The Portfolio Letter
History, economics, psychology and markets | Portfolio report #2 / May 2026
Welcome to Portfolio Newsletter #2.
The last portfolio letter I published was in November 2025 and many significant macroeconomic and geopolitical events have taken place since then.
My recent focus has been to self-educate in the realm of short-term leveraged trading and technical analysis, hence the absence from writing. I hope to do this type of trading with 5% of my portfolio with the goal to become a more complete investor/trader.
The big macroeconomic news of course is the Israel/America versus Iran war. The American war machine marches on and inflicts huge destructive consequences on the world. Why? Blackmail, lust for money, huge kickbacks, thirst for power, thirst for control, thirst to spill blood. Who knows for sure— perhaps it is a combination of of all these. But it keeps on happening so we might as well control what we can and attempt to grow and protect our wealth during this period of unfortunate destruction and murder.
In my desire to learn technical chart analysis and short-term leveraged trading I have recently completed the Trading Metamorphosis Program by The Market Sniper (Francis Hunt). I can recommend it if you desire to do the same.
It took me around four months to complete and it was a very professional and comprehensive training program. The course, and the access to the highly useful ‘Sniper Circle’ community for one year, in my opinion justified the relatively high price tag.
Francis Hunt teaches his own trading methodology which teaches you to identify a unique chart pattern of price action. You then complete a subsequent 360 degree analysis of supporting trend, trading volume and macro analysis. The method is called the ‘Hunt volatility funnel’ method (HVF).
Once you have identified a HVF chart pattern that satisfies all criteria— you can now derive buy or sell entry price points for a trade, stop loss levels, take profit target levels and trade time gestation periods. In in order to execute a trade which gives you a higher probability of success with asymmetric returns.
The meaning and goal of ‘success’ in this context is to increase your fiat currency capital. The community then encourages you to convert your surplus capital into gold and silver bullion as a wealth protection and savings vehicle.
This is an approach and philosophy I agree with.
It has been a thoroughly enjoyable and illuminating experience learning this process of technical chart analysis and short-term leveraged trading.
One of my goals is become the most complete investor and trader I can be, and this program helped me move toward that goal.
There is an important lesson here, if you are interested in investing— which you most likely are, I can’t stress the importance of learning the mechanics of as many financial instruments as you can.
Instruments include company stock (shares), ETF’s, bonds, treasury bills, options, warrants, commodities, futures, CFD’s, mutual funds, swaps, foreign exchange, real estate investment trusts and cryptocurrency.
Start with the instruments you believe might currently provide the most opportunity for you, and then expand from there.
For example, I have studied the mechanics of options contracts before attempting to study bonds because investing in bonds right now does not fit my macro-thesis. On a side note— I do not deem government treasury bonds to be an ethical investing instrument. As in my opinion— I would be voluntarily funding an inherently coercive, violent and extortive institution. Corporate bonds are ethically fine in my opinion, but of course it is up to you what you deem to be ethical and where you put your money.
If you combine these investing skills you continue to develop with the ongoing study of history, economics, psychology and markets— you give yourself a greater chance of growing and protecting your wealth in an optimised and efficient way.
In this letter I will discuss the current situation relating to markets, portfolio construction, hedge positions and I will reveal my current stock and options portfolio. Including relevant stock ticker symbols.
The Current Situation
Over the last two years we have witnessed a large increase in the prices of gold and silver in fiat currency terms. In my opinion the metals are doing their job just fine as wealth protection. They will continue to be a good place to store value as fiat currencies most likely continue their loss of purchasing power relative to gold.
Despite some recent pullbacks in the metals I think there is nothing to worry about. The fundamental factors are still in place.
Broke governments have gigantic levels of public debt which is costing more and more to service. They rely on other people to buy new debt to service the interest payments. All while facing increasing budget deficits, increasing future liabilities and rising consumer prices (decreasing purchasing power of currency). These occurrences decrease the real returns on bank deposit interest, bonds and also stocks.
It is not the best looking scenario.
For governments, if bond yields keep rising and no one wants to buy their bonds besides their own central banks, there is going to be a big problem. This indicates to me that a long-term bull market for precious metals is still in place. As precious metals are historically the safe haven when fiat currencies falter.
I feel very good owning some physical bullion. It’s beautiful, it’s shiny, it feels great to hold in your hand, you can turn it into jewellery and it helps you to sleep well at night. While considering its 6000 year history of use as money, it is also useful to remember that all the fiat currencies of history have eventually failed.
I recommend Bullionstar and Strategic Wealth Preservation if you wish to buy and vault precious metals internationally.
The Israel/America versus Iran war has hugely affected the production, transportation and supply of crude oil, natural gas, sulphur and fertiliser due to the closure of The Strait Of Hormuz. This supply disruption will have large negative delayed downstream consequences, as many countries and companies rely on products travelling through the strait. There is no alternative way to adequately obtain all their supply elsewhere without the drawdown of backup reserves.
Logistics is important for society. In my home country trucks have a little sign on the back that says ‘without trucks, Australia stops’. Very true, I used to load these trucks with a forklift everyday for a long time. Truck engines need lubrication and petrol to run. Automobile lubricant retailers in the U.S. are now projecting a 40% shortfall in lubricant supply.
Diesel fuel prices have already risen and could rise more in the near future.
A huge issue and structural change, oh but there is more.
Sulphur as a product, is produced as a by-product of the crude oil refining process. Sulphuric acid is essential in the extraction and refining process when mining minerals such as copper, cobalt, nickel and uranium. Copper and cobalt are essential inputs for making electric cars. A large AI data centre may need hundreds of tons of copper to build.
Sulphuric acid is also essential in fertiliser production. Around half of the supply goes to fertiliser production and around half goes to mining.
The price of sulphur is up 95% since the start of the war.
Natural gas is the primary input for ammonia production and ammonia is the building block for urea, the worlds most widely used nitrogen fertiliser. Fertiliser is a necessary input for food production.
If farmers can’t afford or attain fertiliser, they don’t plant for the season or they switch to a different crop that doesn’t require as much nitrogen fertiliser. For example if it is not economically feasible to plant wheat, they might plant soybeans instead.
See where this is all going?
When the cost of all these inputs rise due to lack of supply relative to demand, the price of the end products will rise as well, either now or in the future. Politicians will want to hide this or pass the blame on to ‘greedy farmers and corporations’. The general population absorbs the price rises until they can not.
This is a massive energy crisis that will brutally affect global standard of living and the market in the very near future, I believe. Which means you can take the opportunity to pre-emptively position and benefit.
The Strait Of Hormuz shock combined with the existing conundrum that politicians have with servicing increasing debt with increasing yields, leads me to confirm my belief and macro-economic thesis that hard assets are the place to be going into the future.
Good companies that produce energy, precious metals, commodities and the commodities themselves should all experience a high demand for their products in the near future. Although nothing of course is guaranteed.
The U.S 30 year bond yield has recently broken back out above 5%. Before 2024, the last time it was above 5% was in 2007.
As government bond yields march higher so does the debt service cost of the government. In May 2007 the U.S. debt-to-GDP ratio was approximately 64%, today it is approximately 122%
I guess we will see how long they can sustain servicing the debt, and we can expect quantitative easing on the long bonds to return, alongside the money printing they are already doing to buy short-term bills in the U.S.
I reference the U.S and the U.S dollar as it has the most widely used currency in the world and has the most liquid stock market, but most other countries have the same debt problems that the U.S has. It is a global problem. Non-U.S countries also hold large amounts of U.S assets and U.S dollars that could get re-priced drastically.
Japan is a good example of this. Japan has massive public debt levels and owns a large amount of U.S treasury bonds that could need to be sold off.
Portfolio Construction
Regarding portfolio allocation percentages— I aim to distribute capital in the following way— 66% physical gold and silver bullion, 24% long equities including dividend paying stocks, 5% options trading strategies and 5% short-term leveraged trading utilising CFD contracts (contract for difference). No real estate, no bonds and no fiat currency bank deposits besides those needed for living expenses.
The allocation to physical bullion may seem excessive and it may be. I am largely going off gut instinct but it feels good to me and it useful to consider that gold and silver is real money with intrinsic value that possesses all the required properties that make it ideal as money.
I think of it as a savings vehicle. It doesn’t provide a traditional yield unless you lend it out to someone, but your yield is measured in the increasing loss of purchasing power of fiat currencies— which I believe will continue and will beat the real returns (adjusted for consumer price inflation) provided by bonds.
The riskier instruments of options and leveraged CFD spread betting are lower allocations because of the increased risk involved.
Although with options contracts you can reduce risk by only selling options instead of buying them. My options income strategy is to sell puts— then when I eventually get assigned on the put and have to buy the stock, I will sell covered calls against the stock.
I also think it is useful to hold cash in your brokerage account which can give you the optionality to buy companies at better prices if there are large falls in price. You can also add to positions you already own on dips, to create a lower cost basis using a tranche buying strategy.
I need to improve in this area. I am usually fully invested and I need to get better at keeping cash in my brokerage.
The Sectors I Am Invested In
Oil, coal, natural gas, copper, gold, silver, uranium, rare earth metals, graphene, corn.
I am most bullish on gold and silver miners as they are leveraged plays on gold. Their input costs will not rise as much as the metal prices in my opinion.
Hedge Positions
Bear put spread on QQQ (Nasdaq index).
Long position on SH (ProShares Short S&P500 ETF - Inverse ETF that is short the S&P 500).
Short Positions
Carvana put option (CVNA)
Current Portfolio (equities)
My portfolio is quite simple.
I aim to increase the net value of my account through growth in equities, options trading and dividend payments. I take profits on individual stocks at 100% gains by selling my initial investment stake— leaving the rest to run in a ‘Casey Free Ride’. This is Doug Casey’s method to take profits, where at 100% gains you take your initial investment off the table, thereby protecting it and letting the remaining shares run in a risk free ‘free ride’.
I recommend subscribing to the publication Doug Casey’s Crisis Investing on Substack to learn more about this methodology and for quality individual stock recommendations. It is a fantastic publication of which I am a paid subscriber. It has helped me create great returns.
I also recommend the Capitalist exploits Insider Program, The Tucker Letter and Macleod Finance for paid newsletters. All quality publications.
I am part of The Market Sniper community for technical analysis and short-term leveraged trading.
I make withdrawals from my portfolio for living expenses, so at the moment I am not able to maximally compound my returns but I am working on changing that.
Current year over year (YOY) returns for the portfolio stand at +39.13%. They peaked at +89.95% on March 2, 2026. Yes the 50% pullback has hurt, but I think it is probable that I can claw back those gains by the end of the year.
My year to date (YTD) returns have been badly affected by the recent pullback in gold and silver. In March 2026 YTD returns peaked at +35.04% and as of writing they now stand at -1.01%.
Interactive Brokers uses time-weighted returns. This accounts for myself taking profits/small losses, adding to positions and withdrawing cash from my account for living expenses. The return is based on performance only.
YOY returns for physical gold is +38.32%, and for physical silver it is +131.97%.
YTD returns for physical gold is +5.40%, and for physical silver it is +8.59%.
Individual Positions
I won’t discuss all of the individual positions in my portfolio. It would make this a very long letter, but I will highlight a company which I am excited about and have a larger relative position in.
The company is HydroGraph Clean Power Inc. (HG.CN) (HGRAF.OTCM).
They make the material graphene which is characteristically 200 times stronger than steel, highly electrically conductive, highly flexible, lightweight and impermeable.
It is somewhat of a ‘super material’.
HydroGraph’s core technology is their patented Hyperion System, which uses a unique detonation-based “explosion synthesis” process. Hydrograph’s technology makes the production of graphene economically feasible, which for other companies it hasn’t been in the past.
The potential use cases for this material and the potential scalability of the business is very exciting to me.
To Conclude
I hope you have learnt something and obtained some ideas from reading this letter. I don’t want it to be too long so I will end it here. After publishing this I plan to make access to these portfolio letters a paid tier. Existing subscribers such as yourself who have gotten in early will not need to pay.
Protect your wealth, grow your wealth and maximise your personal freedom going into the future, and you can minimise any unnecessary suffering for yourself, your friends, family and society at large.
Thank-you for reading.
If you have any questions regarding the portfolio, you can drop a comment or send me an email at hello@shernonhague.com
-Shernon
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*Not to be construed as financial advice. This newsletter is for informational and entertainment purposes only. Please perform your own research when making financial decisions.
Cover photograph by Shernon Hague | Arashiyama, Kyoto, Japan 2016 | 35mm film