‘Start the Week’ is coming to you slightly late given the long weekend in the US.
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’s edition will focus on risk management and hedging as we make plans to navigate a seasonally tough time of year.
While you are here please ensure that you are signed up directly for Benny & The Squirrel - some exciting developments in the making!
In the weekend flagship note, the ‘🐿️20-for-20’ portfolio journey continued as we assembled our shortlist picks in the resources sector. Check it out via the link below 👇:
Autumn Hedging Plans
During my time on the sell side, the week following the Labor Day weekend in the US was one of the busiest of the year, as corporates raced to catch the post-summer capital markets issuance window before their June 30th financial statements went ‘stale’ in the second week of November.
I always found it ironic that auditing calendars and holiday plans forced issuers into one of the most seasonally choppy windows of the year from a risk perspective. Aside from seasonality, the Fall of 2026 gives us some extra risk juice in the form of a couple of ‘live’ Fed meetings, the mid-terms and the Anthropic IPO (which - the 🐿️’s astonishment - appears to be growing by the day).
Yet markets feel remarkably complacent - the dispersion trade (traders long single stock volatility against short positions at index level vol) dominates leaving the VIX and VIX (vol of vol) bumping along the floor.
Notwithstanding the kabuki theater of the ‘Three Soros Amigos’ (Bessent, Warsh and Druckenmiller) publicly squabbling about monetary policy, US Treasury volatility remains remarkable subdued.
Notwithstanding all the jumpiness about seasonality above, this window last year turned out to be a decent performance period for the BUSHY™ portfolio in 2025. It was not until closer to Halloween that we started to chop.
BUSHY™ closed on Friday exactly 150bps behind where the portfolio was in terms of YTD performance at this time in 2025.
The portfolio has clambered back out of the drawdown that started at the outset of the Iran war and accelerated after a premature call of the bottom in front month crude in early June. This drawdown maxed out at -6.43% at the end of June )(steeper than the 4.86% ‘Liberation Week’ drawdown of last year).
BUSHY™ is currently sitting with the following allocation:
So how are we planning to protect ourselves: