A Message from Mike

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Perspective: Beyond the Fog of War

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We are now six weeks into the geopolitical volatility sparked by the Iran conflict and the closure of the Strait of Hormuz. For many investors, this period has felt like a direct confrontation between headline fear and fundamental value. However, the first full trading sessions of April have delivered a telling message: while conflict drives the initial “shock” volatility, it is earnings and structural demand that ultimately dictate where the market finds its floor.

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The “resilience” we are highlighting this month isn’t just about the market holding steady; it’s about a sophisticated rotation. Investors are looking past the immediate noise and identifying the sectors that are not just surviving this environment, but are becoming indispensable because of it.

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Markets Today: A Rebound in Search of a Floor

After a brutal March that saw the ASX 200 retreat nearly 10% from its February highs, early April has provided a significant relief rally. The index has reclaimed the 8,700-8,800 range, a move largely driven by a massive “short-covering” rally as traders pivot toward potential de-escalation signals.

However, we must remain disciplined. Volatility hasn’t disappeared; it has simply changed focus.

Short-term swings are now less about “war panic” and more about “valuation reality.” As the “war premium” in oil begins to fluctuate, the market is aggressively separating the winners from the laggards based on their upcoming Q1 earnings reports.

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Tech & Cybersecurity: The Invisible Frontline

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Perhaps the most significant development of the last six weeks is the outperformance of what I call the “Digital Frontline.” While broad tech indices wavered, specific holdings in our portfolio- most notably AMD, Palo Alto Networks (PANW), and CrowdStrike (CRWD)-have seen gains between 7% and 10%.

The logic is simple: modern conflict isn’t just fought with hardware; it’s fought with code. Cybersecurity is no longer a “discretionary” expense; it is a critical utility. In 2026, a corporation might delay a hardware refresh, but they will never risk a security breach. This “sticky” demand is why these names are currently the primary engines of our portfolio’s growth.

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Defence: The Slow Burn vs. The High Speed

It may seem counterintuitive that despite billions of dollars in weaponry spending, traditional defence stocks (RTX, Northrop Grumman) have seen a “slow burn” rather than a vertical spike.
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• The Reality: Unlike software, building a missile system takes years, not hours. The massive procurement cycles we are seeing today will hit earnings in 2027 and 2028, not this month.
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• The Strategy: We view our Defence exposure as our long-term insurance policy. While the “Digital Frontline” provides the high-octane performance today, the Defence primes provide the durable, government-backed foundation for the future.