I sent this piece on Monday, and I'm sending it again now because what I lay out below is directly tied to the two new positions I've added to the portfolio. If you missed it, read it now because this is the thesis behind the trades. |
If you're a Premium Member, please scroll down to the Premium Section for the two new recommendations. |
|
In 2025, Agnico Eagle Mines, a gold miner most people have never heard of, generated a free-cash-flow margin of 30%. |
That same year, Alphabet posted 18%. |
A company that pulls rocks out of the ground in northern Canada produced more free cash flow per dollar of revenue than the company that owns Google, YouTube, and Android combined. |
This might be the most important signal in the markets right now. |
The Kings of Capital-Light Are Becoming Capital-Heavy |
For twenty years, the investing world ran on one assumption: asset-light beats asset-heavy. Software beats shovels. Code beats copper. |
The winners scaled to infinity with near-zero marginal cost. No factories, no mines, no trucks, just servers and algorithms. |
That assumption built the most concentrated stock market in modern history. |
The Magnificent Seven, Apple, Microsoft, Nvidia, Amazon, Alphabet, Meta, Tesla, became shorthand for the entire market. Information technology dwarfs every other sector by weight. |
But the very thing that made those companies so valuable, massive free cash flow on minimal capital expenditure, is reversing. Fast. |
Hyperscaler capex as a percentage of operating cash flow sat around 40% a few years ago. In 2025, it hit nearly 70%. By the end of 2026, it's projected to approach 90%. |
Five companies alone, Microsoft, Amazon, Alphabet, Meta, and Oracle, account for nearly one-fifth of the S&P 500's total market cap. |
Their trailing free cash flow is on pace to get cut in half between now and the end of next year. |
Now think about what funded the decade-long rally. Buybacks. |
Massive share buybacks fueled by excess cash flow. Buybacks as a percentage of operating cash flow are projected to fall from 46% in 2022 to just 15% this year. |
That safety net, the one that cushioned every dip, that turned "buy the dip" into a religion, is being pulled away. |
The kings of capital-light are becoming capital-heavy. |
And the market hasn't fully priced it in yet. |
All that capital has to go somewhere. Hundreds of billions are being deployed into physical infrastructure — data centers, substations, transformers, and the grid connections that make them operational. I've added two companies to the Moonshot Minute Portfolio that sit directly in the path of that spending. |
Moonshot Minute Premium subscribers get both names, my entry strategy, and the thesis behind each one. More on that below. |
When the Disruptors Get Disrupted |
I grew up in a house where money was tight. First-generation American, lower-middle-class, and nobody handed me a portfolio or a trust fund. |
Everything I've built, I built by questioning the narratives everyone else accepted as truth. |
So when I look at what's happening in tech right now, I don't see a temporary rotation. I see a structural break. |
For decades, "asset-light" businesses, the software, media, and platforms companies, traded at premium valuations because they had high incremental margins, minimal capex, and recession resistance. |
Those assumptions are being shattered because AI is doing to knowledge work what the internet did to newspapers. |
Remember newspapers? Warren Buffett used to call them one of the greatest business models ever invented. Local monopoly. Pricing power over subscribers and advertisers. High margins. Massive barriers to entry. |
Then the internet obliterated the entire industry in less than a generation. |
Now, AI is doing the same thing to the same sectors that disrupted newspapers. |
As AI investor Matt Shumer wrote: "AI isn't replacing one specific skill. It's a general substitute for cognitive work." |
Software companies, consulting firms, content platforms, legal services, financial analysis, and more... The most AI-vulnerable sectors are getting sold off as investors adopt a "shoot first, ask questions later" mentality. |
Just last week, billions were wiped from the market caps of data security firms after one popular AI platform published a single blog post revealing numerous security vulnerabilities that its AI discovered, vulnerabilities that all of these companies had missed for decades. |
This time, it's not just valuations being questioned. It's entire business models. |
The ratio of the Magnificent Seven ETF to the S&P Global Natural Resources ETF is breaking down after a double top. |
If it cracks horizontal support, this rotation could accelerate in ways that shock the investing world. |
|
The Case for Miners Has Never Been Stronger |
Now flip the script. |
The mining industry accounts for roughly 1% of global equity market value. One percent. |
NVIDIA alone, at $4.5 trillion, is worth more than double the combined value of the top 50 global miners on the planet. |
There's $320 trillion in global debt and $470 trillion in global wealth—measured against just $2.2 trillion of market value in the top 50 mining stocks. |
When capital starts moving into a space that small, multiples don't just expand. They explode. |
And the fundamentals are screaming. |
Gold miners are printing money. At current spot prices, industry all-in sustaining cost (AISC) margins exceed $3,000 per ounce. |
Free cash flow per share for the XAU gold mining index could grow more than fivefold between 2024 and 2026. |
Agnico Eagle's free cash flow jumped 74% last year to $3.6 billion. |
The company increased its net cash position by $1.94 billion, paid off $950 million in debt, bought back nearly $600 million in shares, and still has a disciplined expansion plan to grow production 20–30% over the next decade. |
Alamos Gold is approaching the end of a major capex cycle that will boost consolidated free cash flow to approximately $1.3 billion by 2028, with an 18% reduction in AISC to $1,250 per ounce. |
These companies generate cash flow margins that rival, and in some cases exceed, those of Big Tech. |
Yet gold miners as a group still trade below 0.8x net asset value, well below the last cycle peak of 1.4x. The market doesn't believe the gold price is sustainable. But what if it's wrong? |
Franco-Nevada founder Pierre Lassonde has said gold could exceed $17,000 an ounce by decade's end. And capex relative to the gold price has fallen roughly 70% since 2013, meaning future supply growth will be severely limited. |
The gold-to-S&P 500 ratio just broke a 45-year trendline. That's the kind of signal that defines generational shifts in capital allocation. |
| 🚀 Get Moonshot Alerts Instantly | Markets move in minutes. Your inbox can't keep up. | Join the Moonshot VIP Text Service and get real-time alerts, portfolio updates, and first-move intelligence directly to your phone. | Be first to know. Anywhere. | 👉 [Join the Text List →] | |
|
|
Why AI Can't Disrupt a Copper Mine |
AI can disrupt a law firm. It can disrupt a consulting practice. It can disrupt a software company. But it cannot create copper out of thin air. It cannot manufacture uranium. It cannot conjure rare earths from a data center. |
If anything, in an ironic twist, AI is accelerating demand for the very resources miners produce. |
Every data center needs copper for wiring. Every turbine needs rare earths for magnets. Every reactor needs uranium for fuel. The AI revolution can't replace mining because its very existence depends on it. |
But there's a layer between the mine and the data center that most investors are ignoring completely. |
None of this works without the infrastructure to move power from source to site. |
That bottleneck is creating what I believe is one of the most asymmetric opportunities in the market right now. |
I acted on it late last week, adding two new portfolio holdings. Premium Members get both picks below. |
Meanwhile, the world has shifted from a demand-constrained economy to a supply-constrained one. |
Resource analyst Craig Tindale put it plainly: "You can't build the robot armies that will displace humans. We don't have the materials." |
Mines take years to permit and build. Smelters are closing across the West. |
Glencore's Mount Isa copper smelter needed a $600 million government bailout just to stay open for three more years. |
China controls over 70% of global midstream processing for critical minerals and is tightening export restrictions, driving prices higher. Western smelting capacity is in rigor mortis. |
The binding constraint on the global economy is no longer consumer demand or credit expansion. It's access to energy, metals, components, and processing capacity. |
The companies that own those resources, the ones with assets in the ground that no algorithm can replicate, are sitting on what may be the most undervalued moat in the entire market. |
| 🚀 Get Moonshot Alerts Instantly | Markets move in minutes. Your inbox can't keep up. | Join the Moonshot VIP Text Service and get real-time alerts, portfolio updates, and first-move intelligence directly to your phone. | Be first to know. Anywhere. | 👉 [Join the Text List →] | |
|
|
The Signal Is Already Here |
I'm not telling you to sell all your tech stocks tomorrow. I'm telling you to open your eyes to what the market is already signaling. |
Gold-to-S&P 500 ratio: broken a 45-year downtrend. Silver: outperforming gold. Agricultural commodities: breaking out. The U.S. dollar: entering what appears to be a long-term decline. Inflation indicators: coming alive.
|
And the companies that defined the last era, the asset-light, buyback-fueled, capital-efficient darlings, are being forced to spend like industrials while their moats get eaten by the very technology they championed. |
The mining sector, at 1% of global equities, is where tech was in the early 2000s. |
Ignored. Misunderstood. Underowned. And about to re-rate in a way most investors won't believe until it's already happened. |
A 30% free-cash-flow margin from a gold miner versus 18% from the company that owns Google is a fact we can't ignore because facts don't care about consensus. |
Here's your actionable step: Start building exposure to resource miners and hard assets before the rest of the market catches on. |
Gold bullion. Silver. Copper miners. Uranium producers. These aren't your grandfather's commodity trades. |
These are companies generating 30% free-cash-flow margins, buying back shares, paying down debt, and sitting on assets the world desperately needs, and can't manufacture in a lab. |
And for Premium Members, I'm going one step further. |
Last Wednesday, I added two new positions to the Moonshot Minute Portfolio. |
Both are directly tied to the infrastructure bottleneck I outlined above. One has a backlog so deep that it has revenue visibility through the end of the decade. The other has customers paying upfront just to secure capacity. The names, the numbers, and my full entry plan are detailed for you below. |
The great rotation isn't coming. It's here. The only question is whether you'll be positioned for it or watching from the sidelines, wondering what happened. |
Double D |
P.S. Here's a screenshot of the current Moonshot Minute Portfolio. I've blurred out the tickers since that information is only for Premium Members, but you can see how we've done so far: |
|
|
|
🔓 Premium Content Begins Here 🔒 |
|
In today's Premium Section, you'll find two new recommendations we're adding during this grid buildout supercycle. | I hope you've been paying attention because many of our picks are currently beating the S&P by up to 4-to-1 this year. | Most financial newsletters charge $500, $1,000, even $5,000 per year. Why? Because they know they can. | I don't. | I built my wealth the old-fashioned way, not by selling subscriptions. | That's why I priced this at $25/month, or $250/year. | Not because it's low quality, but because I don't need to charge the typical prices other newsletters charge. | One good trade, idea, or concept could pay for your next decade of subscriptions. | The question isn't 'Why is this so cheap?' The question is, 'Why would I charge more?' | 👉 Upgrade to Premium Now | P.S. If this newsletter were $1,000 per year, you'd have to think about it. | You'd weigh your options. You'd analyze the risk. | But it's $25 a month. | That's the price of a bad lunch decision. | And remember, just one good idea could pay for your subscription for a decade. | 👉 Upgrade to Premium Now | |
|
|
Tidak ada komentar:
Posting Komentar