Nick Hodge,
Publisher
July 15, 2025
Editor’s Note: Below you’ll find a portion of the Market Analysis section from this month’s issue of Foundational Profits. We are absolutely smoking the S&P 500 this year, having closed gains in the first half that include 114% on Philip Morris, 33% on a blockchain ETF, and several other double-digit winners. We’re also sitting on large open winners in gold, ethereum, and battery stocks. You can see my rationale for current positioning in the issue excerpt below. And if you want to see my full positioning every month — each position I own, and how much — you can do so by becoming a member of Foundational Profits. It’s $249 per year, and that’s a steal for this kind of portfolio guidance. —Nick
I have been telling you for a few months that it was going to be a bullish second half of the year, there would be no recession, and that coming reflation would boost our portfolio.
This is all now playing out and consensus is starting to catch up.
Consensus forecasts for Q2 GDP, which will be released later this month, are around 2%. And that’s probably pretty darn close to what the actual number will be. That is a positive change from negative growth in Q1, which corresponds with positive moves in the US indexes to new highs.
Inflation is ticking higher as well, which is ok as long as growth comes with it and you own it in your account. Inflation likely bottomed for the year with the April monthly CPI at 2.31%. May came in slightly higher at 2.35%, and June will likely come in higher as well given oil’s rise as bombs fell last month. (Ed. note: June in fact came in higher.)
We own that inflation in our account via gold, silver, copper, uranium, oil and Ethereum.
We own the growth with names like Papa Johns and Enovix.
And there are other major macro factors at play. Both the dollar and bond yields are bearish. The dollar for obvious reasons like the passage of the Big Beautiful Bill and the ugly debt that comes with it.
As you know, when you make more of something without a commensurate increase in demand, value goes down. And Trump, like all modern presidents no matter the color of their tie, is presiding over a record-high M2 money supply.
I told you months ago the DOGE wouldn’t bite, and it is indeed whimpering in its cage. This has led to the worst first-half yearly performance of the dollar index since the Nixon era.
At the same time, yields have been moving down and to the right all year, despite the bond vigilantism in May that threatened the 10-year yield going to 5%. We can debate the reasons why, including loosening of capital requirements on banks that allow them to hold more bonds to the GENIUS Act, or "Guiding and Establishing National Innovation for US Stablecoins Act," which passed last month. That bill requires stablecoin operators to buy bonds.
No matter the reason, rate-sensitive trades are still working. That includes utilities, which we profitably sold out of, perhaps prematurely, last month. It also includes real estate, as mortgage rates come down to 3-month lows. And that’s why we’re getting back into a REIT.
The last major macro callout goes to volatility, which has made lower lows since April’s Liberation Day as the S&P has marched to new all-time highs.
Here is every position we’ve closed so far this year:
The open portfolio contains ten current winners. We added two new positions in June that are already up. And we set limit orders for three new positions in July.
This is professional and transparent portfolio management from a long-time successful stock market operator.
Its contrarian macro approach has led to market-beating performance for over a decade. And that performance is playing out again this year as many other investors get whipsawed by Trump and his ever-changing economic policies.
If you’d like the guidance of a steady hand, check out Foundational Profits.
Call it like you see it,
Nick Hodge
Publisher, Daily Profit Cycle