Performance Report: 07/31/2026
All performance data for our strategies is net of all fees and expenses. All performance data for indexes or other securities is from sources we believe to be reliable. All data is as of 07/31/2026
Investment Strategy
MAP - Full ($500k+)
MAP - Plus
MAP - Balanced
S&P 500 Index2
Mod Alloc(AOM)2
Growth Alloc (AOR)2
Jun Return
(0.5%)
(2.0%)
(0.2%)
(0.1%)
(0.8%)
(0.7%)
YTD
8.0%
3.9%
1.8%
8.6%
4.0%
6.2%
Inception1
114.0%
N/A
N/A
154.4%
54.2%
79.2%
Sortino3
1.18
N/A
N/A
0.86
0.56
0.70
(Disclosure: We added performance figures for our new strategies solely on a month-to-month and YTD basis as any prior data will be inconsistent and potentially misleading. We will post continuous data for our full-size MAP Strategy since its inception on 5/1/2019. We use AOM and AOR as our benchmarks as they are low-cost index funds that model the exposure of the majority of retail investors. Our risk measures are aligned closely with these funds. It is important to note that individual account performance varies and your account may perform better or worse than its model. The model's performance is simply the average performance of all accounts participating in the model.)
Performance Update
The last several months have been difficult. All of our strategies are positive for the year and either ahead or close to our benchmarks. Since inception, our gains continue to be enviable, but the last few months have taken a toll. With that said, I'm confident in how we are positioned going forward. In fact, I'm oddly optimistic about our growth prospects for the next couple of years. I think the stock market has handed us an incredible gift by discounting some themes that should outperform for a considerable period of time. These are the same themes I addressed last month that will possibly benefit from shortages.
Fertilizer stocks: While the entire investment world is fretting over oil & gas prices, waiting on bated breath as to what Trump may or may not say about his war with Iran, the smart money should be looking at fertilizer instead. Yes, about 30% of the maritime trade for oil passes through the Strait of Hormuz but that only represents about 20% of total oil production. Over 30% of the world's fertilizer passes through the Strait. So if any product stands to gain from an interruption of traffic in the Strait, it would be fertilizer products produced in other parts of the world. However, while oil and gas stocks have skyrocketed higher, fertilizer stocks have been mired in a sideways channel. While energy stock indexes are up well over 50% since the Iran invasion, the fertilizer stocks I track are, on average, flat. Given that domestic fertilizer production is more concentrated than energy, these companies have more pricing power and could see their margins increase at a faster rate.
There is a host of reasons to be bullish on fertilizer even if the Strait is fully open. It will take time for ships to acquire the appropriate insurance coverage to pass through the Strait. We don't know how much of the infrastructure in the Middle East was destroyed or compromised but we know a decent bit was. Moving forward, will our nation allow for our food security to be so interdependent on an area that is so volatile?
A bonus factor that has nothing to do with the War with Iran is weather patterns in Europe. Apparently, the Gulf Stream is slowing down and, as a result, is causing most of Europe to heat up in a measurable way, challenging their agricultural production. If this continues, not to mention the War between Russia and Ukraine compromising Europe's bread basket, agriculture production will need to be shifted to other areas of the world which could result in supply/demand imbalances for crop inputs.
If I could only invest in a single theme right now, fertilizer would be it. From a technical perspective, fertilizer stocks have been trading sideways so there could be one more move lower. If so, we'll average down which will result in larger percentage gains. If the current sideways movement in these stocks is resolved on the upside, I'll increase our exposure which will increase the contribution these stocks make to our long-term gains.
Drones: Much like fertilizer stocks, Drone stocks have inexplicably underperformed the past few months. I bought several of these names in June only to be stopped out. However, I bought back in using my MAP system, and now we are sitting on a nice gains on all four of these stocks. Our allocation to them is small because they are so freakishly volatile. I assume our overall allocation will be on the small side but I plan on holding these companies for quite some time and expect them to make a sizeable contribution to our returns.
I've continued to do research on this theme and I'm growing more bullish by the day. I've talked to law enforcement, military personnel, utility companies, oil and gas executives, and they are all highly optimistic that drones will play a far bigger role in their business moving forward.
To sweeten the pot, the US government, for security purposes, is restricting the sale of foreign-made drones. The laws at this point are somewhat vague but it appears that domestic producers will have a substantial advantage in this space for many years to come.
It is now rumored that the US military has burned through its inventory of long-range missiles. It stands to reason that these weapons could be replaced with military drones.
While Fertilizer stocks are my #1 preferred investment at this juncture, I wouldn't be at all surprised if the returns on our positions in the drone industry far outpace those in the fertilizer space.
Nuclear and Rare Earths: I'll lump these together even though they are very different products; they have an identical catalyst, which is the hyper-growth in computing power. We need more electricity, and we need more rare earth materials to pull off AI, VR, etc. And both of those appreciated in a remarkable fashion last year. And both of them have fallen precipitously this year. If they are in for a "second wave", I would expect these securities to continue to do incredibly well for the next 24 months.
Gold and silver: And speaking of a "second wave", the odds are decent for another strong move higher for precious metals, which I addressed last month. It was rumored that the Chicago Mercantile Exchange (CME), alongside JP Morgan (JPM), could not deliver on some silver contracts late last year. While no one outside of the CME or JP Morgan will confirm this, where there is smoke, there is fire. And there certainly was fire in the silver market last year. (JPM wrote the contracts but the CME stands behind them - apparently neither had sufficient silver to deliver.) Just as fertilizer stocks have done, precious metals have traded sideways for a bit now so they could have one more push lower before the second bullish wave takes hold.
Last year I did extensive research project on gold versus stocks and discovered that gold futures have actually outperformed both the DOW and S&P 500 by a factor of nearly 3:1. This was as of July of last year. I intended to publish it on the website but never had the time to get it done. I will update the numbers and post it soon. Stock market apologists are quick to point out that large-cap equities (S&P 500 and the DOW) have outperformed gold since 1970. This performance is based solely on the fact that an investor had reinvested all of his or her dividends. Since 1980 along, half of the "advertised returns of the S&P 500 and the DOW are a direct result of dividend reinvestment. (The change in price in the index of both the S&P 500 and DOW have not quite appreciated as much as gold since 1970.)
However, it's not just possible, but frankly quite easy, to generate a competitive yield in gold by using futures. A gold futures contract would allow an investor to have 100% of their money exposed to the change in gold price while maintaining a 95% allocation to US Treasuries. This is because gold futures are leveraged 20:1 which leaves plenty of room for an allocation to other investments. Had an investor bought a gold futures contract and then invested the remaining balance in 1-year US Treasuries while reinvesting the income, the returns would be 2.9x that of a dividend reinvestment in the Dow Jones Index.
Of course, Wall Street doesn't advertise such things b/c they can't make money on gold trades. Their profits are focused on stocks and bonds. Gold is the anti-Wall Street investment so they never tout as worthwhile even though it has outperformed their product.
Moving Forward
I have several "investment mantras" I like to cling to. One is "always be second". This idea comes from my business classes in college. I went to college in St. Louis, so we spent a great deal of time studying beer (I actually mean studying it, not just drinking it - but we did have a bar in the middle of campus where a student could use his meal points to buy beer). When I got my class schedule first semester, freshman year, I had 3 classes in various Adolphus Busch halls. Anhueser Busch (AB) was one of the biggest benefactors of our university.
AB has, or at least had, a standing rule that they never wanted to be first to market. This cost them considerably in the light beer market but it has served them well over time. The idea is simply that too many ideas fail. They would wait to see if "an idea would take hold" and then jump on it as it was far less risky.
I prefer to take the same approach to investing as it reduces our risk. I call it "Succession Investing". Yes, we miss out on some terrific opportunities, but I have found that being patient provides equal opportunities but with less risk.
A real-life example of this was the performance of our gold mining positions the past couple of years. In March of 2024, I posted and article about the impending opportunity in gold stocks. Here is a link to the post: What in the World is Going on with Precious Metals Miners? If you don't care to read the old post, I'll provide the Reader's Digest version. Back in Q1 of 2024, gold hit a new 52-week high while gold mining stocks hit 52-week lows, all within days of each other. I surmised, correctly, that the market was wildly wrong about the prospects of gold miners and they would outperform. I concluded the post by saying:
Eventually, investors will jump on the bandwagon of gold mining stocks....Wall Street is known for chasing fads and gold simply isn't a fad yet. When it does become one, gold and other commodity-based stocks could see gains equal to several times the gains in the underlying commodities.
Gold mining stocks ended up being an incredible trade that made all of us quite a bit of money the past 2 years. But the trade required incredible patience as mining stocks languished while gold outperformed. By being patience, I entered the positions with little risk and rode them higher for the next couple of years.
Another example of "Succession Investing" is buying energy and rare earth names following the big run-up in EV and AI stocks. Last year we saw names like Molycorp (MP) and Uranium One (UUUU) deliver massive percentage gains in our portfolio as the investing world realized that EV's and AI don't exist in a vacuum. All this new tech would require a lot of power and materials. I grew quite impatient waiting for the rest of the investing world to catch up, but eventually they did, and subsequently, we did really well.
I believe the fertilizer trade may be the ultimate succession trade we'll see for quite some time. And we can enter our positions with a lower level of risk given their sideways movement the past few months. And drones should be one as well. Defense companies like Lockheed Martin and General Dynamics have all done well going back to when Trump lambasted NATO countries for not spending more on defense. And then the War in Iran took them to a whole new level. Drone stocks should ride that wave and do far better as they are more speculative.
Conclusion
Another mantra of mine is "Buy Low, Sell High". Yes, I get that it's a radical approach, but I have found it to work. However, in a world of perpetual money printing, the Buy Low, Sell High can be challenging. Some stocks never go low as new money being thrust into the markets keeps everything aloft. And sometimes low-priced stocks rocket higher like we saw with DELL and Micron (MU) earlier this year. But historically, stocks trading "on the cheap" have to "climb a wall of worry" before they break out. I see fertilizer stocks doing this now. In fact, as I'm writing this, a couple are breaking out higher from bullish "Head and Shoulder" patterns. Gold and silver have also been climbing that wall of worry and they appear to be breaking out as well. Once positive momentum is established, all the momentum traders jump in and the early adopters, like us, should benefit.
I'm confident our themes are climbing that wall of worry and breaking out. Given the global-macro developments in the rest of the capital markets, our themes should do well.
As always, please don't hesitate to call us at 512-553-5151 if we can be of any assistance.
Best,
Matt McCracken
1) Inception date of 4/30/2019
2) All benchmark prices and returns are obtained through IBKR's PortfolioAnalyst reporting tool. S&P 500 Index is calculated using the index price. AOM is the iShares Core 40/60 Moderate Allocation ETF. AOR is the iShares Core 60/40 Balanced Allocation ETF. These benchmarks were chosen as they represent the prevailing investment strategies of retail advisors.
3) The Sortino ratio is a commonly used measure of "alpha" or the value a manager adds to a portfolio. It is similar to the Sharpe ratio. The Sortino ratio does emphasize the negative impact of downside volatility more than the Sharpe ratio which is why we use it as our primary measure of alpha.