Markets love certainty. It doesn’t matter where the certainty comes from. As long as they see less uncertainty and more stability. Under such conditions they tend to move higher. That is what the SP500 index has done over the past 11 days. It has risen about 11% in little over 2 weeks. The SP500 and the Nasdaq have both gone from a 100-day low to a 200-day closing high in these 11 days.
Markets seem to have moved on from the ME war…they are considering it yesterday’s issue. We kinda agree with them.
Yes, we still need to get a firm peace deal. However, the ceasefire seems to be holding…so far…and this improves the chances of both sides coming to some sort of agreement, even if it is temporary. If military action ramps up again, it is likely to be short-lived because neither party can afford to prolong these battles for too long. The economic, political and human stakes are too high for everyone involved…in spite of the online bravado.
Remember, here we are investors. We keep our politics out of our investing process. We try to see the facts and signals as they present themselves. Along those lines, even if the ME war is toned down, the macro impacts of these events will likely be longer lasting…in the US, in the ME region and globally. The forward looking economic landscape is what we are focused on as we invest today.
We started off 2026 invested in stocks and etfs like AAPL, ALAB, BE, GLD, GOOG, IBIT, MRVL and NVDA. Over the past three and a half months, we tweaked our portfolio to take advantage of our winners and to initiate a few new positions that we believe will be future beneficiaries of AI, cybersecurity and e-commerce. This week we added one such new stock to our SWAT portfolio.
We still have a 50%+ allocation to AI. There is a built-in cash buffer, a commodities hedge, a couple of international etfs and a reasonable allocation to crypto. We have also put some money to work in healthcare.
This diversified portfolio has kept us on the right side of 2026 market trouble. We planned for both right-tail opportunities and left-tail risks. The market’s move higher over the past eleven days is exactly the type of right-tail opportunity that we wanted to position for. The prior move down was the left-tail risk that we were ready for. Our portfolio’s barbell hedge in action.
This is the S.W.A.T. way.
Along the way, we’ve been tracking several secular, macro, fiscal, and monetary trends and catalysts. Based on these signals, we mapped out what we believe is likely to happen in each of the next 4 to 5 quarters, starting in Q4 2025. So far, we got most of it right and some of it wrong. And that’s okay. We do not profess to be fortune tellers. No one is right all the time. We strive to be like water and adjust to market conditions and macro developments as they come at us.
We continue to update our forward-looking market roadmap…our next refreshed Q2-Q3 outlook will be published in a few days.
Bottomline, we said that this market is not to be trifled with…this is not the year to F.A.F.O. In Q2, our focus is to make the final turn as we pivot our SWAT portfolio for the rest of 2026.
Welcome to Beachman’s Investing Brief, where we invest in market-leading stocks and ETFs with a proven record, while taking a long-term horizon and a lower risk approach. Over the past 6 years, our structured investing has delivered an average annual return of +141% at a CAGR of +43%.
NOTE: We are winding down both this SWAT substack and our trading SALTY substack in early 2027. Therefore, we are phasing out existing annual subscriptions…they will not be renewed.
Market signals
New position alert: Our neocloud stock pick
Beachman’s portfolio plan
Conclusion
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Take a look at the SP500 chart below. As we mentioned, the index gained 11% over the past 11 days. It topped in February 2026, then started a major downtrend and has since recovered all those losses. The SP500 is now testing upside resistance at 7,000.
As we dig a little deeper, we should note that the MAs are healthily trending higher... shorter term MAs crossing above longer term MAs is bullish.
More stocks have regained their 50DMA, although we aren’t seeing many new 52-week highs. Momentum has somewhat picked up, although daily trading volume is tracking lower than average volumes. Additionally, we noticed that traders and institutions are still putting on more protective hedges.
So in essence, we are trending higher on fumes. Bears are confused yet confident about their thesis. Bulls are confused yet convinced that earnings reports are going to beat expectations. This is what makes a market! Two sides of the same transaction…each with differing views on what is right and what is wrong. Love it!
The Q1 earnings season has just kicked off. We will receive updated performance information for the companies that we are tracking. Most businesses are currently in their quiet period. They cannot comment on forward guidance until they publish their Q1 earnings report. This vacuum of company-led information tends to get filled by rumors, fintwit “alerts”, and geopolitical tweets. Wall Street also does their part to feed the frenzy by issuing bullish or bearish reports on stocks that they either want to sell high or buy low. We have seen this movie play out over and over again prior to every earnings season. As individual investors it is easy for us to get caught up in these crosswinds.
A few weeks ago, AI semiconductor stocks were hated…now they are not. Then quantum computing stocks were on a tear…but then hated for months and now everyone loves them again. SaaS was going to get disrupted by AI…everyone was selling their cloud names. Now SaaS is back with a bang. Hot…then cold…then hot again.
Here on the beach, we certainly track key business developments. However, we update our investing thesis and Beachman scores for stocks based on quarterly earnings reports…if the thesis is confirmed by the company’s current performance and forward prospects, then we stay the course. If and when the thesis is broken, we exit.
A neo-cloud is a specialized cloud provider built specifically to power AI and high performance computing (HPC) workloads. Unlike hyperscalers like AWS or Azure that offer a broad range of general purpose services, neoclouds focus almost exclusively on GPU-as-a-Service (GPUaaS). They are the first versions of NVDA’s AI factory concept…a paradigm shift that redefines data centers from general purpose storage warehouses into specialized “manufacturing” facilities for intelligence. Jensen Huang describes this as a model in which data is the raw material, GPUs are the machinery, and tokens (units of AI-generated content) are the finished products.
If one wants to invest in AI, one has to consider owning a neo-cloud stock. But there are so many of them and it is difficult to decide which one to buy.
We took our time to choose and buy our preferred neo-cloud stock. We finally did it this week.
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