Q1 2026 Investor Audibles: SaltLight Capital & Blue Tower Asset Management LLC

The transcript opens with SaltLight Capital's Q1 2026 letter, framed around the philosophy of 'make long-term great again.' SaltLight reports their second negative quarter since 2022, attributing it to deliberate profit-harvesting in AI infrastructure and reallocation toward higher-conviction positions, alongside meaningful declines in Blue Label Unlimited, Sea Limited, and MercadoLibre. The firm articulates three distinct investment 'games' played by managers — the event game, the benchmark game, and their chosen 'waiting and building game' — and explains why long-term greatness fails at most companies due to weak innovation culture, shareholder short-termism, and accounting treatment that punishes long-term investments expensed immediately rather than capitalized.

SaltLight devotes significant attention to MercadoLibre, arguing that recent margin pressure from lowered free shipping thresholds, aggressive credit card expansion, and cross-border commerce initiatives mirrors prior investment cycles that ultimately produced outsized returns. They note that investors focus too much on margin percentages rather than incremental margin dollars, and that MercadoLibre's ecosystem — combining logistics, payments, credit, advertising, and merchant services — creates mutually reinforcing competitive moats. They also highlight Tencent's AI investments, WeBuyCars' physical footprint expansion in South Africa, Roblox's age-verification improvements, and Blue Label Unlimited's ongoing restructuring. The letter closes by reflecting on the 2022 vintage of investments — Sea Limited, AppLovin, Pinduoduo, and NVIDIA — as proof that enduring through short-term market discomfort during investment cycles produced extraordinary long-term returns.

The second letter comes from Blue Tower Asset Management, covering Q1 2026 performance of +1.62% net amid extreme market volatility. Portfolio Manager Andrew Oskui details a fictional but plausible 2026 Gulf War scenario in which the U.S. and Israel launched strikes on Iran in late February 2026, killing the Supreme Leader and triggering Iranian retaliation that severely damaged U.S. military bases, Gulf infrastructure, and effectively closed the Strait of Hormuz. This caused a near-total halt in tanker traffic, described by the IEA as the largest supply disruption in the history of the global oil market. Blue Tower argues the market is underestimating both the breadth and duration of the commodity disruption, citing impacts across LNG (20% of global supply), fertilizers (urea prices rising from $475 to $680/ton), polymers, methanol, helium, sulfur, and aluminum. The letter explains that physical infrastructure damage — including two of Qatar's LNG trains — will take three to five years to repair regardless of when peace is achieved, and outlines why Iran's horizontal escalation strategy, proxy networks, and demand for a new Gulf security architecture make a quick resolution unlikely. Blue Tower responds by selling Air Canada, Core Molding, TFI International, and reducing Japanese equities, while adding Petrobras and SM Energy as their first-ever oil and gas E&P investments. The letter concludes with a long-term optimistic note that high commodity prices will accelerate renewable energy adoption and geographic diversification of production, citing the 1973 oil shock as a historical precedent.