Security, Power and Real Assets
Warren Levitan@wlevitan
The idea
I believe spending on must-have security software keeps winning even at high valuations, so a third of this sits in the leading platforms. I also think the grid can't keep pace with demand, so another third is in off-grid and backup power, from turbines to batteries. The rest leans on oil, gas, pipelines, copper and a small slice of rare earths as an inflation hedge if rates stay higher for longer, with a small cash buffer and no single name dominating. I'm planning to hold this for five to ten years and would rethink it if real assets stop acting as an inflation hedge.
What it owns
- Security is the one software budget companies keep paying for when they cut everything else. · CrowdStrike HoldingsIt protects the laptops and servers companies can't afford to lose, the kind of software that survives budget cuts., Palo Alto NetworksIt sells one platform so companies can drop smaller security vendors and consolidate spending when budgets tighten., FortinetIt sells the firewalls that sit between a company's network and the internet, which nobody turns off to save money., CloudflareIt sits in front of websites and apps blocking attacks and keeping them online, hard to cut when downtime costs real money., ZscalerIt checks every connection between employees and the apps they use, a must-have as more work runs through the cloud., OktaIt controls who gets to log into what, and identity is one of the first places attackers go., RubrikIt keeps backup copies of company data that ransomware can't wipe out, so a business can recover after an attack.33%
- With the grid short on capacity, companies and households pay for power they can make or store themselves. · GE VernovaIt makes the gas turbines that power plants and data centers buy when the grid can't deliver enough electricity., CumminsIt builds the backup generators data centers and hospitals keep ready in case the grid fails., CaterpillarIt sells generators and turbines that companies put on their own sites when they can't count on the grid., Bloom EnergyIt puts fuel cells right on a customer's site, giving data center builders a way to skip the years-long wait for a grid connection., Generac HoldingsIt sells backup generators for homes and businesses, the everyday version of the belief that people will add their own power as the grid gets less reliable., Fluence EnergyIt builds big battery systems that store power and add capacity to a strained grid.30%
- Energy producers and pipelines tend to hold value when inflation and rates stay high. · Exxon MobilIt pumps and refines oil and gas, which hold value when inflation and interest rates stay elevated., ConocoPhillipsIt pumps oil and gas and gains more directly than integrated peers when energy prices stay high with inflation., Williams CompaniesIt runs natural gas pipelines and gets paid on volume moved, a toll road that also feeds the gas turbines and fuel cells in the power slice., Kinder MorganIt owns one of the biggest US gas pipeline networks, a real asset with fees that tend to rise with inflation.17%
- Copper is a real asset that also gets wired into every new power project, and rare earths are scarce materials the US wants to make at home. · Freeport-McMoRanIt mines copper, the metal grids, generators and data centers can't be built without., BHP GroupIt is the giant, diversified miner in the copper slice, steadier than pure copper plays because it also mines iron ore and other metals., Southern CopperIt sits on some of the largest, cheapest-to-mine copper reserves anywhere, so it keeps making money even if copper prices dip., MP MaterialsIt mines and processes rare earths used in magnets for motors and turbines here in the US.13%
- Cash7%