'Straya Ruggedization Basket
The 🐿️'s 'Start the Week' note! Detail of our new Australian equity basket. Plus our weekly review of BUSHY™ and live Acorn trade ideas. 2026, Week 12.
In case you missed it, I used the weekend note to look beyond the Iran war and the investment opportunities related to ruggedizing Australian’s sovereign resilience. Am pleased to say that I under-promised and over-delivered on getting out this ‘Start the Week’ note ahead of the ASX open on Monday.
In the context of another tough week for risk assets (outside of energy and precious metals), BUSHY™ eked out a positive +0.37% return for the week.
Pretty happy with that (although the portfolio is still well below the high water mark set in late February). Full BUSHY™ and Acorn review after we lay out the specifics of our…[drum roll please]…
‘Straya Ruggedization Basket
As mentioned in the weekend note, we are still in ‘shopping list’ mode here at Blind Squirrel Macro. The construction of our ‘Straya Ruggedization Basket (‘SRB’) falls into that category. Strapping on a bunch of risk here - however sound the thesis - does not make a great deal of sense while the Strait is still closed.
Let’s start with what is NOT going into the SRB. The 🐿️ was guilty of pulling up the charts of Santos and Origin Energy as semi-direct plays on the Aussie LNG export angle when hostilities in the Persian Gulf broke out. But this rodent does not fight governments.
There are easier energy plays around the world. For example Canadian E&Ps now have wind at their back (with government and ‘Maple 8’ backing) in support of their energy export ambitions. By contrast, the Gladstone LNG complex is most likely facing margin headwinds from Canberra’s energy security policies in the coming years.
Lynas is indeed a tailor-made play on the US defense supply chain plus Japanese capital theme. However, the risk / reward here does not meet my requirements. LYC is up 160% since last summer and already trading at over 9x FY28 revenues with plenty of execution risk in Texas ahead of it. Arguably its chart still makes a bullish technical case but way too much fundamental risk for me.
The small / micro-cap (single project) opportunities I touched on in the Saturday note (Strike Energy, Ardea Resources, NeuRizer and International Graphite) are really for the gambling class - well, you know who you are!
The SRB Framework
Much of Australia’s ruggedization capex drive needs to be built around existing in-country expertise and regulatory frameworks. I was looking for listed companies of reasonable substance and scale that are well positioned to be focal points for investment under the “Future Made in Australia” framework.
For me, the low-hanging fruit falls into 3 categories: