I’ve been a trader and investor for 44 years. I left Wall Street long ago—-once I understood that their obsolete advice is designed to profit them, not you.
Today, my firm manages around $5 billion in ETFs, and I don’t answer to anybody. I tell the truth because trying to fool investors doesn’t help them, or me.
In Daily H.E.A.T. , I show you how to Hedge against disaster, find your Edge, exploit Asymmetric opportunities, and ride major Themes before Wall Street catches on.
Table of Contents
H.E.A.T.
THE TRADE EVERYONE HAS WRONG
There is a particular kind of error that only happens at currency turning points. It happens when a generation of investors learns to measure performance in units that are silently shrinking — and then convinces itself that the shrinkage is the performance.
The S&P 500 is up almost 10% year-to-date. Gold is up over 4%. Oil is up almost 90%. The 30-year Treasury yield is over 5% — the highest sustained level in a generation. Every one of these numbers is being read by the consensus as a market event. Every one of them is actually a currency event.
If you want to test that claim in 30 seconds, do this: price the S&P in gold and tell me if you're up. Price your portfolio in barrels of oil. Price your salary in fertilizer. The numbers you have been congratulating yourself for are the numbers a shrinking ruler produces. The dollar is not your benchmark anymore. The dollar is what you are being graded against, whether you have noticed or not.
Hedge funds have noticed. They've quietly built the trade that follows from this — and the trade has nothing to do with picking the next AI winner. It has to do with which side of the debasement ledger your capital is sitting on.
THE SETUP IN ONE PARAGRAPH Three separate Porter & Co. analysts — Marty Fridson, Erez Kalir, and Porter Stansberry himself — have independently concluded that the U.S. dollar is in the early innings of the same erosion that took down the British pound after Suez. T-bill issuance is up 171% in six years. The 30-year is yielding 5%. The Strait of Hormuz is functionally impaired for Western-insured traffic, and a shadow fleet just settled cargo there in yuan. And global hedge funds now hold a record 19% of their assets in semiconductors — double their 2026 starting allocation. The professionals have already picked a side. The question is whether you understand which side that is. |
THE BIFURCATION HEDGE FUNDS ARE ALREADY TRADING
Here is the part the financial press will not tell you cleanly: in a debasement, not all assets win. The retail narrative — "buy stocks, they hedge inflation" — is from a different monetary regime. It was true when the dollar was merely soft. It is no longer true now that the dollar is structurally compromised.
What works in a debasement is a specific kind of asset: one whose cash flows, replacement cost, or scarcity is denominated in something other than fiat. What gets destroyed is the opposite — anything whose return profile is locked to a nominal dollar number. Long-duration coupons. Fixed-rate annuities. Wage labor without leverage. The entire balance sheet of any business that sells commodity output priced in dollars while paying for inputs priced in hard assets.
This is why hedge funds went from 2% semiconductor allocation in 2022 to a record 19% today. They are not chasing chatbots. They are front-running the repricing of capacity. Semiconductors are one of the few liquid public-equity expressions of productive scarcity priced in dollars — capacity that cannot be built quickly, demand that cannot be deferred, and pricing power that resets every quarter. The same logic — productive scarcity, dollar-resistant pricing — is what's driving the bid under gold, Bitcoin , oil , and the entire infrastructure layer of the AI buildout.
171% T-bill issuance growth, 2019–2025 | 5.06% 30-year Treasury yield, May 22 | 19% Hedge fund semiconductor allocation | $97.07 WTI crude per barrel, +87% YTD |
Source: U.S. Treasury, Bloomberg, Goldman Sachs Prime Services. Confirmed metrics; see Credibility Firewall below.
"Cooperation runs on trust. Trust runs on a unit of measure that stays the same from one day to the next. Break the unit of measure and you break cooperation."
— Porter Stansberry, Porter & Co. Daily Journal, May 19, 2026
THE SUEZ TELL
In 1956, the British government launched a military operation to keep control of the Suez Canal. The pound had been the world's reserve currency for the better part of a century. It was — in the minds of every City banker and Whitehall minister — the currency. Until it wasn't. When Eisenhower withdrew U.S. support for sterling in the foreign exchange markets, the rest of the world's capital followed in days. The pound collapsed. Historians frame it as the end of the British Empire, but that is the wrong frame. Empires don't end in moments. Currencies do.
Erez Kalir, drawing on Ray Dalio's empire-cycle work, made the point in last week's Daily Journal: the crucial moment in a reserve-currency transition isn't when the hegemon weakens. It's when the world realizes it has weakened. That realization is not a forecast. It is a coordination event — the moment when foreign creditors, central banks, and commodity exporters simultaneously update their priors and stop accepting the old unit at the old price.
The Strait of Hormuz situation is exactly that kind of tell. Western-insured traffic is impaired. Risk premia have forced rerouting. Fertilizer shipments are down 56% in the first month of the war and there is no strategic reserve. And the shadow fleet that ran the blockade settled its cargo in yuan. This is not a headline. It is a price discovery event for the dollar's monopoly on global settlement — and the price is being marked down in real time.
WHERE THE MONEY GOES — THE DEBASEMENT BENEFICIARIES
Four tiers of investable exposure to the dollar's structural decline. Tickers are illustrative of the thesis, not personalized recommendations.
TIER | THESIS | MECHANISM | ILLUSTRATIVE NAMES |
Monetary Hardness | Assets that cannot be printed and are increasingly being priced as money substitutes | Direct dollar-debasement beta; long-term store-of-value bid from sovereign and institutional buyers | Physical gold, gold miners (NEM, AEM), Bitcoin, MicroStrategy (MSTR) |
Productive Scarcity | Hard-asset cash-flow businesses with multi-year replacement cost moats | Pricing power resets quarterly against rising input costs; capital base appreciates in real terms | BWXT, nuclear infrastructure, semiconductor capacity (ASML, TSMC), pipelines (ENB, EPD) |
Commodity Convexity | Oil, fertilizer, copper, uranium — the physical inputs the global economy cannot substitute away from | Supply chains priced in dollars but constrained by geology and geopolitics, not by Fed policy | XOM, CVX, NTR, MOS, Cameco (CCJ), Glencore |
Sovereign-Grade Cash Flow | Businesses that the government effectively cannot tax or regulate away from inflation hedging | Tobacco, alcohol, defense primes — pricing power baked into addictive demand or guaranteed contracts | Philip Morris (PM), Lockheed Martin (LMT), General Dynamics (GD) |
WHERE THE MONEY BLEEDS — THE PRESSURE POINTS
PRESSURE POINT | WHY IT BREAKS | WATCH LIST |
Long-duration Treasuries | The Treasury is rolling 171% more T-bills than six years ago. A coming rollover at 5%+ yields means a fiscal arithmetic problem with no clean exit. | TLT, EDV, 30-year UST yield breaching 5.50% |
Subprime consumer credit | Wage stagnation in real terms (debasement tax) collides with stickier-than-expected food and energy. Even "resilient" subprime books crack when rollovers reprice. | CACC, ALLY, COF, auto loan delinquencies |
Software multiples | Hedge funds are funding the chip trade by selling software. SaaS multiples compress as duration repricing flows through the discount rate. | Long-duration unprofitable SaaS, IGV, WCLD |
Fixed-coupon corporates | Investment-grade and high-yield issuers who termed out at 2021 coupons hit a refinancing wall against a 5%+ curve. Debasement makes coupons look cheap; rollover risk makes them expensive. | LQD, HYG, BBB downgrade watch |
CREDIBILITY FIREWALL
Every issue separates confirmed data from directional inference. Read both columns before acting on the thesis.
CONFIRMED (SOURCED & DATABLE) | DIRECTIONAL (INFERENCE & FRAMEWORK) |
• U.S. T-bill outstanding +171% from 2019–2025 (U.S. Treasury). • 30-year UST yield: 5.15% (May 19, 2026). • Hedge fund semiconductor allocation: 19% of book (Goldman Sachs Prime). • WTI crude: $108.66, +87% YTD. • Gold: $4,552.50/oz. • Fertilizer shipments through Hormuz: -56% in first month of war. • Yuan-settled cargo transit confirmed during Hormuz closure. | • Dollar reserve-currency erosion will follow a Suez-style pattern of slow drift, then sudden repricing. • Hedge fund chip-vs-software pair trade reflects debasement positioning, not just AI conviction. • Real wages will continue compressing relative to commodities through 2027. • The next leg of the trade is in commodity convexity and sovereign-grade cash flow, not Magnificent Seven beta. • Subprime credit cracks before investment-grade does. |
WHY NOW — THE CATALYST STACK Three things just happened in the same week: (1) The 30-year Treasury yield closed at 5.06% — a multi-decade high — while the Treasury continues issuing record amounts of short-dated paper that must be rolled. (2) A shadow fleet ran the Hormuz blockade and settled in yuan, the first publicly acknowledged commodity transaction at scale outside dollar clearing in a war zone. (3) Global hedge funds hit a record 19% semiconductor allocation, having sold software to fund it. None of these are isolated. They are the same trade, expressed three different ways, by three different cohorts of professional money. The retail investor who is still measuring his portfolio in dollars — instead of measuring the dollar against his portfolio — is the last person in the room who hasn't repriced. |
THE BEAR CASE ON THIS THESIS
Honest disclosure: there are three ways this trade fails. First, the Fed could engineer a credible disinflation — a sustained period of positive real rates that re-anchors the dollar without breaking the credit system. The 2022–2023 hiking cycle showed this is harder than it looks, but not impossible. Second, the Hormuz situation could resolve faster than expected, oil could mean-revert to the $70s, and the entire commodity-convexity layer of the trade could give back a year of gains in a quarter. Third — and most underappreciated — the dollar's reserve status could erode very slowly, the way sterling's actually did between 1945 and 1971. Twenty-six years is a long time to be early. Many people who were structurally right about the pound went broke being right too soon.
The thesis does not require imminent dollar collapse. It requires that the relative ranking of asset classes keeps shifting toward productive scarcity and away from nominal-dollar promises. That trend is already well underway, and the data above suggests it is accelerating, not reversing.
DO THIS TONIGHT
Four moves, none of which require new capital. All of which change how you see the next twelve months of statements.
A THIRTY-MINUTE RE-BENCHMARKING DRILL 1. Re-price your portfolio in gold. Take your December 31 total and divide by the gold price that day. Take today's total and divide by today's gold price. If the second number is lower, you have not actually made money this year — you have lost ground to the hardest money on the planet. 2. Repeat the exercise in barrels of oil. This is your purchasing-power benchmark against the physical economy. Salaries and rents track this number on a five-year lag. 3. Identify your longest-duration nominal promise. Whatever pays you fixed dollars the furthest into the future — a 30-year bond, a fixed annuity, a low-coupon muni — is your single largest debasement-exposed position. Mark it. 4. Move one position from the "promise" column to the "scarcity" column. You are not trying to flip the portfolio overnight. You are trying to bend the trajectory by one allocation a quarter. |
FIVE TAKEAWAYS
1. The dollar is not collapsing — it is bifurcating the asset universe. Every position in your portfolio should now be classified as either dollar-resistant or dollar-exposed. There is no neutral category anymore.
2. Hedge funds have already made the trade. A 19% semiconductor allocation funded by software sales is not an AI bet; it is a scarcity bet — and they are funding it by selling duration. The retail investor who still thinks the chip trade is about ChatGPT has misread the room.
3. The Suez analog matters less for its drama than for its mechanism. Reserve currencies don't fail when the issuing nation gets weaker. They fail when the world simultaneously realizes the issuing nation got weaker. The Hormuz yuan settlement was a coordination event of exactly that kind.
4. Long-duration nominal claims — 30-year Treasuries, fixed-rate corporates, low-coupon municipals — are the cleanest short expression of this thesis. You do not need to short them. You only need to not own them while owning the offsetting hard-asset basket.
5. Tonight's homework is not optional. Price your portfolio in gold. Price it in oil. If you do not like what you see, you have just found your real benchmark — and the first move on your re-allocation list.
The unit of measure is lying to you. Stop measuring in it
Space Exposure Designed For Potential Weekly Payouts
The space economy is no longer just a government program — it’s becoming part of a global industry that is gradually advancing.
But why view long-term growth as the only potential path forward?
SPCI seeks to offer approximately 100% concentrated exposure to the space industry while striving to generate weekly income through a disciplined put credit spread options strategy.
Gain exposure to the “final frontier” and a potential weekly distribution while you wait for the theme to play out.
Discover SPCI.
Distributor: Foreside Fund Services | Investing involves risk including possible loss of principle.
News vs. Noise: What’s Moving Markets Today
More of the same on Friday, and last week. Oil prices high, inflation high, interest high, but the market doesn’t care. Sometimes investing is hard, sometimes it’s easy. Right now it’s easy. The market is telling you where to invest, it’s the bottlenecks—-memory, photonics, space, and a bunch of other AI related areas. The government is also picking winners, look what happened to quantum stocks last week. Could we be in a bubble? Sure, you always need to plan for the worst and hope for the best. Control your position sizing and have hedges in place. Balance out the high fliers with HALO type names.
Futures are up, and oil is down, on news of a peace deal, for real this time.
Where do bonds fit into the mixt? Hint, they don’t……
Every model portfolio Wall Street gives you relies on bonds being a risk reducer. Yet we’ve seen them add risk to your portfolio in 2022, liberation day, and the selloff around the Iran war. I don’t have an issue with bonds as an asset class, but just like every asset class there are times when they are attractive and times when they aren’t. An environment where yields and inflation are moving up is not a good environment for bonds. What about TIPs as the article talks about? Take a look at a monthly chart of $TIP ( ▼ 0.16% ) ….
Pretty much dead money over the past 5 years, with a nasty drawdown thrown in.
We’ve talked here about a number of bond alternatives, and will continue to——tail risk hedging, P&C stocks, Tbills, pre merger SPACs, digital credit. If interest rates top out somewhere and inflation looks like it’s coming back down, then we will talk positively about bonds again.
What Iran Tells Us About UFO Disclosure
When governments confront unknown threats in their airspace, defense budgets surge
and the same aerospace and surveillance companies move hardest. On March 2nd,
Northrop jumped 6% and Lockheed 3.3% on the Iran news — and President Trump has
since ordered the formal release of government UAP files, with the Pentagon confirming
compliance. So if a conventional conflict can move these stocks this fast, what happens
when the bigger story breaks?
See the UFOD holdings: [thetruthisoutthereufod.com
ETF News
A Stock I’m Watching
We’ve covered a bunch of stocks left for dead that have reinvented themselves in the AI boom. IBM could be another one……
In Case You Missed It
Great talk on with the Acquirers Podcast on markets, value investing, inverse Cramer, and Michael Gayed joins me to talk about taking income from your portfolio and how to get more than 4%……
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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