Long before this latest Middle East shock hit the front pages, we were already positioned for it.
Back in our December 2025 Alpha Tier issue, we called energy “the quintessential contrarian trade” for 2026. At the time, that was not the comfortable call. It was the kind of call that makes people raise an eyebrow when you publish it… and nod after the market does the talking for you.
Well, the market is talking now.
So today I’m sharing something different. Not a polished monthly essay written with the benefit of hindsight. But the actual Weekly Update our subscribers receive inside VMF’s Strategic Asset Allocation when markets are moving fast, headlines are flying, and portfolios need to be read in real time.
That’s the point of these updates.
They show subscribers what matters, what doesn’t, what the market is quietly signaling beneath the noise, and how those signals are affecting our Model Portfolio as events unfold.
The update below, dated March 7, came after a week in which geopolitics hit global markets like a sledgehammer. Oil surged, of course. But so did the consequences across bonds, currencies, equities, and inflation expectations. And in moments like this, the edge is not reacting faster to headlines. The edge is having the right framework before the headlines hit.
Here is the latest Tier One Weekly Update.
It was a risk-off week across global financial markets, and the catalyst needs no elaborate introduction: the U.S. & Israel attack on Iran sent shockwaves not only through the obvious place, oil, but across currencies, bonds, equities, and inflation expectations as well.
Still, our Model Portfolio continues to show several pockets of strength… and one above all: our overweight in the energy sector.
That has become the clearest vindication of a call we made back in December 2025, when we described energy in Alpha Tier as the “quintessential contrarian trade.”
At the time, the consensus was still leaning the other way. Even J.P. Morgan was laying out a path in which Brent could sink into the low $30s by the end of 2027.
Fast forward to Friday, and Brent closed around $93.60 while WTI ended near $91.62. That is no tjust a move. That is a message.
But amid all the media frenzy (and, frankly, all the noise) it helps to listen to what the market itself is saying.
And right now the message is remarkably clear: the Brent forward curve is in deep backwardation.
That matters because the curve is telling us something very specific: the stress is in the present, not yet in the distant future.
The market is paying a steep premium for barrels available now, while prices further out remain far more restrained. In fact, even after this week’s surge,
Brent for delivery at the back end of 2026 is still only a little above $70.
In plain English: oil for immediate delivery has become dramatically more expensive, but the market is still not convinced this will evolve into a lasting structural shortage.
And that, of course, is the great unknown hanging over markets right now: duration.
Because that is what will determine everything that follows.
How long does this war last? What does it mean for inflation?
Does it alter the path of monetary policy at all?
And how far do the consequences spread across broader value and supply chains... not only in oil, but in LNG, fertilizers, and other critical inputs that depend on flows through Hormuz?
Those are not peripheral questions...
They are the macro questions now.
We’ll address all of them in our next monthly issue, due next Friday, March 13.
For now, what matters is that our energy sector play continues to press new highs... the natural consequence of a well constructed Model Portfolio and a Strategic Asset Allocation tuned for a Fourth Turning world.
Sometimes the market tests your patience first.
And then it rewards your conviction.
Good investing!
Vasco Marques de Freitas, CFA, CMT
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