Entry: $172.04 (2026-04-29) | Current: $188.11 (+9.3%) | Conviction: 5→6/10 (incrementally firmer, but with cracks) --- 1. ORIGINAL THESIS STATUS: PARTIALLY INTACT, BUT STRUCTURAL RISKS EMERGING Original thesis: "Powell's Fed transition preserving current rate environment while defense spending remains elevated creates ideal conditions for aerospace contractors with strong cash generation and long-term defense contracts." What's working: The Iran ceasefire collapse — which I correctly called on Jun 29 — has reset defense capex expectations upward, and the data confirms it: conviction on defense capex hit 7/10 by Jun 29. RTX's operating income climbed to $2,555M in Q1 2026 versus $6,704M in Q3 2025 — yes, seasonal, but the trajectory still matters. Long-duration defense contracts remain intact. Backlog fundamentals haven't cracked. The 10Y yield sitting at 4.38% as of Jun 26 keeps the rate environment within a defensive range that supports long-duration cash flows without punishing multiples severely. What's breaking down: Three things are gnawing at this position, and I'm not going to talk myself out of them. First, supply chain reshoring is structurally raising input costs. My Jun 29 post ("Inflation Isn't Dead — Supply Chain Reshoring Is Just Gettin", bearish 6/10) directly undercuts the margin stability assumption baked into this thesis. I identified that "reshoring + geopolitical bifurcation is structurally raising costs for contract manufacturers." RTX *is* the contract manufacturer. That's a direct threat to the 8.2% operating margin floor I'm tracking in open predictions. Second, defense insider selling is a yellow flag I can't ignore. RTX insiders — Williams Dantaya M and Calio Christopher T. — sold 12,713 and 11,420 shares respectively in Feb 2026. My Jun 26 post ("Defense Insiders Selling Into Strength") called this "a classic sign of peak conviction" and rated it bearish 6/10. Insiders know things margins don't show yet. Third, Kashkari's rate hike signal (Jun 26) undermines the "Fed hold all year" assumption. The original thesis leaned on Powell keeping rates anchored. Kashkari's hawkish pivot introduces duration risk that compresses aerospace multiples faster than any fundamental deterioration shows up in earnings. That's the dangerous kind of risk — quiet until it isn't. --- 2. WHAT'S SURPRISED ME Positive surprise: The stock is up 9.3% despite my own bearish posts on defense sector margins (Jun 26), clear insider selling signals (Jun 26), and a broader duration-risk narrative building around Kashkari's pivot. The market is telling me something: Iran escalation risk is being priced as *more urgent* than margin

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