Strait still closed? Then Carry on Selling.
The 🐿️'s 'Start the Week' note! Our weekly review of BUSHY™ and live Acorn trade ideas. 2026, Week 11.
In case you missed it, I used the weekend note to re-underwrite each position in the Acorn short book. In a world in which maintaining length in risk assets seems like a dangerous pursuit, a short book is an important insurance policy 👇.
PSA🚨: Blind Squirrel Macro has been de-grossing for well over a month. Making money on the portfolios’ hedges in January was ‘the tell’ for the 🐿️. I think we are now at the stage that every single day that the Strait of Hormuz is closed you should sell some more long positions. That’s what we will be doing.
Sunday night update (Monday late morning my time): This futures open looks SPECTACULARLY COMPLACENT. Act accordingly.
Listen, I get it: “What if it all blows over? Risk assets will rip and I will be playing catch-up for the rest of 2026!”. Simple. Take out some FOMO insurance.
We are already running out of diesel here in Australia. The government is talking about fuel rationing plans that could be in force in the next few weeks. I need to fly up to Asia at the end of the month. Fuel surcharges are one thing - I am more concerned about outright flight cancellations.
Australia refines approximately 20,000 barrels per day of conventional jet fuel domestically. This meets less than 20% of the country’s aviation demand - the rest comes from international imports. These are not currently flowing. I live a long way away from most places - planes that fly down under do not have enough in the tank for the journey home…
Unsurprisingly, the airline sector has shed almost 30% of market cap since late January - well before the time that the missiles and drones started flying. Are listed airlines potentially the ultimate de-escalation trade?
What if for every few percentage points that you take down your net long exposure you add a ‘right tail’ of airline upside? You can buy 15% delta calls on JETS 0.00%↑ - the airline ETF - for 37% implied vol. Basically pennies. An inexpensive way to dull the FOMO. Link to OptionStrat payoff model via the image below.
I will have discussed this in more detail with Benny on the Sunday show (never miss one!) but at least you are getting this before the JETS 0.00%↑ calls open for trading!
BUSHY™ and Acorn Review
The beta portfolio lost 137bps on the week - now +7.37% year to date. We are going to be eating our own cooking. More pink tickets for BUSHY™ this week.
