$55M Portfolio + Positions Update: +18.4% In August
Asymmetrical Bets
· Asymmetrical Bets
· August 31, 2026 at 11:24
· ⏱ 4 min read
| Read on Substack ↗
Summary
The article argues equity markets are priced for perfection — the S&P 500 near 7,711 at roughly 23x earnings and VIX near 14 — while risk-free Treasury yields above 4.70%, a nearly $2T deficit, and a hawkish Fed leave almost no margin of safety. The implication is that September's jobs, CPI, and FOMC catalysts create asymmetric downside risk for stocks even after the author's portfolios gained 18.4% in August.
•The blended portfolio return was +18.4% in August; equal-weight average of the six portfolios was +11.9%, with Photonics ($19.7M), Asymmetric Bets ($18.2M), and Flagship ($15.1M) driving the blended number.
•The S&P 500 trades near 7,711, up about 21% over the past year, at roughly 23 times earnings.
•The 10-year Treasury yield is above 4.70% and the 30-year is above 5.20%, making a ~4.7% risk-free yield an alternative to stocks.
•The federal deficit is nearly $2T, and mega-cap tech has issued around $200B in corporate bonds this year, adding supply that keeps yields high; Scott Bessent's $4B bond buyback is described as a temporary band-aid.
•Fed Chair Kevin Warsh said at Jackson Hole that financial conditions are not restrictive and inflation is still too hot, effectively killing hopes for immediate rate cuts.
•The VIX is near 14, suggesting complacency, while the September 4 Non-Farm Payrolls, September 11 CPI, and September 16 FOMC are the key catalysts.
The article states the S&P 500 is near 7,711, up 21%, at roughly 23x earnings, with 10-year yields above 4.7% and VIX near 14, leaving 'almost zero margin of safety' — a direct bearish risk setup for
The article states the S&P 500 is near 7,711, up 21%, at roughly 23x earnings, with 10-year yields above 4.7% and VIX near 14, leaving 'almost zero margin of safety' — a direct bearish risk setup for broad equity beta if September data disappoints.
Risk: AI/momentum could keep pushing the index higher despite valuation; the author only warns of vulnerability and does not disclose a short position.
The article highlights that 'market volatility is asleep, with the VIX sitting near 14' and then lists three macro catalysts plus structural bond-supply issues, implying expectations are too calm and
The article highlights that 'market volatility is asleep, with the VIX sitting near 14' and then lists three macro catalysts plus structural bond-supply issues, implying expectations are too calm and an upside volatility shock is possible.
Risk: The VIX can stay suppressed during a melt-up, and VXX carries negative roll/decay in low-volatility regimes.
This newsletter, published August 31, 2026,
features Asymmetrical Bets
discussing SPY, VXX.
2 trade ideas extracted by AI with direction and confidence scoring.