Contrarian Codex — Portfolio positioning / macro update
"This is a rates drawdown wearing a war costume like it's carnival, and it resolves when the rates story resolves" — so it's time to put some cash to work.
One-line take: An unusual between-newsletters note prompted by the sharp equity/commodity weakness — Mart argues the selloff is a rates-and-dollar drawdown mis-read as a war story (a hawkish Warsh Fed + a DXY pushing toward 102 are the real drivers, with the Hormuz oil shock routing through an inflation-fighting Fed and running gold over on the way). He still sees the USD "release valve" as inevitable but not imminent, stays very bullish on gold and uranium, and — judging sentiment washed out — draws down a third of his cash (leaving ~10%) to add to UUUU, MAI, APM and MRLN.
1. Stocks & names mentioned
| Ticker | Name | Research | View | What he said | At |
|---|
| UUUU | Energy Fuels | QT · SA · STK · FA | Positive | Adding here: the CEO is buying shares, recent news flow is positive, it is building a rare-earth "giant," and the stock is down ~50% from its highs — a primary target for the fresh cash he is deploying. | read ↗ |
| MAI | Minera Alamos | — · FA | Positive | Adding despite already being a full position — he calls it "simply one of the best growing US based gold producers," with the paid-for Copperstone build set to roughly double output. | read ↗ |
| APM | Andean Precious Metals | — | Positive | Adding: Bolivia is still a risk "but improving," and it remains a two-asset silver-gold producer trading at a deeply compressed multiple after the drawdown. | read ↗ |
| MRLN | Merlin Labs | QT · STK · STK · FA | Positive | "High risk AI play … but has taken a massive hit. Now a full position" — the same asymmetry as before at a lower price, with the design risk (CDR) already retired. | read ↗ |
| LIB | LibertyStream | — | Positive | Flagged as "looking very attractive here" on the weakness — an industrial-basket name he likes, but he is "already way overweight there," so he is not adding. | read ↗ |
| LODE | Comstock | QT · SA · STK · FA | Positive | Named alongside LibertyStream as very attractive on this weakness, but he is already overweight the industrial names, so no add here. | read ↗ |
2. Talking points
The Fed stopped pretending — Warsh's first meeting
- The Fed has held at 3.50–3.75% since late last year, and at the mid-June meeting — Kevin Warsh's first as chair — it removed the easing bias, cut the statement roughly in half, and produced a dot plot where 9 of 18 officials pencilled in at least one hike before year-end.
- The median end-2026 dot moved to 3.8% from 3.4% in March; the PCE forecast was lifted to 3.6% from 2.7% (the largest single-meeting revision Mart can remember). May PCE printed 4.1% year over year, a three-year high.
- September hike odds now sit near 70%, up from 58% the day prior — and it is that hawkish shift, more than anything company-specific, that turned the pre-existing weakness in risk-on equities notably worse.
Rates, the dollar and the release valve
- The 10-year touched 4.60% (its highest since May) and the 2-year is printing fresh 2026 highs above 4.2%, with yields breaking out globally — the notable exception being China.
- The DXY sits near the top of its 52-week range after gaining more than 2% in June and touching 101.50; over 102 there is a case it runs to 110 again, "which is not great for commodities and commodity related equities."
- Mart still believes the USD will be used as a release valve to relieve fiscal stress — but "just because I believe this is inevitable doesn't mean that it is imminent." Warsh's push for a smaller balance sheet pushes duration onto private hands and lifts the term premium, keeping the long end heavy even when growth data disappoints.
Oil, Hormuz and the "4K HD horror movie"
- A rising oil price is not helping risk assets, because the market reads it as more geopolitical turmoil, more inflation and more Treasury-market dysfunction — the sequence that bleeds into risk-on equities.
- Over the past week the IRGC attacked three vessels transiting Hormuz (including a Qatari LNG carrier and a Saudi crude tanker); Washington revoked Iran's crude-sale waiver ("the sort of thing you do once you have decided a deal is dead") and hit 80+ targets inside Iran, with tit-for-tat escalation widening the target set to ~900 miles from the strait.
- The variable Mart watches most is Hormuz throughput — ships are still passing, but volumes are nowhere near pre-war levels.
Gold — run over on the way through an inflation-fighting Fed
- The inversion at the heart of it: an oil shock in a cutting cycle sends money into gold, but an oil shock while the committee is openly debating a hike sends money into the front end instead — the market reads the shock as inflation and the response as tighter. Escalation in the Gulf, once the proverbial gold catalyst, now routes through the central bank first and the metal gets run over on the way through.
- June payrolls came in at 57,000 vs ~110,000 expected, with April/May revised down a combined 74,000 and participation falling to 61.5% (lowest since early 2021). Gold posted its first weekly gain in five weeks and silver added ~7% — then the tankers were hit and the move was overwritten inside two sessions.
- Sentiment is washed out: the Gold Miners Bullish Percent Index hit 0.00 in early June (from 100 in January), retail bulls collapsed to 31.4% vs 42.3% bears, and Chinese gold ETFs bled ~$1.5bn in a month — yet Comex net length rose to 194,000 contracts, so the leveraged crowd is buying the decline rather than capitulating. The two readings don't reconcile: no clear winner yet in the $4,000–4,100 tug-of-war.
The official-sector bid and a barely-twitching uranium
- The PBoC bought 14.93 tonnes of gold in June — its largest monthly purchase since 2023 and its 20th consecutive month — lifting holdings to 2,346 tonnes. Gold is under 9% of Chinese reserves vs ~70% for the US, and a reserve manager answers to a 30-year mandate, so "a July FOMC meeting barely registers." Mart remains very bullish on gold despite the weakness.
- Uranium has "barely twitched" through all of it — spot near $85–86 (flat on the month, +15% on the year) and the term price at an 18-year high on the recent TradeTech numbers. Utilities contract on 10-year horizons and don't consult the dot plot; the equities still move with the broad-market wind for now, which he frames as frustrating but an opportunity.
Putting cash to work — the adds
- "This is a rates drawdown wearing a war costume … and it resolves when the rates story resolves and the USD is being weakened again." With the end "in sight," Mart deems it time to deploy cash — drawing down a third of his cash position and leaving ~10% on the table (his personal sleeping level), enough to take advantage of depressed commodity sentiment while keeping room if things flare up.
- The adds are gold-heavy on purpose (he already holds over a third of the book in uranium): UUUU (CEO buying, REE giant, down ~50%), MAI (best-growing US gold producer), APM (improving Bolivia risk, two-asset producer) and MRLN (high-risk AI play, now a full position after the drawdown).
- He also calls the industrial names LibertyStream and Comstock "very attractive here" but is already way overweight them, so he isn't adding. June CPI (next Tuesday) and Hormuz throughput are the near-term variables that break the spell.
3. In plain English
UUUU — Energy Fuels Positive
Energy Fuels is a US uranium producer that is also building the first non-Chinese "mine-to-magnet" rare-earth chain — mining the ore, processing it at its White Mesa mill, and (via the ~$1.9bn Vacuumschmelze acquisition) turning it into the permanent magnets that go into EV motors, wind turbines and defense hardware. Rare earths matter here because China controls most of the supply and has been adding US names to export-control lists, so a domestic alternative carries strategic value the market rewards in fits and starts.
Mart is adding on this drawdown for a simple checklist of reasons: the CEO is personally buying shares (insiders rarely buy a broken stock), the recent news flow has been positive, the rare-earth build-out is progressing, and the stock is down roughly 50% from its highs. That combination — improving fundamentals against a halved price — is exactly the setup he wants when deploying fresh cash.
MAI — Minera Alamos Positive
Minera Alamos (in the process of being renamed Mining Americas) is a small US-focused gold producer. It already runs the Pan mine in Nevada, and it owns a fully-permitted, already-paid-for second project — Copperstone in Arizona — that the board has committed to build. When Copperstone comes online it roughly doubles the company's annual gold output at a much fatter margin than Pan earns today, so this is a growth story where the growth is funded and de-risked rather than hypothetical.
Even though it is already a full position for him, Mart is adding more, calling it "one of the best growing US based gold producers." The logic: a producer about to double output, valued near the standalone value of just the new mine, with the gold price weak — buying that combination during a sentiment washout is the whole idea.
APM — Andean Precious Metals Positive
Andean Precious Metals is a two-asset silver-gold producer — Golden Queen in the US and San Bartolomé in Bolivia — that generates real cash flow today, unusual for a company its size. The knock on it is the Bolivia exposure (country risk, a purchased-ore plant, a legacy Silver Elephant lawsuit), which the market prices as a heavy discount to the underlying earnings.
Mart's read is that the discount has become too steep: Bolivia is "still a risk, but improving," and after the drawdown the shares trade at a very low multiple of the cash the business actually throws off. He is adding here, treating the compressed valuation as the margin of safety while the two-asset production keeps paying him to wait.
MRLN — Merlin Labs Positive
Merlin Labs is a post-SPAC company building "Merlin Pilot," an AI system that flies aircraft with reduced or no human crew — starting with the military C-130J transport. It is a classic high-risk, high-reward micro-cap: tiny current revenue, a huge potential market if the technology certifies, and a stock that swings violently on news and on the broader appetite for speculative growth.
The stock has "taken a massive hit" in the rates-driven selloff — not because anything at the company broke, but because expensive money crushes exactly this kind of pre-revenue, high-multiple name. Crucially, the Critical Design Review (the single biggest engineering risk in the early thesis) has already passed. So Mart is buying the same asymmetric bet at a lower price with less risk attached, and has sized it up to a full position.
Analysis distilled from the Contrarian Codex between-issues positioning note (PDF linked above). For personal study — not investment advice. Source material © Contrarian Codex / "Mart".