1/16 The 60/40 portfolio & target-date constructs are relics of a bygone era.
Rigid, fragile models linearly optimized for a system that no longer exists. #SharpeWorld
We are entering a period of non-linear change, & the old playbooks are breaking
Enter: The Pillars of Power. 🧵
Rigid, fragile models linearly optimized for a system that no longer exists. #SharpeWorld
We are entering a period of non-linear change, & the old playbooks are breaking
Enter: The Pillars of Power. 🧵
2/16 If you study geostrategic history from first principles, a pattern emerges
The hegemon who controls the World Order always has leadership in 3 interconnected spheres:
1️⃣ Asymmetric Technology
2️⃣ Low-cost, abundant Energy
3️⃣ Fully-controlled Money
The hegemon who controls the World Order always has leadership in 3 interconnected spheres:
1️⃣ Asymmetric Technology
2️⃣ Low-cost, abundant Energy
3️⃣ Fully-controlled Money
https://x.com/AquaVisX/status/1945870058410144171?s=20
3/16 This framework is rooted in Nature.
Just like water flows through a river, money flows through the complex adaptive system of the stock market.
To understand markets, you must understand the stock and flow of energy
Just like water flows through a river, money flows through the complex adaptive system of the stock market.
To understand markets, you must understand the stock and flow of energy
https://x.com/AquaVisX/status/1958573403977228780?s=20
4/16 Why do we need a 'new' way to allocate capital?
The Concentration Cascade & The Diversification Illusion
Major indices are not truly diversified; they are concentrated bets on a few companies - highly dependent on a single chokepoint: TSMC in Taiwan
The Concentration Cascade & The Diversification Illusion
Major indices are not truly diversified; they are concentrated bets on a few companies - highly dependent on a single chokepoint: TSMC in Taiwan
https://x.com/AquaVisX/status/2026035759309058360?s=20
5/16 This peak Concentration - an output of the old System - comes at a time when the underlying System itself is now changing
Waves are converging and Pendulums have swung too far - now they are set to swing back, non-linearly
Waves are converging and Pendulums have swung too far - now they are set to swing back, non-linearly
https://x.com/AquaVisX/status/2030774781306679638?s=20
6/16 To survive & thrive this non-linear transition, the Pillars of Power framework isn't just a geopolitical lens - it doubles as a naturally-balancing portfolio
By investing where hegemonic power focuses, you align with the deepest fundamental forces
By investing where hegemonic power focuses, you align with the deepest fundamental forces
https://x.com/AquaVisX/status/1986564182884688037?s=20
7/16 Let’s look at an extremely simple application of this portfolio. It uses an equal-weighted, highly liquid mix of just three ETFs:
💻 Tech: $XLK 🛢️ Energy: $XLE 🪙 Money: $GLD (Gold).
No complex algorithms, just three core representations of Power
💻 Tech: $XLK 🛢️ Energy: $XLE 🪙 Money: $GLD (Gold).
No complex algorithms, just three core representations of Power
8/16 The results of this incredibly simple 3-position portfolio are impressive.
Since January 2005:
- $1,000 invested in the market (SPY) grew to ~$7,800
- That same $1,000 invested in the simple Pillars portfolio grew to ~$17,700
More than 2x the return of the market
Since January 2005:
- $1,000 invested in the market (SPY) grew to ~$7,800
- That same $1,000 invested in the simple Pillars portfolio grew to ~$17,700
More than 2x the return of the market
9/16 Even better: this 'version' is practically maintenance-free.
Just a simple rebalancing trigger to avoid extreme concentration - triggering only 4x in ~21 years
A naturally balanced alternative at a time when the market itself has never been riskier
So easy a cat (unlike Larry, I don’t have one) could implement it.
Just a simple rebalancing trigger to avoid extreme concentration - triggering only 4x in ~21 years
A naturally balanced alternative at a time when the market itself has never been riskier
So easy a cat (unlike Larry, I don’t have one) could implement it.
10/16 But this setup is just the foundation.
The true opportunity lies in moving down the funnel to find the purest, most asymmetric expressions of these Pillars.
The goal isn't just to buy the sector; it's to find where the ultimate convexity lies beneath the surface
The true opportunity lies in moving down the funnel to find the purest, most asymmetric expressions of these Pillars.
The goal isn't just to buy the sector; it's to find where the ultimate convexity lies beneath the surface
11/16 Let’s walk through the Technology Pillar as an example:
➡️ Broad Tech (XLK)
➡️ Semiconductors (SMH)
➡️ Semiconductor Capital Equipment
➡️ Advanced Packaging
➡️ potential oppty: $ONTO
You drill down to the confluence of major waves like AI scaling and de-globalization
➡️ Broad Tech (XLK)
➡️ Semiconductors (SMH)
➡️ Semiconductor Capital Equipment
➡️ Advanced Packaging
➡️ potential oppty: $ONTO
You drill down to the confluence of major waves like AI scaling and de-globalization
12/16 Everything is a wave.
While you can trade the short-term chop, the real wealth is made by focusing on the longer-form waves spanning years and decades.
Mapping where you are on the wave and flow with the river, not against it
While you can trade the short-term chop, the real wealth is made by focusing on the longer-form waves spanning years and decades.
Mapping where you are on the wave and flow with the river, not against it
13/16 Right now, we are at a "Confluence".
Multiple cycles - Technology Revolutions, Demographics, Empires - are all converging at once (4th Turning).
The framework helps direct your attention to the intersection where these massive flows of energy meet
Multiple cycles - Technology Revolutions, Demographics, Empires - are all converging at once (4th Turning).
The framework helps direct your attention to the intersection where these massive flows of energy meet
14/16 Before you deploy capital, it's key to establish internal order.
With external media and markets compromised by noise and chaos, the Pillars act as mental scaffolding. They help structure your thinking so you don't get whipped around by the daily noise
With external media and markets compromised by noise and chaos, the Pillars act as mental scaffolding. They help structure your thinking so you don't get whipped around by the daily noise
15/16 Harness the flow visualized by the 6 A's Flywheel:
👁️ Awareness: See the world as it is.
🎯 Attention: Focus your flowing energy.
⚡ Agency: Recognize your power.
🏃 Action: Move intentionally.
⚖️ Accountability: Own the result.
🌍 Actualization: Shape the future
👁️ Awareness: See the world as it is.
🎯 Attention: Focus your flowing energy.
⚡ Agency: Recognize your power.
🏃 Action: Move intentionally.
⚖️ Accountability: Own the result.
🌍 Actualization: Shape the future
16/16 The water we are swimming in is changing non-linearly.
The era of blind, passive investing is over. Stop reacting to the world's design and start building your own.
Order your Mind. Harness your Money. Shape your Future
The era of blind, passive investing is over. Stop reacting to the world's design and start building your own.
Order your Mind. Harness your Money. Shape your Future
https://x.com/AquaVisX/status/1986842133232574927?s=20
The Pillars of Power Portfolio
The Foundational Framework 'Doubles' as a Portfolio
Link: aquavis.substack.com/p/the-pillars-…
The Foundational Framework 'Doubles' as a Portfolio
Link: aquavis.substack.com/p/the-pillars-…
h/t to @TaviCosta @ConvexityDredge @jam_croissant @SamanthaLaDuc @SantiagoAuFund @MacroCharts @crossbordercap all influential/referenced in this piece
@TaviCosta @ConvexityDredge @jam_croissant @SamanthaLaDuc @SantiagoAuFund @MacroCharts @crossbordercap @threadreaderapp unroll
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