Allies Go Their Own Way
Dave@daverose
−3.5%
since Sep 9
The idea
I believe US allies stop leaning on Washington and start funding their own security, tech, and energy, a shift that runs through 2035 as NATO spending pledges phase in. I own it through European defense funds and names, chip and software champions like ASML and SAP, non-US energy suppliers, grid build-out plays, plus gold and broad Europe funds as ballast against the dollar. No single stock is a huge bet, I keep some cash in reserve, and I am in it for years, not waiting on one headline to prove it right.
What it owns
- Allies buying their own chips and software means Europe's tech champions win orders that used to default to American firms. · ASML HoldingIt makes the lithography machines that every chip maker in the world needs, so European and allied governments buying their own chip supply means more ASML orders., SAP SEIf European governments and companies stop trusting US cloud and software vendors, SAP is the homegrown default for enterprise software and sovereign cloud deals., NXP SemiconductorsIt makes the semiconductors that power European cars and industrial equipment, so it benefits as Europe pulls chip supply closer to home rather than depending on distant suppliers., STMicroelectronicsPart-owned by French and Italian states, it is the chipmaker Europe funds when it wants manufacturing capacity on its own soil through state-backed programs., Arm HoldingsIt is the UK-based chip architecture that lets allies build processors without depending on American designs, so sovereign chip programs outside the US boost its licensing and royalties.24%
- Allies want energy from suppliers Washington can't hold over them, which favors European majors and non-US nuclear fuel. · EquinorNorway's state-backed producer is now Europe's largest single gas supplier after Russian supply stopped, and pipeline gas is the backbone of European energy security., TotalEnergiesFrance's energy major wins if Europe keeps buying energy through its own companies rather than depending on non-European suppliers, especially through its growing LNG business., ShellIt runs the world's largest LNG trading business, so if Europe wants gas from friendly non-US sources, much of it flows through this company's infrastructure and trading desks., CamecoIf Europe restarts nuclear power to cut energy dependence, the uranium has to come from a friendly supplier, and this Canadian company is the largest Western producer., EniItaly's energy major is building gas routes from North Africa and the eastern Mediterranean into Europe, exactly the non-Russian, non-US supply this take depends on.22%
- If allies drift from Washington, money drifts from the dollar too, which favors gold and broad European markets. · Vanguard FTSE Europe ETFThis fund holds European and UK stocks across the whole region, so it captures the broader market lift if capital and investment flow back into the continent., SPDR Gold SharesIt tracks gold prices, and central banks that trust the dollar less tend to accumulate gold reserves as an alternative to dollar-denominated assets., iShares MSCI Eurozone ETFThis fund holds eurozone stocks broadly, so it captures the lift if money flowing back into Europe narrows the valuation gap with the US market., iShares MSCI Germany ETFIt holds German industrial companies positioned to benefit from the country's major fiscal commitments to defense and infrastructure spending., VanEck Gold Miners ETFGold miners move harder than gold itself, so this fund amplifies the de-dollarization bet if central bank gold buying keeps rising and miners hold their costs steady.20%
- Europe is funding its own weapons now that US protection looks unreliable, and that money flows to its defense makers. · Select STOXX Europe Aerospace & Defense ETFThis fund holds Europe's biggest weapons makers, so it captures the continent's shift toward funding its own defense through the rest of this decade., Leonardo DRSIt is the US-listed arm of Italy's Leonardo, so it offers direct exposure to a European defense company winning rearmament contracts across the continent.14%
- Rearming and re-powering a continent requires factories, grids, and concrete, the unglamorous layer the headline trade skips. · First Trust Smart Grid Infrastructure ETFRearmament and energy independence both require a bigger electric grid, and this fund holds the equipment makers building it across Europe and allied countries., EatonIt makes the switchgear and power hardware that every new factory, data center, and grid upgrade needs, so rising industrial build-out across Europe lifts its order backlog., CRH plcIt sells cement, aggregates, and building materials that every new factory, military base, and grid project needs, so infrastructure spending across Europe and North America lifts its volumes.13%
- Cash8%