The Debut 'Ask us Everything' Show

Benny & The Squirrel: Episode 53.

The Blind Squirrel and Capital Misallocation

May 22, 2026

The 🐿️ celebrated entering the back half of his 50s by taking viewer questions with Benny. The first in our series of regular shows.

Show was streamed live at 7pm EST on Thursday 21st May, 2026.

As explained before, Blind Squirrel Macro paid subscriptions are paused until early June. I am unable to accept new paid subscribers until then but please get in touch if you recently subscribed to the letter and are interested in a trial / review of the archive.

I am not able to publish paywalled commentary on a billing pause - so for the next 3 weeks, enjoy the show notes for free! No slides this week.

SpaceX IPO: Valuation Deep Dive

Key points:

Manus AI model test: Benny fed the SpaceX S-1 to Manus (the Chinese AI, blocked from Meta acquisition), which produced a 15-tab model arriving at a similar conclusion to their own research — hard to get past $500–600B; stretching to $1T requires “letting the right tail in”. It pretty much matched our own model from 2 months ago.
Anthropic/Colossus deal: Anthropic leasing the Memphis data center (~$1.3B/month) turns xAI into a “neocloud landlord.” The Colossus center cost ~$28B in infrastructure + ~$25B in chips (~$50B capital business) generating ~$15B in rental income — a good return on capital, but it’s a cap rate/REIT business, not an AI-multiple business
The valuation bridge problem: At $7B EBITDA in 2025, a $2T valuation is simply not justifiable by fundamentals. Rupert: “I can’t see the bridge between $600B and $2T.” The concern is that retail and unsophisticated investors will apply “space AI multiples” to what is effectively REIT income
Market structure risk: At $2T with a 5% float, you need to place ~$115B of paper in one day (the greenshoe alone would be the 10th largest IPO ever). Even assuming 100% of passive/closet indexer demand, you’re still 40% uncovered. This creates massive potential for market dislocation

SpaceX IPO Mechanics & How to Play It

Is it a market top signal? — “A narrative I could get behind.” Rupert stays out of the way and watches for signs of market structure weakness from the primary raise itself
How to buy big IPOs: Don’t buy on the open. The Facebook IPO anecdote — when a Smith Barney colleague offered Rupert “as much as you want,” that was the tell. High retail allocation = bad aftermarket. Wait 6–18 months for the “seasoning” reset to $200–300B before getting interested
Insider dynamics: D1 and Coatue are already 20–25x baggers on SpaceX paper; they’ll show up in the book to “keep the party looking like it’s raging” but they’re really just managing average cost — not buying to hold
Comparison to Bitcoin ETF launch: History rhymes — Grayscale → ETF → retail 401Ks put money in at the end. SpaceX is the same dynamic: VCs have pre-sold to family offices and IRAs, inverting the traditional IPO access model — “complete exit liquidity”

Were Walmart Earnings More Important Than NVIDIA?

NVIDIA is more important for the market (it drives AI capex and S&P leverage to spending), while Walmart is more important for the economy (a bellwether for the US consumer)
The “K-economy” split: AI capex is booming while most consumers are “completely screwed”
Key concern: if Walmart starts doing negative comps, that’s a five-alarm fire — but currently ignored because the market is driven by the AI trade and Russell 2000 is “completely driven by AI capex”
If faith in the AI trade breaks: XLP/defensives are already too expensive to offer real protection; rate-sensitive stuff (Rocket Mortgage, UWMC, Home Depot, Pool Corp) is the unloved contrarian long

Market Top Signals & Paul Tudor Jone

PTJ is “having it both ways” — simultaneously most bullish and calling IPOs a top signal. Both hosts are wary of macro legends on TV: “there’s always an agenda”
Rupert’s philosophy: he prefers confirming turns and pressing them; Benny prefers calling turns. Neither is superior — holding is actually the hardest skill
Technical tell for a top: when a market stops making new highs and goes flat — that signals distribution. Key indicator: policy change (Fed, political support for the market disappearing) or 10Y Treasuries breaking 6%

How to Decide When to Sell a Winner

Rupert’s framework: Enter with a predefined stop but target a “fair multiple.” Once you hit it, redo the work. If the thesis still holds, become a pure trend follower with a trailing stop. Never try to flip to short (that’s Benny’s game)
Benny’s framework: Think of equities as options by delta. If a 5-delta stock moves to 25 delta, start taking some off. Take your initial capital off the table (”play with house money”). Three approaches: take capital off, be systematic, or revise valuation (which is “arrogant but has merit”)
Covered calls debate: Rupert used them on Rheinmetall last year at a 30% premium to elevated levels — worked perfectly, banked premium, didn’t get called away. Benny more skeptical: “If you think it’s late-stage parabola, just sell it or buy puts”
The long-term compounding point: Dave’s chart showing 75% of the S&P 100-year CAGR is explained by the top and bottom 2% of observations — the cost of missing GE Vernova or NVIDIA-type runs is enormous

Turkey Sells Gold & Sovereign Reserve Dynamics

Turkey sold 58 tons of gold and all its US Treasuries — forced selling to fund government obligations with one of the world’s weakest currencies
Broader point: sovereign buyers of gold and reserve assets face “enormous bills to pay” — this is a key driver of the gold pullback
Gold has been “detached from real rates since the Russia-Ukraine war.” The real driver now is PBOC/Chinese & Indian retail demand
Gold inversely correlated to oil — uncomfortable trade right now, but “the absolute best buys are the most uncomfortable”

Gold, Oil, SOFR & Bonds Positioning

Rupert’s gold allocation: ~6.5% of portfolio, sitting on hands all year. Bought platinum/palladium last week (”probably a silly trade but sticking with it”). Getting close to topping up gold
Benny’s SOFR pain: lost money on SOFR calls (front-end rates trade) this year. Pain partially offset by a levered short/long bond position
Trend followers are now outright short the entire yield curve — same as late 2021 setup before the 2022 bond bear market
Portfolio construction idea discussed: bonds + gold + energy as a recession hedge that also captures upside if oil spikes to $200-300 (at which point gold and bonds “go just like that”). Rupert prefers gold over bonds on the other side of the energy trade

Equities as Inflation Hedge & Bond Market Dynamics

Are equities now the “safe haven asset”? Both hosts note that when bonds sell off, equities are holding — suggesting investors (consciously or not) believe equities keep up with inflation
Historical bond bear market triggers reviewed: oil shock (1970s), taper tantrum (2013), COVID money printing (2022)
Bonds disconnect from fundamentals is “funny to see equities holding” — but “it’s a great plan until you get punched in the face” (Mike Tyson)

Portfolio Construction: Beta vs. Active

Rupert: 75–80% of capital is in a “beta portfolio” (runs with Bushy/VTTHX); remainder in single stock, macro, and thematic ideas discussed on the show
Benny: Biggest position is Energy Transfer (ET) — held for 6 years, his “pipeline company” core long. Won’t sell due to tax consequences and strong distribution yield; described as “key infrastructure with unrealized optionality” (polar vortex quarters can generate $2B)
Both hosts dislike Apple on valuation but acknowledge the “technofeudal” lock-in
Key insight on passive flows: “more and more money is flowing to the top of the cap stack” — people don’t trust governments, so Apple (which didn’t succumb to the capex boom and keeps buying back stock) becomes a quasi-sovereign store of value
Tax rule: Never make an investment decision solely on tax grounds. A delayed sale for tax reasons is “often an absolute curse.” Uzbekistan IPO shoutout — priced at $25, already trading at $28

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