“First, the only certainty is that there is no certainty. Second, every decision as a consequence is a matter of weighing probabilities. Third, despite uncertainty we must decide and we must act. And lastly we need to judge decisions not only on the results, but how those decisions were made.”

What does that mean? It means the future is never certain. We can have certain beliefs. We can have hopes and fears, but none of it makes it so. As investors, that means our task is to identify possible outcomes and assign probabilities to each.

• The best-case scenario is that it ends soon and the damage to oil and gas production remains limited. This is still my predicted case, assuming wiser voices prevail—though I admit that might be a stretch. I would give this an 80% probability.

• The worst-case scenario is that the entire region—Iran, UAE, Qatar, and others—goes up in flames. Just a few weeks ago, this probability was zero. Now, it is a non-zero possibility that we must acknowledge, up from 0% just a few weeks ago. I would give this a 20% probability. If China or Russia were drawn in, that probability would rise further.

You might argue, “The US has won, and it has complete superiority over Iran. The war ends when the US administration decides to end it.” If that is your belief, then the worst‑case probability is indeed much lower than 20%.

But consider the other side of the ledger. Iran has already demonstrated its ability to use drones and missiles—including hypersonic missiles—to effectively strike the UAE, Saudi Arabia, Qatar, Israel, and other targets. Even now, the US Navy is not entering the Strait of Hormuz because of the threat of drones, missiles, and hypersonic missiles.

Why does this matter to investors? This war, even if the United States were to walk away, could be sustained by Iran. And Iran has said as much. Iran can continue striking Israel and our regional allies—the UAE, Qatar, and others—where the US maintains military bases and where vital oil and gas infrastructures sit. The old saying comes to mind: when you kick a hornet’s nest, just because you stop kicking doesn’t mean the hornets are done with you. Given how economically devastating it would be to take 20% of the global oil and gas supply offline—potentially for years—even if the war ended today, the worst‑case scenario could be severe.

I am not making a case for or against any country. As an investor, my job is to examine the probability space the way a space alien would—without attachment to any nation, only an attachment to understanding the range of possible outcomes. Emotions can be expensive when you invest. Consider anyone who assumed in spring 2022 that the Ukraine war would be over quickly—as many expected once the US and the EU ramped up their support—only to lose money when it didn’t.

Given all the above, the Iran crisis has fundamentally changed the probability landscape. Before, the chance of a regional supply shock turning global felt remote; now, it’s a non‑zero risk investors must account for. I see an 80% chance that tensions eventually cool without disrupting global oil flows — and a 20% chance that a broader conflict engulfs multiple Gulf states. We can debate the exact numbers, but the key is that this “worst-case” scenario didn’t exist a few weeks ago. Investors who ignore it are effectively betting that policymakers will behave rationally — not a wager recent history encourages.

We’ve already seen what reactive, short‑term decision‑making can lead to: 2020 (COVID), 2022 (Ukraine), and now 2026 (Iran). Over the past six years, this is the third major policy “monkey wrench” investors have had to navigate.

Lack of Second-Order Thinking Is Not New

I’m not saying this Iran situation will definitely end badly. However, judging by the way leaders and institutions are reacting and reading corporate and alternative media, I do believe the downside potential is real and significant.

History provides a sad parallel. If you look at books and photos from Europe in the early 1900s, it was a marvel—wealthy, educated, and the pinnacle of civilization. Then in 1914, the heir to the Austro-Hungarian Empire (a country that no longer exists) was assassinated while visiting Serbia. That set off a chain of events that pulled all of Europe into the first mechanized war—machine guns, chemical weapons, and about 20 million dead. It wiped out the Austro-Hungarian and Ottoman Empires, threw Russia into a revolution, and so much more.

Looking back, you just think: all that carnage, all that destruction, the end of Europe’s golden age—and for what? Because one man, important as he was, got killed. What a colossal waste. What a needless waste.

People at the time saw it as a great, short adventure. Soldiers marching off, women giving them flowers. They had no idea. If they had known what was coming, they wouldn’t have been so eager.

Just as a seemingly improbable event triggered WWI, the current low‑probability tail event for the Iran adventure must be hedged.

There are many analysts who see the same risk. Risk – not certainty. Here is one example from Luke Gromen:

Source:

The Drunken Captain Metaphor

This brings us to how investors should behave in an environment of uncertain leadership.

If the captain of a ship is skilled and disciplined, his actions are predictable, whether the captain is good or evil. You can chart your course accordingly. But if the captain behaves like a drunken sailor—reacting impulsively and guided by emotion—then his next move becomes impossible to forecast.

That’s where we find ourselves today: navigating global markets captained by policymakers who often think one move ahead on a chessboard that demands ten. I am not making a political statement – for or against any political party – but merely assessing the decision quality observed over the last 6 years or more – like the remarkable lack of 2nd order thinking. Essentially checkers players in a global chess world. As investors, we must recognize that reality doesn’t call for panic, but for prudence. In this environment, portfolio positioning also becomes a survival strategy, not a luxury.

Once you recognize you’re on a ship without a steady captain, prudence—not panic—becomes essential. That’s when portfolio positioning transforms from theory into survival strategy to make a lot of money from different possible scenarios.

Portfolio Positioning

Here’s how I’ve personally adjusted my own portfolio in light of these dynamics:

• Rolled over my call options on gold and silver miners to January 2028. I extended the maturity of the calls (i.e., sold the old ones and purchased new ones with the longer maturities) because, in a war situation, what historically often happens is first, a run toward liquidity, followed later by a run toward the original money — gold and silver. I like the leveraged exposure to gold and silver miners (hence the options). If you own them outright, then time is not your enemy, assuming you have the cash to ride out any volatility. With options, time does become your enemy (i.e., the closer you get to maturity, time decay sets in), which is the reason why I rolled over my options, given the current war situation and the possibility of gold/silver prices going down in the short term. Alternatively, you can buy gold and silver outright (physical or paper), but then you lose the leverage.

• Bought January 2027 call options on XOM (Exxon) roughly nine months ago, specifically to hedge against the risk of the Middle East going up in flames. Back then, there was a lot of talk in the Senate about imposing a 500% import duty on countries doing business with Russia, and Iran war —a longtime goal for many in Congress across both parties—was even back in the picture as a possibility. I thought buying these call options was wasted money — insurance for a low-probability scenario. But that low-probability scenario happened, and my calls are now up 14x.

• Significantly increased the cash portion of my portfolio (via U.S. Treasuries). Until things become clearer, I have increased my cash position.

• Purchased, over the last four months, 15% out-of-the-money S&P 500 (SPY) put options, positioning for potential downside should we experience a major stock market correction.

This is the strategy that works for my risk tolerance and my outlook. Your particular situation, of course, may be different.

What Does that All Mean for Kinross Gold?

In summary, the long‑term bullish thesis for gold and silver remains fully intact. Kinross Gold continues to offer quality leveraged exposure to gold’s long‑term trend. The near term may stay volatile until the Iran situation stabilizes, but fundamentally, the long-term opportunity remains strong. So, let’s take a deep look at Kinross, and what makes it such a great company.

Chapter 2 - People Matter: Great people build great businesses; bad ones can ruin even a billion-dollar opportunity

Top management—especially C-level executives like the CEO, CFO, and COO—really matters.

The best leaders are smart, hardworking, and focused on increasing shareholder value, mainly by raising the stock price.

But there are also “lifestyle” executives—those who do just enough to keep their jobs and coast along with mediocre performance. They often get away with it because they’ve stacked the board with friends who won’t challenge them. In theory, boards are supposed to represent shareholders and oversee executives. In reality, a clever executive can pack the board with allies, creating a cozy setup where everyone’s happy—except we the shareholders.

In this analysis, we will be focusing on the core 3 C-level executives: Chief Executive Officer (CEO), Chief Operating Officer (COO), and Chief Financial Officer (CFO). Source: https://www.kinross.com/about/senior-management/default.aspx

Chief Executive Officer (CEO) – Paul Rollinson

• Business experience: A long career in the mining industry, spanning geology, finance, and executive leadership.

• Long tenure with Kinross: Joined in 2008 (18 years with the company). Initially served as Executive Vice-President, New Investments, before being appointed CEO in 2012.

• Long tenure in current role: 14 years as CEO (since 2012).

• Diverse professional background: Began his career as an exploration geologist before moving into investment banking, focusing on mining, industrials, and energy sectors. Holds an Honours B.Sc. in Geology from Laurentian University, Canada and a M.Eng. in Mining from McGill University, Canada.

• Bottom line: With his combination of technical expertise, financial acumen, and sustained leadership, Rollinson has demonstrated the steady, capable management essential to Kinross’s continued success.

Chief Operating Officer (COO) – Claude Schimper

• Business experience: Mining executive with more than 30 years of mining experience, including senior operational and executive‑level roles.

• Long tenure with Kinross: First joined Kinross in 2010 and has held progressively more senior operational roles, most recently leading the company’s Russia and West Africa regions.

• Role as COO: Appointed Chief Operating Officer in July 2022, responsible for safely delivering on Kinross’ operational objectives across its global portfolio.

• Prior experience: Before Kinross, served as Chief Operating Officer for Balkan Resources Inc. and held positions at Placer Dome, Canada, and at several South African mines, including AngloGold Ashanti’s Mponeng gold mine.

• Education: Holds a South African National Higher Diploma in Metalliferous Mining from the Technikon Witwatersrand (Johannesburg, South Africa).

Chief Financial Officer (CFO) – Andrea Freeborough

• Business experience: Senior finance executive with a long career in accounting, corporate finance, M&A, and investor relations, including more than a decade at KPMG and over 15 years at Kinross.

• Long tenure with Kinross: First joined Kinross in 2009 and has held several positions within the Finance function, most recently as Vice‑President, Investor Relations and Corporate Development, before becoming Chief Financial Officer on May 1, 2019, and Executive Vice‑President in October 2021.

• Role as CFO: Since 2019 leads Kinross’ Finance function and is also responsible for Information Technology and Investor Relations.

• Prior experience: From 1998 to 2009, held increasingly senior roles at KPMG in its Toronto, London (UK), and New Jersey/New York offices, most recently as Associate Partner.

• Recognition and education: Named one of the “100 Global Inspirational Women in Mining” by Women in Mining (UK) in 2016; is a Chartered Public Accountant (Chartered Accountant) and holds a Bachelor of Business Administration from Wilfrid Laurier University, Canada.

In a nutshell, the company has a very strong CEO, COO, and CFO. Serious people for a serious company.

Chapter 3: Quality and Location of Mines: How good are the mines, and can you trust the country where they’re located?

When you’re looking at a silver or gold mining company, the first thing you need to figure out is where their mines actually are and how much metal they have in the ground. Because here’s the thing—a mine can be absolutely loaded with gold and silver, but if it’s sitting in a country that decides to turn against the mining industry, the government can just step in and shut the whole thing down. Just like that.

When mining companies talk about what they have in the ground, they break it into three buckets based on how confident they are. It’s basically a sliding scale of certainty:

• Proven & Probable (P&P) reserves are the real deal. These are deposits they’ve drilled off and studied extensively—they know exactly where the metal is, how to get it out, and that the math actually works. When a company talks about their mine plan or production forecast, this is the number backing it up.

• Measured & Indicated (M&I) resources are the next level down. The metal is there and they understand it pretty well, but it’s not quite ready for prime time. They need to do more work before anyone starts digging. Typically, somewhere in the range of 40-70% of this category eventually converts to Proven & Probable after additional studies.

• Inferred resources are the wildcards. You’re looking at just enough drilling to know something’s there, but not nearly enough to be sure about grade, tonnage, or whether it even makes economic sense. History shows that maybe 10-20% of inferred resources eventually move up the chain. So take them with a grain of salt.

World Map with Kinross Locations

As the map shows, Kinross’s operations are heavily weighted toward the Americas, with a key asset in West Africa.

Source: https://s204.q4cdn.com/896213035/files/doc_presentations/2026/03/Kinross-Investor-Presentation-March-2026-1.pdf

Kinross Reserves & Resources

Source: https://s204.q4cdn.com/896213035/files/doc_financials/2025/q4/KGC-Q4-year-end-2025_Exploration-news-release_final.pdf

So here’s how long Kinross can keep going based on their 2025 production and what’s left in their reserves:

• Gold: Roughly 19 years

• Silver: Roughly 15 years

That’s actually pretty healthy. A lot of miners would love to have that kind of runway.

Kinross Reserves & Resources, and Remaining Life

Source: https://s204.q4cdn.com/896213035/files/doc_financials/2025/q4/KGC-Q4-year-end-2025_Exploration-news-release_final.pdf

Kinross is in a pretty good spot when you look at what they have in the ground. Across their operating mines and development projects, they’re sitting on healthy gold and silver reserves.

But beyond just the numbers, what stands out is where those mines are located. Most of them are in places with low to medium political risk.

The U.S. assets are about as stable as it gets. Chile and Brazil sit in that medium-risk tier. And then there’s Tasiast in Mauritania (Africa), their one and only high-risk operation.

This gives them diversification without leaving them overly exposed to any single volatile region.

So, what does this mean for an investor looking at Kinross? The company appears to be on solid footing. Its reserve life is well above the industry average, providing a long runway for production. More importantly, its geographic diversification—anchored by stable U.S. assets—insulates it from the political risks that plague many of its peers.

That incredible upside potential for the shares (103% to 768%)—or even higher with call options (up to 6,235%)—probably explains why so many institutional investors own 55% of the company. What does that mean for you? Let’s take a closer look at how we arrived at these numbers in Chapter 8 (further below).

In the following sections, we will cover the following:

Chapter 4: Ownership: Who owns the company?

Chapter 5: Shareholder Friendliness: Dilution & Buybacks

Chapter 6: Hype vs. Reality: Is this a hype company or one of real substance?

Chapter 7: Financial Health Check: Profitability, cash flow, and balance sheet strength

Chapter 8: Upside Potential & Catalysts: How high can the stock & call options go?

Chapter 9: Risks: What could go wrong—operational, financial, or government red flags?

Chapter 10: Key Takeaways for Investors: What you need to know

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“The big money is not in the buying and selling but in the waiting.”

— Charlie Munger

Not financial, investment, legal, or tax advice. Please read our full Disclaimer on the Disclaimer page. Accessible via the provided link and via the homepage menu. Continued reading constitutes your agreement to its terms.

We covered the major silver mining company Pan American Silver Corp. (PAAS), one of Wall Street’s top three silver mining names, last year on July 27, 2025, when PAAS was trading at $28.51. Today (March 11, 2026), PAAS trades at $60.83 — a 113% gain if you bought shares, and much more if you used long‑dated call options.

The Fringe Finance Report continues to believe in the multi‑year bull case for silver and gold, in line with investors like Rick Rule, Eric Sprott, and Jim Rogers. That doesn’t mean a straight line up. As a long‑term investor, I don’t pay much attention to day‑to‑day or month‑to‑month volatility, as long as the underlying investment thesis hasn’t changed. If I were a day trader (and there’s nothing wrong with that), my perspective would be different — but I’m not, so it isn’t.

Coming back to silver prices, this year has been interesting for the corporate media. They got excited when silver jumped from about $71 at the start of the year to $115 late in January. As always, the corporate press tends to take short‑term moves and project them out to eternity (“it rains today so it will rain forever; it’s sunny today so it will be sunny forever”), so the headlines went overwhelmingly bullish.

Equally predictable, when silver collapsed to $73 in February, the tone flipped to doom and gloom. Today, as of March 11, 2026, silver is back near $86. I’m not disappointed at the corporate media for this. That would be like complaining that fast food isn’t healthy — they are who they are.

But as a long‑term investor, I can’t help but focus on the long-term trend. Back in December 2024, the Fringe Finance Report published an article titled “Jim Rogers Buys Silver.” Back then, silver was around $30, and we quoted Jim Rogers in that article saying:

“Everybody should own gold and silver. If I were buying one today, I would buy silver because it’s cheaper.”

That means in the period from December 2024 to March 2026 — roughly 15 months — silver has gone from about $30 to $86, an almost 3‑fold increase. Many experts now expect silver to move significantly higher in 2026 and beyond, driven by a multi‑year supply deficit, geopolitical factors, and other structural factors.

The Fringe Finance Report did a detailed deep dive on the global silver market back in July 2025, in the article “Silver Boom: Just Getting Started. Supply, Demand & Investment Opportunities,” which argued for a bullish silver market.

If anything, the bullish case has only strengthened since then. China — a major silver exporter — has implemented silver export controls starting January 1, 2026, and in late 2025, the U.S. government, for the first time in U.S. history, added silver to its annual list of critical minerals and metals for U.S. industry.

If you’re bullish on silver, then silver miners can be a powerful leveraged way to play the bull case. And if you understand options and know how to manage the risks of long‑dated calls (with all the challenges that come with them), long‑dated call options on silver miners can serve as an extra‑leveraged tool to amplify that silver view.

Among the many players in the silver mining industry, Pan American Silver Corp. (PAAS) remains one of Wall Street’s top 3 favorites. This standing shapes analyst recommendations and the flow of capital across major financial institutions. Pan American Silver is almost always one of the first names US investors look at before turning to other large producers, mid‑tier miners, or explorers drilling for the next big silver discovery.

In the following sections, we will cover the following:

Chapter 1: People Matter: Great people build great businesses; bad ones can ruin even a billion-dollar opportunity.

Chapter 2: Quality and Location of Mines: How good are the mines, and can you trust the country where they’re located?

Chapter 3: Ownership: Who owns the company?

Chapter 4: Shareholder Friendliness: Dilution & Buybacks.

Chapter 5: Hype vs. Reality: Is this a hype company or one of real substance?

Chapter 6: Financial Health Check: Profitability, cash flow, and balance sheet strength.

Chapter 7: Upside Potential & Catalysts: How high can the stock go, and what could drive it?

Chapter 8: Risks: What could go wrong—operational, financial, or government red flags?

Chapter 9: Key Takeaways for Investors: What you need to know.

Chapter 1 - People Matter: Great people build great businesses; bad ones can ruin even a billion-dollar opportunity.

Top management—especially C-level executives like the CEO, CFO, and COO—really matters.

The best leaders are smart, hardworking, and focused on increasing shareholder value, mainly by raising the stock price. They’re the kind of people you’d jokingly want to marry.

But there are also “lifestyle” executives—those who do just enough to keep their jobs and coast along with mediocre performance. They often get away with it because they’ve stacked the board with friends who won’t challenge them. In theory, boards are supposed to represent shareholders and oversee executives. In reality, a clever executive can pack the board with allies, creating a cozy setup where everyone’s happy—except we the shareholders.

In this analysis, we will be focusing on the core 3 C-level executives: Chief Executive Officer (CEO), Chief Operating Officer (COO), and Chief Financial Officer (CFO). Source: https://panamericansilver.com/about/leadership/

Chief Executive Officer (CEO) - Michael Steinmann

• Business experience: 30+ years in the base and precious metals industry.

• Long tenure with Pan American Silver: Joined in 2004 (22 years with the company). Held increasingly senior roles, became President in 2015, and President & CEO in 2016.

• Long tenure in current role: 10 years as CEO (since 2016).

• International background: Educated in Peru and Switzerland. Holds a Corporate Finance degree from Escuela Superior de Administración y Negocios (Lima, Peru), an M.Sc. in Geology from the University of Zurich, and a Ph.D. in Natural Science (Geology) from the Swiss Federal Institute of Technology . This matters as PAAS is active in multiple countries and a more domestic person might be out of his depth.

• Bottom line: Based on his extensive experience and proven track record, he remains exactly the kind of person you’d want in this role.

Chief Operating Officer (COO) - Scott Campbell

• Business experience: 25+ years in the mining industry, spanning exploration, project development, and mine operations.

• Tenure with Pan American Silver: Joined in 2019. Promoted to Senior Vice President, Operations and Projects, then to COO in October 2025.

• Recent leadership roles: Previously served as Country General Manager for Ecuador at Dundee Precious Metals (2022–2024), and held senior leadership positions at Barrick Gold in Argentina and Peru. His career has a strong focus on Latin America—critical as Pan American operates extensively in the region.

• Education: Educated at Dalhousie University in Canada (B.Sc. Earth Sciences).

• Bottom line: A seasoned operator with deep regional expertise and a track record across the mine life cycle. Promoted from within after six years with the company—exactly the kind of leader you want running day-to-day operations.

• Transition Coverage: The old COO, Steve Busby, with 40 years of experience in the precious metals industry and 23 years with PAAS, is staying with the company as Special Advisor to the CEO, which is good business practice and speaks highly of PAAS. As anyone in leadership knows, there is a Grand Canyon worth of difference between being part of a department and leading the department. As a leader, you are it. So, it is helpful for Scott (the current COO) that the old COO is sticking around for a bit as the Special Advisor to the CEO – just in case.

Chief Financial Officer (CFO) - Ignacio Couturier

• Business experience: He has a BSc in Geological Engineering from Queen’s University (Canada), a long tenure with Pan American Silver, and previously he worked for Minera Antamina, a mining company based in Peru.

• Long tenure with Pan American Silver: 23 years with the company. Mr. Couturier started working at Pan American Silver in 2002. He was Vice President of Finance before becoming Chief Financial Officer in 2022.

• Medium tenure in current role: 4 years as company CFO. In 2022, he became Chief Financial Officer. That means he has been in his role for about 4 years. Not bad. Not great either, mitigated though by the fact that he has been with the company since 2002. Not a red flag though. Just something to be aware of.

• International background (relevant for a global business like PAAS): Does not seem to have an extensive international experience. He went to school in Canada. He holds a BSc in Geological Engineering from Queen’s University (Canada) and an MBA from McGill University (Canada).

• In a nutshell: Based solely on background, he would seem to be a moderate choice for CFO due to his medium tenure as CFO and his somewhat limited global experience. That came into play in 2024 with the unexpected high tax issue, which in my judgment (and I could be wrong) was due to insufficient proactive foreign country management (proactive stakeholder management). Different countries and cultures work differently, and expecting US/Canadian business customs to apply outside the US/Canada is unwise—assuming that is what caused the tax issues. We will take a close look at whether the 2024 tax issue was a one-time mistake or a recurring problem in 2025.

In a nutshell, the company has a very strong CEO and COO, and a solid CFO. Serious people for a serious company.

Chapter 2: Quality and Location of Mines: How good are the mines, and can you trust the country where they’re located?

When you’re investing in a silver or gold mining company, the most important thing to know is where their mines are located and how much metal is in the ground. Because here’s the thing—you can have a mine full of silver and gold, but if it’s in a country that suddenly turns against mining, the government can shut you down. Just like that.

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“When it rains gold, reach for a bucket, not a thimble.”

— Warren Buffett

Not financial, investment, legal, or tax advice. Please read our full Disclaimer on the Disclaimer page. Accessible via the provided link and via the homepage menu. Continued reading constitutes your agreement to its terms.

Gold at 5,000 and silver selling off on war headlines may dominate the news cycle, but that is a poor way to build a portfolio. The real opportunity is not in reacting to each price change, but in understanding the forces driving this resource cycle and how carefully chosen mid‑tier silver companies can turn volatility into long‑term returns.

Rick Rule’s recent moves in silver are a useful starting point. Years ago, he bought silver because it was widely disliked, and he expected sentiment to normalize. When the price far exceeded his expectations, he didn’t cling to the trade; he treated it as a completed speculation, sold, and asked where each marginal dollar could now work harder. His answer was not to move completely “out of silver,” but to shift his investment “into select silver stocks.”

We covered that here last month.

Crucially, Rick Rule found that many silver producers were priced as if silver were much lower than the actual spot price. If the metal simply went sideways, the metal itself would deliver no additional return, but the equities could still re‑rate upward as analysts and investors updated their assumptions. If share prices fell, the intrinsic value of good companies could prove more resilient than their share prices implied. That is a very different proposition from merely hoping silver keeps going up.

In a recent interview (see YouTube video below) with Kitco on March 2, 2026, Rick Rule said the following:

Rick Rule (timestamp – 1:57): “What I discovered was that the silver [mining] stocks themselves were being valued by Bay Street [Canadian equivalent of Wall Street] at about $45 silver. Therefore, if the silver price held constant at 75, by definition, I wouldn’t make any more money on silver, but I could still make money in the silver stocks. Conversely, if the price fell, because of the implicit discount in the silver stocks, while their prices might fall, their values wouldn’t.”

As to the impact of the Iran war on precious metals, Rick Rule had this to say in the following interview on March 2, 2026.

Rick Rule (timestamp – 14:57): “..My experience has been that news, geopolitics gives people the psychological excuse to do what they wanted to do anyway. But the impact of the news doesn’t last very long. In my experience, what moves precious metals is people’s fear of the maintenance of their purchasing power in fiat denominated instruments. The consequence of that unfortunately I think those fears are real…”

And of course, if legendary investor Eric Sprott is correct that “silver should be at $300,” miners have a lot of potential upside. You can read about that in this article by clicking here.

Last week we published an article called “Silver Miners with Liquid Options for Extra Leverage. Silver Bulls: Leverage Up with Miners and Call Options on Miners.” That article covered 12 silver miners (4 majors, 4 mid-tier, and 4 juniors) with liquid options.

In that article, we said:

• “If you’re bullish on silver for the long term, miners offer a leveraged way to play that view. But if you’re bearish on silver, then miners simply don’t make sense.”

• “For those who are bullish, miners—from large producers to small, pre-revenue exploration companies—can be an excellent tool. And if you’re comfortable with options trading, buying long-dated out-of-the-money (OTM) call options can add even more leverage on top of that.”

• “If you’re bearish on silver, this may be where you exit.”

• “But if you share my bullish outlook (and I could be wrong) and want leveraged exposure to silver—to make the most of the coming rally—let’s dig deeper.”

In the following chapters, we will do a deep dive on the potential share prices of the 2 of the 4 mid-tier silver miners mentioned in the above article, at different silver price assumptions from the current level, to $100, $200, and $300 (along with more conservative price increase assumptions for the gold that they also produce).

Let’s cut to the chase — the share price impact is extreme, as the detailed walkthrough below explains.

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“In the short run, the market is a voting machine, but in the long run, it is a weighing machine.”

— Benjamin Graham (often quoted by Warren Buffett)

Not financial, investment, legal, or tax advice. Please read our full Disclaimer on the Disclaimer page. Accessible via the provided link and via the homepage menu. Continued reading constitutes your agreement to its terms.

Back when the Concorde was still flying, if you urgently needed to get from New York to London, nothing beat it. The Concorde could cut your travel time from around nine hours down to about three. It was perfect if getting to London quickly really mattered. But if you didn’t need to be in London, then this question does not even matter—whether you flew commercial or hopped on the Concorde—since your destination is different.

Silver miners work in a similar way. If you’re bullish on silver for the long term, miners offer a leveraged way to play that view. But if you’re bearish on silver, then miners simply don’t make sense.

For those who are bullish, miners—from large producers to small, pre-revenue exploration companies—can be an excellent tool. And if you’re comfortable with options trading, buying long-dated out-of-the-money (OTM) call options can add even more leverage on top of that. Just remember: options are complex, they expire, and they can go to zero.

Personally, I’m very bullish on silver, even after the price swings we saw at the end of January 2026. As an experienced finance professional, I’m also very comfortable using options. As of February 2026, the longest-dated exchange-traded call options on silver miners expire in January 2028.

Why go for options that far out? Because if you don’t sell or exercise before expiration, your options become worthless—and I’d rather give myself plenty of time. Like other silver bulls, including legendary investor Eric Sprott, I believe in the long-term story for silver. But as the January 2026 volatility showed, anything can happen. Having leverage on leverage—call options on silver miners—is aggressive enough for me without adding the pressure of a short timeline.

Chapter 1: Are You Bullish or Bearish on Silver?

As mentioned above, it all starts with your perspective on silver. Will silver price continue to go up, as many legendary investors believe, or will it go down again, as it has happened before in the history of silver prices?

I can’t emphasize enough how important this point is. If you are bearish on silver, then leveraged investment in silver, like buying silver miners—or even more leveraged, buying long-dated OTM call options on silver miners—makes no sense.

So, let’s step back and see what the cases are for and against silver. And in the spirit of full disclosure, so that you know where I am coming from, I am not only bullish on silver; I am very bullish on silver (and gold) and own miners and call options on miners.

The Case Against Silver

The case against silver would say that this feels like déjà vu—a repeat of past silver manias. We saw one in the early 1980s when the Hunt brothers tried and failed to corner the silver market, and another around 2010 after the subprime crisis, when easy money from the Fed pushed inflation fears and sent silver soaring. Both times, prices hit spectacular highs—only to crash and stay depressed for years afterward.

Now we’re seeing a similar setup again, with silver climbing toward a new peak in late January 2026 near $115. If history rhymes, we can expect another sharp drop followed by a long stretch of weak prices. And it did crash down to about $73 in mid-February 2026, although it recovered somewhat. As of Feb. 26, 2026, it is trading at around $86. Might it go back to around $30, where it was in January 2025—just about a year ago?

From that perspective, piling into silver or silver-mining stocks doesn’t look appealing right now—unless, of course, one’s strategy is to profit on the downside with long-dated puts.

Silver Prices - 100 Year Historical Chart

Source: https://www.macrotrends.net/1470/historical-silver-prices-100-year-chart

The Case For Silver

The famous quote “In the short run, the market is a voting machine, but in the long run, it is a weighing machine,” mentioned at the beginning of the article, is a reminder that while in the short term, investor sentiment may prevail, in the long term, the stock price will reflect economic reality.

That means if you look at the stock or silver price history as a reason for or against silver, you will miss the big picture. And the 800‑pound elephant in the room is the persistent silver supply shortfall since 2021. For a while, this shortfall could be managed with existing reserves, but those are coming to an end.

Think of it as having an income gap in your personal budget. Say since 2021 you made the real median income after tax of roughly $70K per year. But at the same time, you spent $80K per year. For a while you could make up the gap with loans and credit cards, but eventually the day of reckoning approaches (when you run out of credit).

That is what is going on with silver. The silver reserves are coming to an end.

The Fringe Finance Report covered the global silver supply and demand situation in great detail back in July 2025 in the article called “Silver Boom: Just Getting Started. Supply, Demand & Investment Opportunities.”

Beyond this 800‑pound gorilla of a supply shortage, a few other factors have also contributed to rising silver prices.

• Rise of a Multipolar World — From the early 1990s (after the Soviet collapse) until recently, the U.S. stood alone as the global superpower. Now, even U.S. leaders admit we’re in a multipolar era, with China emerging as a major power. Sure, headlines peddle hopeful tales of China’s downfall, but the data tell a different story: China’s industrial output is double that of the U.S. and exceeds the combined output of the U.S. and Europe. Every country has challenges (ours included), but banking on a rival’s collapse is just wishful thinking.

• The Game-Changer: Global Price Discovery — For decades, the U.S. (COMEX) and U.K. (LBMA) exchanges set silver prices, often through “paper” manipulation—cash-settled futures that big players could game without physical delivery. (JP Morgan paid a record $920 million fine in 2020 for exactly that.) Now, China’s Shanghai exchange—focused on physical settlement—has risen as a rival hub, making such manipulation far more difficult.

• National Security on the Line — China kicked off 2026 with new export controls on silver, limiting shipments to licensed firms only. Meanwhile, the U.S. officially listed silver as a critical mineral for the first time in 2025. These moves underscore how high the stakes have become.

So, back to the core question: which story do you believe? Is this another fleeting bubble like those of the 1980s or 2010—or the start of a new era of higher prices (with the usual ups and downs)? Heavyweights like Eric Sprott, Jim Rogers, and Rick Rule—as well as The Fringe Finance Report—are betting on silver’s future. Ultimately, that’s for you, the investor, to decide.

If you’re bearish on silver, this may be where you exit.

But if you share my bullish outlook (and I could be wrong) and want leveraged exposure to silver—to make the most of the coming rally—let’s dig deeper.

Chapter 2: Why Silver Miners Beat Silver for Bullish Investors

Let’s rewind to 2025 for a quick thought experiment. Back then, silver was sitting at roughly $40 an ounce. On average, mining companies spent about $20 per ounce to dig it out of the ground, refine it, and get it ready for the market. That means miners cleared about $20 in profit for every ounce they sold — not bad.

Now, let’s imagine silver prices double to $80 an ounce. Investors who bought physical silver are thrilled — their holdings have doubled in value. But here’s where it gets interesting: for silver miners, the story is even better.

Their costs don’t automatically double. They’re still spending around $20 to produce that same ounce of silver. So at $80 an ounce, their profit margin jumps to $60 — triple what it was before.

That’s the beauty of leverage in mining stocks. When the price of silver climbs, the profits of mining companies grow much faster than the metal’s price itself. More profit per ounce typically leads to stronger earnings, and when earnings rise, share prices tend to follow.

This is why many bullish investors prefer to invest in silver mining stocks instead of just buying silver bullion. The metal may shine, but the miners can sparkle even brighter when prices move in their favor.

And if you are as bullish as the legendary gold and silver investor and self‑made billionaire Eric Sprott — who said, “Silver should be at $300” — then a silver miner would not only be the Concorde, it would be the Concorde on steroids, with the sky being the limit.

Legendary Investor Eric Sprott “Silver should be at $300”

Chapter 3: How to Analyze Silver Miners

Silver miners, as well as gold miners, are complex businesses and require investors to do their homework before buying.

On a 20,000‑foot level, though, miners are straightforward: find a country that won’t steal what you discover, locate gold or silver hidden in the ground, buy the rights, get the required licenses, dig it out, process it into silver bars, and sell them.

Sounds easy enough—but at a 20,000‑foot level, everything seems easy, like flying a commercial aircraft. In theory, you’d just learn how to fly, join a major airline, work your way up the hierarchy, and voilà—you’re now a captain flying a big commercial jet (say, for American Airlines, for example).

The devil, in both cases, is in the details.

Legendary speculator Doug Casey shared his approach on how to analyze gold and silver miners, and The Fringe Finance Report covered it in the article “Legendary Speculator Doug Casey: ‘The (gold & silver) mining stocks is where you should be right now.’” in Chapter 4, “Doug Casey’s Golden Rule: It’s All About the People – The 9 P’s.”

In the following chapters, we will focus on silver miners — from major established producers to pre‑revenue exploration companies — that have an active, long‑dated options market, defined as having call options extending at least to January 2028. Since today is February 2026, that’s almost two years out.

We will start with a major US-based silver miner with silver mines only in the US and Canada — a rarity and a Wall Street darling.

Chapter 4: Major Silver Miners with Liquid Options (4 silver miners)

Major miners are my favorite mining space for buying options. I get leverage from the miners themselves, extra leverage from the options, and lower corporate risk by sticking to large, diversified majors—instead of riskier mid-tier silver miners or even riskier juniors.

This doesn’t make mid-tiers or juniors bad choices. They’re—after all—the playground of legendary gold and silver investor and self-made billionaire Eric Sprott. But we all need to pick our sweet spot—where interest meets competence and risk tolerance.

4.1. Hecla (HL) - Major US-based silver miner with silver mines only in the US and Canada — a rarity and a Wall Street darling

Hecla Mining (HL) is the 7th largest silver miner by market cap and is frequently grouped as one of Wall Street’s favorite silver mining companies.

What makes mining so complex is that many mining operations are located in countries with flexible relationships to property rights — they may seize assets or “re-negotiate” fees when it suits them. That’s what makes Hecla special: it’s a US-headquartered company with mines exclusively in the US and Canada, eliminating country risk.

Source: https://stockanalysis.com/stocks/hl/

The Fringe Finance Report first wrote about Hecla back in August 2025, when it was trading at around $7.50.

Hecla’s price chart looks like you missed the boat. But when you factor in how much gold and silver prices have risen since January 2025 and realize the Hecla stock has only captured about half that move, meaning many investors still seem to think the metal prices are temporary and will drop soon, and plus consider what further metal price gains would do to the Hecla share price on a P/E basis and FCF multiple basis, it’s easy to agree with Doug Casey who said about miners in general:

“Even after their recent run — two, three times up — they’re still at about the lowest level in history.”

Source: https://ffus.substack.com/p/legendary-speculator-doug-casey-the

Full Disclosure

I own Jan 2027 maturity call options that I purchased in 2025 when Hecla was trading at around $6, and I am still bullish.

Call Options

As of February 26, 2026, the longest maturity for exchange-traded call options on Hecla Mining (HL) is January 21, 2028—almost two years out. Hecla shares trade at $24.54. Here’s the leverage at that expiration:

• At-the-money (ATM) calls at a $25 strike cost $11.10 each. This lets you control roughly 2x as many shares as buying stock outright.

• Deep out-of-the-money (OTM) calls at a $47 strike cost just $7.05 each. This gives 4x leverage compared to buying shares.

Your choice depends on your silver price forecast and Hecla’s path by 2028.

Key caveat: Recent silver rallies have spiked implied volatility (IV), making options pricier. For context, I bought HL $12 strike calls when the stock was ~$6—costing $0.50/share for 12x leverage. Now, they’re costlier.

Warning: Options can expire worthless—you risk 100% loss. Only trade if you are experienced.

Hecla (HL) Call Option Prices at Various Strike Prices for January 21, 2028 Expiration as of February 26, 2026

Source: https://www.barchart.com/stocks/quotes/HL/options?expiration=2028-01-21-m&moneyness=5

We discuss the remainder of Chapter 4 and much more in the next chapters.

Remainder of Chapter 4: Major Silver Miners with Liquid Options (4 silver miners)

Chapter 5: Mid-Tier Silver Miners with Liquid Options (4 silver miners)

Chapter 6: Junior Silver Miners with Liquid Options (4 silver miners)

Chapter 7: Summary

Chapter 6 also includes a 200x opportunity as per legendary gold and silver investor and self-made billionaire Eric Sprott.

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“In theory, there is no difference between theory and practice. In practice, there is.”

— Yogi Berra

Not financial, investment, legal, or tax advice. Please read our full Disclaimer on the Disclaimer page. Accessible via the provided link and via the homepage menu. Continued reading constitutes your agreement to its terms.

In 1865, if you went to a hospital for surgery, you were approximately twice as likely to die as if you stayed home and did nothing. This was not because surgeons were incompetent. They were often brilliant, highly trained, and genuinely dedicated to saving lives. They operated with speed and precision. They knew anatomy. They understood the mechanics of the human body as well as anyone could with the tools available.

But they did not wash their hands.

They did not sterilize their instruments. They moved from autopsies to deliveries without changing their coats. When patients developed fevers and died, the surgeons called it “bad luck” or “constitutional susceptibility.”

They could not see what was killing their patients. The instruments looked clean. The hands looked clean. The coats looked like coats. What they did not know—could not know, because the microscope was still crude and germ theory was considered fringe—was that “clean” is not the same as “sterile.” That invisible organisms, invisible threats, were being transferred from patient to patient on the very tools meant to heal them.

When Joseph Lister began insisting on sterilized instruments, his colleagues mocked him. They had been operating successfully for years. Their patients died, yes, but that was the nature of surgery. The idea that something as simple as cleanliness could change outcomes seemed naive. It was only when the data became undeniable—when Lister’s patients survived at rates that could not be explained by luck—that the profession began to change.

For decades, surgeons operated on a flawed map of reality. They were not stupid. They were not careless. They were working with the best available understanding, and that understanding was killing people.

The lesson is uncomfortable but unavoidable: you cannot solve a problem you do not know exists. You cannot see what your mental thought model of the world does not include.

Finance is not surgery. No one dies when we misprice an option. But the principle holds: if your model of how markets work omits something fundamental, you will make systematic errors. You will see patterns that aren’t there and miss dangers that are. You will think you are being prudent when you are actually being reckless. You will think you are being disciplined when you are actually being rigid.

The question is not whether your model is wrong. All models are wrong. The question is whether it is wrong in ways that matter.

Most of us were trained on a model of markets that is wrong in ways that matter.

This article reveals what that model missed, what replaced it, and exactly what to do next to invest more successfully. Most importantly, while it mentions academic concepts, the focus is on real-world investor impact.

After all, any financial theory without better outcomes is wasted effort, plain and simple.

Chapter 1: The Initial Beautiful Simple World in Finance 101

The investment thought model we were all told was beautiful. That was its power and its danger.

Homo Economicus

It began with a simplification so useful that generations of economists forgot it was a simplification. They called him Homo economicus (Latin for “economic man”). He is fully rational. His preferences are stable and consistent. He has access to all relevant information and processes it correctly. He forms expectations that are, on average, accurate. He optimizes constantly under known probability distributions. He does not get tired, emotional, or distracted.

If you’re a Star Trek fan (I am), think of Homo economicus as Spock or Data.

This fictional creature is the foundation of modern finance. If you assume markets are populated by versions of him, you can derive clean, mathematical results.

The famous 1970s option pricing formula by Black and Scholes showed that, under certain assumptions, the price of an option had to match their formula. If it didn’t, there would be free money on the table, and homo economicus would act on it until the price corrected.

The Capital Asset Pricing Model (CAPM) says all assets should be priced based on their risk relative to the market portfolio. Riskier assets demand higher expected returns.

The efficient markets hypothesis completed the picture. If everyone is rational, prices reflect all available information. New information gets incorporated instantly. You cannot consistently beat the market because the market already knows everything you know and has already acted on it.

This was intoxicating. For the first time, finance had foundations. You could build on them. The models became not just tools but a worldview. If options were priced “correctly,” then markets were, in some deep sense, efficient. Prices might deviate temporarily, but the deviations were noise, and the noise would be arbitraged away by our tireless rational agents. This worldview still persists, mostly because it’s useful. These are tools, and good tools outlive the theories that spawned them.

But the worldview also became a cage. It trained several generations of finance professionals to see markets as machines that occasionally misfire, rather than as crowds that occasionally coordinate.

We forgot that homo economicus was a simplification, not a description. We started believing our own map. The problem was not that the models were wrong. The problem was that we treated them as complete. Reality is more complex.

That might sound abstract. Think of airplane speed: the dashboard shows 180 mph, tempting you to say, “Wow, three times a car’s speed limit!” But it’s airspeed. With a 60 mph headwind, your ground speed (how fast an aircraft is moving relative to the Earth’s surface, like a car) is just 120 mph.

For all the math used in finance, step back and realize: finance predicts human investment behavior—not like engineering, where you build perfect machines that follow fixed principles. In short, there is STEM (Science, Technology, Engineering, Math), and then there are social sciences. Finance is a social science, even if many finance professors wish otherwise. I say that as a lifelong finance professional with deep love for the field.

That leads us to our next topic: Behavioral Finance.

Chapter 2: The Human Factor: Emotions Over Equations

The first cracks appeared from within the profession. Researchers began documenting things that should not exist in a world of homo economicus.

Value stocks outperformed growth stocks, year after year. Momentum strategies worked. Stocks continued to drift after earnings announcements instead of adjusting instantly. Closed-end funds traded at persistent discounts that no rational explanation could fully justify.

Behavioral finance emerged to explain these anomalies. The research of Kahneman and Tversky had already shown that real humans do not behave like homo economicus. Human beings have emotions that impact their investment decisions.

Surprise. Surprise.

No psychologist would ever assume that people act rationally all the time. Their mental model is—as I understand it—that we are all emotional beings with bursts of rationality. The frequency and duration of rationality vary from person to person and can be improved with training, but that is it. Human beings thinking like Star Trek’s Spock or Data is an adult fairy tale.

Well, that insight eventually also hit us finance people.

Specifically, they found out that—among other things—human beings anchor on irrelevant numbers. They treat losses differently from gains—losses hurt about twice as much as equivalent gains feel good. They are overconfident in their judgments and underconfident in their ability to recognize their own overconfidence.

The anomalies suddenly made sense. They were not mysteries. They were predictable consequences of human psychology.

For investment practitioners, this was validating. The models were wrong, and here was the proof. You could beat the market, not by being smarter than everyone else, but by being more disciplined—by recognizing the systematic errors that real humans make. Buy cheap stocks. Hold them. Don’t get shaken out by volatility. This was not speculation. It was science.

Behavioral finance is still about mispricing—prices that have deviated from fundamentals because of cognitive errors. The errors are systematic rather than random, which means they are predictable, which means you can trade against them and eventually be proven right.

Behavioral finance says the fundamental value is still out there, waiting to be discovered. It is just harder to see because of all the humans in the way.

This is why many value investors love behavioral finance. It provides intellectual cover for what they already believe: that the market is moody and irrational in the short run, but sober and rational in the long run. If you can endure the moodiness, sobriety will reward you. Homo economicus may not run the day-to-day trading, but he shows up eventually to collect his arbitrage profits.

Truth be told, I love this approach too, as it helped me in many instances to make a good amount of money.

But what if the market is never sober? What if the long run is just more short runs, strung together? What if the “errors” don’t correct but compound? What if the market is even more complex, and behavioral finance—while closing some gaps—does not close all the gaps?

To answer that, we need a different model entirely.

Chapter 3: The World We Actually Inhabit. Well, As Far As We Know.

Consider two companies with similar financial performance, and what sometimes happens in these scenarios.

• Company A’s stock falls 30%. Its cost of equity rises. It cancels a planned expansion. The cancelled expansion causes analysts to reduce their growth forecasts. The stock falls another 15%. The company, now trading at a discount to its peers, becomes a takeover target. Management spends its time fending off activists instead of investing in the business.

• Company B’s stock rises 30%. It issues equity at the elevated price and uses the proceeds to acquire a smaller competitor. The acquisition increases its market share and reduces competitive pressure. Margins expand. Analysts raise their forecasts. The stock rises another 15%.

In the standard model, both companies are mispriced and will eventually revert to fair value. Homo economicus is out there somewhere, preparing to arbitrage them back to sanity.

In the behavioral model, both are exhibiting cognitive biases—extrapolation, overreaction—that patient arbitrageurs can exploit.

But there is a third interpretation. In this interpretation, both companies are simply experiencing the consequences of their own prices. The falling price made Company A weaker. The rising price made Company B stronger. The feedback is real. The trajectory is self-reinforcing.

This is reflexivity.

Reflexivity in investing is the idea that markets are a two-way street. The efficient market hypothesis (see Chapter 1) argues that prices fully reflect all available information—that information dictates prices, not the other way around (essentially a one-way street). In that view, the actions of market participants—buying and selling—have no influence on underlying fundamentals.

Reflexivity challenges this assumption. It says that information does shape prices, but prices, in turn, shape information and behavior. The beliefs and actions of investors feed back into the system, creating self-reinforcing cycles that drive both booms and busts.

Reflexivity in investing is a theory advanced by the often‑controversial George Soros, building on the philosophical ideas of Karl Popper about the interplay between perception and reality. Yet whatever one thinks of Soros himself, the logic remains sound—like 2 + 2 = 4.

It is not a fringe theory. It is a description of how markets behave when the thing being priced is not a passive object but an active participant in its own valuation.

In a reflexive market, the relationship between price and fundamentals goes both ways. The price affects the fundamentals, which affect the price, which affect the fundamentals. This is not a temporary deviation from normal. It is the normal state of affairs.

This is not nihilism. It is not a claim that “anything goes” or that fundamentals don’t matter. It is a claim that the relationship is bidirectional, and that ignoring one direction leaves you blind to half the motion.

Sanity Check – Let’s take a quick break

The different thought models can feel exhausting. Let’s step back and remember what we’re really trying to accomplish.

There are roughly 8 billion people on this planet. A fraction of them trade. Investing theory—when you boil it down—is a competition to do better than the other investors. When you’re facing millions of rivals, you need thought models to understand how everyone else will buy and sell.

If there were only 20 people in the market, you could get to know them personally—their situations, wants, needs, desires, fears—and make brilliant decisions. But with millions, maybe billions of investors? That’s impossible.

So we build thought models. They’ll never capture all the complexity—and they don’t need to.

As the old American joke goes: “I don’t need to outrun the lion. I just need to be faster than the other guy in my group.”

Where does this leave us, and what tools do we have to become better investors?

For example, Chapters 1 and 2 explain why gold and silver miners are currently such a compelling investment. Chapter 3 explains why Tesla has been such a compelling investment for a long time.

We discuss all that in more detail and much more in the next chapters.

Chapter 4: The Market You Actually Live In

Chapter 5: Sterilizing Your Instruments – Where does this leave us, and what tools do we have to become better investors?

Chapter 6: Gold/Silver Miners & Tesla – Two Trades, Two Models

Chapter 7: Conclusion: What the Surgeons Taught Us (And What We Still Need to Learn)

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“Historically, there has been a bull market in commodities every 20 or 30 years.”

— Jim Rogers

Not financial, investment, legal, or tax advice. Please read our full Disclaimer on the Disclaimer page. Accessible via the provided link and via the homepage menu. Continued reading constitutes your agreement to its terms.

Jim Rogers is a legendary investor. A man who traveled the world twice—the real world, not just Europe—twice. Circled the globe by motorcycle. Co-founded the Quantum Fund. And has seen more bear markets than most traders have seen trading days.

And he is still very generous with his time. Still sits down for interviews.

He is not selling anything. He has no stock, no fund, no service that we can buy from him. He is just sharing his thoughts.

That is a gift for all of us.

Given his legendary status, he is a fountain of wisdom. Perfect? No. No one is. But smart and insightful? No doubt.

Chapter 1: The Jim Rogers SNL Phil Hartman Principle

I like Jim Rogers a lot. He’s a smart, successful investor. I once saw a video of him giving a speech in front of a large audience in Singapore. While the hall was filling up, he was walking back and forth on the stage. On his face, you could see a sharpness and alertness that was 180 degrees different from how he appears in interviews.

That contrast reminded me of an old Saturday Night Live sketch where the late Phil Hartman portrayed Ronald Reagan. In public, Reagan seemed like a gentle, grandfatherly figure (much like Rogers), but behind closed doors, he was sharp, fast-talking, and completely in command once the cameras were off. Here’s the full SNL video for your enjoyment. If you want to fast forward, you can see him changing his persona at timestamp 0:40.

I say all this in good humor and with great admiration for Jim Rogers. Still, I also recognize that a public persona and a private self—especially for people with a large public profile—are often carefully constructed.

On the surface: “Oh, I’m too lazy to trade base metals. I just hold gold and silver for my grandchildren.”

Beneath the surface: a man investing globally—from the U.S. to Japan to Uzbekistan.

But enough of the detour—let’s dive into what Jim Rogers shared.

Chapter 2: Jim Rogers: “Do Not Invest in Things You Don’t Know About”

Many investors look for the hot tip—the next best thing. And there’s nothing wrong with that, as long as you treat it as inspiration and are willing to spend the time and effort to understand it in detail. Here’s what Jim Rogers says in his video further down below.

The interviewer asked Jim Rogers what advice he would give to a 30- or 40-year-old Jim Rogers. Here’s what he said.

Jim Rogers (timestamp 12:28): “Well, it doesn’t matter whether you’re in your 30s or in your 50s or whatever. You should only invest in what you yourself know a lot about. Do not listen to me or the television or other people. You, if you’re going to be successful, you have to stay with what you know. If you’re going to be successful, you do not listen to other people. And I would tell 35 year old Jim Rogers, “Be careful. Don’t listen to other people. Don’t jump in and out of hot things. Just stay with what you know. Be patient. Be calm and wait.” There’s always something that you can invest in if you’re patient and knowledgeable. I didn’t say it was easy. I just said that’s the only way.”

Let’s repeat that: “Be careful. Don’t listen to other people. Don’t jump in and out of hot things. Just stay with what you know. Be patient. Be calm. And wait.”

Great advice. But let’s be honest: that’s not how modern investing works. The typical retail investor today is drowning in narratives—AI chips, quantum computing SPACs, Brazilian real estate ETFs. The message, repeated constantly across every platform, is that somewhere else is where the alpha lives. Your own backyard is boring. The edge is always just over the horizon.

The interviewer asked, “What if you’re not knowledgeable yet? Should you educate yourself on things you believe will do well, or things you already like?”

Jim Rogers (timestamp 13:37): “Well, most people—it’s easier for them to learn about things they like than other, strange things. So certainly start with what you like. Start with what you know and build from that. And even if you only wait and invest in things you know a lot about, that’s fine. Many people got very rich investing only in what they know. But the main thing is: do not invest in things you don’t know about.”

Source: https://tapandesai.com/what-is-circle-of-competence/

If you think about it, with roughly 55,000 publicly traded companies around the world, every second there is an opportunity that we all miss. And you know what? It doesn’t matter. As Jim Rogers said, “There’s always something that you can invest in if you’re patient and knowledgeable. I didn’t say it was easy. I just said that’s the only way.” Here’s his further remark on the topic.

Jim Rogers (timestamp 24:10): “Well, just be careful. There are—and always will be—great opportunities in the world. Try to find them. I didn’t say it was easy. I just said there always have been and there always will be. Even in prosperous times, there’s opportunities somewhere if you take the time and have the knowledge to find them. I don’t know where right now, but I know they’re out there somewhere—just that I’m too lazy.”

This resonates with me. I am aware of multiple alpha opportunities, but I am not equally comfortable with all of them. For example, given my knowledge of monetary history, policy, and geopolitics, and as a finance professional able to build pro forma financial models, I am very comfortable right now investing in the gold and silver mining sector.

But it also seems, as we reported earlier in the article, “How Legendary Retail Investor Chris Camillo Turned $84,000 into $42 Million, And Why He Says AI Changes Everything,” that there are tremendous AI opportunities.

However, that is outside my circle of competence and would require a lot of work and research for me at this point. If you have a different background—say, IT instead of my background—AI may come more naturally to you.

It is all as Jim Rogers said above: “Start with what you know and build from that.”

In the following sections we will cover the following:

Chapter 3: Gold, Silver, and the Art of Waiting

Chapter 4: Jim Rogers on Gold and Silver Miners

Chapter 5: Jim Rogers on the US Equity Market, US Dollar, Bonds, Inflation, and the Turkish Scenario

Chapter 6: Final Note

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“The fine print never matters—until it does.”

— Unknown

Not financial, investment, legal, or tax advice. Please read our full Disclaimer on the Disclaimer page. Accessible via the provided link and via the homepage menu. Continued reading constitutes your agreement to its terms.

Money is about psychology—both good and bad. Excitement and greed, when kept in moderation, can motivate people to learn how to invest. Other emotions, like “going with the crowd” or complacency, are less helpful. A particularly dangerous emotion in investing is accepting public narratives without questioning them.

We all know not to trust the car salesman who says, “No worries. The car is perfect. You can trust me.” No one is that gullible anymore.

But with banks and brokerage houses, we’re told, “No worries. Your money is safe. The FDIC protects deposits in banks up to $250,000, and the SIPC protects brokerage accounts up to $500,000.” If that’s true, and your assets are below those thresholds, then that’s it—case closed. You can pick any FDIC-insured bank or any SIPC-insured broker; they’re all the same.

But are they?

To save the suspense—they are not. There are significant differences that can make a big impact in an extreme scenario. But I’m also not hitting the panic button. In 99.9% of cases, your brokerage account with an SIPC‑insured broker in the U.S. will be just fine.

But in 0.1% of cases, being proactive and thoughtful with your brokerage account can mean the difference between keeping all your assets or not. Why is that?

Let’s take a look.

Chapter 1: SIPC Insurance: The Dangerous Myth That Lulls Investors to Sleep

On paper, SIPC insurance shouldn’t even need to exist. In theory, your cash and securities at your broker are held in segregated accounts at the Depository Trust Company (DTC).

What Is DTC?

When you own a car, you have a title that states you’re the owner, and your state maintains a database recording that information. Think of DTC as a private organization that does something similar for securities.

However, there’s a small wrinkle. If I own one share of Google in the cash brokerage account of my broker (say, XYZ Broker), DTC doesn’t have my name on record as the owner. That one share of Google is part of a segregated pool of client assets held in the name of XYZ Broker. My broker, XYZ, is the officially registered owner in DTC’s records, and the broker’s internal records show that among those assets, one share of Google belongs to me.

The Fringe Finance Report covered this topic in more detail in September 2025 in an article titled “You Don’t Actually Own Your Stocks at Your Broker: Here’s Why It Matters — The Unsettling Legal Fine Print of Your Brokerage Account and How It Can Cost You in a Crisis.” You can read it here.

For the purpose of this article, however, let’s move on.

These cash brokerage accounts are supposed to be walled off—untouched by a broker’s own operational funds or liabilities. In such a world, there would be no confusion about ownership—your assets would be yours, always and everywhere. So even if your broker were to go bankrupt, the assets in your brokerage account would not be part of the broker’s bankruptcy estate. They remain the property of the customer.

But the financial world rarely exists in theory.

History shows that even in tightly regulated environments, things can go wrong—not necessarily because of the system, but because of people. A dishonest or desperate broker can blur the lines between client assets and firm funds, dipping into customer accounts to cover losses or liquidity gaps. When that happens, identifying which funds belong to whom becomes messy. That’s the point at which SIPC steps in—not to rescue investors from market swings, but to untangle the chaos left behind by human error or misconduct.

There’s another wrinkle. When investors buy securities using margin accounts, the landscape changes.

Securities held in margin accounts may be more susceptible to being commingled with broker assets. This is because margin accounts typically involve the broker holding securities on behalf of the client as collateral for loans, which can create opportunities for misappropriation or commingling if proper safeguards are not in place.

Brokers are required to maintain physical possession or control of customer fully paid and excess margin securities, keeping them separate from the firm’s house assets. (Source: https://www.law.cornell.edu/wex/customer_protection_rule).

However, having to do something and actually doing it are not always the same thing. And if the broker fails, those balances can become part of the bankruptcy liquidation pool.

Again, this is where SIPC may provide a backstop—though it’s a limited one.

Now you may say, sure that stuff doesn’t really happen. Let’s see.

FINRA’s “2023 Report on FINRA’s Examination and Risk Monitoring Program” shared its findings about how their member firms are complying with their obligations to segregate customers’ assets. One of their findings was “inaccurate segregation of customer securities.”

2023 Report on FINRA’s Examination and Risk Monitoring Program, Segregation of Assets and Customer Protection Section

Source: https://www.finra.org/rules-guidance/guidance/reports/2023-finras-examination-and-risk-monitoring-program/segregation-assets-customer-protection

Here is an example of a registered broker-dealer that commingled customer assets with their own assets.

SEC Press Release 2018 Re: Electronic Transaction Clearing (ETC), a Registered Broker-Dealer

Source: https://www.sec.gov/newsroom/press-releases/2018-45

I’m not hitting the panic button here — just pointing out that your first line of defense for your assets held with your broker is that they are not commingled with the company’s own assets. The SIPC serves as a second line of defense, and even then, its protection is limited. Is it high risk? Probably not. But it does happen.

To provide an extra layer of protection, some brokers go further to reassure clients. They purchase additional private insurance—coverage that extends beyond SIPC’s limits.

These policies don’t just increase protection amounts; they also say something about the broker itself. A firm that goes through the extra due diligence required to secure such coverage—having an insurance company perform a deep dive into its procedures and controls—demonstrates seriousness about risk management and client trust. That extra layer—psychological as much as legal—sets better brokers apart from the rest.

A final factor is one modern investors can’t ignore: cybersecurity.

Not all brokers cover losses from cyber‑theft or account hacking. Some explicitly include it, while others either exclude or cap their responsibility. In an era where “the vault” is digital, overlooking that detail can be as reckless as leaving your safe open.

So yes, SIPC insurance plays a role—but largely as a backstop for imperfections in human systems. The real differentiator lies in how a broker handles segregation, margin exposure, third‑party protections (extra insurance), and cyber risk. The fine print and broker trustworthiness matter more than the logo.

Chapter 2: Your Broker Due Diligence Checklist

If Chapter 1 was about understanding why broker quality matters, this chapter is about how to evaluate it.

Choosing a broker is not about picking a slick app or the one with the cheapest trading fees—it’s about trust, structure, and risk management. A good broker is like a well‑built ship: you don’t notice the engineering until the waters turn rough. The goal here is to help you recognize which ships are seaworthy.

Let’s break this into five key areas that separate truly solid brokers from the rest.

1. Margin vs. Cash Accounts

Understand the difference, because it’s not small. A true cash account means your assets remain distinct from the broker’s balance sheet. A margin account may end up being commingled and introduces risk in the event of liquidation. Many investors open margin accounts by default without realizing it. The safest approach is to confirm you’re in a fully paid cash account unless you truly need margin.

2. Insurance Layers and Their Meaning

SIPC protection is the baseline, not the finish line. Look for brokers that carry supplemental insurance from private firms such as Lloyd’s or excess‑SIPC providers. This extra coverage signals that the broker has passed deeper audits and is serious about fiduciary responsibility. The amount matters—but the due diligence behind obtaining it matters more.

3. Cybersecurity

In 2026, your financial safety depends as much on encryption as it does on accounting. Reliable brokers disclose their cyber protection policies and whether customer accounts are insured against hacking or wire‑fraud losses. The best firms publish independent audit results, carry cyber‑liability insurance, and offer two‑factor authentication by default. “Trust, but verify” applies doubly in the digital age.

4. Financial Strength and Transparency

US brokerage financial statements—like 10-Ks—offer a clear view of a firm’s financial health. However, they exclude the vast majority of customer assets (as they should), which are legally segregated under SEC Rule 15c3-3 (a rule forcing brokers to keep your stocks and cash separate from their own funds in case they go broke). This creates a critical limitation: even pristine financials can’t assure your holdings’ safety in a crisis. Still, they give insight into how well the company is run.

5. Protecting Customer Interests to the Maximum within Legal Limits

Crisis times are a great revealer of corporate character. Do brokers, within the limitations of U.S. law, protect their customers’ interests to the maximum, or do they retreat to virtue signaling at the customer’s dime? One would think: “Of course, brokers protect their customers’ interests to the max.” Unfortunately, a recent example shows that to be untrue.

Here is one example. Investors can purchase foreign company shares on U.S. stock exchanges, usually in the form of ADRs (American Depositary Receipts). Russian company shares started trading as ADRs on U.S. exchanges since the 1990s, and many U.S. investors bought them through their brokers. The legendary investor Li Lu—the “Chinese Warren Buffett,” as Charlie Munger called him—reportedly made his first fortune trading Russian ADRs in the U.S. in the 1990s. In early 2022, the U.S. government halted trading of Russian ADRs on U.S. exchanges. After the initial confusion died down, some brokers helped their clients rescue their assets (via conversion to ordinary shares), while others stonewalled. A choice. As the old saying goes, “To get to know the character of a man, give him adversity or power.” More about how some brokers reacted - to the extent known - below.

Pulling It Together

The right broker earns your confidence not through branding but through systems, discipline, and openness. SIPC insurance may smooth over extreme failures, but true protection comes from understanding how your broker operates before anything goes wrong.

Think of due diligence as your pre‑flight check. Pilots go through a checklist every time, not because crashes are common (they are not) — but because the stakes are high. The same logic applies to your money.

In the following sections we will cover the following:

Chapter 3: The Fortress Tier: 3 Brokers That Are Bulletproof

Chapter 4: Competitive Middle Ground: 1 Broker with a Few Trade-offs

Chapter 5: 3 Not So Great Brokers

Chapter 6: The Strategic Takeaway: How to Plan Your Brokerage Relationships for Safety & Growth

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“In 1975, the price of gold fell from $200 an ounce to $100 an ounce…. And the people who got shaken out in 1975 at $100 missed a move from $100 to $850. The point of this is that you need to prepare yourself financially and psychologically for 20% pullbacks, 30% pullbacks, even 50% pullbacks.”

— Rick Rule (January 24, 2026)

Not financial, investment, legal, or tax advice. Please read our full Disclaimer on the Disclaimer page. Accessible via the provided link and via the homepage menu. Continued reading constitutes your agreement to its terms.

The costliest investing mistake isn’t buying a loser—it is dismissing a winner without a second thought.

None of us investors, including me, are perfect. Looking back, we can all probably identify times when we missed great opportunities.

For me, it was Bitcoin. Like many, I wish that when it first appeared and was trading for cents, I had just invested $100 with the thought, “What the hell—I spend $100 on all kinds of useless things, and this might be something game-changing.”

What I regret most is not that I didn’t invest. It’s that I dismissed it without doing my homework first—without taking the time to study it and make an informed decision. If, after doing that homework, I had decided not to buy it, I would have been ok with it. What bothers me and still bothers me—as a constant reminder to do better—is that I didn’t do my homework. I simply dismissed it as a passing fad, a hoax.

In law, there is often a concept called a “safe harbor” provision. Sometimes things are so complex that even someone who wants to comply with the law doesn’t know exactly what to do. The “safe harbor rule” typically states that if you do these specific things, then regardless of other rules, “you are good.”

That is why I have adopted a “safe harbor” rule for my own investments. If I see something interesting, I will do my homework, make a decision—whether to invest or not—and then, whatever happens, “I am good.”

That leads me to the topic of gold, silver, and miner investing. When it comes to these investments, I’m reminded of my own experience with Bitcoin. While many are loaded up on it, others outright dismiss it as an instrument of a time long gone—and in the case of miners, as an unsexy industry digging up relics of the past while harming the environment.

I’m not trying to convince anyone to invest, or not invest, in gold, silver, or miners. That’s a personal choice, and as always, you should do your own homework. My only point is that you owe it to yourself to do that homework—especially as it relates to miners, given where we are right now.

There’s a reason legendary investor Rick Rule is rotating out of gold and silver ETFs and into miners, and why Eric Sprott is loaded up on gold and silver miners.

So that years from now, you can look back and say, “I didn’t just dismiss it.”

Chapter 1: Rick Rule Sold 80% of His Physical Silver and Bought Silver Stocks

So, let’s begin that homework by examining the recent, decisive move by one of the sector’s most respected figures – Rick Rule. Legendary investor Rick Rule shared these insights at the Metal Investor Forum held January 23-24, 2026.

• Rick Rule (6:10): “I sold about 80% of my physical silver…with half the proceeds, I bought high-quality silver stocks. Why the move from silver into silver stocks? Here’s why. The silver stocks have not kept pace with silver.”

• Rick Rule (6:36): “Let’s say it [silver] declines, if that’s the right phrase, to 75 or 80. The silver stocks, I think, are priced on a net present value basis discounting 40. So if the price holds at 75 or 80, I think those silver stocks rerate. By contrast, if the price of silver just goes steady or I don’t make any money in the silver, and I make 50 or 100% in the silver stocks...”

In simple terms, what is Rick Rule saying?

• He remains bullish on silver but believes there is more upside potential in the miners than in the metal itself.

• He considers silver mining stocks to be severely undervalued. Their current prices appear to be based on a long-term silver price of $40/oz, not the ~$112/oz price seen on January 28, 2026.

• Therefore, even if silver corrects to $75–$80/oz, he expects silver mining stocks to increase significantly in value.

Be Prepared For Pullbacks

Most investors dream of buying the next big thing, watching it rise immediately after purchase, and never declining until they sell. As all experienced investors know, this is a fairy tale.

Rick Rule reminds us of this with a concrete example from the 1970s gold market.

While he believes we are in a 10-year bull market for gold, silver, and miners, the journey will not be smooth. Severe pullbacks are likely – a roller coaster if you will. Unless you are prepared—both mentally and financially—you may not reach the promised land.

Gold Price History Graph

Source: https://www.macrotrends.net/1333/historical-gold-prices-100-year-chart

• Rick Rule (1:00): “Don’t bet that the future is going to be as easy as the past. That doesn’t suggest that there isn’t money to be made. It just suggests that the easy money has been made. Don’t get yourself used to being spoiled because although I think for 10 years there’s going to be money to be made, you’re not going to be able to make money on your mistakes which you were able to do in 2025.”

• Rick Rule (10:48): “In 1975, the price of gold fell from $200 an ounce to $100 an ounce. And many of those newfound believers wish they never learned to spell gold. All the belief that they had at $200 evaporated when the price went down when it was a better buy. And the people who got shaken out in 1975 at $100 missed a move from $100 to $850. The point of this is that you need to prepare yourself financially and psychologically for 20% pullbacks, 30% pullbacks, even 50% pullbacks. You need to understand your portfolio well enough that you have the conviction where price declines are opportunities as opposed to risks.”

In a nutshell: There is still a lot of money to be made, but the path – if history is a guide - will be volatile. If you believe in the long-term thesis for gold, silver, and miners—and are prepared both financially and psychologically—you can navigate the turbulence and make it to the other side – the pot of gold at the end of the rainbow.

Chapter 2: Are Gold, Silver, and Miners the Only Opportunity?

No.

As outlined in prior articles, we are currently tracking seven high-conviction macro themes:

A. Gold, Silver, and Miners

B. Rare Earths and Critical Minerals

C. Oil and Gas Companies

D. Moves by Legendary Investors

E. The Next Industrial Revolution: AI

F. Bitcoin and Related Equities

G. Congressional Stock Trades

We have covered all of these topics previously, with the notable exception of Congressional stock trades—a fascinating dataset of publicly disclosed (though lagged) transactions that often do remarkably well.

The most important macro topic for any investor is not the one making the most headlines—it’s your sweet spot.

Your sweet spot is where three elements overlap:

1. Your genuine interest in the topic.

2. Your knowledge (or your commitment to learn).

3. Real opportunities to profit.

For me, the best sweet spot currently is gold, silver, and miners. This stems from a long-term interest in monetary policy, geopolitics, and firsthand experience living across multiple countries. Your sweet spot may be entirely different—perhaps AI, energy, or something else entirely.

Finding yours is critical. As discussed in Chapter 1, severe pullbacks are almost guaranteed in any major trend. If you lack genuine interest and foundational knowledge (#1 and #2), you’ll be vulnerable during pullbacks. You might be tempted to fold a winning poker hand—where your cards are strong enough to win, but insecurity leads you to fold and lose.

Chapter 3: The Case Against and For Silver

As an investor, there are two competing narratives regarding silver: Story A (“Same Old, Same Old”) and Story B (“The World Has Changed”).

We covered this in more detail in the article “First Majestic Silver (AG) Mining Company – 2x vs. 6x vs. 20x” in the introduction, before Chapter 1.

3.1 Story A – Same Old, Same Old

This narrative views the current situation as just another silver bubble, similar to past bubbles:

• The 1980 bubble, driven by the Hunt brothers’ failed attempt at cornering the silver market.

• The 2010 bubble, fueled by post-subprime crisis Fed money-printing and inflation fears.

• In both cases, silver peaked (in 1980 and 2010) and then crashed hard, remaining low for years. Story A argues that the new silver highs will follow the same pattern: prices will fall and stay low for a long time.

To proponents of Story A, the recent highs are merely the latest peak in this predictable cycle. Their logical conclusion is that silver and silver miners are poor investments at this stage, and the sophisticated play might even involve long-dated puts to profit from the coming decline. In this view, history is clear, and the story is over.

3.2 Story B – The World Has Changed

Story B argues that fundamental changes support a sustained rise in silver’s value, with legendary investors like Eric Sprott, who said, “Silver should be at $300,” believing this. The key drivers are:

• Supply Deficit: Since 2021, global silver consumption has exceeded production annually. Silver is a critical industrial commodity for EVs, clean energy, and defense (e.g., missiles). Historical stockpiles used to cover the shortfall are dwindling, impacting prices.

• Multi-Polar World: The era of the US as the sole superpower is over, replaced by a multipolar world with China as a major pole. Despite media narratives, China’s industrial output is twice that of the US and exceeds the US and Europe combined. Relying on a competitor’s collapse is denial.

• Global Price Setting: For decades, the COMEX (US) and LBMA (UK) set global silver prices, with widespread allegations of manipulation via paper sales (cash-settled futures not requiring physical delivery). In 2020, JP Morgan paid a record $920 million fine for precious metal manipulation. A new pricing hub in Shanghai, China, predominantly settles in physical silver, making manipulation harder. This creates a growing price disparity, enabling arbitrage where one can take physical delivery in the US and sell in China. China, a major industrial user, could drain Western silver inventories, turning price manipulation into a national security and supply chain issue.

• National Security: Starting January 1, 2026, China implemented export controls on silver. In 2025, the US added silver to its critical minerals list for the first time.

One more word to the global price setting: If I wanted to buy or sell a globally traded security, say, the shares of Toyota, the Japanese car company (their stock trades in Tokyo (TYO 7203), London (LSE TYT), and New York (NYSE TM)), as you would expect, arbitrage—buying in New York and selling in Tokyo—is not possible, as the shares trade globally at the same price. Silver is different—for now. Economists have a saying: “What can’t go on, won’t—eventually.” Legendary investor Eric Sprott expects the physical market in Shanghai to emerge as the global price setter.

3.3 Conclusion: The Investor’s Verdict

The choice is not merely between two price predictions, but between two visions of reality:

Story A believes in unchanging cycles where human psychology and speculative excess are the ultimate drivers.

Story B believes that a coming together of silver shortage, geopolitical shifts, market mechanics, and national strategy has rewritten the rules.

Legendary investors Rick Rule and Eric Sprott, among others, loaded up on silver miners (and gold miners). The question now rests with you: which world do you believe we live in? I believe in Story B, but I could be wrong (although I doubt it).

Chapter 4: The Case Against and For Miners

Miners are essentially a leveraged play on gold and silver — they amplify price movements in both directions. I like to think of them as an express elevator for the precious metals. That’s the case FOR them. Of course, if you believe gold and silver will fall sharply and stay low, that’s the case AGAINST miners. When gold and silver rise, miners can be the express elevator to heaven. But if they crash and stay down, miners can be the express elevator to hell. And call options on miners (discussed further below) are the super‑duper fast version of those express elevators — in both directions.

Call options on miners are NOT for the faint of heart — but if things go well, they go extremely well.

Why, you may ask, are miners a leveraged play on gold and silver?

Imagine a mining company, “ABC Gold Corp.” Its business is simple: dig gold out of the ground and sell it. Like any business, it has costs. These are often measured by the industry metric “All-in Sustaining Costs” (AISC), which includes everything from digging and processing to administrative expenses and sustaining capital. Let’s say ABC Gold has an AISC of $1,800 per ounce.

Now, let’s look at what happens to their profit as the gold price rises.

Scenario 1 (the baseline): Gold at $4,000/oz

• Selling Price: $4,000

• AISC: $1,800

• Profit per Ounce: $2,200

Scenario 2: Gold at $5,000/oz (a 25% increase)

• Selling Price: $5,000

• AISC: $1,800

• Profit per Ounce: $3,200 (a 45% increase in profit!)

Scenario 3: Gold at $6,000/oz (a 50% increase)

• Selling Price: $6,000

• AISC: $1,800

• Profit per Ounce: $4,200 (a 91% increase in profit!)

This demonstrates the powerful operational leverage of gold and silver miners. With a fixed AISC, a relatively small increase in the gold price leads to a massive increase in profit margins. Higher profit margins mean higher earnings per share (EPS), which typically lead to a higher stock price. And if the P/E ratio further expands due to investors rushing into gold miners (FOMO), the stock price could increase even more.

At the beginning of the article, I said the following: “That is why I have adopted a ‘safe harbor’ rule for my own investments. If I see something interesting, I will do my homework, make a decision—whether to invest or not—and then, whatever happens, ‘I am good’.”

What would that homework look like as it relates to miners?

Well, in the following sections, we will cover the following:

Chapter 5: Share Price — Is the P/E Ratio the Right Metric for Mining Stocks? (What Else Works?)

Chapter 6: Asset Value — How to Quickly Size Up an Undervalued Miner

Chapter 7: The Qualitative Side and Other: What to Look For in a Mining Company

Chapter 8: The Top Silver and Gold Companies to Watch

Chapter 9: How to Turbo-Charge Your Gold & Silver Stock Investments

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“The best thing a human being can do is to help another human being know more.”

— Charlie Munger

Not financial, investment, legal, or tax advice. Please read our full Disclaimer on the Disclaimer page. Accessible via the provided link and via the homepage menu. Continued reading constitutes your agreement to its terms.

When you watch the global news these days, it’s impossible not to hear echoes of Charles Dickens’s famous opening line from A Tale of Two Cities: “It was the best of times, it was the worst of times…” We are living in a time of tremendous change—simultaneously thrilling and very concerning.

But from a pure investor’s perspective? What a great time to be alive.

Right now, macro opportunities are exploding across the board. The real art lies in finding your sweet spot—the place where three things overlap:

1. Your genuine interest in a theme,

2. Your knowledge (or willingness to learn), and

3. Real opportunities to profit.

Chapter 1: Seven Hot Macro Themes to Invest In

At the Fringe Finance Report, we are tracking 7 hot macro themes we believe matter today. Of course, nobody knows the future—only hindsight is 20/20. But if you think about the future in probabilities (not certainties), you can spot asymmetric bets where the odds favor you. And yes—smart people will disagree. That is healthy. Debate sharpens ideas.

But here’s the harsh beauty of investing: the market doesn’t care about our opinions. Future returns will be the ultimate judge.

So what are these 7 themes? They are:

A. Gold, silver, and miners

B. Rare earths and minerals

C. Oil and gas companies

D. Moves by legendary investors (today’s deep dive!)

E. The next 30-year industrial revolution: AI

F. Bitcoin and MSTR (yes, even after the recent beat-down)

G. Congressional stock trades (publicly disclosed with a lag—and shockingly strong performances)

We covered all these topics in prior articles, with the exception of “G. Congressional stock trades.” If you are interested in any of those topics, please click on the article archive link here, where you can sort the articles by date (“Latest”) — with the newest article first — or by popularity (“Top”).

Image source: https://ffus.substack.com/archive

Today, we are zeroing in on Theme D: Legendary Investors.

Specifically, we’ll unpack the top 10 holdings and recent material changes of the following six legendary investors based on the latest published SEC filings (November 2025).

1. Seth Klarman (Baupost Group) – Famous for his value investing philosophy, explained in his famous book Margin of Safety.

2. David Tepper (Appaloosa) – Known for his successful contrarian investing and owner of the NFL’s Carolina Panthers.

3. Li Lu (Himalaya Capital) – “The Chinese Warren Buffett,” as per Charlie Munger.

4. Chris Hohn (TCI) – Known for his value-based, long-term investment strategy and significant philanthropic efforts.

5. Andreas Halvorsen (Viking Global) – Known for his research-intensive, long-term equity approach and former special forces military background.

6. Bill Ackman (Pershing Square) – Known as a highly influential activist investor who takes large, concentrated stakes in companies to drive significant strategic changes.

The investment choices of legendary investors are a great source of information for any investor to be inspired by and to ask, “Why did they buy this?” and “Is this something that would make sense for me too?”

As mentioned above, in the following chapters we’ll review the latest available portfolio information for the six legendary investors. These filings, submitted to the SEC in mid-November, reflect their holdings as of September 30, 2025. The next quarterly reports, covering data as of December 31, 2025, are due in about a month—by mid-February.

Chapter 2: Seth Klarman (Baupost Group) Top 5 Positions & Changes vs. Prior Quarter

Seth Klarman has a fairly concentrated portfolio with only 22 investments as of September 30, 2025. The top five investments constitute 45.72% of his total portfolio.

Seth Klarman (Baupost Group) Top 5 Positions

Looking at his top five holdings, two moves stand out immediately: he dramatically increased his stakes in two very different companies while trimming back everywhere else. It’s like watching a master chess player quietly repositioning his strongest pieces.

His boldest moves:

• QSR (Restaurant Brands International): Doubled his position to over 8 million shares

• ELV (Elevance Health): More than doubled his stake to over 1.3 million shares

Meanwhile, he reduced his holdings in Google, building materials giant CRH, and insurance broker WTW by 12-30 percent each.

What do these two companies have in common?

One owns Burger King, Tim Hortons, Popeyes, and Firehouse Subs.

The other is one of America’s largest health insurers.

At first glance, fast food and health insurance seem like an odd pairing. But Klarman sees what others miss: both businesses thrive on human necessity. People need to eat, especially when budgets tighten—fast food becomes more attractive during tough times. And healthcare? That’s non-negotiable regardless of the economy. These aren’t flashy growth stories; they’re steady cash generators that keep working when other businesses struggle.

Klarman’s trims tell the other side of the story. Google depends on advertising budgets that shrink in downturns. CRH relies on construction projects that get delayed. WTW’s consulting work slows when companies freeze spending. By reducing these positions, he’s not saying they’re bad companies—he’s preparing for uncertainty.

His reasoning follows a simple pattern: when markets get expensive and economic clouds gather, shift toward businesses that serve essential human needs. The math is straightforward—when people have less money, they still buy burgers at Burger King and still need health insurance. These companies become more valuable precisely when everything else becomes riskier.

This isn’t about predicting the future. It’s about positioning for it. Klarman isn’t betting against growth; he’s ensuring his portfolio can survive whatever comes next while still participating in the upside. The real lesson isn’t which stocks to buy—it’s learning to see businesses through the lens of human necessity rather than market momentum.

In a world chasing the next big thing, sometimes the wisest move is to quietly double down on what people will always need. That’s not just investing—it’s common sense with a margin of safety.

In the following sections we will cover the following:

Chapter 3: David Tepper (Appaloosa) Top 5 Positions & Changes vs. Prior Quarter

Chapter 4: Li Lu (Himalaya Capital) Top 5 Positions & Changes vs. Prior Quarter

Chapter 5: Chris Hohn (TCI) Top 5 Positions & Changes vs. Prior Quarter

Chapter 6: Andreas Halvorsen (Viking Global) Top 5 Positions & Changes vs. Prior Quarter

Chapter 7: Bill Ackman (Pershing Square) Top 5 Positions & Changes vs. Prior Quarter

Chapter 8: Key Takeaways for Investors

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