Tactical Situation Report
(Weekly Portfolio Intelligence)
Super Summary:
- The US and Iran are in a low level, active war over the Strait of Hormuz. It's contained for now
- Investors are still questioning chip companies as AI trade still surges forward for now
- Good economic news for employment and inflation, and these still remain primary areas to watch
- Oil prices accelerated above $80 per barrel, and it will dent corporate earnings for those most reliant on energy
- Our average portfolio is up 20.7% so far this year with Alpha Convergence up 27.72% against the S&P 500 at 9.00% and the equal weight version at 11.37%
Our results since June 23rd.
On The Move
Nice thing happened this week. The market struggled with the S&P 500 falling for the week as the equal weight version that is most like us was slightly down. Meanwhile, our compressed and unrealized alpha woke up, expressed itself and we are ahead of our benchmarks again. We still see lots more compressed alpha while we are still quite early in the period, so unless an ill wind blows through the markets that could wipe out that potential, we are solidly in our expected lane. That ill wind is something you know we monitor very closely, so all our instruments are lit and reporting back to us that conditions are challenging and we are meeting them well.
In the above graph, we also see the blue line doing best. This is a sort of Alpha Convergence for Dummies that I build and track. I have found that early in our periods it tends to run ahead of us before signal degrades and we accelerate past. I use it as my stalking horse to tell me we are in a good direction, and one of the many ways we look to confirm whether we are performing within reasonable expectations.
On the overall market, we see continued bumpiness from the Iran War, oil prices, AI fears and a market wondering whether companies will see any sort of good returns from the hundreds of billions they are investing in AI systems. We naturally have positions in all these areas plus most everything else for good balance and why we watch so closely.
What It Means for Us
Patience and quiet observation. Our technology is working as designed and that means good things for the returns we get for our risk. Not much else other than I watched some of our lawmakers question the new head of the Federal Reserve and concluded some senators have no clue how our economy works and that's OK as long as they are not making economic policy. But it was amazing how naïve some folks are about a national central theme they manage.
From the bridge.
Disclaimer
This newsletter is provided for informational purposes only and represents the current opinions of Life UnLocked Partners ("LUL"). It should not be considered personalized investment advice or a recommendation to buy, sell, or hold any security or adopt any particular investment strategy. The information presented is based on sources believed to be reliable, but LUL makes no representation as to its accuracy or completeness.
Past performance is not indicative of future results. All investments involve risk, including the potential loss of principal. The investment strategies discussed may not be suitable for all investors. Each investor should review their investment objectives, risk tolerance, and financial situation with a qualified advisor before making any investment decisions.
Performance data presented reflects the specific LUL strategies described and may not reflect the performance of any individual client account, which will vary based on account-specific factors including timing of investments, additions or withdrawals, and individual restrictions.
This communication is not an offer to sell or solicitation of an offer to buy any securities. LUL is a registered investment advisor. For additional information about LUL, including fees and services, please refer to our Form ADV, available upon request.
Benchmark Data: SPY and RSP Sharpe Ratios are sourced from PortfoliosLab (December 2025) and represent trailing 12-month calculations. Industry benchmarks for active managers and hedge funds are based on published academic research and industry surveys.
Past Performance: Past performance is not indicative of future results. All investments involve risk, including possible loss of principal. The Sharpe Ratio is one of many metrics and should not be used in isolation for investment decisions.
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