Helix

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It’s surprising to note that most analysts and financial media, don’t go back in time to tick back on what the company CEO said a few quarters back. They just take the earnings call at face value, and worse, a number of them don’t even analyse it against what they wrote four quarters back. And we beleive them, we buy and sell based on that. Don’t pat yourself on your back, for not following the folly. Even if you don’t, your fund manager does, and you depend on them to deliver your pension.

Cloud contracts are a famous example; there are lesser and lesser of those five or ten year contracts coming through, nowadays. But the cost of executing their contract keeps accumulating today for a contract signed in 2020, at the height of the pandemic. What did they tell us back then? Cost of compute, or whatever it was called, was going down, but they were smart to get customers locked in, for five years. They quietly stopped talking about it afterwards, if you see.

I am not saying every company does that, but it is not illegal to do so. Your fiduciaries don’t care to look back, at the earnings call from four quarters back. You can, but can you?

You have a binary choice. Either continue to leave things as is, or start looking at how your investments are doing.

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So passive investors are mostly locked into a tax wrapper. So they keep buying, with the hope of withdrawing at some point in time. More on the sequence of returns risk, later.

But, they are actually going against two major factors that generate stock returns - Size and Valuation.

Since a vast majority of passive investors use market cap weighted index tracker funds (go look at your brokerage statement; you are no different!), when momentum increases stock prices, they often buy the largest, most expensive stock, at the peak. This is your usual ‘bull year’, my investments are growing case. And their banks, and brokerages are going to tell them, that markets are volatile, so stay invested.Even if they wanted to, they can’t exit so easily. They will face all the brakes and speed humps when they try. Good for us, stock pickers, and fund managers, you see.

If we just snip out the most overvalued, mega cap stocks, the rest of the index stocks, gives us an opportunity to beat the market. In the case of the S&P 500, snip out the magnificient seven tech stocks. They take 35% of the index anyways. The remaining stocks are still fairly valued. Pick five, or ten, and build a portfolio. That beats the market by breakfast tomorrow.

Easy peasy investing! But a smarty pants way. What do you think?

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The Narrative

The market loves a good story, and right now, the story is that Airbnb is an ESG darling. Analysts point to their “top-notch” ESG scores as proof of a sustainable, forward-thinking company. They’ve managed to convince the world that they represent the “sharing economy,” a phrase that sounds great in a marketing deck but means nothing on a balance sheet. Because of this halo effect, the market has tacked a massive premium onto their stock. It’s the classic 2021 clean-energy bubble playbook: if it feels good, pay more for it.

The Data

I’ve spent 30 years watching funds destroy capital by chasing narratives instead of numbers, and this is a textbook case. Let’s look at the actual unit economics vs. the story. Airbnb currently enjoys a 20% valuation premium solely attributed to its ESG rating.

Their business model exists to chase renters out of the market and gentrify your area. When you look at the mechanics, the valuation is 20% higher because of an unjustified ESG rating. If you peel that rating off, the valuation drops massively. That is the reality the market is choosing to ignore.

The Helix View

I am amazed at how easily investors get blinded by a “green” sticker. At Helix, we don’t care about saving the planet; we care about whether the unit economics make sense. This is a “smoke and mirrors” play where the social component of ESG is actually a liability disguised as an asset. We are publishing our position because we believe the most overlooked opportunities sit at the intersection of sustainability and boring, high-margin economics—not in companies that rely on regulatory blind spots and social displacement to juice their margins.

We might be early on this, and being early often looks exactly like being wrong. We will likely underperform the index for the next 12 months while this thesis ripens, but we are trading short-term pain for structural alpha. If you need quarterly dopamine hits, this trade will make you miserable.

The Binary Choice: You either believe that ESG ratings will continue to be disconnected from the actual social impact on housing markets, or you believe the market will eventually price in the regulatory and social cost of gentrification. If you don’t believe the latter, don’t take the position.

The next decade of alpha won't come from following the herd into overpriced ESG darlings. It will come from finding the structural advantages others are too blind to see. Reply to this email to receive a copy of our factsheet.

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The financial narrative is a powerful thing. It tells you that Canada is a diversified, modern economy with a thriving banking sector and a tech-forward future. Helix Research doesn’t buy the narrative; we look at the unit economics. And the economics of Canada are, at their core, a one-trick pony: oil.

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The narrative surrounding Cardinal Health (CAH) has long been as unglamorous as the trucks it operates: a low-margin logistics utility. But if you’re still looking at CAH through that lens, you’re missing the transformation of its “quantamental DNA”.

I analyzed this shift, and I am amazed at how a legacy distributor is successfully pivotting into a high-margin specialty platform amidst a “macro tsunami”. Don’t believe the popular narrative that this is just another middleman; the data shows a company generating “idiosyncratic alpha” through business model innovation.

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In an era of performative finance, it is easy to get lost in the “brochure”. But at Helix Research, we don’t buy the brochure—we buy the balance sheet. As we move into Q1 2026, the global landscape is defined by fragmentation and sudden volatility shocks. Our strategy, is designed to cut through the noise of emotional capital flows and ESG box-ticking to find forensic financial quality.

Our 2024 performance, delivering a +84.00% gross return, was rooted in this same discipline. Today, we are doubling down on our 130/30 Barbell Strategy: going long on “boring” cash flow and shorting the hypocrisy of greenwashing.

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We’ve all been there. You open up a trading app, pull up a stock, and see that beautiful, climbing green line. It’s easy to look at that upward trajectory and assume the momentum will simply carry you into the future.

But there is a fundamental trap in how we read these visuals. When you look at a chart, you aren’t looking at a live engine; you are looking at “finished business”.

The Mirage of Extrapolation

Most investors see a steady trend and instinctively extrapolate. They think, “If it went from $50$ to $100$ like this, it’ll go to $150$ the same way”. However, that chart is merely a record of returns that have already been delivered to someone else.

The past is a finished chapter. To figure out if there’s a sequel, you have to look deeper than the line itself.

We discussed this as part of our Global Financial Education Sessions. Want to join our next session?

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For decades, Procter & Gamble (P&G) has been the bedrock of conservative portfolios—the “anchor” that keeps investors steady when market seas get rough. However, recent data from our latest strategy review suggests that this defensive giant may be facing a “PhD edge” in its pricing power, signaling a potential shift in its long-term narrative.

As a long-short equity hedge fund focused on capital preservation, we are closely examining whether P&G still deserves its place in our core portfolio or if it’s time to trim our position.