Wall Street’s 60/40 formula was born in 1952 — the same year as the first credit card. A lot has changed since.
That’s why we created a new approach — The H.E.A.T. Formula — to empower investors to spot opportunities, think independently, make smarter (often contrarian) moves, and build real wealth.
Table of Contents
🔥 Here’s What’s Happening Now
Today’s newsletter focuses on AI. It’s getting harder and harder to figure out what’s real and what’s AI generated these days. Take the pictures below, no way you can tell if they are real or not……
@TuttleCapital
— #Oliver Ante (#@ShortReportMeta)
9:45 AM • Aug 11, 2025
Not a lot going on yesterday ahead of CPI this morning. Somewhat telling that the bulls tried to rally but the market ended up red, but again CPI is all that really matters at the moment.
Crypto is interesting again, Bitcoin couldn’t hold most of it’s gains yesterday but Ethereum did. Still think you ought to have both.
I bought the dip on Gold……
This is something you really need to keep an eye on. I talk about this issue a lot, I don’t know if market dynamics have truly changed because of retail investors, but I am open to the idea that they have……
But the resilience of individual investors may signal something more than just misplaced optimism. Their willingness to stick with stocks may be more enduring than many veterans realize. That, in turn, may help temper any eventual reversion to the mean for highflying stocks.
Why would this be more than a passing trend? For one, there has been a generational change among investors. Fewer remember calamities such as the dot-com downturn or even the financial crisis.
Instead, the current crop of young investors have known mostly blue skies since they opened their first brokerage accounts. They came of age during a time of superlow interest rates when markets moved only higher over time.
I think there are a few key implications here, including:
I used to be agnostic between being long and short. I don’t really short individual stocks much anymore. I do always have hedges but they are typically index based or ARKK based.
I think today’s “meme” stock is not the post covid “meme” stock. Today’s stocks are thematic and they can keep going up longer than you think they can.
I’ve been investing since 1981 so I’ve seen a lot. I fully realize that this current bull market could end like the internet bubble, or even worse, 2008. I also realize it could keep going. If you have the time to be a trader (which I don’t anymore unfortunately because I love it and was good at it) then who cares, you can play both sides.
If you don’t, then you need to structure your portfolio accordingly (H.E.A.T. Formula) and the 60/40 won’t cut it.
🧠 The H.E.A.T. Formula Edge: How to Use AI to Find Themes, Stocks, and Sharpen Your Strategy
I’ll be speaking at the Big Sky AI Forum in October talking about using AI to potentially enhance your investment results….
I think the internet was a game changer in that it allowed everyone access to the same information. Prior to that, if I outworked you I could consistently find hidden gems using fundamental analysis. If we all have access to the same information, then I can’t consistently find stocks that others haven’t found.
AI is a much more powerful game changer. I use Chat GPT (I’ve tested Grok from time to time and just feel GPT does a better job) to help pick the thematic stocks I want to own, drill down on second and third order stocks within themes, and walk through potential strategies.
The potential power really hit me one day when I had GPT looking through a research report from a big Wall Street firm and it told me to sell a stock it knew I owned and buy a stock recommended in the report.
One of the cool things about AI is it gets to know you, what your investing strategy is, and your level of sophistication. It knew what I was looking for and thought the stock was a better fit. It’s then it really hit me, for $200/month I had the world’s best investment analyst giving me unbiased, personalized investment advice.
A few key things you need to keep in mind….
AI is like everything else, garbage in, garbage out. Ask a dumb question, you get a dumb answer.
Ask it to put things in the level you want. I will often ask for PHD level analysis on a topic I know a lot about and ask it to dumb down something I don’t understand.
If you don’t think it’s right you can argue with it. I went back and forth with it 3 times on an options strategy until it finally realized it got it backwards.
From time to time it will tell you public companies are still private or merged companies are still out there. Probably stems from when it was trained. It can also mix up symbols, I trade DJT a lot (Trump Media) and it often thinks those are the Dow Jones Transports.
It will tell you it can backtest things, I don’t think it can yet, at least not the off the shelf stuff. However, the fact that it thinks it can probably means it’s not that far away.
Here’s a short outline of the things you could have AI do…..
Step 1: Use AI to Identify the Big Themes
Institutional investors have armies of analysts scanning the world for macro and sector shifts. Today, you can replicate a lot of that work in minutes.
Scrape and Summarize: Feed AI the latest earnings transcripts, industry white papers, and regulatory filings. Have it rank recurring topics by sentiment, urgency, and revenue impact.
Cross-Reference with Market Data: Match those qualitative signals with ETF inflows, options activity, and short interest to see where investor money is already flowing.
Example: You might see repeated mentions of “AI power demand” in utility earnings calls. Cross-check with surging capex at data center REITs, and you’ve just found a theme to watch.
Step 2: Find Stocks Within the Theme
Once you have a theme, AI can sift through thousands of potential plays to find the highest-probability candidates for deeper research.
Filter by Fundamentals + Catalysts: Ask AI to screen for companies with revenue exposure to the theme, above-average margins, and upcoming catalysts (earnings, product launches, regulatory decisions).
Incorporate Unusual Activity: AI can monitor options flow for short-dated, out-of-the-money trades — often a sign that someone with conviction (and possibly superior info) is positioning ahead of a move.
Example: If “AI power demand” is the theme, AI might pull Modine ($MOD) for thermal solutions, Vertiv ($VRT) for power infrastructure, and BWX Technologies ($BWXT) for nuclear-based energy supply.
Step 3: Run and Improve Strategies
AI isn’t just an idea generator — it can be a relentless backtester and risk manager.
Simulate Across Scenarios: Test your strategy against historical data and synthetic “what-if” markets. As I said above, be careful here, there is only so much backtesting AI can currently do.
Optimize Allocation: Use AI to adjust position sizing based on volatility, correlation, and expected return — making your portfolio more resilient to drawdowns.
Refine Timing: Combine sentiment analysis, technical signals, and macro triggers to improve entry and exit points.
Why This Matters for H.E.A.T. Formula Investors
The H.E.A.T. Formula is built on four pillars: Hedges, Edges, Asymmetry, Themes. AI strengthens each one:
Hedges: Quickly test which downside protection works best in your current portfolio environment.
Edges: Spot unusual options trades or sector-specific sentiment shifts faster than humans can.
Asymmetry: Identify situations with capped downside but open-ended upside.
Themes: Surface emerging investment narratives months before they hit the mainstream media.
The Bottom Line
Right now, AI in investing is like having a junior analyst who works 24/7, never forgets anything, and can read every 10-K, news article, and options tape print instantly.
The investors who learn to curate and govern their AI stack — deciding which models to trust, what data to feed them, and how to translate insights into action — will have a structural advantage.
The tools are here. The edge is available. The only question is whether you’ll build the system before your competitors do.
When will people realize it’s Gold AND Bitcoin, not Gold OR Bitcoin……
$BEGS offers tailored potential upside and strategic exposure to both crypto & precious metal asset classes with Bitcoin, Ethereum, Gold and Silver — all in one ETF.
Consider adding BEGS to your portfolio: rareviewcapital.com/2x-bull-crypto…
Distributed by Foreside Fund Services, LLC.
— #Matthew Tuttle (#@TuttleCapital)
3:47 PM • Jul 9, 2025
📈 Stock Corner
Today’s stock is Cohen Circle Acquisition (CCIR)…..
This is a SPAC that’s about to be a DeSPAC. As we saw with PEW (yes I still own that) things can get weird around a symbol change and anything can happen. The merged company will be Kyivstar (KYIV) and it’s a pure play on the rebuilding of Ukraine (assuming the war ends soon of course).
📬 In Case You Missed It
CCUP (2x CRCL) launched yesterday…..
🤝 Before You Go Some Ways I Can Help
ETFs: The Antidote to Wall Street
Inside HEAT: Our Monthly Live Call on What Wall Street Doesn’t Want You To Know
Financial HEAT Podcast https://www.youtube.com/@TuttleCap Freedom from the Wall Street Hypocrisy
Tuttle Wealth Management: Your Wealth Unshackled
Advanced HEAT Insights: Matt’s Inner Circle, Your Financial Edge
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