I know, it’s so weird. Why would anyone ever bother seeing other humans when they can just peck their thoughts and questions into a chat box. It’s so much more efficient. Well, regardless, I guess we live in a world where not everything can be reduced to a mathematical equation. I guess we’d better just get used to that.

The stocks that represent the physical economy, which I’ve been referring to as Heavy Assets, Low Obsolescence, spent the past week rallying hard as technology stocks continued to melt down.

And then late in the day Friday, two new ETF filings hit the SEC’s website, both commandeering my HALO term. I’m not sure how to feel about this. They say imitation is the most sincere form of flattery. Okay, I’m flattered. But shouldn’t I be getting some money? I’m not a lawyer but I have a lot of lawyers. I guess we’ll figure it out.

These two filings hit within two minutes of each other. It got a big reaction from the ETF reporters. I haven’t decided how I feel about it (or looked into the funds’ methodologies) yet.

I’m going to speak with these guys and try to learn some more about what they’re planning, I’ll report back once I do.

One thing is for sure - my big idea about how to navigate this year in the stock market has exploded in to the public consciousness. All the major investment houses on Wall Street are putting out notes, quantitative baskets of stocks and strategy pieces on HALO. It’s a full blown thing now.

So I thought that today I would answer a question posed to me internally on my research team’s Slack channel: What is the ultimate HALO stock. I came up with four that would definitely make the list. No one is talking about these stocks but they represent the epitome of HALO as an investing concept. These companies are all about live events and completely immune to the current fears about AI disruption.

Let’s run through them…

This is Sphere Entertainment (SPHR), which is only an obvious buy in hindsight. I’m sick to my stomach that I missed it. I saw U2 at the Sphere when it first opened. On a subsequent trip to Vegas I saw the science documentary they’ve been showing on nights that they don’t have a concert. Then they brought in the Eagles and Dead & Co which was proof of concept that there are lots of different kinds of audiences for this. And then they did a revamp of The Wizard of Oz which complete with atmospheric flourishes and sold $300 million dollars worth of tickets since it’s launch in August. It’s unbelievable. Now you can sit back and imagine all of the potential opportunities they have to bring in top acts and then sell out these theatrical film experiences based on beloved IP. It’s a grand slam.

Right now the Backstreet Boys are finishing up their residence at the Sphere. This spring they’ll bring in Phish and No Doubt (I’m going to that one in May). They just announced a string of “no repeat” weekends with Metallica playing completely unique sets on Thursdays and Saturdays in October (shit, I probably have to go back for that too). The Sphere is HALO. Chatbots and AI agents can’t touch it.

I don’t own this stock but a million years ago I used to sell it to my stock brokerage clients over the phone. I’m talking 2003, 2004. Anyway, the stock has been absolutely on fire. Michael Batnick is long the stock personally and has been beating this drum for over a year now. On Friday they reported what has to be their best quarterly earnings ever. They crushed it.

IMAX’s Q4 numbers and full year 2025 total should put the "theaters are dead" crowd into a permanent coma. A record $410 million in revenue, up 16% year-over-year. They grabbed a record 3.8% of the total global box office. Cash flow jumped 33% to $185 million with 45.1% margins, which is insane. The Q4 alone was a blowout, with revenue up 35% to $125 million and earnings per share of $0.58, that’s a double vs last year. Record full-year operating cash flow of $127 million, a gain of 79% vs 2024. They started building 65 new systems in the last quarter. Gross margins were 57%_, net income is up 34% and the box office hit a $336.2 million quarterly record.

In 2026 they’re going to break the scale. Management guided to a record-shattering $1.4 billion at the box office for this year. They’re planning to drop another 160 to 175 systems into the network and keep EBITDA margins locked in the mid-40s. And now they have Christopher Nolan’s already sold out run for The Odyssey (he actually shot the film with special IMAX cameras) while Denis Villeneuve comes back with the final Dune of the trilogy. There’s a Ryan Gosling film called Project Hail Mary, a Michael Jackson biopic (I’m good, have fun). Disney’s got two big ones coming - The Mandalorian & Grogu and Avengers: Doomsday. This company is single-handedly saving Hollywood. The studios are fighting over securing enough theaters for the IMAX release of their films. Fans are fighting to get tickets, selling these showings out as soon as they come online. AI isn’t a factor here. IMAX is HALO.

This is the C shares of the Liberty Media tracking stock for Formula 1, the hottest sport in the world. There are A shares (FWONA) that carry voting rights but these are more liquid and widely used by retail. Then there are B shares that are listed in the OTC market (FWONB). Why are there three classes of shares for the same company which is, itself, a tracking security for a business that is controlled by Liberty Media Group? The answer is that nobody knows. John Malone just likes doing tracking stocks with the various businesses in his Liberty Empire. There are like a dozen different tickers and, just to keep you on your toes, he is constantly reclassifying things and even exchanging entire portfolios of different media holdings between them. It’s like an MC Escher drawing, nobody even bothers to try to untangle it anymore. Malone is a media investing genius and a billionaire, I won’t question it.

The bottom line is if you’re bullish on racing and motorsports, this is the stock. It has 100% ownership of Formula 1, which manages the global commercial and broadcasting rights for the world’s premier racing series. It also has an 84% stake in Dorna Sports, the commercial rights holder for MotoGP, Moto2, Moto3, and World Superbikes. Also under the FWONK umbrella is a 30% stake in Meyer Shank Racing, 24% of the high-tech hospitality venture F1 Arcade, 7% of the youth-focused digital media brand Overtime Sports, and a 7% interest in the Kroenke Arena Company. They also own the permanent Las Vegas Grand Prix pit building through its LV Diamond Property subsidiary. As you can see above it’s had a messy few months but this is as HALO as HALO gets. Whether you’re watching the races or related content on TV, streaming or the internet, they’re getting paid. And if you’re attending in Dubai, Miami, Vegas, Austin or anywhere else, they’re also getting paid. Formula 1 is HALO, even if they start letting AI do some of the driving.

Last one is a stock I own and have owned personally for years. It’s one of the best investments I’ve ever made. LiveNation (LYV) is the most important company in the live concert business worldwide. It’s also part of the Malone empire. Liberty owns approximately 30% and controls almost half the votes.

If the pandemic and its aftermath have taught us anything, it’s that live music is one of the most undisruptable enterprises on earth. The desire to take in a performance, in-person, among a crowd of fellow show-goers dates back to the dawn of civilization. It will never not be important to people. We love going to shows. Every age, race, gender, nationality, genre fan base - the concert business transcends any barrier you can think of. LiveNation is the company that brought the concert business into the twenty-first century. They do an incredible job.

If you’re going to be a long-term investor here, you’re going to have to weather periodic outbursts from politicians launching anti-trust investigations given the company’s dominance. They are the leading platform for ticket sales (Ticketmaster) and they own or operate a lot of venues around the world. Artists frequently use them as a shield as they seek to maximize the profitability of their tours via mechanisms like dynamic pricing. Bruce Springsteen doesn’t want his working class fans to know that the ticketing algorithm is constantly adjusting to capture top dollar for every seat in the arenas he’s playing, using real-time demand data to not leave any money on the table. This is America, he should be able to do that. If you’re a Bruce fan, be happy for Bruce. It’s not true that the ticketing firm makes most of the money. The artist is making most of the money. In some cases, almost all of it. The ticketing company is handling the details and getting the tickets into the hands of the people who want them.

The fans don’t always understand this so LiveNation has to take some of the heat, in the same way the NFL team owners have paid Roger Goodell $700 million in career earnings to take the punches they don’t want thrown in their direction. The reality is that when you go to a show being run by LiveNation’s ticketing operation at a LiveNation venue, you’re getting the best possible fan experience under the sun. It’s totally seamless, from the way the app works to the way that ticketing process works with the amphitheater, stadium, arena or concert hall. And yes, the artists are all making a fortune right now too - they’re getting a way better deal from a LiveNation partnership than they get from the Spotify partnership.

LiveNation is expected to do over $25 billion in revenue this year. When they reported Q4 earnings in the middle of February, they said they had already sold 67 million tickets for shows this year and that 80% of its large-format venues were already booked for 2026. In recent years, LiveNation began building its own company-owned venues (VenueNation) to give it even more control of the fan experience. They project that over 70 million people will see a show at one of their owned and operated facilities this year. AI is not currently working on building stadiums to host Taylor Swift concerts. LiveNation is big time HALO.

Obviously nothing you read on this site should be considered as financial advice. Do your own research and take responsibility for your own decisions. And if you want help, you can talk to us anytime.

Chris Verrone almost didn’t make the taping on Thursday. He was trapped in a Mexican hotel being told by security not to head to the airport. The cartel was hanging police officers from the bridge and burning down buildings to retaliate against the government for taking out their leader. Finally, he got word that they could get him and his group out of the country and back to the USA safely. We saw him the next day. I don’t think I’m going back to Mexico for a vacation any time soon. Anyway…

Dan Clifton is the policy wonk at Strategas and his insight complements the macro and trend work that Chris does on behalf of clients. In addition to the research products they sell, the firm also has a few ETFs based on the macro and the political views of the team.

We had a fascinating discussion about the political problems large-scale AI projects are now running into across the country. We talked midterms, positioning, asset allocation and some of the hottest trends in the market today. This was a classic episode of The Compound and Friends - if you’re a fan of the show you’re going to love it!

THE COMPOUND & FRIENDS

On episode 231 of The Compound and Friends, ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Michael Batnick⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ and ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Downtown Josh Brown⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ are joined by Daniel Clifton and Chris Verrone of ⁠Strategas Research⁠ to discuss: AI's backlash, the Stock Re-rating, Midterms, Anthropic vs The DoD and more!