1H 2025 Results

“The White House has indicated that it will soon release an updated trade policy with new tariffs. We expect this to introduce brief selloffs, but do not panic—the market will quickly reprice on any positive developments” – Plebdex 2025 January recap

A lot has happened. As we forecast at the end of January, trade policy brought about extreme bouts of volatility. 

From peak to trough, the Plebdex shed 18.2% of its value, bottoming on April 7 at the mountaintop of trade uncertainty. If we had written on that day that we expected the trade tension to be short-lived, most would not have believed us. Since April 7, the Plebdex has rallied an astounding 26%.

Year-to-date (YTD), the Plebdex is up 8.96%, outperforming the S&P’s 5.85% YTD. The Plebdex has returned 77.21% since its inception on January 1, 2023, outperforming the S&P 500’s 66.50% by 1,071 basis points. Kratos and Uber have accounted for nearly 50% of this year’s index gains. 

Our Top Performers

1. Kratos Defense & Security (73.77%)
2. Uber (45%)
3. Vanguard Developed Markets (19%)
4. Cybersecurity (17%)
5. Intel (12.25%)

Honorable Mentions

1. Bitcoin (9.66%)
2. Uranium (9.08%)

Our Laggards

• PayPal (-14.55%)
• Biotechnology (-9.31%)
• Google (-5.75%)
• Healthcare (-2.67%)
• Energy (-1.57%)

2H 2025 Expectations

We eagerly await seeing how the remainder of 2025 unfolds. We expect the Plebdex’s 1H underperformers to outperform in the coming months as trade policy firms, as well as fiscal and monetary policy, loosen. 

We expect tax cuts to propel a strong month in July and the Federal Reserve Bank to cut the federal funds rate by 50 basis points to 3.75%-4% by the end of the year. We do expect the Fed to continue running off its balance sheet through the quantitative tightening program started in late 2021. 

Corporate earnings have held up remarkably well considering the policy backdrop, and we expect an acceleration into year-end. We expect a brief 10%+ correction in the September timeframe, followed by a return to a record by the end of the year. 

Stay the course. 

New Investment Ideas

We have our eyes on a few investment ideas that we are considering for our 2026 portfolio. We will publish a series of articles over the next few months, examining these picks and explaining why we believe they hold strong potential.

1. Lithium – battery technology will accelerate over the next few decades. Lithium, known colloquially as white gold, is forecast to see demand grow 3x by 2030 on the low-end. We recommend LIT, a lithium ETF, or a pure stock play, such as Albemarle (ALB).
2. UnitedHealthcare (UNH) – the healthcare insurance and services behemoth has seen a significant rerating of its share price (-50%) due to concerns over Medicare costs and an investigation into the insurer’s Medicare Advantage business and billing practices. UnitedHealthcare denies all allegations and has recently reinstated its former seasoned CEO, Stephen Hemsley. We anticipate that this stock will double in value over the coming year. 
3. PepsiCo (PEP) – the beverage and snack behemoth has seen its shares reprice as GLP1s gain popularity and the DHS pushes the MAHA movement. We expect PepsiCo to innovate through these challenges and are willing to enjoy the 4.15% dividend while we wait. 
4. United Parcel Service (UPS), a logistics and transportation company, has seen a 55% haircut in its share price. The winddown of the Amazon shipping partnership and the current trade environment have proven tough on UPS. Ironically, the Amazon relationship was unprofitable. We believe that UPS is charting a bold turnaround strategy focusing on automation to improve profitability and efficiency. UPS also leads with a strong brand reputation – a very valuable asset. 
5. Coinbase (COIN) – cryptocurrencies are here to stay. We see Coinbase as the penultimate leader and exchange platform. If you believe in crypto assets, Coinbase is a near-assured winner. 

Beyond 2025: Investment Hope & Concern

Nothing is ever certain. We, like any investor, remain cautious, though our outlook for our portfolio remains rosy. We are excited by the rapid growth and proliferation of new technologies that aim to boost productivity and efficiency. 

All great things come with a cost; what that cost is, only time will reveal. We forecast that the 2020s will be remembered as a period analogous to the Roaring Twenties. Asset speculation and technological innovation will usher in a new era. We expect a defining market moment in the early 2030s, but the future beyond remains bright.

For brevity, we have outlined the biggest risks in the days to come:

1. Uncontrolled federal spending – flattening the spending curve could be seen as progress
2. Inflation – as the money supply grows, inflation will increase. Folks forget that inflation was intended to consider both goods and assets. Appreciation in stocks, housing, and other assets is inherently inflationary and tied to the money supply.
3. AI – The U.S. and other nations have gone all-in on AI spend. If the innovations begin to show cracks or the hyperscalers slow their spending, the market will quickly reprice the high flyers. 
4. Stablecoins – worthy of their own series, stablecoins introduce a unique opportunity and systemic risk to the financial system, akin to the Free Banking Era, circa the U.S. in the mid-1800s.

May the odds ever be in our favor!