JPMorgan Chase's new national-security portfolio... A 'who's who' of advisers... A range of outcomes from good to awesome... Adjust your sails... Berkshire Hathaway is about to get interesting...
Two weeks ago, I recommended looking for stocks in industries favored by Trump administration policies...
And just a few days later, Todd Combs – one of Warren Buffett's two investment managers – left Berkshire Hathaway (BRK-B) to run JPMorgan Chase's (JPM) brand-new Strategic Investment Group.
JPMorgan CEO Jamie Dimon cited Combs' nine-year stint on the bank's board of directors, saying Combs understood "all aspects" of the company and "supports the role we play helping make the world better and safer for all its citizens."
It reminded me of Lloyd Blankfein, then the CEO of Goldman Sachs, claiming that his bank was "doing God's work" during the great financial crisis. The average corporate leader today talks like a game-show host giving a business school commencement speech.
But then I learned a bit more about what Combs will be doing and started taking the whole thing a lot more seriously...
The Strategic Investment Group will invest an initial stake of $10 billion as part of JPM's $1.5 trillion (with a "t") Security and Resiliency Initiative ("SRI"). That is a massive sum of money. It's equal to roughly one-third of the bank's $4.6 trillion in total assets and more than 4 times its shareholders' equity.
The group will invest in companies deemed "critical to the United States' national security." That phrase appears in most White House announcements about the stakes it has taken in public companies like Intel (INTC) and MP Materials (MP).
Combs said the $1.5 trillion would spur "economic growth and innovation to make the world more secure." According to JPMorgan, the group will look for "opportunities that cut across middle-market and large corporate clients in the defense, aerospace, healthcare and energy sectors."
Of course, this list of industries overlaps very well with the one in the Trump administration's November 24 announcement of the Genesis Mission. That's the White House's project to promote investment in the "biotechnology, critical materials, nuclear fission and fusion energy, space exploration, quantum information science, and semiconductors and microelectronics" sectors "to improve our Nation's national, economic, and health security."
The emphasis on security is underscored by the makeup of the SRI's advisory council...
Besides Combs and tech billionaires Michael Dell and Jeff Bezos, it includes:
- Chris Cavoli, retired supreme allied commander Europe and commander of U.S. European Command
- Ann Dunwoody, retired commanding general of U.S. Army Materiel Command
- Jim Farley, president and CEO of Ford Motor (F)
- Robert Gates, former U.S. secretary of defense
- Alex Gorsky, former chairman and CEO of Johnson & Johnson (JNJ)
- Paul Nakasone, retired general, former National Security Agency director and commander of Cybersecurity Command
- Condoleezza Rice, former U.S. secretary of state
- Paul Ryan, partner at Solamere Capital, former speaker of the U.S. House of Representatives
- Phebe Novakovic, chairman and CEO of General Dynamics (GD)
It's a who's who of former high-ranking military, intelligence, business, and political figures. You have to remind yourself that it's not a political action committee... It's a group of people who'll advise the investment of $1.5 trillion into the industries they've served in at the highest levels.
When JPMorgan first announced the SRI on October 13, Dimon's comments sounded like President Donald Trump could have said them:
It has become painfully clear that the United States has allowed itself to become too reliant on unreliable sources of critical minerals, products and manufacturing – all of which are essential for our national security... Our security is predicated on the strength and resiliency of America's economy. America needs more speed and investment. It also needs to remove obstacles that stand in the way: excessive regulations, bureaucratic delay, partisan gridlock and an education system not aligned to the skills we need.
JPMorgan will offer advice, provide financing, and in some cases invest capital in four key areas, which also sound like they were dictated to the bank by Trump:
- Supply Chain and Advanced Manufacturing, including critical minerals, pharmaceutical precursors, and robotics
- Defense and Aerospace, including defense technology, autonomous systems, drones, next-gen connectivity, and secure communications
- Energy Independence and Resilience, including battery storage, grid resilience, and distributed energy
- Frontier and Strategic Technologies, including AI, cybersecurity, and quantum computing
On December 5, I wrote that, despite the Trump administration telling us what industries it's targeting with the Genesis Mission...
There are probably hundreds, if not thousands, of potential targets among those industries. It will take a substantial amount of work to find the best bets among them.
Turns out, JPMorgan has already done plenty of that work by breaking down the four themes into 27 subcategories. The investment bank even gives us a document detailing all of them (available here).
We rarely get this kind of signaling with real money. And we never get it with $1.5 trillion in real money...
It's as though JPMorgan read all the White House announcements and executive orders since Trump took over, thought it sounded good, and decided to make it all come true.
It's as if Jamie Dimon said, "Hey, I know how to make the stock market go up even if the AI bubble bursts. We'll just commit to investing $1.5 trillion into a whole bunch of U.S.-based industrial, health, and energy companies. People will see us doing it, and they'll put their money into those companies, too. And voila, we just added 10 years to the bull market. Also, let's hire Todd Combs from Berkshire Hathaway. When people see Warren Buffett's guy on board, they'll love it. Plus, he's brilliant, so he'll help us make tons of money on our investments."
If you're a subscriber to The Ferris Report, get used to hearing me talk about the Genesis Mission and JPMorgan's Security and Resiliency Initiative. When the biggest bank in the world tells you what it'll do with $1.5 trillion of loans and investments for the next several years, pay attention – especially when the list of targeted industries is exactly what the government wants to favor for domestic expansion.
Like AI itself, it's highly unlikely American investors will be able to avoid the incoming investments into these sectors. Health care and energy are two of the 11 sectors that make up the S&P 500 Index. Defense and aerospace are major pieces of the S&P 500's industrials sector. Those three S&P 500 sectors have a current combined market cap of around $12 trillion.
JPMorgan says it'll invest in "middle-market companies" in addition to the big ones you find in the S&P 500. But remember, the S&P 500 accounts for roughly 80% of the total stock market cap. So those middle-market companies won't increase the size of those three sectors by much, probably less than $1 trillion.
In other words, JPMorgan alone will invest an amount equivalent to roughly 11% to 12% of those three sectors. That'll likely attract at least that much more. That's a combined investment of maybe 22% to 24% of the three sectors' current size headed their way over the next several years. This much money is bound to push some stock prices up.
In his comments about SRI, Dimon also said that "America needs more speed and investment."
So he'll do what he can to influence the government to get out of the way and let him push as much capital into those industries as fast as he responsibly can.
The range of outcomes for you and other investors is somewhere between good and awesome...
Most of us hold the S&P 500 in our retirement accounts. So a good portion of that $1.5 trillion is aimed right at your 401(k) over the next several years.
JPMorgan will also make venture-capital investments and loans, so not all of its portfolio will go straight into equity investments. But that hardly matters. Money going into those sectors will attract other money and lots of it, not just domestically but from all over the world.
And the easiest thing for all that capital to do will be to buy U.S. stocks in those sectors. Get ready for the industrial, health care, and energy sectors to light up the S&P 500.
JPMorgan's energy-investment targets aren't the traditional ones we associate with Trump. We know the president loves fossil fuels. He has frequently spoken of "beautiful clean coal" in his support of the coal-mining industry.
The SRI will target "energy independence and resilience" by looking for opportunities in nuclear energy, grid resilience, distributed energy, battery storage, and solar. That doesn't sound like oil and gas will get much love. But we know Trump loves them, so I'm sure plenty of capital is headed their way, too.
Maybe I should just rename The Ferris Report and call it "The Genesis Mission Investor" or the "JPM SRI Investor"... It'll be hard to pay much attention to other industries next year as I hunt for opportunities to share with readers.
In my December 5 Digest, I suggested that I was late to the party...
Though I'd anticipated a move toward ideologically driven capital allocation a few years ago, I said I hadn't done enough to exploit the opportunity.
But an investor as knowledgeable and connected as Todd Combs has only just begun to invest in this idea. That means you and I have plenty of time to exploit the trend and invest in Trump's targets.
The implications of more government involvement in the economy are mixed at best and probably not great for the long term... But you and I don't have our hands on those levers of power. It's like the country singer Ricky Skaggs says, "You can't control the wind, but you can adjust the sail."
Todd Combs has seen a huge change in the wind and made a correspondingly huge adjustment to his sails. Warren Buffett hired Combs in 2010 to help manage Berkshire's investments. Before the recent announcement, it looked like he'd never leave the company. Berkshire even appointed him CEO of Geico, the company's wholly owned insurance subsidiary, in 2020.
Combs also joined JPMorgan's board of directors in 2016. Berkshire started buying shares in the bank in 2018, at one point owning as many as 60 million shares before selling the entire position in 2020. Combs kept his board seat for another five years, even though Berkshire had sold the stock. Maybe he always had his eye on JPMorgan...
Smart guy. It's a bigger opportunity than hanging around Berkshire and trying to move the needle on its $1 trillion market cap. He's under no such burden at JPMorgan, where he's no longer a board member.
Other changes at Berkshire Hathaway also seem to be marking a transition...
The same press release that reported Combs' departure also announced that Berkshire's chief financial officer of the last 40 years, Marc Hamburg, is retiring.
And of course we all know Warren Buffett is retiring in a couple weeks after running the company for 60 years.
That's three very important folks, including the man without whom none of it would have happened.
Buffett is 95 years old, so it's no surprise he's giving up the CEO job, though he will remain as chairman.
With Buffett giving up the top job and Combs and Hamburg out of the picture... well, who knows what the future of Berkshire holds?
Berkshire is a conglomerate, made up of hundreds of smaller businesses in a wide variety of industries. When conglomerates get big enough, shareholders often press the company to break up and let the better businesses attract the investors and get the valuations they deserve.
Berkshire has four large groups: insurance, utilities, railroads and manufacturing, and service and retail. It could probably spin off dozens of independent companies if it wanted to.
Buffett has consistently opposed the idea of breaking up Berkshire... But before very much longer, someone else will be making that call.
I suspect things will get interesting after that.
New 52-week highs (as of 12/18/25): Valterra Platinum (ANGPY), Barrick Mining (B), Alpha Architect 1-3 Month Box Fund (BOXX), Novartis (NVS), New York Times (NYT), abrdn Physical Palladium Shares Fund (PALL), and Royal Gold (RGLD).
In today's mailbag, more of your feedback on the demand for skilled labor in America (and the thought of student-loan forgiveness as part of the solution)... Do you have a comment or question? As always, e-mail us at feedback@stansberryresearch.com.
"David M. wrote: 'We should not reward someone for making a major mistake in life by asking the taxpayers to bail them out. When you do something stupid, you need to feel the pain, learn from your error and work hard to correct the situation.'
"I agree with David M. but unfortunately our bankruptcy laws do not." – Subscriber Peggy S.
"To David M. and maybe some others.
"I was brief in my feedback. I was thinking that the college loans might be forgiven, as they were rampantly being forgiven by the last administration and somewhat with the current administration anyway. I was hoping that a condition of this forgiveness would require that a new loan for trade skills successfully completed, which led to gainful employment and regular payments, would be required to forgive the old one. Personally, I never had a student loan. If I did, I would have paid it.
"Also, I have only made one mistake. It was the time I thought I made a mistake, but I really didn't. Mistakes are learning experiences. We all need them, but they don't need to haunt us for the rest of our lives as long as we strive to overcome them." – Subscriber Tim L.
"This is a wonderful article about the pit falls of higher learning when more than 50% do not pursue a career in the field they are getting a degree in. I am 100% behind getting the newest generation out of college and into the trades. We need mechanics, plumbers, electricians, etc., since most of the kids today likely can't change a tire on the vehicle they drive.
"What I don't agree with is [student-loan forgiveness]. I forgave vacations, new cars, dining out, etc., so that I could send my kids to college without debt. A generation of parents who were responsible who sacrificed will now get to foot the bill to forgive student loans. Who do you think is going to pay for that enormous debt? Right, those taxpayers get another bill. I don't think so!" – Subscriber Dave C.
"AI has undoubtedly displaced many so-called white-collar workers, especially those in the technology industry. And Doc is right that 'the most profound bottleneck of the entire American industrial renaissance is the shortage of skilled human capital.' And it is true that 'by their very nature, these jobs cannot be displaced by AI.'
"But I would respectively suggest that these jobs can and will be displaced by another technology – robotics. It will not happen next year, and there is a large, current need for blue-collar workers to build all the new factories and data centers. But there is no future for our youth in those jobs either." – Subscriber Nick A.
"I missed Doc's letter this week on needing skilled labor. This month marks 30 years for us to be in business. I'm an Alliance member and agree that Doc is 100% correct. When we started out in 1995 it was just the two of us striving to carve out a piece of the American pie. Now God has blessed us to have three locations: Vivian, Louisiana, Little Rock, Arkansas, and Houston. We have 85-95 employees and need more but can't find them. We are basically low voltage electricians for installing Building Automation Systems, CCTV, [Fire Alarm], and Security Systems.
"Our plan for this coming year is to develop a scholarship program for our local high school to try and encourage high school seniors to look at going to some kind of technical school/program. Our hope is there are kids out there who would consider a technical program if they had some help with the cost.
"We as companies need to reach out to these kids to find ways to help move them in our direction. We need good, smart, hardworking young employees. We too have guys that are making $80K plus and we are not union. We have 401K matching, good paid insurance, vacation and holiday pay. And still struggle to find workers. We are blessed with more work than we have ever had, and yet can't find good, trained people or just good people for us to train.
"To put it in a nutshell, we as parents have done this, because we have been telling our children for years now you have to go to college to get a good career. We have lost our craftsmen and if we don't start doing something about it rather quickly, we are going to be in trouble.
"Robots didn't build America. They can build widgets, but not America." – Stansberry Alliance member J.J.
Good investing,
Dan Ferris
Medford, Oregon
December 19, 2025
