The strongest bull market you probably don’t own

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Today’s issue in preview:

• The strongest bull market you probably don’t own

• Two world-class inflation hedges you should know about

• This high-tech bull market is poised to reach new all-time highs.

• Learn our Top Themes to buy now

Two world-class inflation hedges you should know about

Credit: f9photos

Our idea of owning Vulcan Materials (VMC) and Martin Marietta (MLM) just received a heck of an endorsement.

Last week, regulatory filings revealed that master investor Chris Hohn accumulated large stakes in both companies during the second quarter.

Chris Hohn isn’t a name you see much on CNBC or in the Wall Street Journal, but he’s one of the world’s most respected, most successful money managers. In 2025, Hohn’s TCI Fund Management generated $18.9 billion for clients. It’s believed to be the biggest annual dollar gain in hedge fund history.

Hohn is a long-term “quality” investor, cut from a similar cloth as Warren Buffett. Hohn looks to invest in world-class companies with giant competitive advantages that can reliably earn high returns on capital they invest in their businesses. He likes entrenched, dominant companies that are extremely difficult to compete with, like Visa (V), Mastercard (MA), and Alphabet (GOOG), all of which he holds.

Hohn is also ultra-selective. He’s very picky about what he buys and typically runs a concentrated portfolio of less than 15 stocks. And he’s been buying Vulcan and Martin Marietta.

Back in June, we detailed these two firms as “unique inflation hedges you’ve probably never considered.”

Vulcan and Martin Marietta are America’s two largest construction aggregate producers.

Together, Vulcan and Martin Marietta own and operate hundreds of mines across America that produce gravel, sand, and crushed stone – aka “construction aggregates.”

These raw materials are literally the foundation of highways, bridges, airports, offices, apartments, homes, and factories. You are virtually guaranteed to have driven on a road made possible by the construction aggregates produced by Vulcan or MM. They are the giants of the industry.

Importantly, many of Vulcan and MM’s mines are in coveted locations near America’s major metropolitan areas. This is key because construction aggregates are very heavy and therefore costly to transport over long distances. Transporting $5 million worth of gold and transporting $5 million worth of gravel are two very different things.

Vulcan and MM’s stranglehold on the country’s best aggregate mines near major metropolitan areas is a significant advantage over their competitors.

Given how difficult, expensive, and time-consuming it can be to permit and develop a large gravel mine, we can say both VMC and MLM own irreplaceable collections of scarce, in-demand resources. Importantly, these scarce resources cannot be printed or coded into existence.

Those attributes are key to playing inflation defense. They’ve allowed the market values of VMC and MLM to rise and outpace dollar debasement over the past seven years.

VMC and MLM are also enjoying the U.S. factory and data center building boom we’ve been investing in with great success. As America grows, VMC and MLM grow with it.

Owning a collection of gravel pits and sand mines isn’t as exciting as owning SpaceX or AI stocks. However, if you want to play inflation defense by owning irreplaceable collections of scarce, in-demand assets whose prices can rise along with the rate of money creation, consider VMC and MLM. Both stocks just received a blue ribbon endorsement from a world-class appraiser of asset quality.

The strongest bull market you probably don’t own

Credit: Kanoke_46

As of this morning, our Sept. 29, 2025, recommendation to own oil stocks has resulted in an extraordinary 68.2% gain, as measured by the SPDR S&P Oil & Gas Equipment & Services ETF (XES).

Back then, we laid out a simple bull case for oil stocks: As the global economy grows, oil demand will remain solid. However, importantly, U.S. shale oil production growth appears to be peaking.

Flatlining supply from this region would remove a critical and reliable source of production growth that has been in place for more than a decade. Plus, oil was very cheap relative to gold and other assets, indicating good value.

With all that in mind, we’ve written frequently and bullishly about owning Canadian oil giant Suncor (SU), U.S. oil giant ExxonMobil (XOM), and XES. Both SU and XOM are up more than 40% since our September call. Both are close to breaking out to all-time highs.

When I recommended oil and started trading it from the long side, I did not factor in the potential bullish driver of the Iran War. That’s been a “bonus” driver of gains in oil stocks. Sometimes, the dice rolls in your favor.

Although positive news related to the Iran War could emerge at any time and trigger a short-term oil/oil stock correction, the long-term picture is bullish. I see three reasons why this is the case.

One: Critical oil infrastructure in the Middle East has been damaged. Oil flows will not return to pre-war levels for possibly over a year. This supports oil prices north of $80 per barrel, which supports large cash flows for oil and gas firms.

Two: Most countries maintain substantial above-ground “buffer” supplies of oil and refined petroleum products in the event of market disruptions such as the Iran War. Over the past five months, much of these buffer supplies have been depleted to compensate for the loss of Middle Eastern flows. They must be replenished.

The coming restocking of buffer supplies will support oil prices north of $80 per barrel… which, again, supports large cash flows for oil and gas firms.

Three: Although oil stocks have had a heck of a run since our September call, they aren’t up much over the past ten years. Adjusted for dollar debasement over the past decade, key oil and gas ETFs XES and the SPDR S&P Oil & Gas Exploration & Production ETF (XOP) are down significantly.

A continuation of the oil stock bull market should be particularly rewarding for the offshore drilling “subsector.”

This oil industry niche consists of companies that manufacture and operate offshore drilling ships, platforms, and related equipment & services.

As I’ve covered over the past few weeks, for many countries and businesses, the Iran War is a brutal reminder: If your survival or smooth operation depends on uninterrupted resource flows from the Middle East, you are in a dangerous, vulnerable position.

No politician, CEO, or major shareholder wants their business to be in that position. No citizen wants their country to be in that position. Many powerful and influential people are realizing this is a big risk that must be mitigated if humanly possible. Executives and politicians will get fired for not addressing it effectively.

This means building and buying as many forms of “not Middle Eastern” resource supply chains as possible economically… like those from safe, resource-rich Canada and Brazil. It means lots of oil exploration off the shores of South America, Africa, Mexico, and eventually the Arctic shelf.

Drilling offshore is one of the few areas in the world that still offers the potential for large new “company maker” oil field discoveries.

This means lots of money is flowing towards offshore drillers now and will continue to do so. This should drive continued gains in the offshore drilling theme.

Current market leaders here include drillship and platform operators Transocean (RIG), Valaris (VAL), Noble (NE), and Seadrill (SDRL). Well-positioned offshore equipment and service providers include Tidewater (TDW), Oceaneering (OII), and TechnipFMC (FTI).

Although oil stocks are up substantially since our original call, we believe they have a lot further to run. The fundamentals are strong. The public is largely indifferent towards this bull market. Still bullish!

This high-tech bull market is poised to reach new all-time highs.

Credit: Photofex-AT

After winning the presidency in 2024, one of Donald Trump’s first consequential acts was telling European countries they needed to start picking up more of the defense bill… that they couldn’t depend on U.S. military assistance as much as they had in the past.

Trump’s stance on how much the U.S. would act as the world’s “policeman” marked a significant departure from how the world had worked for decades.

In response to Trump’s stance and Russia’s invasion of Ukraine, the leaders of Germany, the UK, France, Poland, and Italy began ramping up their domestic spending on missiles, radar, satellites, airplanes, and drones. Overall, European military spending jumped 14% in 2025 alone. Spending in 2026 is expected to reach €454 billion, representing a 32% increase over 2024 levels.

This huge increase in already large budget line items drove a bull market in European defense stocks in 2025. The Select STOXX Europe Aerospace & Defense ETF (EUAD) gained 92% from Jan. 1, 2025, to October 2025.

This fund owns the “who’s who” of major publicly traded European defense contractors. Major holdings include Rolls-Royce (aircraft engines, naval propulsion), Safran (aerospace), Airbus (aerospace), BAE Systems (diversified), Leonardo S.p.A. (diversified), and Rheinmetall (vehicles, missiles, ammunition).

After such a big run, it was reasonable to expect the European defense theme to take a break and digest its large gains. As you can see in the chart below, that’s exactly what happened from October 2025 through July 2026. The fund moved in a long sideways consolidation period.

Recently, however, the strong trend of European defense spending propelled EUAD to within pennies of its all-time high. We think the fund is likely to trade past that all-time high soon.

We live in a deglobalizing world where the U.S. cannot be counted on to provide 24/7 protection for countries around the globe. Defense is becoming increasingly high-tech, which means today’s expensive bleeding-edge systems can quickly become yesterday’s obsolete junk and therefore must be upgraded or replaced frequently. Competition for scarce critical resources will provoke more conflict in the future.

Add it all up, and you get a bull market in European defense stocks. This is a trend breakout you want to pay attention to.

Market Notes

• Our recommendation to own healthcare stocks continues to pay off. Biotech royalty leader Roivant Sciences (ROIV) just hit a new yearly high.

• Mega bank Bank of America (BAC) reached a new all-time high today. This is indicative of a strong U.S. economy.

• Our recommendation to invest in resource-rich Canada continues to reward shareholders. The iShares MSCI Canada ETF (EWC) reached a new all-time high today.

• Oil refining giants Marathon Petroleum (MPC) and Valero Energy (VLO) reached new all-time highs today. These firms benefit from the constriction of resource flows in the Middle East.

Regards,

Brian Hunt
Editor, Money & Megatrends

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