A new acronym is making the rounds in investment circles:
HALO.
HALO doesn’t refer to a video game, or to the ring over an angel’s head.
It stands for Heavy Asset, Low Obsolescence. The idea is simple but powerful: invest in companies with essential assets that won’t go out of style.
Pipelines. Transmission lines. Rail networks. Power infrastructure. In other words, physical systems that are expensive to build, nearly impossible to replicate, and essential to modern life.
You can’t disrupt a railroad with an app. And you can’t replace a transmission grid with artificial intelligence or a meme coin.
That’s the pitch. And to be fair — it’s very compelling.
Why HALO Stocks Have Been Winning
Heavy-asset businesses tend to have:
- Vast barriers to entry.
- Limited competition.
- Predictable cash flows.
- Long asset lifespans.
- Pricing power during inflationary times.
Look at companies like Union Pacific Railroad or NextEra Energy. Railroads own thousands of miles of track. Utilities control regional power grids. Midstream energy firms operate pipelines that took decades and billions of dollars to build.
And because these assets are so difficult to replace, and so critical to economic activity and economic well-being, they tend to generate durable earnings.
In a world obsessed with disruption — especially the disruptive power of Artificial Intelligence — HALO companies represent something increasingly valuable:
Durability, scarcity, and staying power.
So what’s the problem?
The Problem: Now Everyone Loves HALO
When an investment strategy becomes obvious and “consensus,” it gets expensive.
Infrastructure, utilities, and asset-heavy industrial firms have attracted enormous capital recently — especially as investors seek safety from tech volatility.
The result is that valuations have crept higher. Let me show you a few examples:
1. Union Pacific Railroad (UNP)
Union Pacific owns one of the largest rail networks in North America and embodies the HALO idea: massive tangible infrastructure that’s expensive and time-consuming to replace.
Rail networks have traditionally been bedrock holdings in defensive portfolios. But multiple valuation models suggest UNP is trading well above its intrinsic value. For example, based on its P/E, P/S, and EV/EBITDA adjusted for growth, it’s already 30%+ overvalued.
Railroads once traded at modest multiples reflecting stable cash flows and limited growth. But today’s elevated multiples mean much of that future stability is already priced in — leaving less room for future returns.
2. Exxon Mobil Corporation (XOM)
Integrated oil & gas majors like Exxon have vast physical assets including refineries, pipelines, and platforms. Those assets are literally impossible to replicate overnight. That fits the HALO criteria of heavy, long-lived infrastructure.
But based on fundamentals like cash flow and earnings expectations, Exxon Mobil is trading at levels that are more than 50% higher than its intrinsic value.
This suggests too much optimism is being baked into its price relative to its long-term prospects.
3. Utility and Infrastructure Stocks
Many major utility and infrastructure stocks are earning valuation premiums well above historical levels, even where the fundamentals don’t justify them. In fact, they’re trading at levels that used to be reserved for growth companies.
Historically, regulated utilities traded around a 16x to 18x P/E. Today, many trade in the 20s. That means they’re pricing in growth and stability that’s far from guaranteed in a rising-rate environment.
When investors pile into heavy-asset names for perceived stability, they bid up prices — and compress future returns. Sure, you might still earn a small gain. But not the kind of big, explosive returns that tend to come earlier in a company’s lifecycle.
Which raises an intriguing idea…
What If You Could Invest in HALO Companies — Before They Go Public?
Instead of buying established HALO stocks, what if you bought HALO startups?
Think about it:
- Before a pipeline giant controlled thousands of miles of energy infrastructure, it was seeking financing for its first project.
- Before a transmission operator became a multi-billion-dollar utility, it was a regional grid builder.
- Before a rail consolidator dominated freight corridors, it was acquiring overlooked lines at bargain prices.
Heavy asset, low obsolescence businesses don’t start out as huge, cash-flowing enterprise. They start small. And since they need capital to get started, investors can get in at ground-floor prices.
That’s why, at Crowdability, we’re starting to do research on private companies building:
- Next-generation power infrastructure.
- Data-center real estate for AI.
- Water treatment and waste management systems.
- Energy storage networks.
- Industrial logistics hubs.
These aren’t software or AI companies. They’re physical, asset-backed businesses. And unlike publicly traded HALO stocks, they’re often valued based on early-stage metrics, not mature earnings multiples.
Of course, asset-heavy startups aren’t risk-free. For example, there’s financing risk and construction risk, and execution is critical.
But the combination of tangible assets and low technological obsolescence can create a powerful risk-reward profile — especially when valuations are still reasonable.
The Smart Rotation May Be Private
The HALO thesis makes sense. But when an investment thesis becomes consensus, future returns often shrink.
This is why the next great rotation might not be into HALO stocks, but HALO startups.
And that’s why, this year, we plan to bring you several HALO startups to review.
So stay tuned. Because if HALO stocks represent durability, HALO startups could represent durability — plus big upside.
Happy Investing,
Matthew Milner
Founder
Crowdability.com
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