“For many years, you have asked for America’s help, but you never got it. Now you have a president who is giving you what you want, so let’s see how you respond,” said our Commander-in-Chief, rolling the dice, unapologetically placing his bet on a new approach to regime change. “America is backing you with overwhelming strength and devastating force. Now is the time to seize control of your destiny and to unleash the prosperous and glorious future that is close within your reach. This is the moment for action. Do not let it pass.”

As of Saturday, at 11pm ET, Bitcoin had sold off 3.5% to $63,250 on the Iran strikes but then surged 7.5% to $68,000 despite news that the Strait of Hormuz was effectively closed. Spot gold (trading as a crypto token) jumped 5.5% to $5,570 then retreated 4.3% to $5,325 (up less than 1% from Fri).

One River acquired the Quantitative Investment Solutions business from LGT Capital Partners in Switzerland [press release]. Really good people, extraordinary talent, two long-established investment strategies, $900MM in additional AUM, and our first international expansion.

Overall: “What if our AI bullishness continues to be right...and what if that’s actually bearish?” wrote the boys at Citrini Research, some smart guys that no one had ever heard of [here]. They sketched out a scenario from the vantage point of economic analysts in the year 2028 where “the consequences of abundant intelligence” were catastrophic for equity markets and pretty much everything else too. It was a good read for those of us who like to collect creative mental models for what may lie ahead. But for an equity market at the top 1-percentile of historical valuations, mental models that conclude with GFC stock market crashes of 57% are sure to shake out weak longs. So, the S&P 500 ended Monday -1.0%. It closed the week just -0.4%, remarkably resilient given the CNBC hysteria and carnage in many tech names. Having contemplated Citrini’s abundant intelligence left tail, an army of brilliant nerds penned their contrasting 2028 visions for an AI-fueled right tail. I liked Frank Flight’s piece from Citadel the best [here]. Naturally, they’ll all be wrong, which is beside the point. When markets are at valuations seen in the late 1920s, the 1950s-60s, and 1999, most investors definitionally expect a right tail event. Given the unknown nature of AI, anything can quite obviously happen. Absolutely anything. Including a war with Iran, or an infinite number of things that have nothing to do with intelligence. Global debt surged by $29trln to a record $348trln in 2025. It is sure to grow even faster this year, led by governments desperate to rebuild critical infrastructure and defense capabilities. The biggest risk to AI in my left tail mental model is that it doesn’t deliver abundant intelligence in the end, and we find ourselves drowning in a sea of debt without the economic productivity we’ve been promised. And the best way to manage a portfolio for this world of two very fat tails is to be long equities and long highly convex hedges.

For Week-in-Review and Weekly & Year-to-Date market data, scroll to the bottom.

Remember: “I won’t be able to live with myself if I don’t take this swing,” I said to Mara in 2013. Could’ve taken a job for 6x what I’d make by starting One River. We had 4 young kids and were light in the bank. She never hesitated. I’ll always remember that. My old boss/partner, Geoff, backed me with $500k of working capital. Never forget it. Ian was the first partner to join me, others followed. Sam was our first client, a rising star at PAAMCO. Rob led Permal, he came next. Without my partners, internal and external, I’d have nothing. I will never forget that.

Remember II: We caught the 2015 China devaluation. I uprooted everyone and moved One River to Greenwich, between Bridgewater/AQR. Knew we’d never build a firm of consequence from Santa Barbara. I remember how heavy that move was. Soros planned to take an equity stake in One River, but then Scott left Soros to start his hedge fund and the deal fell apart. I deeply respect Scott and remember how psychologically devastating it was. We struggled in markets, almost lost the firm, it would’ve bankrupted my family. I’ll never forget sleepless cold sweats.

Remember III: One River nearly died again in 2017. We made a killing in 2018 when VIX ETNs imploded. Struggled in 2019. Made a Covid fortune, faced massive weekly redemptions. Clients never forgot, soon came back. Alan called that August on a Sunday, he wanted Brevan to buy part of One River [here]. Alan’s one of my heroes; never forget his call. Henry phoned from Ruffer that November. He’s a true investing iconoclast. We bought $600mm of BTC for him. Bloomberg broke the Bitcoin Whale story [here], BTC exploded higher. Never forget that day.

Remember IV: I remember calling Jay the day after he left the SEC. Our Covid lunches, policy, politics, macro. And never forget when he agreed to build my first Advisory Council [here and here]. Alan and Adam pressed me to raise cash to secure our digital business ahead of the Fed rate hiking cycle they saw coming. Never forget when Coinbase, Goldman, and Liberty Mutual filled our war chest [here]. I remember selling nearly all our crypto in 2021, returning $1.8bln to investors. And building One River Digital then selling it outright to Coinbase in 2023 [here].

Remember V: I remember the day the SEC issued a Wells Notice to Coinbase, and how I told our team that despite how grim it all looked, these sorts of events create the biggest opportunities in life/markets. I’ll never forget when Marcel volunteered to move to Abu Dhabi to lead our infrastructure buildout, while Gary tried to destroy the US crypto industry. And I’ll always remember that Alan graciously let me buy back his One River stake in 2023, after we’d grown 4x. To build a firm of consequence, I felt we needed full ownership, so I doubled down again.

Remember VI: In Jan 2024, Patrick produced research that showed how our clients can combine One River strategies with the S&P 500 using cash-efficient overlays to dramatically outperform stocks, with lower drawdowns and a higher Sharpe Ratio [here]. I remember thinking we need to aggressively deploy our resources to become the best in the world at this; it is what will allow us to become a firm of real consequence. And I’ll never forget the day we closed the acquisition of  the remarkable team at LGT [here], which advances One River’s efforts to make this a reality.

Anecdote: I remember every high and low, going back to my start in 1989. The heights were fun, ephemeral. The chasms, I still feel in a raw, visceral way, like they each just happened. In so many ways, trading/investing lessons can be applied to business and life. Vice versa. You need to strike a dynamic balance between optimism and pessimism, risk taking and loss mitigation. Building a business requires more of the former, less of the latter. Without stubborn optimism and tenacity, there’s no way to survive the existential moments that every business venture is sure to face. But apply stubborn optimism to a bad trade and it will inevitably end in disaster. This makes it particularly hard to pursue both business and trading simultaneously. Which is why most people who do it well build strong partnerships to share the burden, which often is too much for one person to bear. And along the journey, you are all forced into difficult, high-pressure situations that allow us to learn things about ourselves and those around us that would have otherwise remained unexplored. Which of course is the pain and reward of such humbling pursuits. Sometimes, it’s tempting to declare victory and walk away, to avoid the risk of suffering more agonizing lessons which we know lay ahead. But you remember that every lesson you learn may someday be valuable to our family, friends, partners. And at a certain point, life is about setting an example, especially for our children, who we all hope will take consequential risks, swing hard at whatever they come to care about most, break through, and race far ahead of us. We hope they live their lives unafraid to fail, having seen us stumble, struggle, pick ourselves up, carry on, build. Because without the pain of failure, they will never really grow, nor realize their vast potential.

Good luck out there,

Eric Peters

Chief Investment Officer

One River Asset Management

Week-in-Review: Mon: US durable goods orders unch -1.4% as exp, factory orders -0.7% as exp. Israel base rate 4.00% (3.75%e). Singapore CPI 1.4% as exp. The US is readying investigations that would enable Trump to impose new tariffs, following the Supreme Court ruling that struck down country-specific emergency levies. China added top Japanese military suppliers to an export control list and placed additional entities on a monitor list, a move to deter Japan’s remilitarization as the latest escalation in dispute over comments made by PM Takaichi on Taiwan. S&P -1.0%. Tue: US conf board cons conf 91.2 (87.1e). Hong Kong GDP unch 3.8% as exp. Australia CPI 3.8% (3.7%e). Hungary CB rate decision 6.25% as exp. Trump’s delivered the longest State of the Union address of the television age, seeking to sell Americans on his economic program ahead of crucial midterm elections later this year. Trump administration is discussing an executive order designed to force banks to collect citizenship data alongside other identification information from customers. S&P +0.8%. Wed: Eurozone CPI 1.7% as exp, Core 2.2% as exp. South Korea BOK base rate unch 2.50% as exp. Trump administration imposed sanctions on entities that support Iranian oil and weapons sales. S&P +0.8%. Thu: US init jobless claims 212k (216k e). Mexico unemp rate NSA 2.70% (2.67%e). Eurozone M3 money supply 3.3% (2.9%e). Japan IP MoM 2.2% (5.5%e). Jack Dorsey’s Block slashes nearly half its staff in a bet on AI changing the future of labor productivity. Paramount clinches deal for Warner Bros Discovery, outmaneuvering Netflix with $111b deal. S&P -0.5%. Fri: Spain CPI 2.3% (2.2%e). France CPI 2.5% (2.3%e). Pentagon declared Anthropic PBC a supply chain risk, barring its use by agencies and contractors with a 6-month period for Anthropic to hand over AI services to another provider. Trump administration seeks to delay court proceedings over refunding tariffs paid by importers. S&P -0.4%. Sat: US and Israel attack Iran (kill the Ayatollah and 40+ senior leaders).

Weekly Close: S&P 500 -0.4% and VIX +0.77 at +19.86. Nikkei +3.6%, Shanghai +2.0%, Euro Stoxx +0.5%, Bovespa -0.9%, MSCI World +0.2%, MSCI Emerging +3.3%, Bitcoin -3.1%, and Ethereum -2.2%. USD rose +0.7% vs Chile, +0.6% vs Yen, +0.5% vs Mexico, +0.3% vs Russia, and +0.2% vs Turkey. USD fell -1.0% vs Brazil, -0.6% vs South Africa, -0.6% vs China, -0.6% vs Indonesia, -0.5% vs Australia, -0.3% vs Sweden, -0.3% vs Canada, -0.2% vs Euro, flat vs Sterling and vs India. Gold +3.3%, Silver +12.4%, Oil +0.8%, Copper +2.7%, Iron Ore -4.4%, Corn +2.0%. 10yr Inflation Breakevens (EU flat at 1.82%, US -4bps at 2.26%, JP +2bps at 1.72%, and UK +1bp at 3.08%). 2yr Notes -10bps at 3.38% and 10yr Notes -14bps at 3.94%.

Feb Mthly Close: S&P 500 -0.9% and VIX +2.42 at +19.86. Nikkei +10.4%, Shanghai +1.1%, Euro Stoxx +3.7%, Bovespa +4.1%, MSCI World +0.8%, MSCI Emerging +6.0%, Bitcoin -21.7%, and Ethereum -28.6%. USD rose +1.5% vs Sterling, +1.4% vs Russia, +1.2% vs Sweden, +1.0% vs Turkey, +0.8% vs Yen, +0.3% vs Euro, and +0.2% vs Canada. USD fell -2.6% vs Brazil, -2.2% vs Australia, -1.4% vs China, -1.3% vs Mexico, -1.3% vs South Africa, -1.1% vs India, -0.1% vs Chile, and -0.1% vs Indonesia. Gold +10.6%, Silver +17.9%, Oil +3.5%, Copper +1.3%, Iron Ore -4.4%, Corn +2.9%. 10yr Inflation Breakevens (EU -7bps at 1.82%, US -8bps at 2.26%, JP -20bps at 1.72%, and UK -8bps at 3.08%). 2yr Notes -15bps at 3.38% and 10yr Notes -30bps at 3.94%.

Year-to-Date Close: S&P 500 +0.5% and VIX +4.91 at +19.86. Nikkei +16.9%, Shanghai +4.9%, Euro Stoxx +7.0%, Bovespa +17.2%, MSCI World +3.1%, MSCI Emerging +15.3%, Bitcoin -24.9%, and Ethereum -35.1%. USD rose +2.3% vs Turkey, +1.2% vs India, and +0.5% vs Indonesia. USD fell -6.4% vs Brazil, -6.3% vs Australia, -4.3% vs Mexico, -3.8% vs South Africa, -3.1% vs Chile, -2.2% vs Russia, -2.0% vs Sweden, -1.8% vs China, -0.6% vs Canada, -0.6% vs Euro, -0.4% vs Yen, and -0.1% vs Sterling. Gold +20.0%, Silver +31.0%, Oil +17.4%, Copper +5.6%, Iron Ore -4.3%, Corn +0.1%. 10yr Inflation Breakevens (EU +7bps at 1.82%, US +1bp at 2.26%, JP -6bps at 1.72%, and UK +15bps at 3.08%). 2yr Notes -10bps at 3.38% and 10yr Notes -23bps at 3.94%.

YTD Equity Index Returns: Korea +48.3% priced in US dollars (+48.2% priced in won), Brazil +25.1% priced in US dollars (+17.2% priced in reais), Taiwan +23% in US dollars (+22.3% in Taiwan dollars), Thailand +22.7% in dollars (+21.3% in bhat), Norway +20.7% (+13.9%), Turkey +19.1% (+21.8%), Hungary +17.2% (+14%), Japan +17.1% (+16.9%), Mexico +16.2% (+11%), South Africa +16.1% (+11.4%), Sweden +13.9% (+11.8%), Israel +13.1% (+11.2%), Portugal +12.7% (+11.9%), Australia +12.6% (+5.6%), Philippines +11.4% (+9.2%), UK +9.9% (+9.9%), Singapore +9.4% (+7.5%), Canada +9% (+8.3%), Switzerland +8.7% (+5.6%), Netherlands +8.7% (+8%), Poland +8.7% (+8.1%), Colombia +8.2% (+7.5%), Greece +8.1% (+7.4%), Belgium +7.9% (+7.2%), Austria +7.6% (+7%), Chile +6.9% (+3.8%), Finland +6.9% (+6.3%), China +6.8% (+4.9%), Spain +6.8% (+6.1%), Euro Stoxx 50 +6.7% (+6%), Malaysia +6.5% (+2.2%), Vietnam +6.3% (+5.4%), Russell 2000 +6.1%, France +6% (+5.3%), Italy +5.6% (+5%), New Zealand +5.6% (+1.3%), UAE +4.6% (+4.6%), Germany +3.8% (+3.2%), HK +3.4% (+3.9%), MSCI World +3.1% in US dollars, Saudi Arabia +2.1% (+2.1%), Ireland +0.9% (+0.2%), S&P 500 +0.5%, Czech Republic -0.8% (-1.3%), NASDAQ -2.5%, India -4.8% (-3.6%), Indonesia -5.2% (-4.8%), Argentina -10% (-13.4%), Denmark -10.9% (-11.3%).

Disclaimer: All characters and events contained herein are entirely fictional. Even those things that appear based on real people and actual events are products of the author’s imagination. Any similarity is merely coincidental. The numbers are unreliable. The statistics too. Consequently, this message does not contain any investment recommendation, advice, or solicitation of any sort for any product, fund or service. The views expressed are strictly those of the author, even if often times they are not actually views held by the author, or directly contradict those views genuinely held by the author. And the views may certainly differ from those of any firm or person that the author may advise, converse with, or otherwise be associated with. Lastly, any inappropriate language, innuendo or dark humor contained herein is not specifically intended to offend the reader. And besides, nothing could possibly be more offensive than the real-life actions of the inept policy makers, corrupt elected leaders and short, paranoid dictators who infest our little planet. Yet we suffer their indignities every day. Oh yeah, past performance is not indicative of future returns.