The T in H.E.A.T. stands for themes. I am a big believer that this market is thematic, and it’s never going back. This is an area where I think retail investors have a major advantage as I don’t think Wall Street has yet realized this. They are still stuck on growth vs. value, large vs. small, US vs. international. Before I go into how you want to look at themes, let me take a moment to explain why I think the market is this way, and why it’s not going back:

The first step in thematic investing is identifying the likely top themes over the next 3 or so years. Some of this is obvious, some of it necessitates a bit more research. The obvious part is AI, but AI is too broad, you need to break it down. There’s the chips, the infrastructure, the power, AI in healthcare, agentic AI, physical AI (robots), old economy stocks using AI, etc. Other areas like space and drones would be obvious if you are keeping your eyes open. You can also use AI to help you identify themes. You can ask it to define the top investment themes for you. I would also suggest keeping up with the news and putting articles in AI and asking it for the implications of certain things. This is an area you used to have to rely on Wall Street for, not anymore.

Once you have the top investment themes, then you need to go through the thematic investment hierarchy:

Step 1: Who are the obvious winners? For each theme you have identified their are companies that dominate that theme. For example in every aspect of AI it’s NVDA because you need their chips. People like to take shots at the Magnificent 7 stocks and claim they are overvalued. Are these stocks likely to 5x this year? Probably not. However, if you look at every major theme and ask yourself who are the winners you are going to find one or more Magnificent 7 company on top.

Step 2: What companies do the winners need to stay winners? For example, I can’t just give you a Nvidia GPU and you can run AI. You need software, hardware, data centers, metals, power, etc. These are the second order winners in any theme. Not as sexy as the winners, and also not likely to 5x this year, but you should also be investing here.

Step 3: Who are the asymmetrical plays? In any theme there are going to be asymmetrical plays. These are the stocks that could be the next NVDA or the next Pets.com. These are the companies who could 5x or more this year, they could also get crushed. These are the companies that Wall Street would call meme stocks. Again, as I stated above, these are no longer names like AMC and GME, these are real businesses with massive potential, and massive risk. You obviously want to size these accordingly in your portfolio.

I am a big believer that your portfolio should be made up of the thematic winners, the companies that the winners need to stay winners, and the asymmetrical names in any theme. Obviously all sized accordingly. I also think you have a huge advantage in identifying these themes and stocks before the “smart money” does. I often talk to a hedge fund manager at one of the world’s largest hedge funds. Whenever he tells me a theme they have “discovered” I am usually already taking profits.

Let’s talk about income for a bit, as it’s a huge topic right now. I recently did my latest Why Covered Call ETFs Suck webinar because I want to highlight the dangers I see in writing calls on stocks you think could go up a lot. I won’t go into great detail here but the bottom line is that when you write a call option you are giving up your upside on a stock over a certain level. I have no problem with you doing this on some stodgy stock like PG or MCD, or doing it temporarily when you think a stock has likely topped out. There is no reason to do it all the time on stocks you think are likely to go up a lot, and the performance numbers bear that out. Now at some point I think you will get zero DTE (days to expiration) options on any stock that trades active weeklies, until then, unless you can get flex options (which you can’t), I would be wary of this strategy.

What can you do? You can write puts. There are a few ways you can do this:

Greenland, and all the trade retaliation, is driving the news and creating a risk off in markets. Remember what happened last year if you took Trump at his word, you were probably on the wrong side of the trade. Remember the art of the deal, I think any weakness is probably a buying opportunity.

News: The Greenland story just escalated from “rhetoric” to policy leverage — and markets are treating it like a real tail-risk. The White House is reportedly tying tariffs on eight European countries (UK, Denmark, Norway, Sweden, France, Germany, Netherlands, Finland) to Greenland negotiations: 10% starting Feb. 1, threatening to step up to 25% if there’s no agreement. That’s why you saw the classic tape: rates up, risk modestly down, gold bid, and Europe already game-planning retaliation (~€93B of U.S. goods) plus broader “anti-coercion” tools. The important part for investors: this isn’t a normal trade spat about tractors and cheese — it’s security + trade fused together, which automatically raises the market’s geopolitical risk premium and creates winners/losers fast (defense/commodities up; exporters/industrials wobble).

Noise: The trap is trading this like it’s a clean, binary “Greenland gets sold / doesn’t get sold” outcome. That’s not how these things resolve. The most likely path is deadline extensions + months of negotiation that produce a face-saving compromise: more U.S. basing rights, more Arctic presence, more resource access — while sovereignty stays intact. In other words, the market will whip around on headlines (“tariffs on” / “tariffs delayed” / “talks progress” / “retaliation threats”), while the real trade is second-order: Europe accelerates defense self-reliance, strategic metals/mining get a bid, and Europe’s most trade-sensitive sectors wear a discount until the tariff boundary conditions are known.

Concrete takeaways for readers

Keep an eye on this. May sound like tinfoil hat type of stuff but this is a real newspaper and a senior person. UFOD launches 1/30, timing may be pretty good on our part…..

Today’s stock is SiTime (SITM)…..

SiTime (SITM) is a classic “picks-and-shovels” way to play the next leg of AI infrastructure without having to pick the winning GPU: timing. As data centers move toward rack-scale systems, higher-speed interconnects, and tighter power/thermal envelopes, clock accuracy and ultra-low jitter become gating specs for everything from compute boards to networking and storage—meaning timing content and ASPs can rise as architectures get more complex. SITM’s MEMS-based timing parts are steadily taking share from legacy quartz because they’re more programmable, resilient, and better suited to modern high-performance designs, and the setup improves if the broader analog cycle is truly turning up at the same time. The bull case is structural demand + operating leverage (a small component that’s mission-critical when “nothing can drift” in an AI cluster); the bear case is that timing is still cyclical and sentiment can swing fast if end markets pause—so it’s one I like most on pullbacks when the market is underpricing how essential “boring” timing becomes in an AI-at-scale world.

Markets don’t just move on fundamentals—they move on themes, positioning, and policy. In this episode, I’m joined by Matt Tuttle, founder of Tuttle Capital Management, to break down his “HEAT” framework: Hedge, Edge, Asymmetry, and Themes—and how those four ideas shape his daily approach to risk and opportunity. We discuss why Matt believes you should always be hedged, what real “edges” look like (and why many disappear once Wall Street markets them), how to structure trades for asymmetric payoffs, and how he’s thinking about 2026. Topics include the shift from AI creators to AI adopters, the importance of AI capex and the Fed as key pillars supporting the market, and how policy shocks can create both landmines and upside.

The H.E.A.T. (Hedge, Edge, Asymmetry and Theme) Formula is designed to empower investors to spot opportunities, think independently, make smarter (often contrarian) moves, and build real wealth.

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