InvestMacro

For decades, the U.S. defense conversation focused on jets, missiles, ships, and software — the visible hardware of military might.

What almost nobody talked about was the industrial engine underneath it all…

The Quiet Machine Behind American Power

The mines, processors, refiners, manufacturers, and logistics chains that turn rocks in the ground into weapons, infrastructure, and strategic leverage.

But that engine now has a name that’s finally entering the public conversation: the U.S. Defense Industrial Base Consortium.

At its core, the Consortium exists to strengthen, coordinate, and secure the Defense Industrial Base — often shortened to the DIB.

You can think of it as the full ecosystem of companies that supply materials, components, technology, and production capacity essential to U.S. national defense.

This includes not just traditional defense contractors, but the upstream producers that make everything else possible.

And in today’s geopolitical reality, upstream means minerals.

Why Washington Suddenly Cares About Where Materials Come From

For years, globalization made supply chains cheap, efficient, and fragile. Critical inputs were sourced wherever costs were lowest, often from geopolitical rivals.

That worked… until it didn’t.

Trade wars, sanctions, hot conflicts, cyber warfare, and industrial espionage exposed a dangerous truth…

The U.S. military cannot be stronger than its weakest supply chain link.

When rare earths, uranium, silver, or specialty metals come from hostile or unstable jurisdictions, national security becomes a hostage to foreign policy.

The Defense Industrial Base Consortium was built to fix that problem.

Its mission isn’t flashy, but it’s existential…

Identify vulnerabilities, coordinate domestic capacity, accelerate permitting and production, and align private companies with national defense priorities long before a crisis hits.

This isn’t about hypothetical future wars. It’s about readiness — today.

Why Membership Is a Strategic Asset, not a Press Release

For companies inside the Consortium’s orbit, participation is far more than symbolic…

It acts as a signal flare to Washington, the Pentagon, and capital markets that a company is strategically relevant.

Membership opens doors to federal coordination, long-term procurement visibility, and policy alignment that non-members simply don’t get.

It also places companies inside the conversation when rules are written around permitting reform, domestic sourcing mandates, stockpiling programs, and defense funding priorities.

In plain English, Consortium-aligned companies stop being “just another miner” or manufacturer. They become infrastructure.

That distinction matters when governments are deciding who gets funding, who gets fast-tracked, and who becomes indispensable.

And that brings us to a new and very important development: mining companies are now stepping into the defense spotlight.

Apollo Silver Corp: Silver as a Strategic Metal Again

One of the more interesting names to emerge in this shift is Apollo Silver Corp. (APGO:TSX.V; APGOF:OTCQB).

Silver rarely gets framed as a defense metal in popular discourse, but it absolutely should.

It is critical to advanced electronics, missile guidance systems, secure communications, solar-powered defense infrastructure, and a growing range of aerospace and energy applications.

Modern warfare is digital, electrified, and sensor-dense — and silver sits at the center of that reality.

Apollo Silver’s alignment with the Defense Industrial Base Consortium reflects a broader recognition that precious metals are no longer just financial hedges or industrial afterthoughts.

They’re strategic inputs.

Domestic silver supply, especially from stable U.S. jurisdictions, reduces exposure to foreign bottlenecks at a time when defense systems are becoming more metal-intensive, not less.

This is silver growing up. And investors who still think of it as a shiny relic are missing the plot.

MP Materials: Rare Earths, Real Power

If Apollo Silver represents the rediscovery of an old strategic metal, MP Materials Corp. (MP:NYSE) represents the hard lesson of losing an entire supply chain.

Rare earth elements are essential to fighter jets, precision-guided munitions, radar systems, drones, and electric propulsion.

For years, the U.S. outsourced this capability almost entirely. The result was a near-total dependence on China for materials that underpin modern warfare.

While it’s yet to become an official member, MP Materials and its government investment reflects a national effort to reverse that mistake.

By rebuilding domestic mining, processing, and magnet production capacity, MP isn’t just supplying materials — it’s restoring strategic autonomy.

This is what “onshoring” looks like when it actually matters. Not slogans. Capacity.

Energy Fuels: Nuclear Security Starts at the Mine

The third pillar in this emerging defense-miner alignment is Energy Fuels Inc. (EFR:TSX; UUUU:NYSE.American).

Nuclear energy sits at a strange intersection of civilian infrastructure and national defense.

Uranium fuels power grids, but it also underpins naval propulsion, deterrence credibility, and long-term strategic stability.

A nation that cannot secure its nuclear fuel cycle cannot fully secure its defense posture.

Energy Fuels’ participation in Defense Industrial Base initiatives reflects a recognition that uranium independence is not optional. It is foundational…

From fueling reactors to supporting advanced nuclear technologies, domestic uranium production is a national security imperative hiding in plain sight.

This is less about profits next quarter and more about sovereignty next decade.

The Bigger Picture Most Investors Are Missing

Here’s the part the market is still slow to price in…

The Defense Industrial Base Consortium represents a structural shift in how America thinks about industry.

Efficiency is no longer king. Resilience is. Redundancy is. Domestic capacity is.

That shift doesn’t happen overnight, but once it starts, it doesn’t reverse easily…

Defense supply chains are sticky. Relationships last decades. Contracts roll forward. Strategic suppliers become embedded.

For investors, that means something profound…

Companies aligned with national defense priorities often enjoy longer runways, stronger political tailwinds, and a margin of safety that purely commercial players don’t.

Apollo Silver, MP Materials, and Energy Fuels aren’t just operating in hot commodity markets. They’re operating in markets that Washington has decided it cannot afford to lose.

And historically, when that happens, capital follows policy.

This Isn’t a Trade—It’s a Theme

Let’s call this what it is…

The Defense Industrial Base is being rebuilt in real time, under pressure, with urgency. The Consortium is the connective tissue making that rebuild possible.

Mining companies inside this orbit are no longer background players. They are strategic assets.

The smartest investors won’t wait until everyone else starts calling these companies “defense stocks.”

By then, the easy money is gone.

The Great Rotation in equities is underway, with the U.S. large-cap tech sector losing its dominance as other sectors, markets, and asset classes take over.

And dominance it is: Nvidia Corp. (NVDA:NASDAQ) alone has a larger valuation than the entire markets of Canada or the U.K. That alone might make one scratch one’s head. The U.S. market had a good year: up 17% (for the S&P) is hardly shabby. But this was barely half of the international markets (per MSCI World ex-US Index) while specific long-ignored asset classes came to the fore: copper equities rose 82% while gold and silver jumped 155% (per iShares Copper Miners ETF and VanEck Gold miners ETF).

There Are Many Signs of a Top

Signs of a top in U.S. stocks abound. The most obvious sign is extreme valuation. By most measures, the market is more expensive today than it was in 2022, 2008, 2000, and even 1929.

There are many illustrations we could provide of this, price to earnings, price to sales, price to book, the Schiller CAPE ratio, and more. This is a fact, not conjecture.

Of course, markets can stay overvalued for long periods, as indeed has this one, but there are signs that the “end is nigh.” Market concentration is a record (the gap between the index and an equal-weighted index, for example, has never been great).

Market speculation is extreme, with margins up over 40% in the last year, record foreign and retail participation, and new speculative vehicles (such as 3x ETFs and one-day options) created to feed the appetite. Simply the length of this bull market (see graph) should give pause. Investor David Snyder has a list of 27 “boxes to check for near the end of the secular bull market,” and he says that now all 27 are checked.

The Market Leaders Are Now Rolling Over

That alone should give pause. Market action is also signaling something is up, with the S&P index only barely etching out a new high in the last two months, while leader Nvidia is down meaningfully over this period. One by one, in September, October, and November, the Magnificent Seven have been topping Microsoft Corp. (MSFT:NASDAQ), Apple Inc. (AAPL:NASDAQ), and Amazon.com Inc. (AMZN:NASDAQ). Yes, the Great Rotation is underway. There is an old saying that a market bottom may be an event, but a top is a process. We are experiencing that process unfolding now.

Foreign Markets Taking the Lead From the US

The most obvious beneficiaries have been, and will likely continue to be, both international markets and commodity stocks. Even after that huge outperformance, international equities are still the cheapest they have been relative to the U.S. for 50 years. We expect this outperformance to continue for a few years, as it usually does when foreign markets outperform by a wide margin.

Relative leadership moves in a long cycle: this period of U.S. dominance has lasted nearly 15 years — the U.S. bull market has been going on longer, of course, 17 years now, almost a record — while the previous period of international dominance lasted seven years.

It would be highly unusual for foreign markets to outperform the U.S. by only one year. To return to long-term values relative to the U.S., international markets would have to triple (assuming the U.S. stays flat). And foreign equities are getting help from economic fundamentals, and many foreign economies are growing faster than the U.S., while a decline in the dollar leads many U.S. investors to look abroad.

Commodity Stocks Were 2025’s Top Performers

As for commodity equities, despite the huge rallies last year, they remain close to 100-year lows relative to the stock market. So there is plenty of scope for a return to more average relative valuations. The traditional factors that can lead to higher resource prices — including significant underinvestment over a period — are certainly in place. So too is the likelihood of higher inflation and a lower dollar. Resource cycles tend to be long, so, again, we should not expect the copper and gold outperformance to be a one-off.

But there is now something else. For the AI sector to be successful — and meet current goals — natural gas, uranium, copper, and silver must all go up significantly. The commodities are the gold miners’ picks and shovels for the AI sector. Planned AI capex for this year and next is $2 trillion, with 850 data centers slated to be built in the U.S. over the next five years. Even if projections are cut in half, there will still be a massive pick-up in demand for these commodities, and the inability of production to keep up will mean higher prices.

Other Parts of the Market Have Lagged and Are Undervalued

Other sectors of the market remain at extreme levels of relative undervaluation: value is at its cheapest relative to growth in more than 50 years. Value stocks would need to compound at 20% per year more than growth stocks for five years to return to their long-term relative valuations. Small caps are also undervalued relative to large caps.

So as the leaders of the long U.S. bull market roll over, the emphasis should be on value and small-cap stocks, on sectors that have lagged, but most of all on international markets and commodity stocks.

Do You Want To Be Shocked?

We referred to the potential end of the secular bull market.

Most would consider that this got underway in early 2009, after the Great Financial Crisis. But if one takes a longer-term view, one could argue that the bull market started far earlier, and we have seen a growing “financialization” of the economy for nearly 40 years.

One analyst who looks at markets through a very long telescope is Robert Prechter of the Elliott Wave Theorist.

He has produced a stunning graphic showing how stock market valuations in this period have become progressively more extreme, but significantly well above the 60-year period before.

When he showed an earlier version of what he calls the “Pluto chart” in his presentation at the New Orleans conference, it was met with audible gasps.

Writes Mr.. Prechter, from EWI’s Elliott Wave Theorist, November 14, 2025, “at the end of last month, investors were paying 7.85 times the book value of S&P 400 Industrial companies, and they were content with a measly 1.16% annual dividend yield from companies in the S&P 500 Composite Index. T-bills pay more than triple that amount. Clearly, there is no income reason to buy stocks; the only reason to buy them is a belief that other investors will bid prices even higher than they already are. [This chart] is a snapshot of today’s unprecedented degree of financial optimism.”

Call It What You Like, This Is Bullish for Gold

When the Federal Reserve launched its new Treasury buying program last month, Chairman Jerome Powell and others went out of their way to emphasize that this was not QE. Well, QE or not, something dramatic occurred at the end of the year, as the Fed started purchasing Treasuries at a frantic pace, $160 billion in “reverse repos” during the month, most of it in the last few days of the year, with an unprecedented $100 billion plus on the last day of the year.

This is a multiple of the Fed’s target for $40 billion a month in its “Reserve Management Purchases” program announced after its last meeting.

To be sure, the reverse repo purchases are a separate program. But both represent the Federal Reserve purchasing Treasuries and adding liquidity. The press dutifully reported that this was to “steady the markets over year-end.”

Was it perhaps connected with the then-pending Venezuela operation?

There is speculation that it could be tied to a major bank unable to meet margin calls on a large short silver position.

QE or note QE, such massive liquidity injections are wildly bullish for gold, even more so than lower interest rates, and the market’s action since the Fed announcement bears that out.

TOP BUYS this week include Metalla Royalty & Streaming Ltd. (MTA:TSX.V; MTA:NYSE American),  Midland Exploration Inc. (MD:TSX.V), Lara Exploration Ltd. (LRA:TSX.V), and Kingsmen Creatives Ltd. (KMEN:SI).

In Canada and the U.S., the tax year ends on December 31. This creates a flurry of selling as the year draws to a close. Why? Investors want to realise losses which they can then offset against gains elsewhere and so reduce their tax bill.

This creates considerable selling pressure, especially amongst small-cap stocks, and they can become quite oversold. The selling can be quite indiscriminate in the last few days before Christmas, but it abates as soon as the year ends, and the stocks often rally — particularly if there is a reason for them to rally (such as them being cheap or, better, some positive newsflow or generally better market conditions for the sector in which that company operates: eg Bitcoin rallies a bit, so all Bitcoin related companies rally).

Some years this works better than others, some picks work better than others. But manage your risk — don’t take on position sizes which are too large, be prepared to sell if the trade goes against you, etc. — and the trade can work well.

You want to be exiting your positions by February-March, so the trade has a nice structured timescale around it.

Note: Companies often do badly because they are not very good companies, so that means you are often buying not-very-good companies. Be under no illusions.

The trade seems to work particularly well with small-cap Canadian resource stocks, so you will need a broker who deals in such things. I use Interactive Investor. If you want to open an account, use this affiliate link (I get a fee, and you get a year’s free trading.)

Anatomy of a tax loss candidate

The ideal candidate wants to have spiked at some point in the last couple of years so that it sucked in a lot of buyers at higher prices. It wants to have been flat or declining for some time, so that buyers will now hate it and want it out of their portfolio, happy to sell at any price just to get rid of the wretched thing.

It wants to be really oversold so there is room for a rebound.

Ideally, they want to have some cash so they are not coming to market for capital in the New Year and thereby killing any rally with a raise.

It’s better if the company has genuine assets and is a genuine business, not some lifestyle company. That lowers risk and betters chances of positive, real newsflow in the New Year.

Take a look at this chart of Company Unknown. You can see that three times this year it spiked above $10. Now it is trading at 84c. How many people have lost money, I dread to think. It has been a proverbial clusterfook.

If you bought anywhere above $2 or $3 — and especially up near $10 or $13 – you will HATE this company.

Meanwhile, there is a huge potential loss for you to realise. So you sell it and take the loss.

But look also at the volume — that has been quite high since the sell off (short sellers covering, increased stock coming to market as it became free trading, but also capitulation). There is a story there, too. Note also the volumes when the stock went from 80c to $1.80 in October.

It’s tailing off again.

This stock could easily rise 50% — and that would only take it to $1.25, which is nothing in the context of the greater volatility.

I’ve read the chatboards. Investors hate this stock. It is not a good company. It’s even been associated with scams.

But all we are looking for is a New Year bounce.

Imagine owning Company Unknown 2, meanwhile. It’s been falling for five years!

It was a $7 stock, now it’s 60c. Investors have had five years of relentless grind lower. It’s a copper company with resources in the Southwestern U.S. That should be a golden ticket in current markets.

Investors will be furious. No surprise they’re selling.

But it’s got capital. There’s some newsflow coming early next year. It looks like it has made a low around 50c. Could this be a dollar stock by March? Why not? The world needs copper. This company has lots of it.

You get the point.

Selling in my view will climax this Friday, December 19, and Monday, December 22,  but you have until New Year’s Eve to buy. (Most will have left their desks by Tuesday of next week I’d say).

The timeframe for the exit is February to March.

With all that in mind, here are 10 tax loss selling ideas for 2025-2-26:

I have been on a 2-day marathon scanning charts. Here are the best ten I could find.

This has been a hard year to find candidates, I must say, largely because resource stocks have had such a good time of it.

Crypto Treasury Companies, on the other hand, have had a terrible year, so — with a bit of help from Bitcoin (it needs to rebound) — they could enjoy a nice bounce.

I’ll tell you my ideas and then at the end of today’s piece, tell you the ones I am going for.

Tech

(NB $ = USD, unless otherwise stated).

1. Strategy Inc. (MSTR:NASDAQ)

Billionaire genius Michael Saylor’s Strategy has had a rotten time of it lately. Once trading at a premium to its Bitcoins, it’s now trading at a slight discount to them. If you want a long-term position in this company, now might not be a bad time to acquire it.

Trading at or near its lows for the year, it has properly puked.

It will only rally if Bitcoin rallies — and that particular engine has run out of steam — but it’s a prime candidate for a rebound.

2. SOL Strategies Inc. (HODL:CSE; STKE:NASDAQ).

To think I was CEO of this company once upon a time, in its earlier incarnation as a privacy company, Cypherpunk Holdings. The company changed focus a year or two ago and is now a Sol staking company.

Basically, it sinks or swims with Solana.

Earlier this year, it got to $34. Now it’s under $2. A proper puke job. One to sell and realise a loss. And so one for us to buy.

Like Strategy and Bitcoin, we will need some help from Solana. If it doesn’t rally, this remains dead in the water. But if it does, it makes a lovely flip.

This could quite easily go above $5.

3. Strive (ASST:NASDAQ) is the third of my crypto treasury ideas.

That’s the one with the chart above — Unnamed Company. I stress this trade is not about quality. It is unfortunately merging with Semler Scientific, which other readers and I hold (Semler is another tax loss candidate by the way, but there are better ones).

Again, with some help from Bitcoin, it could be a nice flip.

Here’s another tech-related idea for you.

4. Healwell AI (AIDX:TSX)

Three years ago, this was a CA$3 stock. Now it’s 85c. But it’s now a top pick of Canadian broker, Haywood Securities, which has put a target of $4.50, now that it has cleaned up its balance sheet and refocused its activities on AI.

We don’t need it to get that high. Pick it up in the low 80s and aim to flip at 1.20 is what I am looking to do.

Oil and Gas

I was looking for names in the oil and gas space as I think oil could prove a winner next year, but while oil itself has been weak, the stocks themselves have not been the disaster I have been looking for.

5. Vermilion Energy Corp. (VET:TSX; VET:NYSE) is not a bad option.

It looks like it made its low in April at CA$7. It was a CA$35 stock in 2022, so there are losers over that time frame, and this year it’s “only down” about 15% which means it is not a mega tax loss candidate. But if oil and gas rally, so will this.

I see it as quite a low-risk bet, although I don’t see mega gains either

6. SM Energy Co. (SM:NYSE)

This $2 billion market company is perhaps a bit larger than ideal, but its chart — going from $50 to $17 — fits the bill.

The reason for the declines is largely lower oil prices. Its production has increased, though its margins have been compressed, so profitability is in doubt. There are also doubts about its reserves.

Such things need not bother us. We are here for a good time, not a long time.

Just as the treasury companies sink or swim with Bitcoin (and Solana), these will need some help from oil and gas prices, but oil to me looks like it’s making a long-term low at $55.

A rally early next year will give this the filip it needs. A decline, though, won’t.

Uranium

7. Lightbridge Fuels (LTBR:NASDAQ) has been a big winner for readers.

I think we first wrote it up at $3 or thereabouts, and it was a great tax loss trade last year, too.

This uranium fuel tech company, with a market cap $420 million, is up and down like the proverbial, and it has just had one of its down phases, hence my adding it to this list.

Really, the chart doesn’t quite fit the bill, but it sort of does and it keeps on giving, so I include it here, if you can get it in the $12 range, here’s hoping in 2026 it will do its thang.

Mining

8. As mentioned, we have a shortage of good mining candidates, but Arizona Metals Corp. (AMC:TSX.V; AZMCF:OTCQX) is a beauty — Company Unknown 2 above.

This CA$80 million cap copper development play has been a right dog, and it has a lot of disgruntled shareholders, but it has some news flow to come early next year in the form of PEA plus about CA$15 million in cash. The chart to me looks like it has bottomed at 50c, which would make an ideal buy point.

I would have expected it to reach there, but it spiked a bit yesterday for some reason, so maybe it won’t go back there before year’s end.

9. NexMetals Mining Corp. (NEXM:TSX.V; NEXM; NASDAQ) Can’t really tell you much about this Botswana critical metals miner, except to say that it was a $50 stock 4 years ago and now it’s a $5. No surprise it’s now looking for a new CEO.

The declines have been relentless and inexorable, and now it’s near its lows. But this CA$180 million market cap company has some $90 million in cash, and some heavyweight promoters, including Frank Giustra, behind the scenes, so it fits our bill well.

Here’s the four-year chart of grimness.

10. I really shouldn’t be giving airtime to companies like this. It’s too small and too illiquid. But South Star Battery Metals Corp. (STS:TSX.V; STSBF:OTCBB) has a humdinger of a chart and plenty of cash — this CA$14 million market company just completed a highly dilutive, full warrants and all, raise CA$6.7 million.

That stock comes free trading in February 2026, so you don’t want to be around for that. Exit this one earlier than the others. But at 13c, it’s tempting.

What will be the trigger for this graphite miner? Lord knows, but the company could start by updating its presentation, which hasn’t been touched since February. What a joke.

Phew. That was some work. I need to go and get some fresh air.

Summary

So there are ten ideas here. Obviously, you can’t go for all of them. Maybe pick three or four — one from each category.

The risk with the treasury companies is that Bitcoin itself continues its declines, and we are unfortunately in crypto winter again, so that is not unlikely. Strategy is the safer option; Sol and Strive will see the bigger gains but also the bigger losses if they don’t work.

Healwell AI is tempting me too.

Oil-wise, I lean towards SM Energy.

And as for the miners, they all have their allure, but probably avoid South Star unless you are feeling really reckless.

A reminder. Don’t chase these things. Leave a stink bid under the market and let the price come to you. You have between now and New Year’s Eve to get your limit order filled.

The usual disclaimers all apply, but I should say this. If you are not an experienced trader, you might be better off not playing this game.

As always, watch your position sizes and manage your risk.

Good luck!

If you’d like to read more from Dominic, you can sign up for The Flying Frisby here.