With two trading days left in 2025, this is the right moment to step back and assess what actually mattered this year — not in hindsight, but in real time.
Markets don’t reward commentary. They reward positioning, discipline, and the willingness to stay convicted when narratives shift. And while no two client portfolios are identical, 2025 reinforced a core belief we’ve written about consistently:
Returns don’t come from owning everything. They come from owning the right things — at the right time — for the right reasons.
What We Got Right
1. AI & Semiconductors: Early, Consistent, and Convicted
In January, we wrote about why AI-related stocks sold off on good news — and why those moments are often buying opportunities, not warning signs. The core argument was simple: efficiency doesn’t reduce opportunity; it expands it.
We didn’t waver as the year progressed.
By August and November, we made the case that this AI cycle more closely resembled the early stages of the internet build-out than a late-stage bubble — emphasizing infrastructure, scale, and second-order demand.
With two days left in the year:
- The S&P 500 is up ~16–17%
- Semiconductor-focused exposure is up multiples of that
The point isn’t the vehicle. It’s the spread.
Broad exposure delivers broad results. Portfolios aligned with the right innovation themes experienced materially different outcomes — not by accident, but by design.
2. Copper: Early Recognition of a Global Growth Signal
In April, when copper was largely ignored by equity investors, we published a piece arguing that copper was one of the cleanest ways to express global growth, electrification, grid investment, and data-center expansion.
That wasn’t a trade. It was a structural thesis.
Since that April post, copper is up roughly ~25%+, validating the idea that real demand — not speculation — was driving the move.
We weren’t chasing momentum. We were identifying a structural signal early, before it became a consensus macro trade.
3. Small Caps: The Rotation Setup (Before the Rotation)
In August, we wrote about the potential for a small-cap rotation — not as a blanket “buy everything” call, but as a selective opportunity driven by:
- improving breadth
- easing financial conditions
- valuation dispersion between small and large caps
The right way to judge that call isn’t full-year returns. It’s relative performance since the thesis was published.
Since early August:
- Small caps (IWM) are up ~18%
- Large caps (SPY) are up ~11%
That relative shift is exactly what early rotation looks like — and it’s why positioning before consensus forms is so critical.
4. Local Lows, Fear, and Staying Grounded
Throughout the year — in March, April, and again around September’s shutdown noise — we wrote about how markets often behave during fear events.
The shutdown is a perfect example.
Despite endless headlines, markets did what they often do during political drama: they largely looked through it. Equities remained resilient, volatility faded quickly, and fundamentals reasserted themselves.
We stayed consistent: volatility creates opportunity, not obligation.
What We Got Wrong
No year is without mistakes — and pretending otherwise doesn’t help anyone.
Two areas stand out:
1. Timing Is Never Perfect
Some of our high-conviction themes took longer to play out than expected. Markets don’t move on our schedules, and even correct ideas can test patience before rewarding it.
That’s not a flaw in the process — it’s a feature of real-world investing.
2. Not Every Signal Fires at Once
There were moments this year where macro or sentiment indicators suggested faster follow-through than we ultimately saw. That reinforced an important lesson we continually stress:
No single indicator works in isolation.
Which is why we rely on process, diversification across ideas (not just assets), and risk management, rather than prediction.
Owning mistakes — and learning from them — is part of why our process continues to improve.
A Quick Note for Long-Time Clients
It’s important to say this clearly:
We do not manage every client to an aggressive, theme-heavy portfolio — and we never will.
Risk tolerance, income needs, time horizon, and personal goals always come first. Some clients should have less exposure to high-octane themes, and that’s intentional.
But we also believe the best portfolios leave room for asymmetric opportunities — because that’s how you avoid permanently average outcomes in periods of real change.
That balance is the heart of our approach.
Why This Was Our Best Year Ever for New Business
2025 ended up being the strongest year RollingWave Capital has ever had for new relationships.
That didn’t happen because we chased attention or performance headlines. It happened because:
- our thinking was consistent,
- our positioning was intentional,
- and our clients referred people when they saw our process working in real time.
If you’re reading this as a warm referral — and you’ve been meaning to take a closer look at your strategy — consider this your nudge.
With two trading days left in 2025 and a full year ahead, now is a smart time to get positioned correctly.
—
Jacob Craton
RollingWave Capital
Disclosure: This commentary is for informational purposes only and is not personalized investment advice. Past performance is not indicative of future results. All investing involves risk, including loss of principal.