There’s a lot happening at MO on the business side, and we couldn’t be more excited about the future of the community and the tools/research we’re building to bring you the best version of Macro Ops yet.
To start, we’ve added three new Operators to our MO team: Dean, Mike G, and Tony. Each is the best at their respective domains and brings differentiated (but complementary) skills to our core MO Trifecta process.
You’ll hear from each of them over the next few days and learn why Alex and I are stoked to have them on the team.
But today I want to review some past Thematic Bets we’ve pounded the table on, and why we’re equally excited about our next batch of Thematic Bets over the next 18-24 months.
Only a handful of Big Bets happen in markets each year. Catching them can be the difference between beating the market or massively underperforming. Adding more talented Operators, like Dean, Mike G, and Tony, lets Alex and me focus on what we do best: building conviction and positioning for fat-pitch setups.
Fortunately, Alex and I have caught a few Big Bet themes throughout the years, which we’ll outline below. And while past success in finding Big Bets doesn’t guarantee future success, it provides a framework for finding the next batch of winners.
Finally, a quick housekeeping note … As some of you know, the MO team recently joined an established asset management firm to manage capital utilizing the MacroOps investment process — if you are a qualified purchaser (please see attached description) and are interested in learning more, please let us know.
Alright, let’s get after it.
The 2020 Commodity Supercycle Call
We started highlighting the coming commodity supercycle in 2017. But it wasn’t until 2020 that we pounded the table, as all three legs of our Trifecta Lens process aligned (fundamentals, sentiment, technicals).
Here’s a snippet from our 2017 piece on the Wealth S-Curve:
“The S-curve lies at the foundation of what I think will be one of the largest global macro forces driving markets over the next decade.
We’re about to begin seeing its effects very soon.
Put simply, THIS WILL BE BIG.
Let me explain.
French philosopher Auguste Comte, rightly said that “demography is destiny”.
He was referring to national power. But, if you take demography and combine it with rising wealth, then you have economic and market destiny as well.
The IMF wrote recently that, “History has shown that as countries become richer, their commodity consumption rises at an increasing rate before eventually stabilizing at much higher levels.”
The more wealth people have, the more nonessential goods people buy, and the more commodities they consume.
There’s a very interesting and well documented relationship between rising GDP (as noted by GDP per capita) and commodity intensive consumption. In other words, once a country hits a certain level of GDP per capita (ie, wealth) they begin to consume a lot more oil, gas, wheat, copper, livestock etc… This consumption grows exponentially.
Can you guess what type of shape this gdp/commodity consumption relationship takes?
That’s right, an S-curve.”
We then publicly called the start of the new commodity bull market on December 7th, 2020 (see below):
“Commodities have put in at least a cyclical if not a secular bottom. Over the next two decades we’ll see demand juiced by incredibly powerful Wealth s-curve tailwinds. You want exposure to this trend.”
The following year marked another seminal macro call: long ags before Russia/Ukraine war.
Long Agriculture Before Russia/Ukraine War
Sometimes it’s better to be lucky than good. But remember, fortune favors a prepared mind. We had no idea Russia would invade Ukraine and send soft commodities like wheat, corn, and soybeans through the roof.
However, we got long before Russia invaded because the setup met our Trifecta Lens process.
We wrote throughout 2021 about our bullish ags thesis:
The Russia invasion was merely the catalyst that lit the underlying structural imbalances we’d identified.
AI & Memory Stocks Two Years Before ChatGPT
Macro Ops was one of the few macro research shops writing about AI and memory stocks years before OpenAI released ChatGPT in 2022.
For example, in October 2020, we released AI & Semiconductors: Understanding The Next Super-Cycle (see below):
“The rise of AI has flipped the semiconductor industry from a cyclical sector into a secular growth powerhouse. A few statistics point to this secular growth story:
AI-based semiconductors will grow 18%/year over the next 3+ years (5x greater than non-AI chips)
AI-specific memory chips command 300% higher prices than standard memory chips
By 2025, AI-related semiconductor technology will account for 20% total revenue
Semiconductor companies will capitalize on these trends by capturing more of the AI technology stack. Under previous technological shifts (smartphones, cloud computing, etc.) semiconductors took smaller portions of the revenue pie (10-20% in most cases).
Here’s the main thing that matters: McKinsey estimates that in an AI-led growth cycle, semiconductors can capture 40-50% of the revenue pie. Remember, AI-based technology will represent roughly 20% of all revenue by 2025. This percentage should increase over time. That means semiconductors will generate 40-50% of a much larger TAM.”
The following week we wrote our DRAM & NAND: Betting On The Semiconductor Supercycle essay … before these names became household “bottleneck” plays.
A few days later, we outlined our bullish Micron (MU) thesis, which we played via deep out-of-the-money LEAPs that returned 4-5x.
Timing The Precious Metals Cycle
The last Big Bet I’ll leave you with was our call on the precious metals bull market that started in 2022.
On July 11th, 2022, we wrote that “the bull market in gold is coming.” Why did we have such conviction? Because it met our Trifecta Lens criteria … It was a fat pitch, with Fundamentals, Technicals, and Sentiment/Positioning all aligning, giving us high conviction to bet big.
We kept writing about the precious metals bull market through 2024-2025 and identified a handful of mining companies that returned 500-1,000% during that time frame.
Other Notable Calls: Minor Metals & Uranium
We’ve also had a few other notable calls throughout the past six years, including catching the bull markets in tin, tungsten, and rare earths before they became mainstream news.
We also successfully called the start (and finish, which was more luck than skill of course) in the uranium market.
As I mentioned above, none of this guarantees we’ll find the next handful of Big Bets and position ourselves well enough (i.e., develop enough conviction) to profit from them. But it does allow you to see our Trifecta Lens process at work.
This is the core of our Macro Ops ethos. We’re obsessed with the craft of investing, managing risk, identifying thematics, building conviction, and staying patient when there’s nothing to do.
Investing is the greatest game in the world, and nowhere is it better to sharpen your skills than inside the Macro Ops Collective.
We’ve spent the past year writing about the next batch of Big Bet thematics, sharing our intel with the community, and forming variant perceptions based on differentiated research. The Collective is the greatest trading community out there.
And we’re just getting started. You’ll hear from Dean, Tony, and Mike G over the next few days as they share their unique approach to markets. You’ll also hear from Alex and me at the end of the week outlining the new tools we’re building for our Collective members.
If you’re interested in joining, click the link below. We’re doubling our prices next year to keep delivering the highest-quality research to the highest-quality members.
I can’t wait to see you in there.