The Cro Capital Report

Good morning, and welcome to another edition of The Cro Capital Report, your go-to source for market analysis, energy trends, and our portfolio strategy.

Markets at a Glance

Figure 1: Month-over-month economic Indicators (July 28-August 28, 2025)

Portfolio Performance Update: Driving Returns with Conviction and Risk Management

As of August 28, 2025, Cro Capital’s year-to-date return stands at +17.16%, significantly ahead of all major benchmarks, including the S&P 500 (+10.44%), NASDAQ (+12.57%), and Dow Jones Industrial Average (+7.65%). This level of outperformance reflects both our disciplined investment process and our commitment to identifying high-conviction opportunities across sectors we believe will define the next decade.

Our results have been driven by a combination of long-term conviction holdings and timely tactical trades. REEMF is now up 45 percent since our initial investment, while our recent addition to the Russell 2000 (IWM), initiated just three weeks ago, has already gained 7.27 percent. URA continues to be our best performer, delivering a 78 percent return since opening the position, underscoring our confidence in uranium’s central role in the evolving energy landscape. Opportunistic entries into TSLA at 299 and GOOGL at 175 have also proven successful, now showing 15 percent and 20 percent gains, respectively. Together, these positions highlight the benefits of our strategy, which blends durable secular themes with disciplined trading execution.

We remain mindful of downside risk. While broad equity markets have rallied this year, we have positioned the portfolio to remain resilient if conditions change. Defensive allocations such as IYK and SPXS have underperformed in the current environment, but they help maintain a more conservative beta in bear markets and provide protection in the event of a pullback.

Looking ahead, we are optimistic about continued opportunity generation while remaining vigilant in our risk management. We currently have Fluence Energy (FLNC), an energy storage company, on our watchlist, which will be presented and debated by the team this week. As always, we are mindful that markets can shift rapidly, and we maintain a disciplined process of daily portfolio evaluation to protect capital and sustain outperformance.

The Official Cro Capital Website

We are excited to announce the official launch of the Cro Capital Website! You can view it now by clicking here or navigating to www.crocapitalpartnership.com. Currently, the website is home to information about the newsletter and provides easy access to the most recent edition, a way to subscribe, and figures we constantly track, such as our portfolio performance and the S&P 500. It also has more information about who we are and what we hope to accomplish. 

While only in its infancy, we hope that the website will be a great place for information about Cro Capital, as well as the market in general. Plans for it include automatic daily updates to figures, the ability to view all past newsletters on the website, and improved ways of reaching out to the team. Lastly, if you have any trouble, feedback, or suggestions for future features for the website, feel free to contact us at [email protected].

Small Caps in the Shadow of Big Tech: A Case for Patience

Earlier this month in our monthly meeting, we asked why the Russell 2000 was lagging considerably compared to the S&P 500. Back on August 4th, it was actually negative for the year (–0.76% YTD) while the S&P was up +7.66%. Fast-forward to now, the Russell has clawed back a bit (+6.37%), but the S&P has also pushed further ahead (+10.44%).

At the time, we came to the conclusion that it was because of interest rates. Big companies get much better credit terms. They can borrow cheaper, they have stronger balance sheets, and in some cases, they don’t need to borrow much at all. Small caps, on the other hand, usually have shakier revenues. That means their cost of capital is higher, so when rates are high, their future cash flows are discounted more heavily, magnifying the effect on their valuations.

That dynamic has been shaping our recent focus. We are looking to begin buying dips in small-cap ETFs since small caps usually don’t lag forever. They’ve had stretches where they dramatically outperform, especially when we expect the Fed to cut rates in the next cycle. We are thinking of it like planting seeds during a storm — you won’t know exactly when the sun comes out, but you’ll already be invested when it does.

An Emerging Opportunity Worth Watching

Solar and wind are both clean forms of energy, but they are technically intermittent. What we mean by that is that the sun doesn’t shine at night, and the wind isn’t always blowing. Storage lets us capture excess energy when conditions are sunny and release it later when demand is high during the evening peak. Without storage, renewables can’t reliably replace fossil fuels as the backbone of the grid. In short, energy storage is the bridge between renewable generation and reliable 24/7 electricity. As Cro Capital continues to research this critical technology, we will continue to share both the facts and the investment opportunities we see emerging.

Thanks for reading The Cro Capital Report.
— The Cro Capital Team

*The information provided in The Cro Capital Report is for informational and educational purposes only and should not be construed as investment advice, a recommendation, or an offer to buy or sell any securities. The views expressed are those of Cro Capital and are subject to change at any time without notice. While we strive to ensure accuracy, we make no representations or warranties as to the completeness or reliability of the content. Always do your own research and consult with a licensed financial advisor before making any investment decisions. Investing involves risk, including the potential loss of principal.