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- The š„H.E.A.T.š„ Formula
The š„H.E.A.T.š„ Formula
AI Driven Insights to Spark Your Portfolio
I am scheduled to be on Bloomberg Today at 12:20PM EST
Friday we launched The Rareview 2X Bull Cryptocurrency & Precious Metals ETF (BEGS)
The H.E.A.T. Formula is a radically different way to look at investing your portfolio.
āH- Hedges, you should always have hedges and be agnostic as to being long or short. Bonds are not a hedge
āE-Edges, you should always look for edges. Preferably these are edges with some sort of psychological underpinning, structural edges, or some sort of barrier to entry.
āA-Asymmetric. Everything you do, be it trades or your overall portfolio, should be designed so that heads you win a lot, tails you lose a little.
āT-Themes. You should always be invested in the top themes. Most everything else is just noise.
Preview of Coming Attractions
I think AI is going to make traditional indexing and active management obsolete. I am putting my money where my mouth isā¦
The investment firm is introducing eight new AI-focused funds, including offerings targeting UFO disclosure and DeepSeek's emerging AI technology.
Our Next Webinar
Uncovering Hidden Themes with AI: How DeepSeek Is Rewriting the Investment Playbook
Thu, Feb 27, 2025 2:00 PM - 3:00 PM EST
1. Bullets From DeepSeek to Disruptors: Explore how one AI breakthrough (DeepSeek) reveals cost-effective strategies and under-the-radar opportunities beyond mainstream tech giants.
2. Finding Alpha in the Noise: Learn how AI-driven data-mining cuts through market hype and identifies genuine growth catalystsāeven in emerging or overlooked sectors.
3. Comparing & Contrasting Strategies: Discover how to harness AI to evaluate different investment approaches.
YouTube Videos
We will be hosting The Watchlist every Tuesday and Thursday. Jeremy Vreeland (Bullish Bears) and I will be discussing stocks we are currently watching, buying, or shorting. We will also be discussing how to structure trades for asymmetrical returns and we will take your questions.
Click below to register for the Thursday:
Tuesdays are live streamed on YouTube here:
Market Recap
Friday again highlighted the difficulties traders are facing as news of tariffs once again roiled markets.
Trump says heāll roll out reciprocal tariffs next week. Here are his possible targets.-MarketWatch
Personally still think this is art of the deal stuff and would be buying dips. The University of Michiganās consumer sentiment survey also showed a jump in inflation expectations, so that didnāt help. I still think this is the most important thing to come out of tech earningsā¦
Hereās GPTs analysisā¦
Conclusion & Must-Own Names
Nvidia (NVDA)
The main HPC GPU provider. HPC meltdown mania hammered it, but Big Techās continuing expansions reaffirm strong GPU demand. A āmust-ownā for HPC hardware.
Broadcom (AVGO) or Marvell (MRVL)
Key HPC networking/ASIC players. Both stand to gain from HPC expansions.
Cloud-Infra (Coherent, Lumentum, Vertiv)
If you want HPC adjacency in optical or power/cooling, these remain big beneficiaries.
Hyperscalers
Amazon, Microsoft, Google each invests heavily, but near-term stock performance can be choppy as heavy HPC spending reduces margins. Over the long run, HPC expansions should pay off. If youāre bullish on multi-year HPC usage growth, holding these on dips can be rewarded.
Final: The HPC meltdown mania sparked by DeepSeek appears overshadowed by unstoppable HPC expansions from the four AI mega-caps. Nvidia is top HPC chip pick, Broadcom/Marvell for HPC networking, COHR/LITE for optical, and Vertiv for data-center power. If you trust that HPC expansions will keep growing, these are your big winners.
Big week for inflation speculation. Powell testifies Tuesday and Wednesday and we have CPI on Wednesday and PPI on Thursday.
TSLA is a core holding, I had GPT take a look at the articleā¦..
Recommendation: Remain Confident or Worry?
Short-Term:
January data lumps typically overshadow big Q4 expansions. The Q1 might be weaker yoy, but watch the entire quarterās deliveries, not just one month.
Brand sentiment in Europe could cause concern if it escalates, but itās too early for a panic.
Long-Term:
Tesla remains the EV leader, invests heavily in battery tech, new model expansions, and is likely to keep robust yoy growth in 2025 with a rumored āModel 2.ā
HPC meltdown mania has no direct negative effect on Teslaās HPC usage for autonomy R&D. Future self-driving improvements might actually yield an HPC tailwind.
Conclusion: If TSLA is your core holding, the January dip in certain markets is not a reason to āfreak out.ā Itās normal EV lumps, and Q1 is often weaker. The brand is still on track for yoy growth in 2025 with new product cycles forthcoming. Hence, staying confident in Teslaās multi-year EV dominance is sensible, especially if HPC meltdown mania is overshadowed by real EV adoption growth.
I also had it rate TSLA from 1-10ā¦ā¦
Tesla (TSLA) ā 8.5/10
Market Leadership in EVs
Continues to dominate global EV brand recognition, margins, and software lead (Autopilot/FSD).
While new competition is emerging, Teslaās scale, cost efficiency, and charging infrastructure remain major advantages.
Short-Term Sales Volatility
Recent data show a January sales slump in China and parts of Europe, which aligns with weaker seasonality in Q1.
Historical pattern: Teslaās deliveries often dip month-to-month due to production transitions or model updates, then rebound later in the quarter.
Mid- to Long-Term Growth
Wall Street expects ~2 million vehicle sales in 2025 (vs. 1.8M in 2024), with the rumored āModel 2ā (lower-priced EV) and an updated Model Y.
Likely to maintain double-digit annual volume growth, driving consistent revenue expansion.
Potential Risks
Brand Sentiment: Political controversies involving CEO Elon Musk may impact demand in certain regions.
Competition: Both established automakers and new players in EV markets, though Tesla still leads on technology and margin.
HPC/AI Angle
Teslaās HPC usage is more internal (training FSD neural nets) than customer-facing, so HPC meltdown mania doesnāt tangibly hamper Teslaās ADAS R&D.
If HPC meltdown mania reduces AI compute costs, Tesla could actually benefit in training autonomy networks.
Verdict: Despite near-term lumps in sales data, Teslaās long-term fundamentals remain strong. With strong brand loyalty, upcoming models, autonomy R&D, and cost advantages, TSLA rates an 8.5/10āa top EV holding for multi-year investors able to weather periodic volatility.
Short term for traders it does look like a short hereā¦..
Whenever I see a headline about something āboomingā that catches my attention. I asked GPT about what this could mean for publicly traded companiesā¦ā¦
1. Andurilās New Valuation and the Defense-Tech Boom
$28 Billion Valuation:
Anduril, founded by Palmer Luckey (of Oculus fame), is raising up to $2.5B at a $28B valuationādouble from $14B last August.
Reaffirms the rapid growth in AI-driven defense tech. Government agencies want advanced autonomous drones, sensor systems, and AI command tools more quickly than legacy defense players can deliver.
OpenAI, Anthropic, AWS Partnerships:
Anduril recently partnered with OpenAI to embed advanced AI in defense solutions. Meanwhile, Anthropic and Palantir signed a deal with AWS for U.S. intelligence & defense.
The synergy: AI companies that once avoided direct military ties are reversing course, suggesting a broader acceptance of AI in defense.
Revenue & Growth:
Andurilās revenue doubled in 2024 to ~$1B, with annual contract value hitting $1.5B.
The firm invests heavily in Lattice (AI-based software) and advanced drones for the U.S. and allies.
Conclusion: This is part of a bigger shift where the Pentagon and militaries globally are looking for cutting-edge AI hardware/software from agile startups, not just from old-line defense primes like Lockheed (LMT) or Northrop (NOC).
2. Major Themes: AI-Driven Defense & Controversies
AI & Robotics in Warfare
Militaries want autonomous drones, sensor fusion, command/control solutions that reduce the human load in the battlefield. AI helps identify threats and coordinate swarms of drones or other assets.
Private Startups vs. Legacy Defense
Anduril shows how smaller, Silicon Valleyāstyle companies can disrupt the slower, ācost-plusā environment of traditional defense contracting.
Thereās new competition for ātop-tierā defense primesāLockheed Martin, Raytheon, Northropāpushing them to adopt AI faster.
Politics & Public Perception
Palmer Luckey openly supported Trump, sparking political debate. Some AI companies (like OpenAI initially) had refused defense contracts. Now, Anthropic & Palantir are forging defense ties. The article highlights how the lines between commercial AI and defense apps are blurring.
3. Publicly Traded Stocks to Watch
Anduril is private, so you canāt buy it directly. But here are some related publicly traded players:
Palantir (PLTR)
A leading data analytics & software firm for defense and intelligence.
Already soared ~370% yoy, with market cap >$250B. They partner with governments globally for AI-based solutions, and just announced more advanced generative AI offerings for defense.
Theme Fit: AI + Defense.
Risk: Valuation is now quite high after a big run.
Large Defense Primes: Lockheed Martin (LMT), Northrop Grumman (NOC), Raytheon (RTX)
Traditional defense contractors investing in AI to remain competitive.
Upside: stable, big government budgets. If HPC meltdown mania calms, they may partner or acquire smaller AI shops.
Downside: slower growth or overshadowed by nimble startups.
Amazon (AMZN)
Not a direct defense prime, but the AWS cloud helps run many AI workloads for defense, plus new Anthropic partnership.
Also invests in advanced robotics, which can have dual-use tech for defense.
Theme Fit: Indirect, but HPC expansions with ties to government clients.
Microsoft (MSFT)
Another HPC/AI cloud provider deeply embedded with DoD (JEDI contract, etc.), integrating OpenAI models.
Theme Fit: HPC expansions + government contract push.
AI Software Providers (C3.ai (AI), BigBear.ai (BBAI), etc.)
Smaller, specialized AI software for intelligence & defense. More speculative, less stable than Palantir.
Conclusion: For direct ādefense + AIā synergy in the public markets, Palantir is the standout. The large primes also hold steady if you want more general defense exposure. āPure HPC meltdown maniaā does not hamper these players as government spending is robust and might even accelerate AI adoption.
4. Final Verdict: Must-Own or Must-Avoid?
Must-Own:
Palantir (PLTR): If you want a pure-play AI defense name, with potentially more contract wins. Valuation is high, so be mindful.
Large Defense Primes: Lower growth, but stable. LMT or NOC can be a safe pick if you want a traditional defense anchor thatās also pivoting to AI.
Watch or Avoid:
Overly speculative small AI defense players with limited track records. Also be cautious about HPC meltdown mania overshadowing near-term HPC expansions. The DoD and allied governments have big budgets, so meltdown mania is less relevant to mission-critical defense spending.
Recommendation: If your portfolio aims for AI + defense, Palantir stands out among public options. Or combine Palantir with a stable āblue-chipā defense prime (Lockheed or Northrop). Anduril is private, so you canāt invest directly, but itās a sign the entire AI-driven defense sector is surging.
If you donāt already own PLTR not sure I would buy it up here, but would certainly consider on pullbacksā¦.
I also asked about ACHRā¦..
Conclusion: The Anduril partnership significantly elevates Archerās prospects in defense and autonomy. While calling it a āmust-ownā is subjective, itās definitely more compelling than a typical eVTOL purely targeting commercial use. If you can handle the early-stage risk and want eVTOL + AI defense synergy, ACHR is a strong candidate for your watchlist or portfolio, especially near the current support levels.
We launched EUAD because this is a theme we think will be powerful for the next 4 years at least. Asked GPT to comment on the possibility this bank happens and who the winners might beā¦..
Overall Takeaways
Bank Setup Likelihood: Moderate (perhaps 4ā5/10). Thereās political appetite for more defense spending, but establishing a brand-new institution is a heavier lift than expanding existing ones.
Defense Spending Rising Anyway: Even if the ārearmament bankā stalls, Europeās near-term priority on military modernization remains strong, meaning EU + NATO procurement is set to climb.
Top Beneficiaries:
European heavy defense contractors (Rheinmetall, BAE) rank highest if you believe ground vehicles, munitions, and maritime programs will surge.
U.S. defense giants (Lockheed, Raytheon) remain prime suppliers to many European militaries, especially for advanced jets and missile defense.
In short, while the ārearmament bankā might not be a done deal, the broader trend of spiking EU defense budgets looks quite real. Any firm with high exposure to NATO/EU equipment programs stands to benefit, and the rated names above are among the top contenders.
Theyāre wrong. The U.S. stock market has often been even more concentrated in the past. The problem isnāt that concentration is making the market top heavy; itās that itās making it overvalued.
The reason we created the H.E.A.T. Formula to be honest, and why we are working on setting up a wealth management firm. Traditional approaches appear to work, sometimes for long periods of time. Thatās not because they are conventional wisdom, itās because markets usually go up and a rising tide lifts all boats.
Some of my favorite chartsā¦
Interestingly they share a fairly similar theme, goes back to what I was saying above on capex spending.
Before you go: Here are ways I can help
ā
ETFs: We offer innovative ETFs that cover all aspects of The H.E.A.T. Formula, Hedges, Edges, and Themes.
Consulting: I'm happy to jump on the phone with financial advisors at no charge. I've built a wealth management firm and helped other advisors grow their practices through the use of substantially differentiated investment strategies. If you want to talk just send me an email at [email protected]
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Wealth Management-Coming SoonThe views and opinions expressed herein are those of the Chief Executive Officer and Portfolio Manager for Tuttle Capital Management (TCM) and are subject to change without notice. The data and information provided is derived from sources deemed to be reliable but we cannot guarantee its accuracy. Investing in securities is subject to risk including the possible loss of principal. Trade notifications are for informational purposes only. TCM offers fully transparent ETFs and provides trade information for all actively managed ETFs. TCM's statements are not an endorsement of any company or a recommendation to buy, sell or hold any security. Trade notification files are not provided until full trade execution at the end of a trading day. The time stamp of the email is the time of file upload and not necessarily the exact time of the trades.TCM is not a commodity trading advisor and content provided regarding commodity interests is for informational purposes only and should not be construed as a recommendation. Investment recommendations for any securities or product may be made only after a comprehensive suitability review of the investorās financial situation.Ā© 2025 Tuttle Capital Management, LLC (TCM). TCM is a SEC-Registered Investment Adviser. All rights reserved.