TweeterProMax

The markets NUKED again and X will have you believe AI will be shut down by the Democrats I don't see the end of AI at all, I see an IRRATIONAL selloff In these moments it's best to RELAX and take a LOOK at the data Here's my thoughts on macro, sentiment and midterms: MIDTERMS: The big change obviously is the Blue Tsunami and the fear of dems wanting to shutdown AI and stop the build out of data centers. While this may be true of the extreme dems, it's not the reality of the majority. What the dems want are data center companies to support the towns they build in, pay for their own power, and not get subsidized. That's reasonable, and a lot of it is already happening Data centers are the only growing construction sector in the US, bringing in billions in tax revenue and hundreds of thousands of jobs. Democrats aren't going to throw that away. They'll flex their power and use it as a bargaining chip to make their share and HOPEFULLY create better conditions for their citizens Some projects may get delayed, but hyperscalers and other companies can work around that by building in other states, paying for onsite power, or paying the towns. The cost to build will now go up though it's very likely companies that already have power and permits just gained even more pricing power People aren't going to use AI less because Democrats won. The demand is still there, so the revenue is still there, and companies still need compute. We have not overbuilt like 1999, and this is not a 2021 bubble with no users/revenue. We're still underbuilding versus demand SENTIMENT: Today was also a deleveraging event combined with programmatic selling. That's what happens when markets move this fast. It triggers even more selling The VIX spiked 69% at the high today and as the saying goes, when the VIX is high, it's time to BUY. That doesn't mean we already hit the bottom, but things are clearly getting very irrational at this point This is happening at multi-decade lows in valuations for a lot of these companies, especially the semis. Buying great companies at great multiples during extreme fear is 99% of the time a winning strategy (this is exactly why I bought more $NVDA today). MACRO: While prices have tanked over the last couple of weeks, long-term yields, oil, and inflation expectations have come down too, all while the economy and earnings have shown strength. Is this really how a stock market meltdown should form? We use a propriety data set called The Milk Road Macro Index, which combines more than 20 indicators into one signal for when to take risk or protect capital. It has been calling for RISK-OFF since early September. This allowed our analysts to raise some cash during September (thankfully) This week, it has sharply turned the other way and jumped out of risk-off and into caution, which tells me that once this irrational sentiment clears, the underlying macro has actually improved significantly. While it's still not hitting full Risk-on, it could hit it any day now I have no idea how long this meltdown will take or if it gets worse from here. But we have an improving macro backdrop and an irrational selloff from a specific event that is now behind us. These are the moments that our process says to buy, so that's exactly what I'm doing today. I'm buying great companies at low multiples during peak fear. While its super painful to do right now, it's almost always the best possible decision you can look back on in 6-12months If you want to see how I'm allocating through this, my real-time portfolio is here: link.milkroad.com/t5837z