Blind Squirrel Macro is back to its regular publishing cadence. The weekend flagship note focused on the challenge of underwriting the industrials sleeve of the ‘20-fo-20’ portfolio. Cycle-high multiples for the cyclicals is the issue. Report here 👇:

BUSHY™ held up well in the context of a tough week for global risk assets. Energy and the RSP/QQQ position in US equities provided the buffer. 2 new positions added during the week. Full report below.

A quick reminder that the BUSHY™ portfolio is investable via a single click on the Plutus platform (as will the ‘20-for-20’ when launched) - full details in my July launch note linked below or the website via the button underneath.

Check out BUSHY™ on Plutus

Weekend Tape Bombs

Am writing this note on Monday morning (Australia time) as overnight markets absorb a number of the weekend’s market-moving events:

• The shock win for Lula in Brazil’s Presidential run off. A nasty unwind of BRL and longs will be a tough start to the week for hot money pools and carry traders. Regular readers will know that the 🐿️ believes that the key driver of Brazilian equities is commodity prices, not politics. I remain a commodity bull and will be in the hunt for bargains if the sell-off gets overdone.

• More anticipated news was the Conservative party’s first election win in nearly a century in British Columbia. This is another piece in the jigsaw that underwrites our overweight position in #COM (the Canadian Oil Mafia) - another win for the diversification of Canada’s energy export markets.

• Anthropic’s IPO S-1 filing failed to materialize as anticipated on Friday. I cannot decide if this is a good or bad sign for the overall AI narrative. Is this a delay driven by investor feedback to the underwriting syndicate or by recent AI safety / rogue agent scares? Neither good.

My sense is that the market is not ready to see Anthropic’s audited financial statements in their ‘full glory’. We have been teased various ARR numbers from the model labs in the past year. It is these numbers that have been the backbone of the AI capex narrative.

Concerns around this narrative have finally come for the copper stocks in the past couple of months. Our preferred play on the copper theme (plus seaborne coal and multi-polar world arbitrage) is Glencore - which has under-performed the (very pricey) pure play copper stocks and which is now flirting with its 200-day SMA for the first time since last summer.

Glencore remains a core Acorn position for now. It would be naive, however, to assume that cyclical miners can be immune from a nasty drawdown if the AI-driven global growth narrative gets punctured beneath the water line.

I completely understand the arguments around ‘unlimited compute demand’ from the AI bulls. However, the more important question relating to who ultimately pays for it remains unanswered. Am not sure that Torsten Slok has a queue of colleagues joining his table at the Apollo staff canteen after this missive (‘No Signs of AI Payoff Outside the Tech Sector’) from Saturday…

On this point, Paul Kedrosky has put together an excellent AI capex revenue hurdle calculator. It translates AI capital expenditure into a required level of supporting external revenue. It then expresses that requirement relative to GDP, global software revenue and the US white-collar salary pool.

The calculator poses some tough questions.

BUSHY™ Review and Acorn Update

We added 2 new positions to the beta portfolio last week:

Read more

IMPORTANT NOTICE

Fully revamped and upgraded show notes (plus lots of bonus content and material) are now being sent out by Benny & The Squirrel directly. These notes will usually come out a few hours after the show is live on YouTube.

Please sign up via the link below.

Benny & The Squirrel

Benny & The Squirrel is a twice weekly show about finance and markets. The show notes for members are hosted here on Substack.

By Benny and the Squirrel

Episode 98 and another unmissable Sunday Show! The AI trade is getting flushed. But is this the big one, or just another crowded-position unwind? We unpack the widening cracks in AI financing, why booming compute demand does not automatically mean booming revenue, and whether the S&P equal weight’s comeback signals a genuine market rotation.

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.

The Visuals and Links

Read more

The Factory Comes With a Price Tag

As promised, this week the 🐿️ continues the quest to short list the industrials candidates for the ‘20-for-20’ portfolio.

What I did not do in Sunday’s note was review how the 2 hypothetical ‘2006 for 2026’ portfolio’s industrials picks would have performed. Let’s do that now.

The (go with the prevailing dominant themes and narratives) ‘Extrapolation’ portfolio owned a couple of auto stocks (bad), 2 mobile handset manufacturers (very bad - if you want to qualify them as industrials) and GE (which at that time was really a financials story).

These names barely feature in today’s ‘2046’ long list. China has changed the complexion of the global auto industry in the past 5 years - a very different sector to underwrite… The 2 ‘GEs’ (Aerospace and Vernova) in the list today will need to be underwritten on a very different basis!

The (an attempt to look around the macro corners without too much hindsight 😉) ‘Mosaic’ portfolio owned 5 names (highlighted below) that all feature in today’s long list (and continue to score well as 2046 candidates).

These names ‘performed’ well - all up between 4x (Fanuc) and an impressive 20x (for Caterpillar - flattered by the last 18 months masquerading as an ‘AI bottleneck bro’ stock) over that 2 decade period - but were frankly a rounding error in terms of overall portfolio attribution when set against the gargantuan moves of the big tech and chip stocks.

But that’s the conventional role of industrials in a diversified stock portfolio - to steadily compound returns through the cycle. The total transformation of valuation multiples and business economics for an industrial should - let’s be honest - be incredibly rare.

Underwriting the industrials sleeve of the 2046 portfolio today presents a unique challenge. Last Sunday’s note pointed out that:

1. Many of the industrial beneficiaries of the AI capex build, global rearmament and industrial re-shoring themes have already seen significant multiple expansion

2. Each of our mosaic of 10 mosaic themes has significant - in many cases binary - positive or negative first-order impacts on these sub-sectors

With much of the current narratives already well priced in to the stocks of historically highly cyclical businesses, we will have to tread carefully.

Quick Reminder of the Rules

We run each stock in the long list (full spreadsheet downloadable at the end of the note) through our 3 screens:

• theme mosaic (attempting to identify winners in multiple worlds and avoid stocks that get wiped out in certain scenarios)

• quality (returns on capital, free cash flow quality, moats and governance)

• valuation (with a focus on implied returns and multiples relative to historical ranges)

A company can score well across the 2046 mosaic, get full marks on the quality screen and still be a poor investment at today’s price. The valuation gate is critical for the industrials group.

The 🐿️ has whittled the group down to a short list of 9 stocks from which probably a maximum of 3 or 4 (given the de-rating risks highlighted above) will make it to the final ‘20-for-20’ portfolio.

Read more

IMPORTANT NOTICE

Fully revamped and upgraded show notes (plus lots of bonus content and material) are now being sent out by Benny & The Squirrel directly. These notes will usually come out a few hours after the show is live on YouTube.

Please sign up via the link below.

Benny & The Squirrel

Benny & The Squirrel is a twice weekly show about finance and markets. The show notes for members are hosted here on Substack.

By Benny and the Squirrel

In Episode 97, Benny & The Squirrel are joined by , author of . Nick has spent fifteen months buried in 10,000 page statutory insurance filings, and what he found should worry anyone with an annuity, a life policy, or exposure to credit markets.

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.

The Visuals and Links:

The Long List

Music from Max Slorach. Find him at:

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

Thanks for listening!

Squirrel Out!

IMPORTANT NOTICE

Fully revamped and upgraded show notes (plus lots of bonus content and material) are now being sent out by Benny & The Squirrel directly. These notes will usually come out a few hours after the show is live on YouTube.

Please sign up via the link below.

Benny & The Squirrel

Benny & The Squirrel is a twice weekly show about finance and markets. The show notes for members are hosted here on Substack.

By Benny and the Squirrel

For Episode 96 the show brings 'Black Monday' (we think not!) chatter, neocloud CDS blow outs, and Brent 2027 going vertical. We break down the first real pain at index level this year, why the AI unwind is a positioning flush and not the big one, the sovereign backstop question hanging over Anthropic / OpenAI and the data center complex, and where the smart money is actually hiding. All that, plus the Squirrel's latest work on the 'Twenty for Twenty' portfolio (Global Industrials) and why BYD might be the world's most impressive industrial company but a less impressive stock.

BUSHY™ enjoyed a solid week last week amid the general turmoil in equity markets. Full report below.

A quick reminder that the BUSHY™ portfolio is investable via a single click on the Plutus platform (as will the ‘20-for-20’ when launched) - full details in my July launch note linked below or the website via the button underneath.

Check out BUSHY™ on Plutus

History Needs Hardware

For newer subscribers, a quick reminder as to the background and thesis for the ‘🐿️-20-for-20’ project.

Report 2 covered the financials sector, focused on the plumbing of the world in two decades’ time - shortlisting only one commercial bank globally, 3 insurers, 2 exchanges and 3 other asset light intermediaries.

… while Report 3 took on the resources sector, shortlisting 4 energy stocks, 4 precious metal pure plays and our preferred 2 copper plays:

Now we turn to the sector that helps convert those resource atoms into real stuff - the global (military and commercial) industrials complex. I currently have 61 candidates in the long list - names straddling multiple GICS industry sectors.

I have broken the long list down into 5 sub-groups (several companies crop up in multiple groups). The semiconductor supply chain will be handled separately.

• Power & Grid (including energy storage)

• Aerospace & Space

• Defense & Security

• Machinery & Automation

• Infrastructure & Logistics

No changes to the framework. Long list names are screened against our mosaic of ten potential world-states for 2046 (remember these are lenses, not forecasts and can contradict / overlap). Shortlisted names will be companies that can thrive in multiple scenarios.

For industrials, the theme mosaic hits differently. In resources, the themes pointed us towards particular commodities and sub-sectors. Here, almost every theme creates an industrial shopping list. The harder question is which on the list can generate durable shareholder returns - and how much we are already being asked to pay for them.

Even Longevity (T9), which I saw primarily as a healthcare / insurance theme before, becomes an important theme for the industrials. Larger, aged societies will of course compete for resources and services and we need to think about a world of robo-nurses!

T2 (Constrained Physical Capacity) the theme that dominated the resources report will clearly be critical with respect to all industrials segments - the problem will be underwriting some full valuations.

Two big tensions stand out from the broader industrials debate.

Expensive Plumbing

First, the electrification wager. Everyone with a pulse now knows that the world needs more electrons. However the market has taken a multi-decade infrastructure build story and priced it like software stocks in their glory days!

Gas turbine and even humble cable makers trade as data-center / AI derivatives. Somewhere along the chain from a GE turbine via Prysmian submarine cable to a Vertiv chiller, the well-defined need to move kilowatts has become a pricy bet on sustained capex enthusiasm.

This summer has seen some of the heat taken out of multiples but they continue to trade at levels that could easily halve again with any further market questioning of the AI capex narrative.

Subscribe now

The Spend Stays even if Fukuyama was Correct

The second tension relates to history, or rather about what it costs to be wrong about it! Defense spending gets lazily talked about as a bet on conflict continuing. I think this framing is wrong. Rearmament is a bill that Europe deferred for thirty years. The past five years have finally focused political minds.

The defense thesis does not require an endless escalation of conflict. Stockpile replenishment, replacement programs and the rebuilding of industrial capacity provide a demand case even in a less hostile world. That is not a guarantee against budget reversals or against overpaying for the contractors.

Civilian aerospace offers a different route through the mosaic. Under T8, growing emerging-market traffic and higher aircraft utilization would work the installed fleet harder, supporting the engine aftermarket and its recurring service revenues.

The Elephant in the Room

When it comes to industrials, China sits above our theme mosaic. It is the customer, supplier and competitor sitting behind almost every global industrial business. You can buy a Japanese robot maker, a European electrical-equipment company or a Korean shipyard. But none offers an escape from the China question.

As my pals and like to say “When China enters the room, margins leave” - this is is a useful starting point for industrial underwriting and a warning against extrapolating today’s profitability twenty years into the future.

The European Parliament’s March study on China’s industrial overcapacity (linked to via the image above) describes the problem - formidable manufacturing capacity competing for demand, with consequences for prices and returns both inside China and overseas.

It would be comforting to dismiss all of this as subsidies and wasteful excess capacity. Also a suboptimal process for picking stocks. A business that can defend its margins against an inferior product is one thing - but in many cases, Chinese high tech products are already both better and cheaper.

Nor does Chinese industrial success necessarily translate into attractive returns for shareholders in Chinese manufacturers. For example, I think there are strong arguments that BYD is the world’s most impressive industrial company. Does that make it ‘a lock’ for the ‘20-for-20’ book? Not necessarily. As a tool of China’s national industrial policy, this great business may not necessarily end up being a great stock.

In a deglobalizing world, are margin structures being created outside of China that are truly unsustainable? A reshoring beneficiary operating behind trade barriers may report excellent returns on capital, strong pricing and a reassuring order book. But we have to distinguish between earned margins and those that are granted by policy.

Protectionism can be durable. Sovereign resilience is one of the reasons we are looking at these businesses in the first place. But we can’t pay up for a favorable local procurement setup masquerading as a permanent competitive advantage. Over twenty years, the rules and the governments writing them can all change.

Each short-listed industrial stock for ‘20-for-20’ needs to clear a specific China screen: has China entered their market and what stops Chinese competition from arriving ahead of 2046? What would a business earn without its current or expected protection? We cannot calculate this scientifically but we can certainly try to stress test it.

The Long List

In the next report, we run the 61 names on the long list below through this stress test plus our 3 systematic screens - theme mosaic score, quality score and valuation score.

Read more

IMPORTANT NOTICE

Fully revamped and upgraded show notes (plus lots of bonus content and material) are now being sent out by Benny & The Squirrel directly. These notes will usually come out a few hours after the show is live on YouTube.

Please sign up via the link below.

Benny & The Squirrel

Benny & The Squirrel is a twice weekly show about finance and markets. The show notes for members are hosted here on Substack.

By Benny and the Squirrel

In Episode 95, our pal Tom Roderick (Trium Capital) is back with us on CPI day as a hotter print cracks a tape that already felt fragile. Recorded at Noon EST on Wednesday 14th October.

We get into why the short end rates trade has been a slog, why Tom prefers steepeners to outright receivers, and how France, bank carry pain and hyperscaler supply are all feeding the same problem: a rising cost of capital.

From there it is CoreWeave spreads; negative hyperscaler free cash flow; the China AI and oil collar; South African 9.5% bonds; Brazil ahead of the second round; A-shares versus Hong Kong tech; Europe drifting right - a potential Le Pen versus Mélenchon runoff; and why gold keeps struggling when real rates rise.

Blind Squirrel Macro’s ‘Start The Week’ note is the weekly review of the BUSHY™ beta portfolio and updates on our ‘Acorn’ trades - anything from single stock ideas and thematic baskets to FX / Credit / Commodity ideas.

Subscribe now

BUSHY™ Review and Acorn Update

Another decent week for the beta portfolio. Most asset sleeves were positive and (partially crystalized) gains in the hedge book drove solid outperformance versus the Vanguard benchmark and the S&P 500.

BUSHY™ is keeping pace with US equities year-to-date with very limited exposure to the central AI trade outside of general equity index length within the CTA sleeve. The portfolio is running at 8.43% weekly annualized volatility, a Sharpe ratio of 1.51 and Sortino ratio of 3.09.

The portfolio has clawed back the bulk of its September drawdown but matching 2025 total returns will require some heavy lifting in Q4. I do not plan on taking any excessive risks to achieve that end. Risk management is front of mind. It feels like steam is coming out of the AI trade and I am not convinced that that trade can unwind without collateral damage in other risk assets.

Check out BUSHY™ on Plutus

Let’s dig into the numbers and last week’s portfolio changes…

Read more

IMPORTANT NOTICE

Fully revamped and upgraded show notes (plus lots of bonus content and material) are now being sent out by Benny & The Squirrel directly. These notes will usually come out a few hours after the show is live on YouTube.

Please sign up via the link below.

Benny & The Squirrel

Benny & The Squirrel is a twice weekly show about finance and markets. The show notes for members are hosted here on Substack.

By Benny and the Squirrel

In Episode 94: The free cash flow countdown on AI capex has hit zero, and the bond market is starting to say no. Benny joins from Milwaukee ahead of Brewers vs Dodgers NLCS Game 1, the Squirrel is back in Oxfordshire after a 15-hour drive through France, and the boys go around the houses: the pulled Firmus float on the ASX, hyperscaler CDS at junk levels, why 5% on the long end is anything but “agnostic”, two rate-sensitive stocks worth your attention, Brazil's pension fund powder keg, and why France is the G7 debt story into April.

IMPORTANT NOTICE

Fully revamped and upgraded show notes (plus lots of bonus content and material) are now being sent out by Benny & The Squirrel directly. These notes will usually come out a few hours after the show is live on YouTube.

Please sign up via the link below.

Benny & The Squirrel

Benny & The Squirrel is a twice weekly show about finance and markets. The show notes for members are hosted here on Substack.

By Benny and the Squirrel

In Episode 93 of ⁨the show, our mate Charlie Peabody of Portales Partners returns for our quarterly bank earnings special. Banks peaked in August/September, and Charlie thinks the balance sheet, not the P&L, is about to drive this market lower. We cover credit cards, BNPL, Goldman's prime broking boom, the Situational Awareness liquidation, the Treasury basis trade, SDR monetization, stablecoins versus deposit franchises, and what Q3 earnings will actually show.

This week the 🐿️ answers the (perfectly reasonable!) question as to why almost 8% of his beta portfolio (BUSHY™) is sitting in emerging market local currency fixed income paper (with over half of that exposure in Africa!). September was a tough month for carry traders. It’s time to re-underwrite.

Subscribe now

The Global Bond Headache

2 decade highs in US Treasury yields and stress in the French OATs market have made all of the recent headlines and the US dollar index looks to be finally following through on that long-threatened breakout. BUSHY™’s EURUSD puts well and truly earned their keep in the past week...

With this backdrop, less column inches have been dedicated to the pain in emerging market bonds. As such, you need to keep an eye on the experts. The ‘Hunger Games’ appear to have come for EM borrowers.

, the Templeton Emerging Markets Income Fund - an unconstrained closed-end fund invested in local currency EM paper - has been a bedrock of my BUSHY™ beta portfolio since 2023.

With a near double-digit (non-manufactured) dividend yield (I always re-invest the monthly payout) TEI has been a steady performer throughout that period. I even added to the position in mid June. Then came September…

Bond bulls and carry traders got smashed last month. MXN and ZAR - the two currencies doing much of the recent performance heavy lifting inside TEI’s book - gave back, between them, most of their year.

The 2 charts below illustrate the impact on JPY-funded Mexican Peso…

… and South African Rand carry traders:

$CEW - The WisdomTree EM Currency ETF gave back 50% of its year in September:

TEI’s NAV total return was running at +11% at the end of August. The closed end fund just lost 9% in price (not NAV - more on that later) over the course of September.

EM local currency paper has bounced back well from carry shocks of the past (summer of 2023, ‘Liberation Week’ and the outset of the Iran War). Will it do so again?

Decomposing TEI’s Year

Read more

IMPORTANT NOTICE

Fully revamped and upgraded show notes (plus lots of bonus content and material) are now being sent out by Benny & The Squirrel directly. These notes will usually come out a few hours after the show is live on YouTube.

Please sign up via the link below.

Benny & The Squirrel

Benny & The Squirrel is a twice weekly show about finance and markets. The show notes for members are hosted here on Substack.

By Benny and the Squirrel

Episode 92 was recorded at 2pm EST on Sunday 4th October, 2026

IMPORTANT NOTICE

Fully revamped and upgraded show notes (plus lots of bonus content and material) are now being sent out by Benny & The Squirrel directly. These notes will usually come out a few hours after the show is live on YouTube.

Please sign up via the link below.

Benny & The Squirrel

Benny & The Squirrel is a twice weekly show about finance and markets. The show notes for members are hosted here on Substack.

By Benny and the Squirrel

Episode 91 was recorded at 5.30 EST on Wednesday 30th September, 2026. We were joined by . Izzy is the founder of the Blind Spot, a finance and ideas publication. Best known as the former editor of FT Alphaville at the Financial Times, she is now a contributor at The Daily Telegraph and a widely read commentator on markets, monetary policy and the economics of AI.

Blind Squirrel Macro’s ‘Start The Week’ note is the weekly review of the BUSHY™ beta portfolio and updates on our ‘Acorn’ trades - anything from single stock ideas and thematic baskets to FX / Credit / Commodity ideas.

This week we are reviewing our energy positions, our US equity factor bet, BUSHY™ FX hedge, defending a recent fixed income addition and laying out a reshuffle in EM equity exposure.

Subscribe now

The 🐿️’s beta portfolio has given back ground versus its Vanguard Target Date fund benchmark (VTTHX) and the S&P (SPY) over the past fortnight but closed on Friday up 12.45% YTD with a realized annualized weekly volatility of 8.53% (vs 13.6% for SPY and 16.5% for VTTHX).

BUSHY™ has now returned 38.16% since public launch at the beginning of 2025:

Current positioning:

A quick reminder that the BUSHY™ portfolio is available via a single click on the Plutus platform - full details in my July launch note linked below.

Check out BUSHY™ on Plutus

BUSHY™ Review and Acorn Update

Let’s dig into the numbers and the portfolio changes…

Read more

IMPORTANT NOTICE

Fully revamped and upgraded show notes (plus lots of bonus content and material) are now being sent out by Benny & The Squirrel directly. These notes will usually come out a few hours after the show is live on YouTube.

Please sign up via the link below.

Benny & The Squirrel

Benny & The Squirrel is a twice weekly show about finance and markets. The show notes for members are hosted here on Substack.

By Benny and the Squirrel

Episode 90 was recorded at 2pm EST on Sunday 27th September, 2026

Blind Squirrel Macro’s ‘Start The Week’ note is the weekly review of the BUSHY™ beta portfolio and updates on our ‘Acorn’ trades - anything from single stock ideas and thematic baskets to FX / Credit / Commodity ideas.

While you are here please ensure that you are signed up directly for Benny & The Squirrel - some exciting developments in the making!

Benny & The Squirrel

Benny & The Squirrel is a twice weekly show about finance and markets. The show notes for members are hosted here on Substack.

By Benny and the Squirrel

In the weekend flagship note, we consider whether or not it is time to look through the ASEAN energy shock. Check it out via the link below 👇:

Read more

IMPORTANT NOTICE

Fully revamped and upgraded show notes (plus lots of bonus content and material) are now being sent out by Benny & The Squirrel directly. These notes will usually come out a few hours after the show is live on YouTube.

Please sign up via the link below.

Benny & The Squirrel

Benny & The Squirrel is a twice weekly show about finance and markets. The show notes for members are hosted here on Substack.

By Benny and the Squirrel

Episode 88 was recorded at 6.30 EST on Sunday 20th September, 2026

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.

Read more