Introduction

Coal is one of the most hated commodities today - the advent of “ESG” meant that coal mining became THE go-to industry to vilify, the poster child of global warming and main driver of carbon emissions. In the process of scoring easy political victories over the recent decade, the world came to forget that the 2 main types of coal are indispensable in the continued growth of mankind. Thermal coal is burnt to provide cheap, reliable baseload power that keeps our lights on - and continues to alleviate millions out of poverty because it is what developing/emerging economies can afford as they continue industrialising. Metallurgical or steel-making coal, is burnt in blast furnaces to produce steel - the very input that enables our infrastructural boom, “green transition”, AI buildout, and increasingly so - wartime economies.

The focus of this piece will be on thermal coal given the confluence of near-term macro catalysts on top of the long term scarcity story. But if you were to ask me if I thought thermal and/or met coal will be victims of structural demand decline by 2040, I would be taking the other side of that bet all day long. To underscore how hated coal remains, we just have to look at the valuation multiples the copper peer group trades at vs coal companies in relation to where commodity prices already are vs their respective cost curves. Today, copper producers trade at >8-10x EV/EBITDA on $6/lbs copper (prices that are +30-40% ABOVE the 90th percentile of the cost curve) vs coal producers trading at <5-6x EV/EBITDA on $140-150/ton Newcastle Thermal Coal or $220-240/ton PLV HCC Met Coal (prices BELOW 90th percentile cost curve)

There is a clear relative valuation arbitrage here: why should coal trade at 5x EBITDA on bottom cycle earnings and copper at 8-12x EBITDA on upcycle earnings, when I have little doubt that we will all be using (more of) coal and copper come 2040?

It is as if green steel will sprout out of nowhere to replace the 90% share of blast furnaces in operation AND many under construction, while a mixture of unstable wind, daytime solar and expensive/long-lead time nuclear will replace the grids of the world’s largest developing economies overnight.

I believe the whole ESG indoctrination is the biggest policy mistake the developed west has made that has serious implications for their future economic potential. Electricity is the biggest limiting factor in the AI revolution, and only China understands that solving for energy abundance/having the lowest cost energy molecule is the foundational competitive edge for scaling AI applications. If you search out objective journalism, it seems like some in the West are beginning to realise just how backward and unprepared the US grid is for the AI revolution vis-a-vis China.

Consistent with my investment framework, I always try to identify a confluence in macro and micro for high probability set-ups, and thermal coal (and to a lesser extent, metallurgical coal) are at the cusp of inflection today:

• Macro: The onset of the Iran War and the destruction of major liquified natural gas (LNG) production plants in the gulf marked a significant turning point for energy markets. While stranded oil exports and onshore storage would likely ease with a lag if/when the Strait of Hormuz is open/definitive end to the war is reached, gas plants that are out of commission will take years to repair at the minimum. With regional gas prices in Asia and Europe doubling since the war started, thermal coal switching in combined cycle gas plants is the only go-to solution that is now exceedingly economic and reliable, to keep the lights on

• Micro: All 4 of the coal producers we are profiling have conservative balance sheets, with different degrees of leverage to higher coal prices. Naturally, the 2 smaller producers we are profiling would have the highest torque to a sustained thermal coal upcycle, while the 2 larger hybrid coal producers are what we deem ‘best in-breed’ long term holdings, given their low-cost, long duration asset base with great management teams that have a history of distributing significant cash to shareholders

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Hi Apes!🍌

This is our monthly portfolio review, where we look at the performances of our respective portfolios and deep dives. For the new apes, we have the:

• Banana Index: Best ideas within a global, unconstrained portfolio (15-25 stocks)

• Small Banana Index: Best ideas limited to global companies under US$10 billion in market capitalization (15-25 stocks)

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The indices came roaring back in April with one of the sharpest V-shaped recoveries concentrated in technology, semiconductors and AI hardware. Our portfolios are pretty much uncorrelated with indices and their growing concentration (and risks) in the AI thematic. Nonetheless, our portfolios recovered slightly even as the bout of hopeful ceasefire headlines caused retracements across the “war hedges” - oil and thermal coal, to which we have exposure to, but where their underlying thesis are independent of war outcomes. In hindsight, trimming our precious metals exposure did hurt us marginally but we like the relative risk-reward of redeploying into increased coal and Chinese solar weightings on a forward-looking basis.

Portfolio Rules

1. There is no day-trading, leverage, or options in these portfolios. As with my investment philosophy, I seek the best ideas with favourable risk/reward over 1-3 years. Also, leverage is usually where portfolios go to die :/ (don’t ask me how I know this)
2. Maximum of 10% cash position in each portfolio
3. There will be tactical buys/sells (maybe a few times per month) and I send these through the chat as and when I make the changes (remember to join the chat here if you haven’t)

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What are the charts telling us this month?

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Hi Apes!🍌

This is our monthly portfolio review, where we look at the performances of our respective portfolios and deep dives. For the new apes, we have the:

• Banana Index: Best ideas within a global, unconstrained portfolio (15-25 stocks)

• Small Banana Index: Best ideas limited to global companies under US$10 billion in market capitalization (15-25 stocks)

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Our portfolios performed in line with the market in March, which is no mean feat given our concentration and market volatility from incessant headlines and developments surrounding the Iran war. Opportunistically, we raised some cash by trimming silver exposure and are now sitting on 10-12% cash in each of the portfolios, preserving optionality for fat pitches. Risk management remains key here, sometimes it is best to do less and sit out of forecasting short term war outcomes/headlines, where one runs the risk of getting whipsawed on the daily. Our well balanced barbell of precious metals - traditional energy helps us to navigate the binary outcomes of war over the short term.

Portfolio Rules

1. There is no day-trading, leverage, or options in these portfolios. As with my investment philosophy, I seek the best ideas with favourable risk/reward over 1-3 years. Also, leverage is usually where portfolios go to die :/ (don’t ask me how I know this)
2. Maximum of 10% cash position in each portfolio
3. There will be tactical buys/sells (maybe a few times per month) and I send these through the chat as and when I make the changes (remember to join the chat here if you haven’t)

Read more

What are the charts telling us this month?

Read more

Hi Apes!🍌

This is our monthly portfolio review, where we look at the performances of our respective portfolios and deep dives. For the new apes, we have the:

• Banana Index: Best ideas within a global, unconstrained portfolio (15-25 stocks)

• Small Banana Index: Best ideas limited to global companies under US$10 billion in market capitalization (15-25 stocks)

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Our portfolios charge ahead with some serious outperformance in February, and are comfortably ahead of all market indices. We have raised about 5-7% cash in each of the portfolios by trimming positions in Gold, Silver and PGM miners. Risk management against a (still very) shaky macro backdrop given ongoing US-Iran war means preserving dry powder and the optionality of playing from a position of strength. Cash at key decision points (particularly when the technicals support the macro view) frees up both mental and actual capital for redeployment.

Portfolio Rules

1. There is no day-trading, leverage, or options in these portfolios. As with my investment philosophy, I seek the best ideas with favourable risk/reward over 1-3 years. Also, leverage is usually where portfolios go to die :/ (don’t ask me how I know this)
2. Maximum of 10% cash position in each portfolio
3. There will be tactical buys/sells (maybe a few times per month) and I send these through the chat as and when I make the changes (remember to join the chat here if you haven’t)

Read more

What are the charts telling us this month?

Read more

Hi Apes!🍌

This is our monthly portfolio review, where we look at the performances of our respective portfolios and deep dives. For the new apes, we have the:

• Banana Index: Best ideas within a global, unconstrained portfolio (15-25 stocks)

• Small Banana Index: Best ideas limited to global companies under US$10 billion in market capitalization (15-25 stocks)

  ---

Our portfolios continue to build on a strong start and we are now pulling ahead of all market indices. We remain fully deployed here, but will look to raise some cash/rebalance away from the precious metals complex to preserve some optionality over first half this year.

Portfolio Rules

1. There is no day-trading, leverage, or options in these portfolios. As with my investment philosophy, I seek the best ideas with favourable risk/reward over 1-3 years. Also, leverage is usually where portfolios go to die :/ (don’t ask me how I know this)
2. Maximum of 10% cash position in each portfolio
3. There will be tactical buys/sells (maybe a few times per month) and I send these through the chat as and when I make the changes (remember to join the chat here if you haven’t)

Read more

What are the charts telling us this month?

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#1 » Which Country is a Dictatorship Again?

Since 2020, China has been labelled “un-investable” by practically all institutional allocators for the following reasons: (1) State intervention in free markets, (2) Arbitrary regulations and the erosion of Rule of Law in favour of Rule by Law (in service of common prosperity), (3) Geopolitical rail risk in th…

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Hi Apes!🍌

This is our monthly portfolio review, where we look at the performances of our respective portfolios and deep dives. For the new apes, we have the:

• Banana Index: Best ideas within a global, unconstrained portfolio (15-25 stocks)

• Small Banana Index: Best ideas limited to global companies under US$10 billion in market capitalization (15-25 stocks)

  ---

Our strong start continues across our portfolios. We remain fully deployed into the new year, but will start raising some cash particularly from the precious metals complex to preserve some optionality over first half this year.

Portfolio Rules

1. There is no day-trading, leverage, or options in these portfolios. As with my investment philosophy, I seek the best ideas with favourable risk/reward over 1-3 years. Also, leverage is usually where portfolios go to die :/ (don’t ask me how I know this)
2. Maximum of 10% cash position in each portfolio
3. There will be tactical buys/sells (maybe a few times per month) and I send these through the chat as and when I make the changes (remember to join the chat here if you haven’t)

Read more

What are the charts telling us this month?

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#1 » Silver - Surfing the Blow Off Top

Blink of an eye, Silver is up >50% over 1 month. Overbought is a feature of bull markets, not a bug. With that said, what comes next? Is this THE top?

This article from Alexander Campbell (ex-head of commodities, Bridgewater 2011-2015) has been making the rounds on X, and it is worth a full read. He captured the bull…

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#1 » Gold vs Oil

Goehring & Rozencwajg produce top notch research on the natural resources space, and just a couple of days ago, they wrote a piece titled “Gold vs Oil”. The contention here is that we are potentially seeing the green shoots of market leadership flowing from Gold to Oil.

I certainly think there could be a sea of opportunities come mid-2026…

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#1 » AI Bubble - Denial Mode?

I really like this X thread by John Mihaljevic (Chairman of MOI Global). He argues that the AI bulls are completely missing the point when they point to the ‘reasonable’ multiples hyperscalers & AI complex is trading at today (~30x P/E) compared to the multitude of tech giants at > 50x P/E during the dot-com to defend their …

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What are the charts telling us this month?

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#1 » Goehring & Rozencwajg - From Carry to Anti-Carry

Goehring & Rozencwajg are the best scientific + thematic thinkers within the natural resource space, and their quarterly commentaries are always an informative read. Whilst they are by default leaning on the perma-bull side of things as natural resource specialists (cue ‘everything looks like a nail t…

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Hi Apes!🍌

This is our monthly portfolio review, where we look at the performances of our respective portfolios and deep dives. For the new apes, we have the:

• Banana Index: Best ideas within a global, unconstrained portfolio (15-25 stocks)

• Small Banana Index: Best ideas limited to global companies under US$10 billion in market capitalization (15-25 stocks)

  ---

We are off to a strong start across our portfolios, and we took advantage of the volatility in the last 2 weeks to reduce our cash holdings from ~8% at inception to being fully deployed heading into end of year! Volatility is not risk, it’s opportunity ;)

Portfolio Rules

1. There is no day-trading, leverage, or options in these portfolios. As with my investment philosophy, I seek the best ideas with favourable risk/reward over 1-3 years. Also, leverage is usually where portfolios go to die :/ (don’t ask me how I know this)
2. Maximum of 10% cash position in each portfolio
3. There will be tactical buys/sells (maybe a few times per month) and I send these through the chat as and when I make the changes (remember to join the chat here if you haven’t)

Read more

#1 » Michael Burry Started Writing on Substack and … You're Buying the Dip?

Financial history often reads like poetry because history doesn’t repeat but it sure rhymes. What better poem is there than seeing Michael J. Burry himself starting a newsletter again (the last time he did, he shorted Amazon 2 months before THE TOP of March 2000). The key takeawa…

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Hi Apes!🍌

I am very excited to launch 2 equity-only Indices that (fingers crossed) will beat the markets handily over a rolling 1-3 year timeframe. These are the:

• Banana Index: Best ideas within a global, unconstrained portfolio (15-25 names)

• Small Banana Index: Best ideas limited to global companies under US$10 billion in market capitalization (15-25 names)

Some quick rules:

1. There will not be any day-trading, leverage, or options in these portfolios. As with my investment philosophy, I seek the best ideas with favourable risk/reward on a 1-3 year investment horizon. Also, leverage is usually where portfolios go to die :/ (don’t ask me how I know)

2. Maximum of 10% cash position in portfolios

3. There will be tactical buys/sells on the edges (maybe a few times per month) and I will send these through the chat as and when I decide to make changes (remember to join the chat here if you haven’t)

4. Periodic performance updates on the indices and holdings will be done in our month end portfolio reviews so keep a look out for those!

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