The sequential jump in $ORCL backlog and their multi year guidance for cloud segment is just.. nuts.

The fact that this happened right after NBIS <> MSFT $18bn deal, and followed by CRWV’s positive comments about market demand for computing power being "massive, astonishing, and unrelenting” with current demand representing a “demand inflection point”, is driving a NVDA moment for AI infrastructure plays.

Interesting OpenAI chart showing what customers use ChatGPT for. Seems like 70-80% of these tasks could just as well be handled by an intelligent EA.

Reminds me of how early we are in this journey; if AGI is truly achievable, then we've barely begun to tap into what AI can unlock.

It's very exciting to imagine that the boundaries of human knowledge could expand at a cadence we’ve never seen before, over the next few decades.

Think of the medical breakthroughs waiting to be discovered, the uncharted territories in space and sea ready to be explored, the new school of thoughts yet to be written, even new planets we may one day call home.

There's no better time to dream a little bigger, to adopt a Panglossian outlook on the future.

Putting All Your Eggs In One Basket, And Then Watching That Basket Very Carefully

Something I wish I had learned more about before leaving an institution to manage my own capital is execution —specifically sizing.

Hence, I’m tracking my trade execution improvement by analyzing my slugging ratio and batting average.

Slugging is how much larger your winners are versus your losers; batting is your average win rate. Simple concepts, but it helps me to compartmentalise the learning process.

Basically, when you have a winning idea, do you have the conviction to load the boat? If not, it doesn't matter how thorough your research is or how many experts you consult — if your best trade only nets your entire book an inconsequential gain. Similarly, if a trade turns against you, can you recognize it quickly and take a minimal loss, or do you cling to your champion idea with mental gymnastics?

Not all ideas will be winners, and that is ok! What matters is having the humility to tell the difference, knowing when an idea needs more work, and not over-sizing in those cases.

Over the past year, my batting average has been poor due to the macro volatility, which caused my mental capital to suffer (e.g., cutting would-be winners too soon just because they turned red due to lack of conviction, or spraying over-sized bets on loose ideas).

My slugging ratio was my saving grace, allowing me to generate a positive YTD% even with <50% win-rate. Yet, attempting to raise my win rate would likely mean sacrificing my slugging ratio — by taking profits too early to secure frequent but smaller wins.

So would I trade my slugging for a better batting? Ultimately it depends on what type of investor you are; personally I prefer home runs and am willing to sacrifice consistency, hence probably not.

This is also why winning trades in mega-caps like BABA and GOOG are so attractive to me. These mega-cap trades are easier to research and more correlated to market benchmarks (boosting batting), while being more predictable and less volatile (improving slugging by allowing you to easily ride the trend) — all without having to worry about liquidity constraints or spreads. You can have your cake and eat it too with these trades!

Sharing as I think too many people focus excessively on batting average and pay too little attention to slugging ratio, when the reverse should be true.

So that our winners really count, and losers only graze us.