MacroEdge Portfolio Strategy Report - August 12, 2026

Good (now Thursday morning) MacroEdge Readers & Community - in this note - we outline the first of many Portfolio Strategy notes to come.

Don Johnson (@DonMiami3), Chief Economist

Good Wednesday evening MacroEdge Readers,

This evening marks the beginning of our first ‘Portfolio Strategy Notes’ - for the time being, these will continue to operate under Ozone, so if you are subscribed to Ozone - you will get these updates, our commentary, input, and more over the next month or so. Stay tuned for an announcement sometime next week for more.

These notes will be delivered each Wednesday, and we look forward to what’s ahead with all things Portfolio Strategy.

Don

MacroEdge Flagship Model Portfolio Strategy Note from Six (@SixFinance) - Head of Research

In Portfolio Strategy, we will be doing something different moving forward, something durable and easily trackable, and soon to be investable, but more on that very soon. The Portfolio Strategy notes will be focused on a discussion around an actively managed portfolio, utilizing securities that are easily traded without extensive trading permissions, and are not overly derivative heavy. We have spent the last six weeks testing out a new interface and semi-actively managing a model portfolio, on which more details will be shared shortly.

The above holdings make up the current composition of the MacroEdge Flagship portfolio, which will be adjusted dynamically, and position-level updates will be shared as changes are made. In fairness to investors in the product itself, this may be done with a lag. The Portfolio Strategy notes are designed to share insight into how the Flagship model portfolio is being managed and why.

Key Points:

1. The book is currently structured to endure a stagflationary environment of low growth and inflationary tailwinds. Should the Iran war reach a real conclusion, adjustments will be made.

2. Hard assets and international equities make up a large percentage of the book’s positioning, as we look for value and diversify risk from overheated U.S. markets.

3. Rate hike odds for September are dwindling, and recent payrolls combined with an in-line CPI report today should be sufficient to forestall a September hike.

What we think is happening:

The market is at odds with an ongoing energy supply shock which has impacted roughly 1/5th of global oil and LNG supplies. Transits through the Strait of Hormuz have dropped to effectively zero. Oil is held down by consistent rhetoric from the Trump administration that a deal is right around the corner. Levered speculators are being washed out of their positions by this rhetoric, punishing active speculators and warding off marginal potential speculators.

Iran has pivoted to the insistence of large reparations, sanctions relief, and permanent tolling of the Strait of Hormuz, something that is politically untenable for the United States. They have publicly stated their goal of outlasting Trump politically, which signals that the Iran conflict is likely to add tailwinds to inflation for some time and is likely to create a favorable climate for energy equities over the medium term.

The United States is running a deep fiscal deficit, and is courting a large 2027 military budget increase. Simply returning to long-run annual budget deficit levels would mathematically induce recession.

There is a bubble in artificial intelligence supply chains, namely semiconductors, as the AI buildout has powered this highly cyclical industry to levels and multiples that will prove difficult to sustain in the medium to long term. Semiconductors broadly are uninvestable at these levels, although they remain tradeable.

Cybersecurity is undergoing a secular demand boom, as new AI models and the coming (albeit further out than many of the quantum equities are currently pricing) quantum threat to legacy systems drives huge demand for protection.

Korean investors and U.S. AI funds like Situational Awareness and Value Aligned Research Advisors have induced a parabolic rise in many AI supply chain stocks that has now culminated in a washout in positioning, delivering the sector. With positioning reset, and hyperscaler earnings behind us, a relevering may occur. It will be difficult to get as much firepower back into that trade as on the initial parabolic move higher. Jensen is raising $500B for AI infrastructure, and Anthropic rushes to IPO into a positive liquidity environment.

The fiscal backdrop is broadly supportive of equity prices, and the Trump regime has shown itself to be highly supportive of risk assets. Shiller CAPE ratio is at the 99th percentile; this is one of the most expensive equity markets in history by that metric.

Much of the earnings boom seen this year is a result of circular investment over tangible end demand. Also contributing to this earnings boom are the mark-to-market gains of private market investments and SPCX that have been reported as other income by hyperscalers. This doesn’t presently have a substantial impact on our positioning, but it is on our radar.

Against this favorable backdrop for equities, sector rotation has been a major driving force, with sectors quickly coming in and out of favor, and hot money ruling short-term pnl’s. In this regime, selective trough buyers in out-of-favor industries are likely to be rewarded more quickly than in other market regimes, if inflections can be identified and prepositioned.

Current Positioning

Metals

Real rates have risen dramatically, sending gold and other precious metals into a bear market. Gold is now emerging from that bear market, and central bank gold purchases remain robust. Gold functioned the way a reserve asset is supposed to function, and was sold in the early days of the Iran crisis. The metals complex now appears to have built a base and is now breaking out again. This is a largely technicals-driven trade, and new lows would give us the impetus to exit these positions.

EIDO

Indonesia represents one of the most interesting macro opportunities on the board right now. A threatened downgrade from EM2 to Frontier market status caused a collapse in the equity market. Large institutions are sidelined until the decision is derisked, while the Indonesian government has responded forcefully and rapidly to make the adjustments in line with retaining EM2 status. If Indonesia is not downgraded, there will be a large initial pop that managers will be forced to chase.

BABA

Alibaba represents a single representation of the Chinese hyperscalers thesis that we have been discussing. Alibaba owns a large chunk of just about every major AI company in China, and their Qwen models power much of Asia. Cloud intelligence grew 38% YoY, and EPS is expected to aggressively ramp. This position is still in our book but has grown from a $101 basis.

CRK

Comstock Resources is majority owned by Cowboys owner Jerry Jones and is somewhat of a “wildcatter” natural gas play. Natural gas is oversupplied in the US currently due to an inability to export more natgas to supply global demand, but export capacity is rapidly ramping over the coming years.

WOLF/FRMI

These are sized small for upside exposure to datacenter power. Wolfspeed is a vertically integrated silicon carbide manufacturer, which is where the puck is going in semis, and Fermi has finally locked in its first tenant after a tumultuous entry into the public markets.

SE

Sea is a rapidly growing e-commerce business in Asia. It complements the broad Indonesian exposure.

TM

Toyota is, despite being a juggernaut in automotive, a sleeper in robotics, with the Toyota Research Institute and Woven City sitting at the forefront of robotics development. A multiple re-rating is in the cards for them once they start leaning into robotics PR, similar to how Hyundai did with Boston Dynamics.

HRL

Consumer staples play, offering branded pricing power, a conservative balance sheet, and a long history of dividend performance. This is somewhat of a cash alternative within the portfolio and may be reallocated to riskier assets depending on market conditions.

ZS/S

Cybersecurity laggards. While the PANW and CRWDs have seen parabolic share price appreciation, we believe that the current cybersecurity wave is a rising tide that lifts all sector boats, and these offer much better asymmetry than chasing after the sector leaders at this stage of the rally.

CAI/XRAY

CAI and XRAY were both added to the model deep in the hole. CAI offers high beta to the genomics theme, while XRAY is the leading supplier of dental equipment and is non-cyclical.

ZROZ

Zero-coupon bond ETF. Long-duration yields are likely near their cycle highs, and this position offers extreme convexity to any weakening of the economy, while providing a hedge and a source of funding for future risk positions.

We will be pushing out updates as we make model portfolio adjustments, and we will provide an update soon on accessing the model portfolio.

For more details, please refer to our Terms and Conditions.