In case you missed it, the weekend flagship covered the Asian Life market - specifically AIA (1299.HK) and Ping An Insurance (2318.HK). Check it out via the link below 👇:

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Gradually…

The cash-heavy BUSHY™ lagged the S&P again last week but another week of gradually closing the gap with its end of February high water mark.

Before we get to the portfolio review, we need to discuss some further portfolio additions - modest ones, the Strait is still shut after all….

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Show was recorded at 6.20pm EST on Sunday 26th April, 2026.

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I got the weekend note out on Saturday this week. This week’s topic is the opportunity in the Asian life insurance space - much sexier than it sounds. The ‘Start the Week’ note will be in inboxes 7am EST on Monday Morning.

The Weekend Note:

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The topic for this week’s note has been gurgling around at the back of the 🐿️’s mind for quite some time. My Hormuz Crisis-enforced buyer’s strike has given me time to think about how to re-position my China / Asia equities book when the time comes to add back risk.

My China coverage in the past 2 years has focused mainly on the topics of consumption and technology. Very little ink has been spilled on the sector that has frankly powered a significant portion of my returns from the region with only a passing mention - financials.

One of my favorite fun facts is that Chinese State-owned banks are responsible for over 25% of total returns in the past 2 years for (EM High Dividend ETF) that has been one of the larger building blocks of my BUSHY™ beta portfolio for the past 3 years.

The ‘Big 6’ Chinese banks and ‘Big 5’ insurers have returned more than 2x the MSCI China since the beginning of 2024. It’s not all about catching the rips in Alibaba .

Yet it has felt much more appealing to write about baijiu innovators and Labubu dolls. This is wildly ironic for me given how significant the role of the financials (over 60% of my deal flow) was during the last 10 years of my investment banking career. I guess that’s the old PTSD kicking in again…

I mentioned back in January that the IPO of AIA was one of the first deals that I worked on upon returning to Hong Kong in 2010. The life insurer went on to compound like a complete beast for the next decade. A ‘one decision stock’ for any Asia-Pacific portfolio manager.

For someone that has been bullish on Chinese stocks since late 2023, I am kicking myself that it was not right at the top of my shopping list at HK$45 per share in early 2024.

Then last year in February, my pal (and excellent financials analyst) Erik wrote a great note on Ping An Group “YWR - +100% upside in Ping An”. I was super familiar with Ping An and loved his pitch. My reaction however was to pester about my strategic vision for its founder, Peter Ma (more on that later). This foolish rodent should have just bought the stock!

More on that later. I suspect that there has been a subliminal reason that I have not given much thought to these businesses. But why the hesitation? Because life insurers sit at the epicenter of my deep macro fears regarding the private credit market.

Over past decade, the Western life insurance industry has been hijacked by private equity. To manufacture yield, the sector’s balance sheets have been stuffed with private credit paper and levered CLOs. As the cycle starts to crack, Western insurance books look vulnerable.

Benny and I talked about this on Thursday evening - the link below will take you to the relevant segment.

Also, if you are not among the 104,000 viewers that have already seen it, take a moment to watch Steve Eisman explore how regulatory arbitrage is allowing ‘Team Saddlebags’ - having run out of capacity with the pension funds and endowments -to offload paper into captive insurer vehicles. Should be mandatory viewing for anyone that owns a life insurance policy or an annuity.

Most Asian lifers have limited need to engineer yield via private credit (with the possible exception of those crazy Taiwanese lifers)1. Their growth comes from pure demographics, and they have the ability to match their long-duration liabilities with traditional financial assets.

The Great Forced Migration of Household Savings

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Show was recorded at 6.45pm EST on Thursday 23rd April, 2026. Larry McDonald was unwell and unable to join but we pressed on anyway as there is so much to talk about!

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Show was recorded at 7.15pm EST on Easter Sunday 19th April, 2026.

This coming Thursday we will be joined by Larry McDonald of “Bear Traps Report” fame.

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In case you missed it, the weekend flagship note came out on Friday morning. In it we launched our refreshed basket of European defense stocks.

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Pulled back into the Pack

The month-do-date finviz risk board (below) is not really what the 🐿️ wanted to see having de-grossed so aggressively (ex-Energy) starting in mid-February.

Even with another significant mark down week for the hedge book, BUSHY™ managed to add 29bps for the week.

We will come back to the portfolio review after going through some immediate ‘Start the Week’ action items:

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I got the weekend note out very early this week. We are reconstructing our defense basket. The ‘Start the Week’ note will be in inboxes 7am EST on Sunday Morning (also early).

The Weekend Note:

Paid subscribers who would like to listen to these pods on their favorite podcast app (instead of via a browser or the Substack app) can set this up very easily. Click this link while on the device you use to listen to podcasts.

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I am sending this ‘Monday Morning’ Note very early this week. A new record!

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As kids, when horizontal Scottish rain (in August) forced the 🐿️ and his brother off the golf links of East Lothian, we were soon pleading with our father and uncle to sit down for some family male bonding via a game of Risk, the 1950s board game based on world domination.

The game would often end in tears when invading armies engaged with the wrong ‘Armchair General’.

My pal made me laugh the other day when he mentioned everybody’s favorite Risk strategy - the occupation of Oceania with a massive blocking army in “Siam”. It works about as well as building 4 houses on those statistically significant orange properties on the Monopoly board.

But it got me thinking. There is a better analogy. When Risk was designed in the 1950s, the game perfectly captured the military doctrines of WWII and the early Cold War. The rule whereby the attacker gets 3 dice while the defender gets only 2 reflects an era of mass mobilization and Kursk or El Alamein style mass tank battles.

In this industrial era model, concentrating mass and taking the offensive yielded a statistical advantage. With three dice against two, the attacker can expect to have the 2 highest dice 37.2% of the time, while the defender only has them 29.3% of the time. This 8% spread in favor of the aggressor - even after accounting for the fact that defenders win ties - dictates the entire strategy of the game.

The Ukraine battlefield and the current conflict in the Middle East have inverted the math. In a world of cheap FPV drones, loitering munitions and electronic warfare, the defender is no longer defending static trenches with inferior armor. They have their cheap and lethal eyes in the sky (and on land and sea). Additionally, sheer volume dominance of naval and air materiel no longer guarantees supremacy.

The defender just got itself a 3rd die - with a profound impact on the game probabilities.

If Risk were to adopt this rule, the game would immediately devolve into a brutal, grinding stalemate. Nobody would ever attack because pushing forward mathematically guarantees disproportionate attrition. Nobody would play the game. I guess there is a (John & Yoko-ish) message in there…

It also means that we need to rethink our positioning in global defense stocks. I first introduced EuroMIC, our basket of UK and European defense stocks in November 2024 (“Lost Umbrella”).

EuroMIC has comprehensively outperformed the broad-based European and US Aerospace and Defense sectors. However, on a growth adjusted basis, this European group still looks inexpensive relative to the US Military Industrial Complex giants.

Consistent upgrades to consensus earnings for the Europeans has kept the group’s average PEG (NTM) ratio reasonable - only 0.29 above where it was in November 2024. The US comps - now on a PEG (NTM) of 2.52 - trade 0.2 below where they were 18 months ago.

So far, all is going to plan. However, I do think the 🐿️’s defense portfolio requires an upgrade. The focus of the original thesis was what I then saw as an inevitable response by Europe to the risk of impairment to its NATO-led security umbrella.

As the US security blanket gets stretched too thin to cover the Middle East and Asia simultaneously, the scramble for sovereign defense has become a worldwide necessity.

Current Positioning

18 months into this strategy, the composition of EuroMIC has shifted significantly. At the individual stock level, EuroMIC was turbo-ed by 3 stocks (Rolls-Royce, Rheinmetall and Saab) returning over 100% in 2025 alone.

No complaints from the 🐿️ but due to some epic stock price moves the current basket is now heavily tilted towards the giants of the old world of defense procurement.

I am not saying that some of these great businesses will not play an important role in the drone / asymmetric war era. It is just that the contribution (and profits) will likely get lost in the context of wider civilian aerospace activity.

Introducing the upgrade: NWOMIC™

NWOMIC™ is the ‘New World Order’ Military Industrial Complex. The portfolio is being expanded to capture a broader geography (especially Asia) and adjusted to reflect the sub-sectors of the global defense landscape most likely to receive a disproportionate share of the spending wallet.

In March of last year (“Drones: Crashin’ or Cash in?”), I wanted to add more ‘drone beta’ to the EuroMIC basket but ultimately could not get comfortable with chasing the parabolic charts and valuations of some of the speculative pure play exposures.

We will remedy this now as part of a broader focus on the world of asymmetric warfare.

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In Episode 41, Benny & The Squirrel welcome to the show. Craig is Senior Macro Strategist at Ninja Trader, the largest retail futures broker in the US. He also writes the excellent macro note, .

The show was recorded at 6pm EST on Thursday 16th April.

Become a paid subscriber to get the audio edition, full show summary and the slide deck (it’s a fantastic one this week) - as well as the rest of the 🐿️’s tireless work!

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Show was recorded at 7.30pm EST on Sunday 12th April, 2026. Sorry for the late one - Benny could not tear himself away from his Masters watch party! Go Rory!

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Am sending out this note early as it was written before the breakdown of the Islamabad talks.

In case you missed it, the flagship note this weekend focused on global opportunities in the world of closed-end funds.

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In May 1993 - roughly eight months after even multiple hikes (to a back-breaking 15% policy rate) could not prevent Sterling from crashing out of the ERM on “Black Wednesday” - a BBC journalist asked UK Chancellor Norman Lamont which he regretted more - prematurely claiming to see “green shoots of recovery” in the UK economy a few months earlier (amid a rough ongoing recession) or “singing in his bath”.

This was a tabloid reference to him reportedly belting out show tunes through the soap suds while the ERM crisis unfolded. Lamont’s deadpan retort - “Je ne regrette rien”. Lamont took a lot of flack for that. Not deterred, the🐿️ is also going to channel his inner Edith Piaf this weekend.

The BUSHY™ ‘beta’ portfolio lost 4bps while its Vanguard target date benchmark advanced 3.47% on the back of last week’s ceasefire / ‘Mission Accomplished’ rally.

This is what will happen to a portfolio when you have cut significant length in equities without making corresponding cuts to the hedge book. The Strait is still not freely navigable. No regrets. The risk / reward of piling into risk assets so close to all time highs with the current backdrop feels poor.

Before we get to the weekly portfolio reviews, I want to follow up on the execution plan for those closed end funds.

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I got the weekend note out a day early this weekend. We looked at trading opportunities in the closed-end fund and investment trust universe. This podcast is NOT about that Hollywood Weinstein. The ‘Start the Week’ note will be in inboxes as usual at 7am EST on Monday Morning.

The Weekend Note:

Paid subscribers who would like to listen to these pods on their favorite podcast app (instead of via a browser or the Substack app) can set this up very easily. Click this link while on the device you use to listen to podcasts.

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Can everyone please take a breath. We have been dealing with a hot war in the Middle East for over a month yet it is a tough eye test to find an asset class (ex crypto, SaaS and precious metals) that is actually still in a drawdown of over 10% from its 52 week highs.

Global energy, industrial and agricultural supply chains have been damaged and, in some cases - Qatari LNG trains spring to mind - the repair job will be measured in years. Yet financial asset markets are pricing the ‘all clear’ and that any longer-term economic damage will just ‘buff out’ - as the auto body shop foreman might say.

The 🐿️’s response to this week’s cease fire ‘announcements’ has not been to join the hordes reaching for a stack of blue (buy) tickets - even when it comes to positions that I really like on a (current situation-adjusted) long term view. Looking at you Brazilian equities.

Instead, this rodent prefers to continue to polish his post-war risk asset ‘shopping list’ - these include the ShinyAcorns™, EM Tech and ‘Straya Ruggedization’ baskets as well as a complete refresh of ‘EuroMIC’ - the soon to be ‘NWOMIC’ (NWO = New World Order) - basket of global defense stocks (next weekend’s report - Drey members have already had some early previews on this).

This rodent is working harder than ever - just not pushing any buttons…

But there may be some candidates for an exception…

Alpha from (old) Access Products

When it comes to public equities, I could argue that there is no reason for closed-end mutual funds (‘CEFs’) to exist in the modern day. It is not hard to understand why asset managers like these sources of permanent fee-generating capital so much, but in a modern market that has more low cost ETFs than individual stocks, what purpose do they serve?

CEFs still make complete sense - in fact I would argue they are superior to ETFs as a collective investment vehicle when the underlying asset is illiquid (e.g., private equity, credit products, real estate). As long as investors fully understand that the lack of on-demand redemption is a feature not a bug.

Investors in CEFs should expect these vehicles to trade at a (sometimes very) wide discount to the value of their underlying assets (NAV). This, however, really should not be the case when the underlying investment is liquid public shares.

Activist investors such as Boaz Weinstein’s Saba Capital are absolutely correct when they argue that asset managers could do a much better job of shrinking these discounts by selling liquid underlying investments (at NAV) or taking on modest leverage to re-purchase or tender for discounted CEF shares in the open market.

However, it is only once Boaz parks an army of attorneys on the lawns of these asset managers and litigates to reassign the investment management contract that the fund houses reluctantly start to take action.

Back in 2023, after successful campaigns in the US, Saba’s activism crossed ‘the pond’ to shake up the sleepy world of the UK’s investment trust sector (the British version of a CEF). Weinstein continues to terrorize the clubby boardrooms of Edinburgh and the City of London to this day.

Quick History Lesson

In 1868, the Foreign & Colonial Government Trust (now known as the F&C Investment Trust (‘FCIT’) and still listed on the London Stock Exchange) was founded as the first collective investment scheme specifically designed to bring ‘stock market investing’ to those of ‘moderate means’.

The explicit original mandate was to democratize capital, allowing investors to access a diversified portfolio of high-yielding emerging market sovereign bonds and railway infrastructure projects. FCIT was famously the only investment trust share which John Maynard Keynes included in the portfolio he managed for his father in the run up to WW1. I wrote about FCIT - the original in more detail last June.

These days, investment trusts are the preferred vehicle for holding illiquid alternative assets such as PE and venture capital, renewables projects and other infrastructure assets and commercial property. The closed-end structure prevents the liquidity mismatches that frequently blow up open-ended vehicles during market panics.

UK trusts maintain strong, independent boards of directors with genuine fiduciary power. It is not uncommon for a UK trust board to fire an underperforming asset manager and hand the mandate to a rival shop. Even if Boaz does not think this happens nearly enough. He’s probably right.

The origin story for US CEFs is darker. They did not hit mainstream until the “roaring (19)20s” when they gained immense popularity, utilizing unchecked leverage to offer synthetic high yields. The promoters also had an unpleasant habit of using them as dumping grounds for illiquid assets that could not be sold in the open market. When the 1929 crash hit, that leverage wiped out retail punters.

The Investment Company Act of 1940 was eventually passed a decade later to impose borrowing limits on the CEFs but the sector never recovered its luster. These days the space is dominated by yield-chasing vehicles for retail investors, heavily skewed towards ‘muni’ bonds, MLPs and option overwriting strategies.

But there are a couple of diamonds in the rough. More on that later.

The Barings Play Book

The 🐿️’s first permanent job in finance was at the soon-to-detonate British merchant bank, Barings. Baring Securities was at the forefront of emerging market investment banking in the early 1990s. There was a well established playbook.

A satellite office would be opened in Taipei / Seoul / Bangkok / Jakarta / Santiago and a research team would go straight to work writing “The Country Book” - a glossy market initiation report containing a bit of macro plus profiles of the dozen largest listed stocks - invariably a cement company, a brewery and a couple of banks.

Many of these new markets would be impossible for most (even institutional) investors to invest in directly due to either foreign ownership restrictions or the lack of local custody arrangements that would satisfy their fiduciary mandates.

Shortly thereafter, Baring Asset Management would launch its latest investment trust - “The Barings [insert name] Country Fund” as an access product for global institutional investors and wealth managers. Some of the funds even traded at a premium to NAV as investors chased the latest ‘hot’ new EM.

Within a couple of years, most large international investors had figured out their direct market access issues and the 🐿️ and his colleagues had executed London-listed GDR or New York listed ADR offerings for the blue chips in these countries - for those investors who still did not have direct access and those that did but wanted to buy their favorite EM stocks at a small discount.

The country funds had served their initial purpose and would gradually start to trade to a discount to NAV until they started to attract the attention of the ‘trust-busting’ predecessors of Boaz Weinstein. Barings’ investment bankers would be hired to organize the defense and ultimate restructuring. The circle of life was complete!

Before we get to the main topic, a quick 🐿️ PSA:

The Opportunity

Back to those potential exceptions that might lure the 🐿️ away from his current buying strike.

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In Episode 41, Benny & The Squirrel welcome back Charlie Peabody to the show. Charlie is a partner and the founder of financials specialist Portales Partners. The show was recorded at 6pm EST on Thursday 9th April.

Become a paid subscriber to get the audio edition, full show summary and the slide deck (it’s a fantastic one this week) - as well as the rest of the 🐿️’s tireless work!

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Happy Easter to all who celebrate. This weekend’s note was a Benny & The Squirrel collaboration! We previewed the jumbo SpaceX IPO. The two of us have moved a decent amount of primary paper between us over our careers. And this one is a doozy!

The Weekend Note:

Slides from the Sunday night edition of Benny & The Squirrel

2.01MB ∙ PDF file

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Music from Max Slorach. Find him at:

email: maxonsaxentertainment@gmail.com / web: maxonsax.com.au

Thanks for listening!

Squirrel Out!

In case you missed it, the weekend note was a deep dive (in collaboration my podcasting partner Benny) on the SpaceX IPO and its broader implications of this jumbo transaction on markets.

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BUSHY™ is still in the process of slowly clawing its way back to the beta portfolio’s YTD high water mark set in late February. Having de-grossed aggressively (starting mid February), it is not surprising that we underperformed during last week’s strong rally in risk assets.

Quite comfortable staying underweight risk. At risk of repetition, the portfolio will stay that way until the Straits of Hormuz are re-opened. I see no upside in being tempted to jump the gun.

BUSHY™ closed Q1 +8.43% - 9.57% ahead of the Vanguard benchmark and 13.07% ahead of the S&P 500 - adding 18 bps in the first 2 trading days of Q2.

BUSHY™ and Acorn Review

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Show was recorded at 6.30pm EST on Easter Sunday 5th April, 2026.

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Happy Easter to all who celebrate. This weekend’s note is a Benny & The Squirrel collaboration! We preview the jumbo SpaceX IPO. The two of us have moved a decent amount of primary paper between us over our careers. And this one is a doozy!

Subscribe now via Website

This note falls into 4 parts:

1. Background and Valuing the core SpaceX business (Starlink and Launch).

2. Dealing with the Pixie Dust and Jazz Hands (the xAI / Space Data Center bit).

3. Deal Dynamics (i.e., who buys all the paper).

4. The Liquidity Black Hole (why this matters to you even if you have no interest in the SpaceX IPO).

Having been an equity capital markets banker for over 25 years, the 🐿️ can safely say that he does not envy the task facing Wall Street’s finest later on this year. This is also one of those deals where the folk on the buyside have no choice but to pay attention. Sitting as an analyst at Fidelity in Boston, a younger Benny could typically be as picky as he wanted to be about the IPO calendar.

However, there are certain moments when a deal comes along that has proper “pay attention” factor for any manager of equities with (or without) a benchmark. The SpaceX IPO is one of those moments.

We started chatting about this topic over a month ago, while Benny was dodging Iranian missiles in an undisclosed bunker 5 star hotel in the Emirates.

I can say off the bat that it is unlikely that either of us will be subscribing for shares in the deal. Even if you also fall into that camp, please stick with us as the deal itself has some important market structure implications.

None of these implications are likely to be discussed in mainstream channels - the underwriting bank fee pool is likely to be measured ‘in the high 100s of millions’ of dollars (even if the issuer negotiates a chunky discount to the normal 4-7% of proceeds gross spread). That number buys a lot of cheerleading.

The cheerleading will not just come from the well-compensated sell-side. SpaceX/ xAI already has a highly diversified cap table…

…full of very vocal investors that (i) will be all over CNBC and (ii) who mostly acquired their SpaceX shares at a fraction of the price currently being touted by Musk. Block your eyes and ears!

However, when we start bandying around fighting talk like “concept valuation paper”, it behooves us to show our workings. The 🐿️ had a crack at handling the topic of valuing SpaceX back in October 2024 (‘To Boldly Go’). An extract:

As you can see, back then the 🐿️ was leaning towards the view that SpaceX was probably undervalued in the private markets IF you were to take the October ‘24 ‘back of napkin’ math above at face value. Indeed, by late 2024, the market had been pretty quick to update that space TAM market share assumption.

In the past 6 months however, the SpaceX valuation has risen to the extent that it is now priced at a 20% premium to the value of the 2040 space industry (in today’s money). Don’t forget that the space revenue TAM this was based on came from Morgan Stanley’s Adam Jonas - not known for his conservative assumptions as relates to Elon Musk connected projects…

Now that we have a potential deal within line of sight, it is time to do the bottom up work. We have built a multi-scenario valuation model for SpaceX. After that, we consider the implications / viability of an up to $115 billion equity raise by the company. Strap-in!

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In Episode 39, Benny & The Squirrel welcome , CIO of Brumby Capital and author of the Substack (one of our favorites). The show was recorded at 3pm EST on Wednesday 1st April.

Become a paid subscriber to get the audio edition, full show summary and the slide deck - as well as the rest of the 🐿️’s tireless work!

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