Store-of-value assets, typically precious metals, have served as the primary form of wealth preservation for thousands of years. In addition to storing value, they were also used as a means of exchange. Around a thousand years ago in China paper money and certificates of credit were introduced not to replace precious metals, but rather to mitigate the risks associated with transporting and make them easier to use in trade.

By the 17th century, European monarchs realized that issuing paper money beyond their precious-metal reserves could help finance wars and other forms of statecraft. This marked the beginning of the divorce between store-of-value assets and money and credit. It is therefore not surprising that whenever trust in the future value of sovereign-issued IOUs, currencies and debt begins to erode, investors convert the latter into gold or other scarce, real assets to preserve the value of their savings.

For the last fifty years, and for the first time in history, the global monetary system has been based entirely on fiat money. As a result, entire generations have known nothing but the current system and can hardly imagine a different monetary order. Yet it is becoming increasingly difficult to deny that the system is under growing strain, weighed down by a level of global debt with no known historical precedent.

The primary sign of such strain is non other than the price of Gold. The yellow metal has been apprecciating for years and from the onset of the XXI century has outperformed US equities and nearly any other asset class. Over the last 3-4 years we have seen an accelleration that saw the metal reaching $5,600/oz the last week of January this year. The metal has corrected peak to through nearly 27% but has recently started to rebound.

Yet the asset is scarcely owned by investors. The total value of investment gold globally including central bank reserves is only $12.6 trillion vs$158 and $160 trillion respectively for equities and bonds. Does the investment case for gold still stands?

Gold has been front and center of SWERVE’s framework nearly from the start of this publication and it is time to revisit the investment case for gold in the current macro regime and whether investors should still seek a structural exposure to the yellow metal in their portfolio.

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Chinese equities have been one of SWERVE’s highest-conviction calls since early 2024. That conviction has been rewarded. From our first publication through the end of last year, the MSCI China Index outperformed the S&P 500 by nearly 30%, underscoring the opportunity that much of the market had overlooked.

2026, however, has been a very different story. The same benchmark has underperformed the S&P 500 by roughly 20%—a reminder that even the strongest long-term investment theses rarely play out in a straight line. Our conviction, however, has not changed. This week, we take the opportunity to reiterate our call, unpack why China's equity market is unlike any other, and outline what investors need to know to allocate capital thoughtfully. We close this week’s article by outlining a range of options to gain effective, yet risk-balanced, exposure to the asset class.

Let’s dive in.

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Back in May, we cautioned that the aggressive rally in semiconductors was built on shaky ground. Fast forward two months, and the sector index is down 30%. What changed?

This week on SWERVE SIXTY we dissect the factors driving the sell-off and what it signals for future tech valuations.

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In the first two articles of this three-parts series, we examined in some dtails the two dominant narratives in todays financial markets; the AI revolution and the intensyfing geoeconomic disruption. This week we bring those two themes together and outline what we believe is a sensible positioning framework for a globally diversified, macro-aware investor. Our guiding principle is straightforward. As global markets become increasingly dependent on the AI trade while political and geopolitical risks remain elevated, investors should shift their focus toward building an antifragile portfolio, one designed not merely to withstand volatility but to benefit from it.

AI Economics: The Cash Flow Gap

The $3.2 trillion of 2024 to 2028 capex anticipated in H1 2026 looks increasingly imprudent. Even on reasonably optimistic assumptions, the monetization needed to justify the investment is highly unlikely to materialize.

The current state of AI economics still points to a massive gap between the cost of provisioning compute and the revenue frontier labs can extract. A new report from Exponential View estimates trailing twelve-month AI revenue at $110 billion, with 11% accruing to the AI labs and 89% to compute infrastructure providers. Assuming seven-year depreciation and a 12% hurdle rate, the $3.2 trillion capex would require $701 billion per year in additional operating cash flow to justify the investment once principal payback and the required return are factored in. For context, total operating cash flow for the hyperscalers plus Oracle was $577 billion in FY2025.

Anthropic's annual recurring revenue (ARR) growth in Q1 and Q2 drove the brazen sentiment. Between December 2025 and May 2026, ARR climbed from $9 billion to $47 billion on the success of its flagship Claude Code product. Some cracks are already starting to emerge in product-market fit. The lofty pricing is unsustainable relative to the value most enterprise customers can extract from the model, and nearly-as-good open-source alternatives deliver the same output for a fraction of the cost. Concerns about data privacy and security are also surfacing. AI labs face increasing competition from infrastructure providers and even from silicon manufacturers developing their own models. More recently, the US government's propensity to control the release of AI models adds a further layer of uncertainty.

On the “micro” side of the issue, open-source models, primarly Chinese, dominate market share with approximately 62% of total tokens served. The trend is exemplified by the average cost per token, which has declined nearly 20% since its May high precisely because of the expanded market share of cheaper models. On the "macro" side, regulation and social acceptance are increasingly a concern that may prevent US frontier labs from growing revenues as fast as the investment in infrastructure requires. The Green Movement's impact on European politics should serve as a cautionary tale.

The five sets of conditions we laid out for the technology to be monetised at a scale sufficent to be supportive of the investment planned are by no mean guaranteed. The result is that, short of some major breakthrough in the technology, we may have seen the peak of AI euphoria in financial markets for the time being.

Iran, Debt, and the Fracturing Order

The June 17 sixty-day negotiating truce has collapsed, and the conflict could escalate further. Regardless of how events unfold, it is already clear that the war is reinforcing two of the structural forces reshaping the global order: unsustainable sovereign debt and accelerating deglobalization.

All major political events of the last 12 months were linked, directly or indirectly, to the unsustainable stock of sovereign debt. Instability in the UK and France, Japan's currency devaluation, the rise of sovranist policies such as "Liberation Day," and the EU's inability to make any progress on the new budget all reflect a common reality: these countries are out of fiscal space. The Iran conflict only compounds the problem as governments face increasingly difficult trade-offs between defence spending, social commitments, industrial policy, and debt sustainability. As a result, we are likely to see more, rather than fewer, such outcomes.

The Iran war has undermined US credibility, and the country is likely to remain the fulcrum of global instability for years to come. Domestically, the United States appears set for even deeper political polarization. The Democratic Party continues to experience growing influence from its progressive wing, while divisions within the Republican coalition are becoming more visible as parts of the MAGA movement question both the rising cost of living and the opportunity cost of sustained foreign engagements.

History suggests that as political polarization deepens, the range of policy outcomes widens. Governments become more willing to pursue increasingly aggressive domestic and foreign policies to secure political advantage. At the same time, weakening hegemons have often proved more willing to take geopolitical risks in an attempt to preserve their influence.

The result is a self-reinforcing cycle. Greater political fragmentation encourages more assertive foreign policy, which in turn emboldens regional powers to expand their own spheres of influence. The outcome is a more fragmented, less predictable international system, one in which geopolitical instability becomes a structural feature rather than a temporary disruption.

Everyone Is Long the Same Story

Consensus positioning among investors appears increasingly vulnerable on both fronts. On one side is the AI trade, which has evolved into the nearly monocausal driver of global asset markets. On the other is the deeply ingrained tendency to dismiss political and geopolitical risk, based on the assumption that policymakers will ultimately intervene to restore stability and put asset prices back on an upward trajectory.

Both assumptions deserve to be challenged. As markets become increasingly concentrated around a single growth narrative while geopolitical risk becomes more structural, investors may be underestimating the likelihood of a structurally different macro regime ahead.

SWERVE’s playbook takes the opposite approach. Rather than relying on a single dominant narrative, we advocate shifting from a monocausal to an overdetermined investment framework. By overdetermined we mean a position whose payoff rests on several independent and individually sufficient causes, so that no single thesis failing can sink it. The level of uncertainty ahead calls for portfolios that can not only withstand but also benefit from a wide range of outcomes that consensus investors continue to dismiss as mere tail risks.

Let’s dive in.

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In the first half of 2026, one developed market did two things that rarely coincide.

It beat the S&P 500 on total return, and in the sharpest risk-off of the year it drew down less than 6%.

Switzerland, the market still treated as the world's default haven, fell more than 13% over the same window.

That pairing is not an accident. Swerve Insights flagged the setup last October: in an age where geopolitics sets the price, jurisdictions that are neutral, solvent, surplus-running, and rule-bound now command a premium the market is only starting to pay. Which market, and why its lead is early rather than over, is inside.

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Due to the essential nature of the themes explored in this week’s report, Swerve Insights has lifted its paywall, offering full access to all readers. Readers interested in securing long-term access …

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Due to the essential nature of the themes explored in this week’s report, Swerve Insights has lifted its paywall, offering full access to all readers. Readers interested in securing long-term access …

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What do the surging demand for air conditioning in India, the explosive growth of AI, and global rearmament have in common?

They all require a massive quantity of the exact same metal.

This week on Swerve Sixty, we revisit a long-time favorite of this publication and outline why this single exposure may ​b​e one of the ​b​est risk-adjusted investment opportunities of our time.

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The economic consequences of the conflict in Iran are emerging as accelerating inflation and slowing economic activity. Rising interest rates suggest that, unlike during the COVID-19 pandemic or the Ukraine crisis, policymakers may struggle to intervene effectively. Despite these mounting concerns regarding a stagflationary regime, global investors remain enthusiastic about the promise of artificial intelligence, continuing to bid equity prices higher.

No sector has benefited more than semiconductors. The Philadelphia Semiconductor Index, which comprises the 30 largest U.S.-traded chip companies, is up 78% year to date with a 47.3 P/E ratio. The industry group’s weight within the S&P 500 has risen from 1.5% in 2002 to a new all-time high of 18.4%. For context, the combined market capitalization of the energy and materials sectors in the S&P 500 is just 7.5%—less than half that of semiconductors.

The sector is dominated by a handful of companies; the top three—NVIDIA, AMD, and Broadcom—account for 63% of the semiconductor sector’s total $11.3 trillion market capitalization. Their EV/sales ratios stand at 12x, 15x, and 17x, respectively. For context, Alphabet and Amazon’s EV/sales ratios are 9x and 4x. Such lofty valuations reflect expectations of long-term growth, exceptionally high margins, and capital-light scalability. These companies utilize a “fabless” model, meaning they do not physically manufacture the chips they design but instead rely heavily on TSMC in Taiwan.

Current price action and valuations imply that market participants are making two critical assumptions:

a) AI deployment and, therefore, demand for compute and semiconductors will continue to grow esponentially.

b) The current set of incumbents will mantain their dominant market share.

Both assumptions face significant challenges and, at current valuations, create an increasingly unattractive risk-reward profile for investors.

Given the risks, investors should seek exposure to companies and sectors that can benefit from AI adoption while remaining relatively uncorrelated and, to some degree, orthogonal to the NVIDIA/AMD/Broadcom trade.

Let us examine the headwinds these companies may face and, conversely, the investment opportunities available to hedge those risks while continuing to participate in the broader AI adoption wave.

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The Misguided Consensus

Early last year, we warned that the bullish consensus surrounding European equities was fundamentally misguided. We argued that a toxic combination of deteriorating economic indicators and intensifying geopolitical headwinds rendered the region deeply unattractive. For macro-aware allocators looking to diversify away from US concentration, we explicitly suggested favoring Chinese equities over the crowded Eurozone consensus trade of late 2024 and early 2025.

That contrarian stance has been thoroughly validated by the market tape. A performance comparison of the respective top-50 blue-chip indices reveals that Chinese large-caps delivered total returns nearly double those of their European counterparts over the trailing 12 months.

Since then, European capital markets have deteriorated significantly, with the benchmark index remaining nearly flat year-to-date. At SWERVE, we believe the situation is poised to worsen. A critical mass of macroeconomic and structural evidence suggests that European equities will enter a multi-year period of secular underperformance, with a strong probability of a sharp, absolute drawdown from current levels.

Our bearish thesis is multi-layered rather than single-variable. To provide a clear framework for allocators, we divide our rationale into three distinct pillars: structural fundamentals, escalating geopolitical risks, and shifting cross-border financial flows.

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High conviction, high performance.

One of our five high-conviction calls for 2026 is already up nearly than 25% YTD.

The “hyperscaler” wars are intensifying, but one name retains a structural lead. This week on SwerveSixty: an update on our best-in-class AI exposure.

Enjoy!

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In investing, the calls you make are easy. Living with them publicly is something else entirely. That’s why we’re launching SWERVE Scorecard: a series where we revisit past conviction calls; wins, misses, and everything in between.

We measure the outcome against the thesis, and tell you exactly what we got right, what we got wrong, and why it matters for what comes next. Because we believe the only way to get better is to keep an honest account.

This week we review April 30th 2025’s “Swerve Insights: 2 Risk-Savvy Ideas for Exposure to China Equities”

The Retrospective

We turned constructive on Chinese equities in Q1 2024. The case rested on deeply discounted valuations and Beijing's limited options but to deploy policy support—stabilizing the economy and lifting domestic stocks. The thesis unfolded precisely: reforms and measures emerged in H2 2024.

As economic data improved, SWERVE reinforced its conviction. In November 2024, we argued that Chinese equities were positioned to outperform the U.S. in the coming year. That call proved accurate: the S&P 500 closed 2025 up 16%, while the MSCI China index surged 31%.

Deeper analysis revealed supportive geopolitics and the new U.S. administration's policies, alongside fundamentals and tailwinds. In May 2025, we recommended two ETFs for China exposure. One year later, their average total return as of April 2026 is 21%, but results diverged sharply. What drove the split, and do they remain viable?

What drove such a wide divergence and, most importantly, are either (or both) of these investments still a viable option to get a profitable exposure to China’s equities?

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While the world focuses on diplomatic and military developments in the Middle East, a deeper transformation is unfolding within the global financial architecture. At Swerve Insights, we identify three irreversible shifts in the global order that investors can no longer afford to ignore. Even in the event of a permanent ceasefire, the genie is out of the bottle; these structural forces will continue to shape capital allocation for years to come.

The portfolio architecture we have developed in recent years anticipated many of these dynamics. In a four-part series published last year, we outlined why the current macro regime diverges materially from those of the past eighty years and why effective wealth preservation now requires a fundamentally different strategic approach. As mounting evidence continues to validate Swerve’s framework, we are in a position to offer a more precise assessment of ongoing developments — and, crucially, how they should be reflected in investment strategy.

Three pillars of the “old world”, the primacy of intangible assets, US hegemony, and dollar ubiquity, are fracturing simultaneously. All three themes share a common denominator: the Erosion of Global Trust. Intangible assets, hegemony, and fiat money all require trust to function. In a world where trust becomes scarce, investment portfolios require a fundamental rethinking to avoid catastrophic losses and to generate meaningful alpha.

In addition to outlining the nature of these shifts and the reasons they are likely to prove permanent, we present a set of investment ideas that investors may consider to mitigate risk and seek alpha in the Age of Geopolitical Dominance.

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As the conflict in Iran persists and market uncertainty intensifies, the fundamental drivers of asset pricing have been sidelined by a more urgent priority: liquidity. This flight to safety, characterized by indiscriminate sell-offs as investors scramble to de-risk, underscores a recurring theme in our analysis. In this “Age of Geopolitical Dominance” cash is not merely a bystander; it is a critical instrument for risk management.

In this week’s edition of SWERVE SIXTY, we examine why, within the current macro regime, a strategic cash position serves as the essential cornerstone of a portfolio’s defensive architecture.

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Times of war are often among the most attractive periods to deploy capital. While fear runs high and liquidity becomes scarce as rates rise and leverage unwinds, these conditions are precisely when compelling opportunities emerge. The fundamental requirement is ensuring the price paid remains materially below the returns likely to be generated over an investor’s time horizon.

The conflict in Iran is no exception. As markets grapple with the potential duration and fallout, several sectors appear significantly undervalued relative to their long-term potential.

The Price Conundrum

Capturing alpha during a conflict is challenging primarily because of price volatility. Most assets suffer outsized declines, leaving investors paralyzed by the fear of “catching a falling knife”. To navigate this environment, consider three basic tenets:

1. Price Is a Liar. Over the long term, prices can serve as a reliable indicator of supply and demand. Over shorter timeframes, however, they can be noisy or outright misleading. A key driver of prices is liquidity, and sudden shifts in its availability or cost tend to have a far greater impact than fundamentals—especially when the asset in question is underpinned by a large derivatives market. As these markets employ leverage, abrupt increases in financing costs trigger margin calls and, in turn, liquidation events that push prices significantly lower. Deleveraging is often forced and, as such, takes precedence over any fundamental assessment of the asset’s longer-term value.

2. Relative Strenght. Market dislocations also present valuable opportunities to assess the future prospects of sectors or individual securities through their price strength relative to relevant benchmarks. When risk-off conditions set in, an asset’s relative strength can be a powerful indicator of pent-up demand and future performance. All else being equal, resilience during periods when markets are declining in unison is often a harbinger of a faster recovery and sustained outperformance over the longer term.

3. Sell the Winners first. When faced with the need to reduce leverage and raise cash, investors and speculators often prefer to liquidate positions that have generated the largest gains, rather than crystallizing losses by selling underperforming assets. Liquidity trumps fundamentals. That is another way fear turns into opportunity.

Three High-Conviction Ideas for Crisis Alpha

As we enter the fourth week of war, markets are navigating a dense “fog of war.” Some sectors have suffered disproportionately, while others have shown relative resilience. As SWERVE is focused on investment rather than trading, we have cross-referenced our “Age of Geopolitical Dominance” macro framework with recent price action to identify three specific sectors—and related securities—that present compelling risk-adjusted opportunities.

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While the "dollar bears" have dominated the narrative, their conviction should give you pause.

This week on SWERVE SIXTY, we explore why macro fundamentals suggest the US Dollar remains in a superior position relative to the other major fiat currencies.

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This is a rare opportunity for you to put yo…

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Last week we argued that the most likely outcome of the U.S.–Israel war with Iran would be that the economic and political consequences of the conflict would eventually force Washington to declare “mission accomplished” and withdraw, without achieving either regime change or the decisive degradation of Iran’s military capacity.

The “Vietnam 1973” scenario is gaining ground as the U.S. administration realizes that the political cost of disrupting global energy markets — domestically and internationally — is simply too high. With midterm elections seven months away, further deterioration of political consensus may cost the president control of the Republican Party and make a likely barrage of impeachment proceedings ever more difficult to stave off. At the current state of play, a “TACO” (Trump Always Chickens Out) scenario appears to be a question of “when” rather than “if”.

While the U.S. president is known to be capable of pragmatic shifts in position, disentangling from the Iran conflict may prove more difficult than expected. A critical mass of factors suggests that Iran may seek to exploit its adversaries' desire for a rapid conclusion to the crisis by delivering a "Parthian shot" — a tactic named after the ancient Parthian Empire, the Iranian civilization that preceded the modern state by more than two thousand years.

The Parthian shot was a cavalry maneuver in which mounted archers feigned retreat at full gallop, only to turn in their saddles and fire arrows backward at pursuing enemies — devastatingly effective, deeply deceptive, and designed to break enemy formations. The Parthians were the nemesis of ancient Rome, and arguably the only major power Rome never succeeded in subjugating. The tactic was most famously deployed at the Battle of Carrhae (53 BCE), one of the most humiliating and costly defeats in Roman military history.

How might history rhyme in today’s circumstances — and, more importantly for investors, what would be the ramifications for financial markets?

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The Iran crisis is providing a real-time stress test for modern portfolios. The result so far: bonds have failed.

This week’s SWERVE SIXTY examines why the defensive role of bonds can no longer be taken for granted—and why portfolio construction must evolve alongside the changing macro regime.

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In the wake of Russia’s invasion of Ukraine in 2022, we coined the expression “Age of Geopolitical Dominance”—shorthand for a macro regime in which geopolitical outcomes, rather than fundamental fiscal or monetary forces, become the primary drivers of asset prices. In such a regime, the most valuable insights are those that correctly anticipate these developments, allowing investors to position their portfolios accordingly.

We have already witnessed two major shifts with profound implications for global markets. The first was President Trump’s return to power, an outcome SWERVE correctly forecasted as early as July 2024. The second was China’s strategic policy shift and its consequent transition into a premier geoeconomic superpower and primary global capital market. We began chronicling this secular move in 2024, capturing the bulk of Chinese equities’ outperformance over the last two years.

The conflict in Iran represents yet another critical inflection point. The distribution of potential results is highly dispersed, and the war’s conclusion may give way to profoundly different scenarios for global financial markets.

Based on historical precedents, regional context, and current U.S. administrative constraints, we outline three primary scenarios and their relative probabilities. Finally, we analyze the ramifications for global investment portfolios by parsing the geoeconomic and financial consequences of each outcome.

The duration of the conflict—specifically the time required for combat operations to cease and for Iran’s political situation to stabilize—will be the definitive marker. While U.S. officials signal hostilities could end within weeks, the events of the next 14 to 21 days will reveal whether such assumptions are correct.

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