1,000-To-1: The Number That Changed The Story For These 2 Stocks

The smallest sleeve in my portfolio is the one I think about most, as weird as that may sound. Market infrastructure (read: stock exchanges) is under 9% of my portfolio and consists of two names. Miami International Holdings ( MIAX ) at roughly 5.5% and CME Group ( CME ) at roughly 3.4% . That's almost a rounding error in light of my investments in LandBridge ( LB ) and Old Dominion Freight Line ( ODFL ). But it is the only part of the book that is supposed to work when the rest of it does not. That was always the point, more or less, of course. Everything else I own is a bet on the physical economy. Land, rails, engines, warehouses, barrels of oil. A lot of it is running on the same idea, which is that demand for physical things is colliding with infrastructure built for a smaller world. I call it Physical Stagflation, and I have been writing about it for years. The exchanges were my counterweight. They earn on volume and volatility, and volatility tends to arrive on exactly the days my industrials are getting hit. When everything else in the book is having a terrible week, the exchanges are busy. That is the job. They also tend to come with high margins and wide moats. As many of you know, I bought MIAX earlier this year because I thought the market had not yet worked out what it was buying. A high-margin options exchange with four licenses, a genuine technology advantage, and a growth runway that most people were pricing as a small-cap curiosity. CME I have owned for years, have written about repeatedly, and have parked in my dividend growth model portfolio as a permanent holding. Then June happened, and my "ballast" turned out to be the least stable thing I own. Ironic, isn't it? CME went from an all-time high above $329 in March to roughly $218 by late June. A third of the market cap, gone, in a business whose volumes were growing. The exchanges fell in near lockstep across the sector. Whatever the counterweight was supposed to do, it did not do it. Again, that was quite ironic (and frustrating), as volatility, in general, was high. Now, that is not a complaint. That is the setup. Because the market spent June answering a question, and both companies have now reported quarters that say the answer was wrong. CME reported July 22. MIAX reported August 5. I have read both transcripts twice, and this piece is my honest update on what they said, what I think the market missed, and where I could still be wrong. There is one more reason I wanted to write these two together. They are the same kind of business and complete opposites on the thing my readers ask me about most. One of them returned $1.2 billion to shareholders in a single quarter and yields north of 4%. The other has never paid a dividend and should not start. Same sector, same moat characteristics, totally different contract with the shareholder. So let's get into it.