The Laser Beam Fund returned -0.2% in November. The quarterly gain is +6.4% and FY26 so far is +11.7%. Our annualised return is 30%.
We entered the month positioned conservatively. After a strong run through September and October, we reduced net exposure and tightened risk controls. That proved sensible. November delivered meaningful volatility. At one point:
Nasdaq down 8.4%
S&P 500 down 4.6%
ASX 200 down 5.6%
MSCI All World down 4.8%
Despite this, the fund did not decline with broader markets. Selective hedges and careful sizing protected us.
More importantly, the volatility created opportunity. We added 10 new positions across AI software, ecommerce, critical minerals and global industrials at attractive entry points. The portfolio ended November in a stronger position than when we entered the month.
MARKET COMMENTARY
The global environment remains dominated by heavy policy support and elevated spending. However, November saw a meaningful rotation beneath the surface.
While the S&P 500 fell 4.6% at one point, roughly 82% of constituents were already 20% below their all time highs. Factor volatility picked up mid month, with style and thematic exposures moving more violently than headline indices.
During the pullback, Fed rhetoric shifted rapidly, lifting December rate cut odds from 30% to over 70% within 48 hours. The Fed is increasingly responsive to market conditions, which supports equities and creates trading opportunities.
Late in the month, market breadth improved. Equal weight indices firmed, small caps outperformed, and sectors like homebuilders, regional banks, and biotech participated. This is a constructive shift after months of narrow leadership.
THE STRATEGY
Our returns have been above in-line with global benchmarks, after the full hedging cost, and with lower volatility. Our average cash balance has been 67% and average net exposure of only 18%.
How have the returns been generated? A refresher: we run a concentrated, global long/short portfolio built for volatile, mispriced markets.
Concentration: We hold 5-20 high-conviction positions.
Agility: We cut losers quickly and let winners compound.
Edge: Ideas are generated via deep fundamental work and our proprietary AI engine, which flags regime shifts early.
We do not rely on being right 100% of the time. Our edge comes from being meaningfully larger when right than when wrong. Since inception, our average winner has been 2.4x the size of our average loser. This has allowed us to deliver decent returns while prioritizing downside protection.
EXITING OUR BIGGEST WINNER: ALPHABET
We bought Alphabet when the market was convinced AI would kill search. In our July newsletter we wrote:
“The market worries AI might replace search. We think that risk is already in the price while the upside from AI is not.”
Since then, the stock rallied 60% and the thesis has mostly played out: Cloud revenue +34%, Gemini reached 650m users, and search revenue accelerated contrary to the bear case.
Alphabet is still a great business, but the market has now priced in more of the AI upside. The multiple has expanded back to roughly 30x earnings, and because of the heavy AI capital investment cycle, P/FCF has blown out to around 60x.
In November we exited the position and recycled capital into ideas where the market is still mispricing the opportunity. We will continue to monitor the stock and wait for another attractive entry point.
AUSTRALIA: A DIFFICULT MACRO SET UP
While we remain positive on the resource sector and some small caps, the broader Australian macro setup is unappealing.
The only meaningful employment growth is coming from government hiring. Productivity is weak, federal spending remains high, and taxpayers are carrying the load.
Inflation is now the highest in the developed world:
Country | CPI |
|---|---|
Australia | 3.8% |
US | 3.0% |
Japan | 3.0% |
UK | 3.6% |
Canada | 2.2% |
Eurozone | 2.1% |
Switzerland | 0.1% |
Australia Monthly CPI (Source: Bloomberg)
With sticky inflation, rate cuts are off the table for now. Corporate Australia is operating in a low growth, high cost environment. The top end of the ASX screens expensively.
Our Approach: Most investors already carry substantial Australian exposure through property. We intend to use the fund to hedge that exposure through targeted shorts when the conditions align. For now, our long exposure in Australia is limited to commodities, avoiding the domestic consumer cycle entirely.
NEW POSITIONS: THEMATIC EXPOSURE
The 10 new positions added during November fall into four themes:
AI infrastructure and modern software – companies getting paid to implement AI, and also benefitting from AI efficiencies.
Global ecommerce and digital consumption – improving demand, cost discipline and operating leverage.
Critical minerals and electrification metals – exposures aligned with long term supply constraints.
Global industrials with minimal Australian exposure – high quality businesses with global revenues and structural demand.
The broadening AI trade: Three years after ChatGPT launched, AI is now showing up in earnings. Companies across the old economy are deploying real AI tools tied to cost reduction and margin lift. We are investing more in companies successfully using AI, not selling AI, as the trade shifts from narrative to measurable productivity gains.
Source: Goldman Sachs
Source: Goldman Sachs
All new positions were added at attractive valuations during heightened volatility.
ACTIVE MANAGEMENT: CONTRIBUTORS AND DETRACTORS
The strategy is intentionally active. We work hard for every percent and have maintained high turnover to rotate capital into the highest conviction ideas. The process is consistent:
Exit positions quickly when evidence breaks
Continuously refine stops and risk levels
Rotate capital into higher conviction ideas
Avoid letting capital sit idle in laggards
Top Contributors: Alphabet (positive AI execution), South32 (commodity strength), Zip Co (fundamentally undervalued)
Top Detractors: DAVE Inc (Fintech weakness), Interactive Brokers (Sentiment), Palladium (Consolidation).
INVESTOR ACCESS
Performance Tracking: To view performance, net exposure, sector breakdown, and top holdings anytime at the private link below (updated weekly at minimum): www.laserbeamcapital.com/performance
Daily Liquidity: Daily unit pricing is now active, allowing you to invest on any business day. You can also see your exact daily NAV via the investor login button on our homepage.
As we move into year end, we wish all investors a relaxing Christmas break. We will continue managing the portfolio actively throughout the holiday period.
Please feel free to reply to this email or call me on 0407 428 147 if you would like to discuss the portfolio.
Regards
Portfolio Manager
The Laser Beam Fund
