Dear Valued Clients,
I hope this message finds you and your families well.
You’re receiving this letter a little later than usual, and you’ll notice it covers both Q3 and the early part of Q4 2025. We did miss our regular Q3 update, and that was on me. Over the past several months, we’ve been heavily focused on improving our internal valuation platform and analytical tools at Seven Bulls Capital Analytics, and while that work has made us better investors, it also meant I fell behind on communication. I apologize for that. Clear, consistent updates are part of the trust you place in us, and you can expect these letters on schedule moving forward.
A great deal has happened since we last connected at the end of Q2, so let’s walk through the most meaningful developments.
Q3 2025: A Stronger-Than-Expected Quarter
Q3 surprised many investors to the upside. Inflation continued to cool, and by September the Federal Reserve delivered its first rate cut of the year, signaling growing confidence that the worst of the inflation cycle was behind us. Markets responded positively:
- The S&P 500 gained roughly 8% for the quarter.
- The Nasdaq posted double-digit gains, supported by ongoing strength in AI-related names and cloud infrastructure.
- Small-cap stocks saw a welcome rebound after lagging earlier in the year.
- The U.S. dollar weakened, helping international equity markets outperform in several regions.
Despite constant noise around politics, trade tensions, and global slowdowns, the quarter reminded us that markets often climb in periods of doubt not certainty.
Q4 2025 So Far: Policy Shifts, Political Tension, and Resilient Markets
The story in Q4 has been more mixed.
The Federal Reserve followed its September cut with a second rate cut in late October, citing a cooling labor market and the need to keep financial conditions from overtightening. At the same time, the U.S. government entered a shutdown on October 1, lasting several weeks. This delayed some economic data releases and created short-term uncertainty.
Yet through it all, markets have held up remarkably well. Major U.S. indices are trading close to all-time highs as investors grow more confident that the Fed’s next moves are more likely to be cuts rather than hikes. Tech remains a major driver of index performance, though we’ve seen rotation and increased volatility within that group as investors debate whether the AI boom is entering a more mature phase.
Geopolitical Picture: High Tension, Controlled Impact
Geopolitical risks remained elevated throughout Q3 and Q4:
- The Russia–Ukraine conflict continued to weigh on European energy and defense markets.
- The ongoing Israel–Hamas conflict introduced periodic volatility in oil and global risk sentiment.
Neither conflict has created a lasting shock to global markets so far, but they continue to influence energy prices and investor psychology.
What We’ve Been Focused On at Seven Bulls
Over the past two quarters, our work has centered around two main priorities:
1. Strengthening Our Internal Portfolio
We continue to invest with a long-term mindset, focusing on companies with:
- Consistent, durable cash flows
- Strong balance sheets
- Management teams that allocate capital effectively
- Business models that can thrive across economic cycles
Our current holdings reflect these principles: high-quality compounders, essential infrastructure companies, financial technology platforms, and asset-light energy businesses with predictable royalty streams.
Our goal isn’t to chase headlines or trade macroeconomic forecasts. It’s to own businesses that can outperform over five, ten, and twenty years.
2. Upgrading Our Valuation Platform
The other major focus and the reason we missed the Q3 letter—has been a significant upgrade to our internal valuation system. The improvements we’ve made include:
- More advanced scenario modeling for rate environments, inflation paths, and margin stress
- A more holistic framework for evaluating valuation vs. business quality
- Stronger integration between our research tools and our actual portfolio construction
This has already improved how we compare opportunities and manage risk.
What We’re Watching Heading into 2026
As we approach the new year, several themes stand out:
- The Federal Reserve’s path: Markets expect additional cuts, but the pace will depend on labor conditions and corporate earnings.
- Market breadth: A healthier market eventually requires leadership beyond a small group of mega-cap tech companies.
- Corporate refinancing risk: Higher interest costs will begin to impact companies with weaker balance sheets.
- Global tensions: Any escalation in Eastern Europe or the Middle East could ripple through commodity markets and global supply chains.
- Practical AI adoption: We are moving from hype to real-world implementation, and companies that harness AI to improve margins will separate from those who merely talk about it.
Bringing It Back to You
Through all the noise rate cuts, political uncertainty, geopolitical conflict, and technological disruption our guiding principles remain the same:
- Focus on business fundamentals, not daily headlines
- Prioritize quality and durability
- Make decisions that align with long-term goals, not short-term emotion
Your financial future isn’t built in a week, a month, or even a quarter. It’s built through consistent, disciplined decision-making over time. That’s the work we remain fully committed to.
Thank you for your patience, your trust, and your continued belief in our research process. If you’d like to review your portfolio or discuss any of the themes mentioned above, I’m always available.
Together, we continue to build intentionally, intelligently, and with clarity.
Warm regards,
Omari Robinson
Chief Research Analyst
Seven Bulls Capital Analytics