I am always thankful to the markets gods when I am out of pocket and not much happens, like yesterday and last week with the Jewish holidays. For those who observed, I hope you had an easy and meaningful fast. I made up for the 24 hours of lost time with bagels, lox, cream cheese, ruglah, mimosa, homemade mac n cheese and marble cake. No wonder I had trouble falling asleep.

As you know I have been writing about the Russell 2000 small caps since April when I became curious and interested in an opportunity. As you also know, I was skeptical because I had been run over by this trade a number of times since 2007. Nonetheless, our model wanted to buy it and we have done so a few times, all of which I wrote about and disclosed the ticker symbol. Two weeks ago, we pruned some of those holdings, luckily right at the high. A few days later, our model bought IWO below to add to our DWAS position. While small caps still offer upside and I think they will rally onbalance into 2026, risk has increased. It is no longer a lay up purchase to close your eyes and enjoy.

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On Thursday, Tesla (TSLA) announced good news on the sales front. The long-term turnaround came much, much faster than expected. We own Tesla in our Unloved Gems portfolio, for full disclosure. At $225, Minnesota Governor, Tim Walz, laughed and cheered that Tesla’s stock was falling. That happened to be the low. Anyone surprised? Yes. I am picking on Tim Walz. He should worry about the government not Tesla’s stock. I have already written that I am 100% against the federal government, directly or indirectly, taking stakes in public companies like the administration just did with Intel. That is no capitalism. It’s picking and choosing winners and losers.

I have long written and continue to write that politics and investing do not mix well. Frankly, only fools try to manage money this way. It’s no different than people rooting for the economy and markets to tank because they don’t like the President or party in power. It’s absurd. In my 38 year career, every single president has presided over all-time highs in the stock market and the economy. That is, my friends, an indisputable fact. I like certain presidents. I dislike others. I root hard for every single president to be successful because that means success for Americans, our clients and my family.

I didn’t mean to get off topic. Sorry. I started writing about Tesla because I wanted to share what good, solid portfolio management looks like. At $225 when Walz was chirping the stock, it looked about as good of a buy as it ever has. On Thursday, after an epic rally and amazing news, the stock sold off. When stocks and markets cannot rally on good news, that is a strong sign. And we plan to prune our position as the stock is indicated higher at the open. We will reassess on a decline if it happens. If not, there are plenty of other opportunities around and we will still a smaller position in Tesla.

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On Wednesday we bought SDS and more SIXO. We sold FNOV, IPO, some QLD and some HYG. On Thursday we bought EMB.

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