Look around whatever room you are in right now. The chair, the screen, the clothes, the coffee mug. Wasif Latif likes to point out that all of it came from the ground.
It is a simple point. Latif, Co-Founder, President, and Chief Investment Officer of Sarmaya Partners, says it’s also one the market spent more than a decade forgetting.
“The world was lulled into thinking that we don’t need these ugly, dirty, grimy commodities anymore,” he told host Evan Delaune on Y’all Street. “That we’re in this post-physical world, it’s all digital.”
Latif thinks that era is ending. His firm’s thesis, which he calls the Return to Tangibles, holds that energy, metals, commodities, and physical infrastructure are becoming the main drivers of the global economy again. He reached that view after nearly 30 years inside some of the biggest institutions in finance.
Learning the Rules
Latif started at Deutsche Bank in New York right out of graduate school. He learned how to analyze stocks and bonds, build risk-based portfolios, and trade currency forwards to hedge client accounts. He then spent 13 years at USAA in San Antonio, where he managed equity and multi-asset mutual funds, ran part of the company’s insurance pool, and helped build its ETF platform.
“The world is returning to tangibles, whether the world likes it or not.”
— Wasif Latif
That experience showed him how the industry works, including the incentives. Most portfolio managers are hired to fit a specific style box, such as U.S. large-cap, and are paid to beat that benchmark. “In a year where the index is down 20 percent, and you’re down 18,” he said, that counts as a great year. It is a rational system for institutions allocating across asset classes. But Latif believes it pushes most managers to own roughly the same things.
When he left USAA and rolled his 401(k) into a self-directed IRA, he had to decide how to manage his own money. He found he did not care about a benchmark at all. He cared about the outcome. That question led to Sarmaya Partners, which he co-founded with his partner, Carl.
Themes That Last a Decade
Latif’s approach centers on what he calls secular themes, market regimes that run seven to twelve years. He walked through the history: oil and gold in the 1970s, Japan in the 1980s, internet stocks in the 1990s, emerging markets and commodities in the 2000s, and mega-cap tech after the financial crisis.
Two lessons stand out. “No secular theme lasts forever,” he said. And the next one usually starts in the shadow of the last, before the market notices.
The tech era, in his view, was built on cheap money and cheap energy. Near-zero interest rates rewarded long-duration growth stocks, and the shale oil bust kept energy cheap. Then came 2020. Stimulus checks and Fed easing put money directly into people’s accounts, broken supply chains limited what they could buy, and inflation followed. Meanwhile, energy and mining stocks were priced, he said, “as if we never needed that stuff.”
That summer, Latif concluded that a new commodity supercycle had begun.
A Series of Catalysts
Since then, he has watched one catalyst after another reinforce the thesis. When the U.S. and its allies froze Russia’s currency reserves in 2022, it sent “a message to foe and friend alike” that dollar holdings could be taken away. Central bank gold buying jumped that year and has stayed high. Latif does not expect the world to abandon the dollar, but he does expect “a good old-fashioned dollar bear market.”
Tariffs added more inflationary pressure, and the war with Iran pushed energy higher. But the catalyst Latif finds most interesting is AI. Most investors see it as a technology story. He sees a physical one, because data centers run on copper, natural gas, power, and uranium. He calls the AI trade a vortex: it started with semiconductors and keeps pulling more of the market in with it.
“You have to be good, and you have to be right, but you have to be different.”
— Wasif Latif
He also points to forces that get less attention: rearmament, friend-shoring that duplicates supply chains across competing blocs, and developed-world debt levels he sees as unsustainable. If governments eventually inflate their way out, he says, currencies decline, and when currencies decline, commodities do well. He jokes with his team that it’s time to get the bell-bottoms out.
Putting it in a Portfolio
Sarmaya expresses the thesis through LENS, an actively managed ETF that Latif runs without a benchmark. It is primarily an equity portfolio, holding oil majors, oil service firms, and producers of natural gas, uranium, copper, platinum, and iron ore, as well as gold and silver miners. Latif prefers companies over raw commodities because their cash flow and operating leverage can outperform over a full cycle. A small position in physical gold and silver serves as what he calls the portfolio’s anchor.
When Sarmaya launched an active ETF, friends warned him the world would see his holdings every day. Latif welcomed it. “You have to be good, and you have to be right,” he said, “but you have to be different.”
Watch Wasif Latif explain the Return to Tangibles thesis on Episode 52 of Y’all Street.
