Investment Newsletter: May 2026
Portfolio Returns
April was a massive rebound from war-ravaged March.
On the month, the benchmark S&P 500 gained an epic 9.9%, while my two portfolios gained 17.7% in the “Adrenaline” growth portfolio, and 9.0% in the “Market Neutral” portfolio.
This brought year to date returns to 4.9% on the S&P, 11.3% on the “Adrenaline” growth portfolio, and 13.2% on “Market Neutral.”
Annualized, that’s 16% on the S&P, 38% on “Adrenaline” and 45% on “Market Neutral.”
Economy
Economically, aside from oil prices from the war we saw previous trends continue.
GDP rebounded to 2.0% annualized, which is decent.
Jobs continue the low-hire, low-fire trend of the past year — which is mainly deportations and federal layoffs.
AI is still barely showing up, with around 10,000 AI-related layoffs per month according to jobloss.ai. But nearly all of those are unwinding excess hires during Covid, when tech doubled head-count both to horde scarce workers and because everybody was online.
Inflation is probably the most exciting for the month, with annualized inflation crossing double-digits driven by oil prices. While the rest of inflation is tame a hair above 2% annualized.
That’s a big change from pre-war, when Truflation pegged annual inflation around 0.7%. But it’ll obviously reverse when the war ends, and the Fed’s new Chair Kevin Warsh knows that so it’s unlikely to drive Fed rates.
Investment Impact
Pretty much everything went up this month as war jitters calmed.
Interestingly, oil markets think oil will stay expensive potentially deep into 2027. Maybe that supply will be disrupted long past the war.
But stock markets have apparently decided it can live with expensive oil — a 10% rebound in a month is normally what you’d see when the war’s over.
Hedges have also had a weird war, with gold down 12% and silver down 19% since the war started on February 28. Bitcoin is up 20%.
This is weird because normally gold especially does great in wars. My best guess is it’s more to do with pre-war moves, with gold and silver leaping this last year on deficit fears. While Bitcoin had a boring 2025, so it did respond to the war like a safe haven hedge is supposed to.
What’s Next
2026 remains a strong year for the economy — and therefore stocks. Driven by strong investment and rate cuts.
Compared to January that growth story is weaker because of the war, which makes investors reluctant to go all-on on factories, and which has already shifted the Fed from 2 cuts this year to zero.
It’s also weaker from the Supremes striking down most of Trump’s tariffs, which were forcing Asians and Europeans to build factories in the US and much is now on hold until there’s tariff clarity.
On the other hand, AI investment is actually accelerating, as we move from AI companies buying chips for giant data centers — so-called “hyperscalars” like Google or OpenAI. To the next phase of thousands of non-AI companies building in-house AI infrastructure, from banks to healthcare and pharma to Walmart.
That mirrors dot-com, where the early investment was Yahoo and Amazon, but then literally every company built out tech to integrate the internet. That’s going even faster with AI, and it’s something I don’t think the market has fully digested yet.
Bottom line, no changes in the portfolios — everything’s hitting on all cylinders, and 2026 remains a likely bull market.
Portfolio Holdings
If you’re new to the party, I describe the hows and whys of the portfolio in the January newsletter. And the most recent edition is the March newsletter.
In short, there’s two portfolios.
The “Adrenaline” portfolio is 70% “growth” stocks I think will go up the most. The other 30% is hedges, split evenly between gold (GLD), silver (SLV) and Bitcoin (FBTC).
The “Market Neutral” portfolio cuts “growth” stocks to just 35%, with the other 35% shorting stocks I think will go down the most. And keeping 30% in hedges.
Here’s the specific holdings, percent allocations, and ticker symbols ready-to-use.
