Portfolio Review: Outperforming the Giants
Staying out of the Mag 7 and long cyclicals has been our edge — and the chart proves it.
The chart from Goldman Sachs tells the story we’ve been positioned for all year — the rotation out of the Magnificent 7 and into cyclicals is finally showing its teeth. The one-day performance spread between cyclical sectors and the Mag 7 just hit one of the widest readings in over a year, confirming that leadership has shifted beneath the surface.
While the broader market’s attention stayed glued to mega-cap tech, we focused on where the real strength was building — in energy, materials, industrials, and financials. These are the sectors that benefit when nominal growth is strong and yields stay sticky, not when rate cuts or AI headlines dominate the narrative. The result?
Massive outperformance.
This has been the key advantage of our Reflation positioning since 2024 — staying long the real economy instead of chasing high-multiple stories that depend on liquidity. When cyclicals outperform like this, it tells you that capital is moving toward value, production, and tangible growth.
For months, the setup has been clear: Mag 7 fatigue meets cyclical resurgence. And while the crowd debates whether Nvidia or Apple will lead the next rally, our portfolios have already been compounding through miners, energy producers, and industrial strength.
It’s not that tech is dead — it’s just that leadership has changed. The market’s heartbeat is shifting, and we’re exactly where it’s strongest. This chart simply confirms what our models and positioning have been signaling all along.
While everyone was chasing the Mag 7, we were loading up on cyclicals — and that’s why we’re up 5x the market.
If you want to know how we spotted it early (and what’s next), the full playbook is in this week’s Portfolio Update.
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