AIA Newsletter September 2026 — Introducing the AIA Permanent Portfolio

The debt arithmetic, by elimination

• Three exits exist and only one is likely. Voluntary spending cuts: "not likely" — the growth is in Social Security and Medicare as the Boomers retire, and "there is zero appetite among voters or their elected representatives for reforming these programs." Outright default: "zero chance… This would be the end of the US Empire."
• That leaves monetization. As the pile grows, creditors "will demand higher interest rates to compensate for the increased risk of nonpayment and/or of being paid in a debased currency" — and governments have always chosen "the perceived easy way out."
• He is careful to disown the doomer framing: "I harp on this not because I am some kind of dollar-collapse Cassandra" — and on timing, "this is not likely to happen next week or even next year, but the trend is certainly in place."

Yield-curve control, with the WW2 receipt

• The mechanism: "the FED will set an arbitrary interest rate and then use QE (printed money) to buy enough bonds to keep the rate at that level while allowing inflation and nominal growth to exceed the controlled rate."
• The precedent, quoted from the St. Louis Fed: rates pegged at 3/8% and 2.5% in April 1942; the Fed "obligated to keep buying securities… forfeiting some control of its balance sheet and the money stock"; CPI over 17% by 1947 and over 20% annualized in 1951 before the Treasury-Fed Accord ended it.
• The steady-state he expects: a 10-year at 3% against 4%+ inflation — "the slow but steady inflating away of the debt in nominal terms" — with the WW2 example as the tail risk.

Why "I just won't buy the bonds" doesn't work — Napier's repression list

• Russell Napier's argument, cited by name: the burden shifts "from central banks to regulated savings institutions" — bank liquidity requirements, preferential capital treatment for sovereigns, pension minimum allocations to domestic government debt, insurance solvency rules, tax advantages, capital controls, directed bank credit, pressure on retirement plans to invest domestically.
• The punchline: "the government does not necessarily announce: 'You must finance our deficit.' Instead, it changes the regulations (Congress makes the rules) so that owning government bonds becomes practically unavoidable."
• The live example: von der Leyen calling €10 trillion of EU household deposits "idle" and proposing securitization to "unlock up to €470 billion." His comment: "these monthly issues just seem to write themselves!"

Why five-flags diversification isn't the answer for the reader

• Doug Casey's prescription is quoted in full — "live in one country, hold citizenship in another, bank in a third, invest or operate a business in a fourth, and keep assets in a fifth" — and traced back to Harry D. Schultz's "Three Flags."
• Then rejected on practicality: "most people don't have sufficient wealth to attract top advisors, and this space is infested with shysters and scam artists… A Family office with a billion dollars? Yes. Guy who sold his HVAC business for $2 million? Not likely."

Harry Browne's Permanent Portfolio — the chassis

• The premise: "because nobody can reliably predict the next economic regime, investors should own assets that collectively prepare them for every major regime." Browne's 25/25/25/25 maps one asset to each regime — stocks/prosperity, long Treasuries/deflation, bills/recession-and-tight-money, gold/inflation-and-monetary-disorder.
• Rebalancing convention: back toward 25% annually, or on tolerance bands when a sleeve hits ~35% or falls to 15%.
• The distinction he draws: "this is genuine diversification by economic exposure and not simply owning hundreds of securities that all depend on rising asset prices and easy credit."

The AIA Permanent Portfolio — what it is and isn't

• The one deliberate deviation: "I want less exposure to bonds due to the reasons articulated earlier… especially true given that I expect persistent inflation and the government to institute yield-curve control." The regime the bond sleeve is supposed to hedge is the one he thinks gets rigged.
• The mandate is explicitly not the AIA Portfolio's: "it is also not a get-rich portfolio. This is better suited for those with accumulated wealth who want to preserve it over the long term during what I expect to be a very tumultuous economic, financial, and political period."
• It will be built in public, slowly: "this will not be a one-issue, one-and-done type situation. It will likely take a while to complete my thinking on this subject and find suitable portfolio components."

Land as the first sleeve — the Talmud, then a REIT

• The sourcing is the Babylonian Talmud, Bava Metzia 42a: "a person should divide his money into three: one-third in land, one-third in business, and one-third kept in his possession."
• But owned liquidly: "I don't want the headache of actually owning it myself. There are many publicly traded companies with large landholdings that allow me to buy land in a liquid way" — and the liquidity is itself part of the thesis: "if things begin to seriously go off the rails in the US, it would be easier to sell shares in a stock than to sell a piece of land."
• The screen: "large land banks with income streams and optionality… Is there the possibility that some new use for the land will materialize in the future?"

Why timberland specifically (the Kopernik argument)

• Kopernik's framing, quoted: markets "extrapolat[e] instead of normaliz[e]" cyclicals, so "many timber-exposed companies trade near prices seen fifteen years ago, despite years of biological growth, stable demand, and monetary expansion that have lifted many other asset categories."
• Trees are a biological compounding asset — 3–8% of volume a year — plus "in-growth": pulpwood becomes small sawtimber, small sawtimber becomes higher-value sawlogs, mature logs qualify for specialty/plywood/export markets. Volume and price per unit rise together.
• The embedded option: timber "can often be stored on the stump," so a weak log price can simply be waited out — "oil wells and mines deplete. Forests can be replanted." Limits acknowledged: age, disease, fire, age-class management.
• Correlation: private timberland has historically shown low correlation with stocks and bonds; public REITs are less diversifying because they trade daily on rates and housing — but they buy professional management and liquidity.

Weyerhaeuser — the inaugural holding

• Disclosure and status in one line: "I have discussed this a bit on the Discord channel, and I do own it. It is the first addition to the AIA Permanent Portfolio."
• ~10.4M US acres plus Canadian licences across three regions — the US South (fast growth, long season, low cost), the Pacific Northwest (Douglas fir, export access) and the Northeast (diverse end markets, alternative use).
• Valuation is explicitly not an earnings exercise: 2025 adjusted EBITDA of ~$1.02bn was a trough year, "that puts the shares at a high multiple of trough earnings. The investment thesis therefore rests on asset value and normalized earnings, not the current P/E ratio." A $2,500–4,000/acre blend on 10.4M acres = "roughly $26–42 billion" gross, though "not a clean equity NAV."
• Capital return framework: 75–80% of adjusted funds available for distribution; 2025 saw $606M of base dividends and $160M of buybacks.

Reading Weyerhaeuser's land trades as evidence on management

• Bought 117,000 NC/VA acres at ~$3,100/acre and 10,000 Washington acres at ~$9,500; sold 28,000 Oregon acres at ~$6,800 and contracted 86,000 GA/AL acres at ~$2,560.
• The read is on the multiples, not the prices: acquiring at ~21× timber EBITDA while disposing at ~45× is "intelligent capital recycling, assuming management's forward estimates prove accurate."

The optionality stack on the same acre

• CCS pore space: across much of the Southern acreage Weyerhaeuser owns the subsurface formations CO₂ can be injected into — "the surface can generally continue producing timber while the subsurface generates lease and royalty income." An exploration agreement covers 187,500 acres across five sites in Arkansas, Louisiana and Mississippi. He calls this "the least appreciated option in the portfolio."
• Wind and solar leases (multiple wind projects and a first solar project), gated by transmission access: "an acre far from the grid has little renewable value, while strategically situated acreage can be worth multiples of its timber value."
• Forest-carbon credits, mineral/aggregate/oil-and-gas royalties (aggregates near growing cities matter because haulage cost is the moat), recreational permits over ~2M Western acres, and conversion to residential, industrial, data-center, conservation or infrastructure use.
• Conversion is already earning, not theoretical — "land sales already generate meaningful earnings. But the timing is irregular, making quarterly results lumpy" — and margins are fat because much of the land carries old historical cost.
• The honest counterweight: "the near-term share price will still be driven primarily by housing, lumber prices, and interest rates."

Aimia — the multibagger mechanism, restated on request

• Q2: Cortland International flat; Bozzetto sold for $270M earmarked for a cash-flowing acquisition. "On hold while we wait and see what management buys."
• The machine: a perpetual-capital entity whose stated goal is growing net book value per share, buying back stock while it trades below NAV ("they are already doing this"), redeploying acquired cash flows into more undervalued cash-flowing businesses, with ~$1bn of NOLs shielding the earnings.
• Why now and not before: "the company went through a period of trying to become this, but the previous management botched it." The bet is on CEO Rhys Simmerton's record, hunting in "places like the UK, which is tremendously undervalued" — "I believe I told the story of Teledyne in a previous issue… This could be a similar type of story."

Selling Global Atomic — the rule he broke

• "I have lost patience with this stock. It was a major mistake not to sell after the first disappointment on financing. I have endured several capital raises."
• The asset isn't the problem, the cap table is: "this is a real uranium mine that will likely get built. However, if they keep issuing stock, how much meat will be left on the bone?"
• The transferable rule, stated as a self-criticism: "when a resource company misses a goal or projection, sell first and ask questions later. I knew this but did not follow my own rules and experience." Note the uranium view is unchanged — URNM's line the same month is "the bull market continues."

Abacus — a cost problem, and management's answer

• Q2 G&A rose to $32M with the increases itemised (legal/professional +$8.46M, payroll +$2.36M on acquisition staffing, stock comp +$2.89M); H1 sales & marketing +78.6% on advertising for the life-solutions push.
• "The market did not like this, and the stock initially dropped on the news. Management got the message and on 8/13/26 announced a $100 million stock buyback program."
• The verdict is withheld: the integration case (life settlements + planning + securitization + asset management) is credible, but "we will need to see proof of execution and costs getting in line. We will see."

Uzbekistan — the inflection, and the index that lies

• Scott Osheroff's chain of causation: inflation 15.2% (2018) → 6.4% (July 2026); currency from double-digit depreciation to ~7% appreciation in 2025; savings surfacing into term deposits as rates fell 26% → high teens; corporate bond raises up from $2M to $20M+ with coupons down from 30% to the high teens/low 20s; a policy rate cut from 14% toward 13% expected.
• The consequence he trades: as fixed income gets less attractive, equity gets bid — "an inverse relationship in the listed equity market which over the past eighteen months has been in a significant uptrend."
• The caveat he volunteers against his own position: the Tashkent UCI index was "up over 100% in August" but is "a flawed index" whose constituents nobody — not brokers, not the exchange — will disclose; "there are many illiquid companies that can move significantly with just a bit of buying pressure."

Exchanges as a category

• HKEX printed record H1 revenue and earnings with the dividend up 24%. "I am becoming a big fan of these exchanges."
• The discipline stays intact even so: "this is a hold, and I might consider adding shares on weakness in major shares" — i.e. add on a market-wide drawdown, not here.

Venezuela — the reopening is slower than advertised

• Quoted reporting: more than half a year after the US "captured and extracted Nicolas Maduro," Chevron is producing and exporting but Exxon and ConocoPhillips have not returned; PDVSA-led negotiations are behind Washington's January expectations.
• Deals that are signing are with "service providers and smaller American oil companies, which seem more willing to take the risks" — the New Stratus profile exactly.
• His own update is smaller than the headline: "no news on New Stratus in Venezuela, but they are close to signing in Colombia. I will remind subscribers that this is a very speculative stock."

Dividend book — the income names

• Hawaiian Electric reframed as a fixed-income instrument: "it is probably good to think of this as a zero-coupon bond" — the return accrues as the settlement is repaid and the market prices in the dividend resuming.
• Swire: underlying profit +11%, recurring underlying profit +36%, DPS +6% into a 10th consecutive year of growth, HK$100bn programme on track — bought "with the long view that I would buy at the bottom of the real estate cycle."
• Thungela: EBITDA nearly doubled (R1,318M vs R691M) and profit R1,391M vs R248M, but "coal sales were up, but so was the Rand, which mitigated the higher sales." Still bullish on the substitution logic — the Gulf war curbs LNG exports into strong demand, "where coal can be substituted, it is being used."
• Odfjell gets the leading indicator rather than a result: "the major Norwegian producers are moving forward with exploration. This will likely filter down to Odfjell."

Housekeeping across the rest of the book

• Quiet month, stated plainly: Ivanhoe, PetroTal, Saipem, Seabridge, Amerigo and DVYE all get "no major news this month" — the monthly-discipline convention of the product.
• Georgia Capital: record NAV, earnings up, consistent buybacks — "not much to say… steady as she goes." Chile: "could take a while to unwind the previous economic regulations."
• Major Drilling's record quarter is read as the cycle transmitting — "higher cash flows from miners begin to move into exploration and eventually into the company's coffers" — with labour the binding constraint. Patagonia Gold's Calcatreu suspension (a local-hiring quota) was lifted. Paladin's FY26 issues "seem to have been resolved."