2025: The Anti-Consensus Mindset

As we approach the end of 2025, a year that began with significant geopolitical reconfiguration and heightened market tensions, it is important to pause and reflect not just on the performance numbers, but on the investment philosophy that delivered the performance that we delivered up until now in 2025.

In November, ai volatility returned despite Nvidia posting strong earnings, “AI bubble” fears resurfaced, causing sharp volatility in technology stocks. Investors are increasingly questioning if huge ai capital expenditure will yield short-term and long-term return on investments.

In other technology news, Alphabet’s biggest current driver is the release of Gemini 3. This is a massive generation leap over previous versions, featuring: “Deep Think” Mode: a new reasoning capability that allows the ai to “think” through complex problems before answering, like OpenAI’s o1 model, also early reports suggest it is outperforming competitors in coding and reasoning tasks, further pushing the “ai race” narrative.

At Binary Capital, we often speak about “noise.” In the first quarter of this year, following the Presidential inauguration in the US, the noise was at extreme levels. The consensus view – driven by headlines regarding tariffs, protectionism, and the so-called “re-ordering” of global trade – was one of immediate caution. The market consensus is often wrong. Or, at the very least, it is often too short-term to be useful for the long-term patient investor.

We took a different view. We remained focused on positive return generation through high-conviction allocations, ignoring the short-term volatility to focus on the long-term exponential trends that are reshaping our world. Trends we identified many years ago and continue to develop into today.

The Year of Divergence

Looking back at the data for 2025, what we see is a stark divergence. The “easy” money of the early 2020s – driven by broad beta exposure – has largely evaporated. We are now in a market of pure indexation as well as high-conviction stock pickers and thematic convictions.

While the broader US indices have spent much of the autumn digesting the valuations of the “Magnificent” tech cohorts, we have seen the real strength of asymmetrical investing play out elsewhere. Our insistence on looking beyond the immediate narrative has served us well. The technology story is not over, but it has evolved. The “ai arms race” we wrote about earlier in the year has shifted from a hardware build-out to an application phase. The winners here are not just the chip designers, but the companies – specifically in healthcare and biotechnology – that are using these tools to solve genuine human problems.

Healthcare: The Quiet Revolution

I have written extensively in these notes about the intersection of technology and healthcare. This is not a sector for the faint-hearted, nor for those seeking quarterly return gratification. It is a sector for the patient and long-term investor.

Throughout 2025, while the market obsessed over trade wars and interest rate pivots, the biotechnology sector has been undergoing a quiet revolution. We are seeing the deployment of ai in drug discovery at a pace that was unimaginable even three years ago. This is the exponentiality of outcomes and returns we often refer to – we see further potential in 2026.

Our portfolios have maintained an overweight to ‘growth’. To us, this is the definition of “looking at the future” while generating returns. We are not just allocating capital; we are supporting investors the companies that will create real innovation for the next generation. The valuation disconnects in this sector, relative to the broader market seems expensive, but alongside that pricing area, which we note, remains one of the most compelling opportunities we see. It is a could be a classic example of the market mispricing time and genuine long-term innovation.

In the US, the economic picture was complicated by government shutdown delays. Unemployment reached 4.4%, a four-year high, while inflation hovered stubbornly around 3%. Following an October rate cut to 3.75% – 4%, investors spent November debating whether the Federal Reserve would pause or cut again in December, with the likelihood of a cut at a higher probability.

UK faced a significant setback as inflation spiked to 3.6% in October (released in November), up sharply from 1.7%. Consequently, the Bank of England voted 5 to 4 to hold interest rates at 4%, citing persistent price pressures despite sluggish 0.1% quarterly GDP growth.

Against the trend, Intel was +10.2% in the month following analyst reports suggesting it could become a foundry supplier for Apple, reigniting turnaround hopes there.

The Anti-Consensus Mindset

The investment industry is often dysfunctional. It is crowded with “me-too” strategies and an obsession with benchmarks that typically look backward rather than forward. There is too much complexity, too many funds, too many investment houses, and not enough clarity.

At Binary Capital, we prefer simplicity and conviction. We do not feel the need to hold 25 different funds when 10 high-conviction managers will do the job better and often at a lower cost. We do not feel the need to trade weekly when the trends we invest in play out over decades.

As we look toward 2026, our stance remains unchanged. We are elite, patient investors. We anticipate that the “noise” will continue – there will always be a new crisis, a new election, or a new economic data point to obsess over. We will read it, we will analyse it, but we will not let it derail our long-term view and overall thinking.

Looking at our performance this year so far (end Nov 2025), so far, we delivered: with returns ranging across the risk profile from +9% to +17% in the more adventurous category. If one is looking closely at the peer group, then these returns fit into the top decile/quartile category in most investment cases.

Our goal remains singular: to deliver consistent, risk-managed, positive returns that stand apart from the peer group. We do this by seeing what others miss, and by having the discipline to wait for the world to catch up to our thinking.

We are patient enough to do what is right and not get distracted with what is wrong.