Jeremy Schwartz 5.0 20 ideas

"You see the last 12 months you see international starting to work... The neutral allocation to foreign today is roughly 60/40... most people are nowhere near 50/50." US retail and institutional investors have spent the last 15 years heavily overweighting US large-cap tech. As international markets begin to show relative strength, portfolios will be forced to rebalance toward historical neutral weightings, driving sustained capital inflows into ex-US equities. LONG broad international equity ETFs to capture the mean reversion in global asset allocation. Continued US economic exceptionalism; a surging US dollar that suppresses foreign equity returns.

"Central banks is one of the key buyers of gold recently... we have three different gold overlays today in the US. GDE is the equity core with gold futures. The miners is GDMN and more recently GDT that does TIPS." Retail investors are vastly under-allocated to gold because they do not want to sacrifice the yield of equities or bonds. Capital-efficient ETFs solve this by using futures to stack gold exposure on top of core stock and bond holdings. As the narrative shifts from crypto speculation back to structural central bank gold buying, these capital-efficient vehicles will attract significant AUM. LONG capital-efficient gold and miner ETFs to capture central bank-driven price appreciation without sacrificing core portfolio yields. Central banks abruptly halt their gold purchases; a spike in real interest rates causes non-yielding assets to sell off.

"They buy dirt. They lease it out to farmers... you see all these farms converting to data centers because we need these data centers. They need land where there's good water and that often overlaps where we had farmland." Farmland provides a baseline of stable, inflation-protected rental income with virtually zero vacancy risk. However, the explosive upside comes from the AI infrastructure boom. Tech companies are desperate for land with access to massive water supplies to cool data centers. Public farmland REITs will benefit from this dramatic revaluation of their underlying acreage. LONG farmland REITs as a backdoor, lower-volatility play on AI data center expansion and inflation protection. High interest rates pressure REIT valuations; a crash in agricultural commodity prices leads to farmer tenant defaults.

I've been using the tagline a defense tech super cycle... even the US rebuilding its arsenal to modernize... it's going to be a 10-year period of tremendous innovation. Rising geopolitical tensions are forcing global governments to modernize and rebuild depleted arsenals with next-generation technology (like drone defenses). This guarantees a decade-long pipeline of elevated government spending flowing directly into aerospace and defense contractors. Go long the defense and aerospace sector to capture the structural increase in global military spending. Unexpected global peace treaties or severe government austerity measures could slash defense budgets and halt the modernization super cycle.

Korea's two leading companies, Samsung and Hynix... have been on fire, but they've actually been getting cheaper... they're like small single-digit PEs, like 5 PE when the S&P is 20. The market is treating the AI-driven earnings surge in Asian memory chipmakers as a temporary bubble, pricing them at distressed multiples. However, AI infrastructure demand is a structural shift, meaning these elevated earnings are sustainable and the stocks are deeply undervalued relative to US tech. Go long Korean semiconductor leaders and broad Korean equities to capture mispriced AI supply chain fundamentals. A cyclical downturn in consumer electronics or an oversupply of memory chips could compress margins and validate the low P/E multiples.

People are underexposed to the dollar. Actually, they've been overexposed to the euro, the yen, the pound... in risk-off moments the dollar tends to go up. Consensus positioning has become overly bearish on the USD, driven by premature expectations of aggressive Fed rate cuts. With the Fed likely holding rates higher for longer and rising global risk-off catalysts, the dollar will catch a bid as a high-yielding safe haven. Go long the US Dollar against a basket of foreign currencies to exploit offside bearish positioning. If the Fed unexpectedly slashes interest rates due to a sudden domestic economic contraction, the yield differential will collapse, weakening the dollar.

People talk about copper as like one of the strategic metals that you really need to do this AI and energy buildout. The exponential energy demands of AI data centers require a massive, physical infrastructure buildout. This creates a structural, multi-year supply and demand imbalance for copper and other strategic metals, driving prices higher. Go long copper and copper miners as a derivative play on the physical infrastructure required for the AI boom. A global manufacturing recession or breakthroughs in alternative conductive materials could severely reduce the industrial demand for copper.

If you were just neutral to equities, fixed income and alternatives, how much would you have in gold? It would be about 13% in gold. So people might be 10% underweight just being neutral. Institutional and retail portfolios are structurally underweight gold compared to a true neutral weighting. As investors realize this deficiency and seek to hedge rising geopolitical and margin risks, capital will systematically flow into gold ETFs to close this allocation gap. Go long gold as a structural portfolio diversifier and catch-up trade for under-allocated investors. A sudden resolution to global conflicts and a massive acceleration in real economic growth could reduce the safe-haven demand for precious metals.

Things like Owl and Ares and KKR and all these big private credit names really selling off... I'm looking at some of this selloff as being a little overdone. The market is mispricing private credit risk by incorrectly comparing it to the 2008 bank leverage cycle. Without a broad economic recession or surging corporate defaults, the massive 40-50% selloff in these alternative asset managers presents a deep-value entry point. Go long top-tier private credit and alternative asset managers that have been unfairly punished by macro fears. If the US economy enters a severe recession, corporate defaults will spike, leading to actual structural losses and liquidity gates in private credit funds.