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The model portfolio was made public in July 2025. It has 5 main components: stocks, bonds, cash, real assets, and alternative assets. Last month’s performance has been:
The same as last month, after breaking to new highs in August, the S&P500 has stalled, and prices have been going sideways since. Overall investor positioning is dangerously bullish and greedy, with near-record levels of margin debt and extreme valuations.
The past month featured three articles about the looming stock market top, the 1920s electrification mania, and a new portfolio strategy that is better than buy-and-hold investing. Check them out if you haven’t already!
The Gray Area portfolio is up 6.73% year to date with lower risk than the S&P 500 (Sharpe 1.51 vs 0.85, Sortino 1.83 vs 1.20, max drawdown 4.41% vs 6.5%, and 76% positive vs 52%).
This model portfolio is reasonably priced for paid members, with free subscribers still receiving three themed research articles each month. Consider upgrading to get up-to-date portfolio changes, allocation decisions, technical analysis, and synthesis of all the research pieces into an actionable plan.
Every month, we look at the updated technical analysis and risk management of each position. We track each position’s returns and the macro justification (or link to detailed research articles about them). We show real diversification strategies based on likely macroeconomic outcomes, summarize the portfolio weights and changes, and discuss possible new entrants to the portfolio and when/how to enter.
I will continue to provide a preview of two interesting positions within the portfolio.
Natural Gas Companies (FCG) - 5.8% → 5.1%
We bought into energy before the Iran conflict began, showing the power of technical analysis and understanding macroeconomic conditions. Be careful with any short-term energy trading, as oil seems heavily manipulated. Energy looks like a good buy overall, with or without the Middle East conflict as a catalyst.
Last month, FCG rejected the $32 level and made a retracement to support. It has since turned up and is testing the highs once again. The uptrend after a long multi-year consolidation from 2022-2026 is still intact. The target level for the immediate move is $35-38. I’ll rebalance back to a 5% allocation right here since we rejected hard off of the $32 level in September.
I can’t ignore the possibility of a larger correction into the green box ($15-19), which would likely coincide with a strong recession and a great buying opportunity. This portfolio position is up 32.3% total, with the target zone being an ideal price for rebalancing.
Uranium Miners (URNM) - 1.9%
The idea behind uranium is that it will be an important part of our energy future, and real assets should offer true diversification from both the S&P 500 and bonds. Over the year, we strategically reduced the position and booked gains.
In the last update, URNM broke out of the downward trend channel I said to watch for a buildout of upward structure. That was dependent on holding $50.56 and also the July low, but they were both broken. As I suspected, this was a fakeout to the upside, and we are continuing the C of (IV), which has a target of $41. - September update quote
URNM went down exactly to $41 and bounced. Now we see whether momentum (red moving average) keeps the price going down for more lows, or if structure builds to the upside. I would want to see green resistance levels break, and any move higher to hold support retracements for entries. Our position is up 10.7% despite the recent selling pressure due to our profit-taking.
For the full portfolio breakdown and analysis, please upgrade your subscription.