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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:
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 four articles about bonds, the digitization of money, the British railway mania, and housing.
The Gray Area portfolio is up 5.42% year to date with lower risk than the S&P 500 (Sharpe 1.49 vs 0.94, Sortino 1.85 vs 1.29, max drawdown 4.41% vs 6.5%, and 75% positive vs 55%).
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I will continue to provide a preview of two interesting positions within the portfolio.
Natural Gas Companies (FCG) - 5.8%
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.
FCG has rejected the $32 support, which was the local high from March. It is now in a short-term support zone. In the long term, FCG is now in an uptrend after a long multi-year consolidation process since 2022. The target level is $36-40. I can’t ignore the possibility of a larger correction into the green box ($15-19), which would likely coincide with a strong recession. This portfolio position is up 20.8% total, with target zone 1 an ideal price for rebalancing.
Uranium Miners (URNM) - 2.2%
The idea behind uranium is that it will be an important aspect of our energy future, and real assets should offer true diversification from both the S&P500 and bonds. Over the course of 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.
I’ll reiterate that we will get a better entry with a change in trend or lower prices. If price makes a move up and then holds support, it is a good sign and time to add to our position. Otherwise, the grey support box at $34-41 will provide an even better entry. Our position is up 12,77% despite the recent selling pressure due to our profit-taking.
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