Dear Mr. Market:<\/p>\n
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<\/a><\/figure>\n<\/div>\nThis is perhaps one of our favorite articles and times of the year; not necessarily because of basketball but rather it allows us the opportunity to articulate our main investment themes we see playing out for the remainder of the year. My Portfolio Guide, LLC<\/a> was the first investment firm to publish a March Madness investing bracket where we share our picks and match them up against each other.\u00a0 We break down and assign each of the four \u201cregions\u201d with an asset class and then pick teams (stocks) that we think have the best chance at doing well relative to others.\u00a0<\/p>\n Not only is this \u201cexercise\u201d a way for us to share our ideas from a macro perspective, but it offers a fun platform to dig into a couple specific investments and themes we are following or excited about. While NCAA teams battle for supremacy on the court, our annual\u00a0March Madness Investing Bracket<\/a><\/strong> pits stocks and ETFs against each other to determine the investment themes we think are likely to outperform the remainder of the year. The competition spans four \u201cregions\u201d:\u00a0Large Cap<\/strong>,\u00a0Small & Mid Cap<\/strong>,\u00a0International<\/strong>, and\u00a0Bonds & Alternatives<\/strong>.<\/p>\n Who will be this year\u2019s champion? Let\u2019s break it down (click here<\/strong><\/a> to see the full bracket).<\/p>\n Read more: March Madness: Final Four Investing Bracket\u00a02025<\/span><\/a><\/p>\n <\/p>\n Large Cap Region: The Heavyweights Clash<\/strong><\/p>\n This year\u2019s large-cap region includes some of the market\u2019s biggest names. Historically, this bracket has been dominated by the tech sector, but after years of outsized gains, big tech valuations are stretched. Despite high earnings growth, companies like\u00a0Microsoft (MSFT<\/a>)<\/strong>\u00a0and\u00a0Nvidia (NVDA<\/a>)<\/strong>\u00a0continue to trade at lofty multiples.\u00a0Amazon (AMZN<\/a>)<\/strong>\u00a0is a surprising contender given that its P\/E ratio is now lower than\u00a0Walmart\u2019s (WMT<\/a>)<\/strong>\u2014a rare value proposition for a high-growth tech stock. Energy also makes a strong case, with\u00a0ConocoPhillips (COP<\/a>)<\/strong>\u00a0benefiting from sustained oil demand and a tight supply market.<\/p>\n March Madness Investing Bracket: Large Cap Region Showdown<\/strong><\/p>\n As the 2025 March Madness tournament kicks off, so does the battle for supremacy in the Large Cap Region<\/strong>\u00a0of the investment world. This region is filled with heavy-hitters: tech giants, retail titans, and energy powerhouses. In the first few rounds, we\u2019ll see some predictable victories, but there are also plenty of upsets and intense showdowns, as companies compete for the ultimate prize.<\/p>\n WMT vs. FND \u2013 The Retail Matchup<\/strong><\/p>\n In this opening round,\u00a0Walmart\u2019s (WMT<\/a>)<\/strong>\u00a0retail dominance faces off against\u00a0Floor & Decor\u2019s (FND<\/a>)<\/strong>\u00a0niche home improvement business. While\u00a0Floor & Decor<\/strong>\u00a0has shown strong growth in the home improvement sector,\u00a0Walmart\u2019s<\/strong> sheer scale, global reach, and e-commerce expansion give it the edge.\u00a0Floor & Decor\u2019s<\/strong>\u00a0lack of diversification makes it difficult to compete at the same level. Winner:\u00a0WMT<\/strong><\/p>\n MSFT vs. WMT (Winner of Round 1)<\/strong><\/p>\n Walmart<\/strong>\u00a0has made it this far, but it\u2019s facing an uphill battle against\u00a0Microsoft (MSFT<\/a>)<\/strong>. The cloud computing juggernaut, AI innovation, and dominance in enterprise software give\u00a0Microsoft<\/strong>\u00a0an unmatched competitive advantage over\u00a0Walmart<\/strong>. The retail giant may continue to dominate in physical stores, but it can\u2019t match\u00a0Microsoft\u2019s<\/strong>\u00a0future-facing growth potential. Winner:\u00a0MSFT<\/strong><\/p>\n LLY vs. TSLA \u2013 The Pharma vs. EV Showdown<\/strong><\/p>\n In this intriguing battle,\u00a0Eli Lilly (LLY<\/a>)<\/strong>\u00a0takes on\u00a0Tesla (TSLA<\/a>)<\/strong>.\u00a0Tesla\u2019s<\/strong>\u00a0falling stock price, quality control issues, and the negative media attention surrounding Elon Musk leave the electric vehicle leader in a precarious position. That said, we wouldn\u2019t bet against Tesla long-term as the stock has been chopped in half before and roared back. Meanwhile,\u00a0Eli Lilly\u2019s<\/strong>\u00a0strong position in the biopharma market, with a promising pipeline and steady growth in diabetes treatments, positions it as a safer, more reliable pick. Winner:\u00a0LLY<\/strong><\/p>\n LLY vs. LMT \u2013 Pharma vs. Defense<\/strong><\/p>\n Eli Lilly\u2019s<\/strong>\u00a0strong fundamentals and growth trajectory face off against\u00a0Lockheed Martin (LMT<\/a>)<\/strong>, a leader in the defense sector. While\u00a0Lockheed Martin<\/strong>\u00a0remains a solid performer with government contracts and steady demand, it lacks the same growth potential as\u00a0Eli Lilly<\/strong>, which is positioned to benefit from the global healthcare push.\u00a0Lilly\u2019s<\/strong>\u00a0focus on innovation gives it the edge in this round. Winner:\u00a0LLY<\/strong><\/p>\n LLY vs. TSLA \u2013 The Upset<\/strong><\/p>\n Tesla<\/strong>\u00a0is a name many investors have been rooting for in the electric vehicle space, but a combination of supply chain disruptions, decreasing margins, and the controversies surrounding Elon Musk has made its future outlook uncertain.\u00a0Eli Lilly<\/strong>, on the other hand, boasts a robust pipeline and solid earnings, making it a relatively safer and more predictable investment for the remainder of 2025. Despite\u00a0Tesla\u2019s<\/strong>\u00a0allure as a long-term growth stock, it doesn\u2019t have the stability\u00a0Eli Lilly<\/strong>\u00a0offers. Winner:\u00a0LLY<\/strong><\/p>\n NVDA vs. AMZN \u2013 The AI Giants<\/strong><\/p>\n Nvidia (NVDA)<\/strong>, with its dominance in the semiconductor market and AI technology, faces off against\u00a0Amazon (AMZN)<\/strong>, the e-commerce and cloud computing titan. While\u00a0Nvidia\u2019s<\/strong>\u00a0cutting-edge technology in AI, machine learning, and semiconductors positions it for massive growth in 2025,\u00a0Amazon\u2019s<\/strong>\u00a0market diversification across cloud, e-commerce, and advertising provides a broader platform for growth. Despite\u00a0Nvidia\u2019s<\/strong>\u00a0impressive capabilities in AI,\u00a0Amazon\u2019s<\/strong>\u00a0reach across so many sectors gives it the slight edge. Winner:\u00a0AMZN<\/strong><\/p>\n MSFT vs. LLY \u2013 Tech Meets Pharma<\/strong><\/p>\n Microsoft<\/strong>\u00a0has fought its way through some stiff competition to get to this round, where it will face off against\u00a0Eli Lilly<\/strong>.\u00a0Microsoft\u2019s<\/strong>\u00a0cloud computing, AI advancements, and enterprise software diversification make it a tough competitor for any company. However,\u00a0Eli Lilly\u2019s<\/strong>\u00a0strong market position and the expanding global healthcare demand position it well for sustained growth, especially in the pharmaceutical sector. Eli Lilly\u2019s stock has surged due to the strong demand for its weight loss drug,\u00a0Zepbound<\/em>, which is driving significant revenue growth and expanding its market dominance in the pharmaceutical sector. That being said,\u00a0Microsoft\u2019s<\/strong>\u00a0expansive tech offerings and dominance in the enterprise space outshine\u00a0Lilly\u2019s<\/strong>\u00a0more niche position. Winner:\u00a0MSFT<\/strong><\/p>\n Final Showdown: MSFT vs. AMZN \u2013 The Cloud Battle<\/strong><\/p>\n The final battle is set between\u00a0Microsoft<\/strong>\u00a0and\u00a0Amazon<\/strong>, two of the largest players in the cloud computing market.\u00a0Microsoft<\/strong>\u00a0has seen tremendous success with Azure, its cloud platform, and its AI capabilities make it a formidable competitor in the tech world.\u00a0Amazon\u2019s<\/strong>\u00a0AWS is still the leader in cloud services, and its growth in advertising, e-commerce, and other sectors makes it a highly diversified growth machine. In this final showdown,\u00a0Amazon\u2019s<\/strong>\u00a0broader market exposure and ongoing innovation across multiple sectors give it the slight edge over\u00a0Microsoft\u2019s<\/strong>\u00a0more enterprise-focused growth strategy. Winner:\u00a0AMZN<\/strong><\/p>\n<\/div>\n Conclusion: Amazon\u2019s March to Victory<\/strong><\/p>\n After a series of intense matchups,\u00a0Amazon (AMZN<\/a>)<\/strong>\u00a0emerges as the champion of the\u00a0Large Cap Region<\/strong>. Despite stiff competition from tech heavyweights like\u00a0Microsoft (MSFT<\/a>)<\/strong>\u00a0and\u00a0Nvidia (NVDA<\/a>)<\/strong>,\u00a0Amazon\u2019s<\/strong>\u00a0ability to combine e-commerce dominance, cloud computing leadership, and advertising growth puts it ahead of the pack. With a strong, diversified portfolio,\u00a0Amazon<\/strong>\u00a0is poised to continue its dominance through 2025, claiming victory in this year\u2019s\u00a0March Madness Investing Bracket<\/a><\/strong>.<\/p>\n Small & Mid-Cap Region: SOFI Surges in a Changing Market<\/strong><\/p>\n The small and mid-cap asset class has long been overshadowed by large-cap dominance, with the past decade favoring mega-cap technology stocks. However, shifting economic conditions, a potential rate-cut cycle, and valuation opportunities have created a renewed focus on small and mid-cap stocks, particularly in financials and energy. This year\u2019s bracket saw a series of surprises as the more value-oriented and sector-diverse plays advanced over traditional growth names.<\/p>\n EPD\u2019s Cinderella Run Falls to Energy Disruptor UEC<\/strong><\/p>\n In the opening round, #11\u00a0EPD<\/a><\/strong>\u00a0(Enterprise Products Partners) pulled off an early upset over #5\u00a0SPMD<\/a><\/strong>\u00a0(Mid-Cap ETF). The pipeline company\u2019s steady cash flow and high dividend yield proved attractive in a market favoring stability, particularly within energy infrastructure. However,\u00a0EPD\u2019s<\/strong>\u00a0run was short-lived, as #1\u00a0SDVY<\/a><\/strong>\u00a0(Last Year\u2019s Champion) struggled against the changing landscape, falling victim to\u00a0EPD\u2019s<\/strong>\u00a0steady performance and high yield in a market that has seen investors favor dividend income over pure growth.<\/p>\n But momentum would only take\u00a0EPD<\/strong>\u00a0so far. It faced a much tougher challenge against #4\u00a0UEC<\/a><\/strong>\u00a0(Uranium Energy Corp), which is well-positioned in the growing nuclear energy sector. With increased global demand for clean energy alternatives and uranium prices rising,\u00a0UEC<\/strong>\u00a0secured a convincing win over\u00a0EPD<\/strong>, continuing its deep run in the bracket.<\/p>\n UEC Holds Off a Challenge from CARS, But SOFI is Too Strong<\/strong><\/p>\n Elsewhere in the bracket, #7\u00a0CARS<\/a><\/strong>\u00a0(CarGurus) won its opening round matchup against #9\u00a0GBX<\/a><\/strong>\u00a0(Greenbrier Companies), benefitting from the continued shift toward digital automotive sales. However, it ran into #4\u00a0UEC<\/strong>, which proved to be the stronger play in a market shifting towards long-term energy solutions.<\/p>\n Despite its strong performance,\u00a0UEC<\/strong>\u00a0ultimately couldn\u2019t stop the dominance of financials. In the later rounds, it ran into #2\u00a0SOFI<\/a><\/strong>, which had already handled #12\u00a0OKLO<\/a><\/strong>\u00a0(another uranium play) with ease. While\u00a0UEC<\/strong>\u00a0benefited from the rising nuclear narrative,\u00a0SOFI<\/strong>\u00a0thrived on the broader shift in banking.<\/p>\n SOFI Capitalizes on Rate Cuts & a Consumer Banking Shift<\/strong><\/p>\n With inflation cooling and economic concerns stabilizing, rate cuts have become a major theme, favoring financial stocks, particularly digital-first institutions like\u00a0SOFI<\/strong>. Traditional banks have been slow to adapt, while\u00a0SOFI\u2019s<\/strong>\u00a0business model has thrived in an environment where younger consumers are embracing online-first banking solutions.<\/p>\n SOFI\u2019s<\/strong>\u00a0final test comes against #3\u00a0ACHR<\/a><\/strong>\u00a0(Archer Aviation), an exciting name in urban air mobility, but still a long-term speculative play with high R&D costs and regulatory hurdles. While\u00a0ACHR<\/strong>\u00a0represents the future of transportation, investors are currently favoring more immediate and tangible plays, giving\u00a0SOFI<\/strong>\u00a0the upper hand.<\/p>\n In the final showdown,\u00a0SOFI<\/strong>\u00a0outlasted\u00a0UEC<\/strong>, as financials remain a strong bet in a market shifting away from traditional banks and toward digital-first solutions. As small and mid-caps begin to close the performance gap on large caps, stocks with better valuations, exposure to key secular trends, and less reliance on high-multiple tech valuations are finding favor once again. With the Federal Reserve expected to cut rates, financials like\u00a0SOFI<\/strong>\u00a0could be well-positioned to outperform in the coming cycle. Unlike legacy banks burdened by brick-and-mortar costs and regulatory capital constraints, SOFI\u2019s digital-first model and chartered bank status allow it to operate with higher efficiency, offering competitive deposit rates and expanding its lending capabilities with lower overhead.<\/p>\n Final Takeaway:<\/strong><\/p>\n After a decade of large-cap tech dominance, small and mid-cap stocks are showing signs of resurgence as macroeconomic trends shift. Energy and financials are leading the way, benefiting from changing market conditions, lower valuations, and an evolving consumer landscape. With\u00a0SOFI<\/strong>\u00a0emerging as the regional champion, the financial sector\u2019s transformation and the broader mid-cap comeback appear to be in full swing.<\/p>\n International Region: Investing Where the Puck Will Be<\/strong><\/p>\n Wayne Gretzky once said, \u201cA good hockey player goes to where the puck is, but a great one goes to where it will be.\u201d That\u2019s the mindset for the\u00a0International Region<\/strong>, where investors must look past today\u2019s uncertainty and position for the future. With Europe and emerging markets outperforming U.S. stocks to start the year\u2014something not seen in over a decade\u2014there\u2019s growing evidence that global markets are shifting. This bracket focuses on who benefits most when the Russia-Ukraine war ends and economic rebuilding begins.<\/p>\n The first round starts with 11-seed\u00a0Philippines<\/strong>\u00a0(EPHE<\/a><\/strong>) taking down 5-seed\u00a0Greece<\/strong>\u00a0(GREK<\/a><\/strong>) in an upset. The Philippines is proving to be an economic force, with a rising middle class and strong growth potential. Valuations on the Philippine market are trading at just 10 times earnings compared to ours at about 25 right now. However, 1-seed\u00a0Poland<\/strong> (EPOL<\/a><\/strong>) is on fire this year and quickly ends\u00a0EPHE<\/strong>\u2019s run.\u00a0Poland\u00a0is at the center of European growth, benefiting from NATO support, near shoring trends, and its proximity to Ukraine\u2019s eventual reconstruction. By the way, the EPOL ETF also currently sports a healthy dividend of almost 5%.<\/p>\n In another early matchup, 9-seed\u00a0Austria<\/strong>\u00a0(EWO<\/a><\/strong>) takes down 7-seed\u00a0SPEM<\/strong>\u00a0(broad emerging markets) and then follows it up with another upset over 4-seed\u00a0China<\/strong>\u00a0(CHN<\/a><\/strong>).\u00a0Speaking of valuations Austria is also trading at a cheap 10 times earnings and has a dividend of almost 6.5%. China\u2019s economy remains a long-term force, but recent struggles in real estate, regulatory uncertainty, and slowing growth give\u00a0Austria\u00a0the edge.\u00a0Austria\u00a0has close ties to Central and Eastern Europe, positioning it well for economic recovery in the region. But\u00a0Poland\u00a0remains too strong, eliminating\u00a0Austria\u00a0and advancing to the finals.<\/p>\n On the other side of the bracket, 6-seed\u00a0Argentina<\/strong>\u00a0(ARGT<\/a><\/strong>) takes down 12-seed\u00a0India<\/strong>\u00a0(FLIN<\/a><\/strong>).\u00a0India\u00a0is a long-term winner but might not be as strong this year. Meanwhile,\u00a0Argentina\u00a0is undergoing a massive economic shift under President Milei, cutting government waste and embracing free markets\u2014similar to the reforms being presented here in the US with the Department of Government Efficiency (DOGE).\u00a0Albeit a divisive topic lately, DOGE has set up an interesting website if you haven\u2019t checked it out yet. (click here<\/a> to view that) Argentina\u00a0continues its momentum, upsetting 2-seed\u00a0Mexico<\/strong>\u00a0(EWW<\/a><\/strong>). While\u00a0Mexico remains a top U.S. trade partner, uncertainty around tariffs and U.S. policy weighs on its outlook.<\/p>\n In a key matchup between 8-seed\u00a0Budimex<\/a><\/strong>\u00a0and 10-seed\u00a0Kernel Holdings<\/a><\/strong>,\u00a0Budimex<\/strong>\u00a0takes the win. Both are rebuilding plays for a post-war Ukraine, but\u00a0Budimex<\/strong>\u2019s strong government contracts and construction expertise give it the edge. However, 3-seed\u00a0EFG<\/strong>\u00a0(developed markets ETF) puts an end to\u00a0Budimex<\/strong>\u2019s run, as developed markets outside the U.S. continue to gain momentum.<\/p>\n The semifinals see\u00a0Argentina<\/strong>\u00a0(ARGT<\/a><\/strong>) facing\u00a0EFG<\/strong>, with\u00a0EFG<\/strong>\u00a0advancing due to its broader exposure to European and Japanese equities. But in the final matchup,\u00a0Poland<\/strong>\u00a0(EPOL<\/a><\/strong>) is simply too strong, taking down\u00a0EFG<\/strong>\u00a0to win the\u00a0International Region<\/strong>.<\/p>\n Poland<\/strong>\u2019s economic resilience, EU support, and strategic position for post-war recovery make it the standout investment in international markets. While headlines remain focused on war and uncertainty, forward-looking investors are already positioning for what comes next. \u200b\u200b<\/p>\n<\/div>\n Bonds & Alternatives: The Golden Run Continues<\/strong><\/p>\n<\/a><\/figure>\n<\/div>\n<\/a><\/figure>\n<\/div>\n<\/a><\/figure>\n<\/div>\n