The November Reckoning
Trading Physical Reality, Not Financial Spin. Repositioning for Structural Alpha in 2026 under the Eco-Economics Framework.
I was at a dinner back in September.
Some portfolio manager, a very well-dressed one was talking about the resilience of the US consumer.
I just laughed. I told him: “Your whole thesis is based on a lie.“
I asked him if he’d looked at the S&P 500 P/E ratio, and he just waved his hand and talked about TINA (There Is No Alternative).
That’s the core problem.
People confuse liquidity with stability. They confuse narrative with data.
At Helix, our investment approach is rooted in eco-economics, a model that mandates businesses be both profitable and sustainable.
This is not philanthropy. This is finance.
We promote radical transparency regarding our thesis and strategy on our research site, www.sowmyvj.com.
November 2025 confirms that the prevailing financial narrative is fractured. The old investment rulebook is useless.
Our analysis shows a massive divergence between misleading lagging indicators and leading data points that scream economic pain ahead. We believe 2026 will be defined by a necessary adjustment to a high-risk, fragmented global order.
I. The Macro Lie: Where Lagging Data Meets 90% Overvaluation
The global picture is defined by divergence and delusion. Financial media focuses on lagging indicators like job counts.
Don’t believe them.
We prioritize leading indicators such as manufacturing indices and inventory-to-sales ratios.
They point toward recession and contraction.
The US economy appears to be an illusion.
It is supported by money flows propping up high market capitalization based on old growth assumptions.
The truth is in the numbers. The S&P 500 10-year P/E Ratio was 39.1 as of September 30, 2025.
I analyzed that data. That is 90.0% above the modern-era market average of 20.6. The US stock market is Strongly Overvalued. This is the main thing.
Structurally, we face an environment of controlled disorder.
This is accelerated by transactional nationalism and great power competition. This fractures regulatory environments and creates policy volatility.
Geopolitical tensions in the Middle East and the continued Ukraine conflict are not news cycles; they are permanent volatility factors that destroy capital.
II. The Policy Lie: Policy Paralysis and the Global Divergence
The policy environment is where the lie gets exposed.
Global climate ambition hit a political wall. I looked at the outcomes of COP30. The failure to commit to a phase-out, the US high-level absence.
It proves that the energy transition will be chaotic and expensive.
This validates our position: we focus on necessity, not aspiration.
The only good news came from Europe.
The proposed EU SFDR 2.0 changes prove that policymakers know the old ESG labels were flawed. They are creating the space for true Eco-Leaders to stand out. This is a technical win for our data-driven model.
However, the divergence is everywhere. I analyzed the UK Budget [referring to my analysis]. It is a perfect example of policy paralysis compounding macro failure. We are also watching the IMF warnings on countries like India. It is a massive growth story, but the underlying financial vulnerabilities cannot be ignored. The eco-economics model mandates that we see the ‘S’ and ‘G’ risk hiding in that growth.
III. The Energy Lie: Shorting the Mirage, Longing Copper
The central market deception right now is the Energy Lie. The belief that Artificial Intelligence (AI) growth is clean and intangible.
We assert that AI is an energy sink built on exponential energy debt.
Firms like Nvidia and Microsoft have soaring market capitalizations and momentum based on ignoring the physical cost of their operations. I looked at the data. They are Eco-Laggards.
This divergence between valuation and physical reality must be exploited. Our structural alpha strategy mandates divesting from these narratives and focusing exclusively on the necessity trade. We are investing in physical, resilient solutions. This includes companies providing resilient, reliable power for data centers and key infrastructure providers.
The AI boom, while transformative, faces bottlenecks related to energy supply and grid infrastructure. This reinforces our long-term focus on: Infrastructure, specifically grid investment, modernising transmission networks, and scaling up storage; Industrials, companies providing equipment for industrial electrification and automation; and Critical Minerals, such as copper, which is essential for electricity networks and the energy transition, with demand projected to at least double by 2040.
IV. Portfolio Positioning: Structural Alpha and the 60/40+ Trap
In a late-cycle environment that continues to reward quality and profitability, diversification is the most effective defence against concentrated US equity markets and high valuations.
We emphasize the “60/40+” portfolio, where alternatives play a critical role.
Fixed Income and Duration Management
The market is pricing in an aggressive cycle of Fed rate cuts (75-100 basis points in 2025 and 75 bps in 2026). I believe that is highly unlikely without severe labor market deterioration. We must be disciplined. Our focus is on locking in yield, managing duration, and focusing on credit quality. We maintain a disciplined, tactical approach to duration, favouring inflation protection via US break-evens. Investment-grade (IG) credit remains a core allocation due to sound fundamentals and an attractive risk-return profile compared to Treasuries. Specifically, we find value in Agency mortgage-backed securities (MBS) over corporate IG. High US public debt and fiscal risks call for diversification outside of US Treasuries. We find European bonds appealing due to anticipated ECB rate cuts and an expanding market.
Equity: Thinking Global Beyond US Tech Concentration
Concentration risk in US mega-caps is extreme, arguing for global diversification. We favor combining AI exposure with themes benefiting from investment and security spending. Financials and Industrials are set to benefit from higher investment. European banks are specifically positioned for extended outperformance into 2026, supported by a solid macro backdrop. We favor euro small- and mid-caps (SMID), which are less exposed to US tariffs, operate primarily in domestic markets, and trade at multi-year low valuations. The EM rally is expected to continue. India offers long-term growth potential in infrastructure and manufacturing linked to global supply chain shifts. China’s tech sector offers appealing valuations and strong growth relative to US tech, making it an attractive diversification avenue.
Alternatives and Hedges
We favour Private Credit and Infrastructure for their income generation, inflation resilience, and capacity to benefit from structural themes like reshoring and AI infrastructure demand. We favor Gold as a structural hedge against US fiscal and monetary policy risks and geopolitical uncertainty. We also continue to position for a weak, albeit non-linear, US dollar in 2026. This entire framework is designed to detect and avoid micro-manifestations of risk, such as the unpriced liabilities we analyzed last week at Clorox.