Signal Mutation! "HALO Assets" Suddenly Explode! Under Dual Anxiety, Who Deserves Heavy Position?

Under the dual influence of geopolitical tensions and AI disruption fears, “light asset” growth stocks have recently been out of favor in the market, while “HALO assets” have attracted capital, leading to strength in sectors such as resources, railways, ports, transportation, machinery, and utilities.

“HALO assets,” short for “Heavy Asset, Low Obsolescence,” refer to companies with heavy assets and low淘汰率 characteristics. This concept was first proposed by investment firm Ritholtz’s Josh Brown in early February 2026 and has since been widely adopted by Wall Street investment banks like Morgan Stanley and Goldman Sachs.

In fact, “HALO assets” have long been a key focus of value investing. The “20 years, 2000 times” growth achieved by Chinese value investor Zhang Yao is based on this logic. Companies like China Shenhua, Shaanxi Coal Industry, China Investment Power, and CNOOC are all “HALO assets.” Similarly, Warren Buffett’s portfolio includes companies in oil, electricity, and railway industries that fit this profile. Many resource giants, such as ExxonMobil’s predecessor, were listed as early as 1920, surviving over a century through various economic cycles and major events, with their stock prices continually reaching new highs.

For investors, companies with heavy assets in low-competition fields may not have explosive growth, but they are characterized by clarity and predictability, making them suitable for heavy holdings. Buying at extremely low valuations during deep downturns can even create investment miracles, as exemplified by Zhang Yao’s strategic approach.

However, if one interprets this as a sector-based approach and buys “HALO assets” at high valuations, it will inevitably take years to digest the valuation bubble. These are never sectors but assets requiring extreme patience. When investing, attention should be paid to valuation and shareholder returns.

Dual anxieties are intensifying

Geopolitical tensions and unilateralism have led each country to place unprecedented importance on resources, critical capacities, and infrastructure.

In an era of geopolitical instability and de-globalization, the criteria for evaluating a great power have shifted profoundly. During globalization, per capita GDP, corporate profits, and consumption levels were indicators of national strength. However, in an age of increasing geopolitical conflicts, technological independence, economic resilience, industrial scale, and critical capacity metrics are gaining prominence. Heavy assets form the backbone of a country’s economy and are vital to national livelihood. The long-term presence of geopolitical tensions and de-globalization has prompted capital markets to reassess heavy asset companies.

Meanwhile, the rapid development of AI has caused tech giants to fall into a state of disruption anxiety. Counter-AI bets have made tangible assets companies a focus of capital attention.

Internet “prophet” Kevin Kelly, in his new book “The World After 5000 Days,” states that throughout the history of disruptive technologies, dominant players in one era have never continued to dominate on the next platform. Once, many companies tried to compete with IBM in computer manufacturing, developing a series of products, but none succeeded. There’s even a joke: “Opposing IBM, let alone succeed.”

Yet, seemingly overnight, IBM also lost its throne. The computer era shifted from hardware focus to software. Companies that excelled in software development replaced hardware giants. Microsoft, which created Windows, achieved victory.

The new round of competition continued, with many software firms attempting to challenge Microsoft with their own operating systems, but most failed because Microsoft was too strong. Who ultimately dethroned Microsoft? The answer is the search engine company—Google. Instead of developing an operating system, Google expanded the realm of search engines.

Later, others tried to compete with Google in search, but failed again. The new king beyond Google is Facebook, a social media company. Today, thousands of companies compete with Facebook in social media, but few succeed. The next winner is likely to be an AR company.

Kevin Kelly says that the strongest companies of each era—from IBM to Microsoft, then Google and Facebook—may all aim to lead in AR, but history shows no company can dominate the next era forever. Their success often becomes their greatest constraint.

“HALO assets” have always existed

“HALO assets” have always been around. Due to their simplicity, low valuation, high dividends, strong cash flow, and sustainability, they are favored by value investors. They may not be explosive, but they offer certainty in “buying to win,” encouraging heavy holdings. The key to investing is avoiding large losses; compound interest can then work its long-term magic. Under conditions of valuation and shareholder culture constraints, “HALO assets” are undoubtedly a “bottomed” investment.

Over the past decade, “HALO assets” have been relatively quiet, never in the spotlight, yet their gains have been substantial. China Shenhua has increased sixfold, Shaanxi Coal Industry 8.7 times, comparable to tech stocks; China Yangtze Power and China Investment Power have doubled or more, with annualized returns over 10%. Machinery companies like Anhui Heli and Zhongchuang Zhiling have tripled over ten years; basic chemical companies like Zhengdan have more than doubled.

Performance is the main driver of these companies’ growth. For example, Yuexiu Expressway’s net profit attributable to shareholders was 319 million yuan in 2014 and 1.562 billion yuan in 2024, nearly quadrupling over ten years. Sheneng Power’s net profit was 2.061 billion yuan in 2014 and 3.944 billion yuan in 2024, nearly doubling.

Currently, A-shares have a dividend yield exceeding 3%, and “HALO assets” with valuations below 20 times remain abundant. Investing in “HALO assets” requires strict attention to valuation and shareholder return culture. High-valuation “HALO assets” may take many years to recoup investment; investors who bought PetroChina above 40 yuan in 2007 have deep experience. Some companies lack a shareholder return culture, risking holding a “golden rice bowl” but not benefiting from dividends. Dividends reflect both cash flow quality and shareholder return culture.

Global “HALO” trading sentiment remains high: the premium for pure “light asset growth narratives” is being systematically compressed. Conversely, traditional industry leaders with high physical barriers, tangible assets (such as upstream resources, critical capacities, infrastructure), and ample cash flow are regaining strategic overweights as “ultimate safe havens” against inflation and technological disruption.