Cold CPI; some fuel to change sentiments. Added more $U @ $21.3 and $BLDR @ $132. Don’t let Trump on TV tonight please

Adding a long position on $INTC @ $22.61 in the overnight market. Prob gonna hold this position for the short-mid term.

Very bullish on Lip-bu Tan. There’s probably only a few people in the world that can turnaround INTC, and one of them is probably him. Got to read about him in his turnaround of Cadence Design Systems ($CDNS), and remember thinking to myself how lucky would I be if I could go back a decade to bet on him. Now there’s a chance, and some regulatory + political tailwinds. So r/r for a long seems right to me.

I view $INTC as a very binary bet. $INTC shouldn’t be priced based on its NTM or even next 2 years earnings, but on the success rate of a turnaround.

If LBT succeeds, and $INTC is able to win back share in CPU + gain competitiveness in GPU + develop a reputable foundry, $INTC is easily @ $40-$60. If he fails, $INTC prob hangs around $15-$20. Potential acquisition probably provides a safe floor, and even Pat’s aimless leadership + expulsion can’t get it below $20.

(Success % x midpoint price if success) + (failure % x midpoint price if fails) = $INTC current price.

15% x $50 + 85% x $17.5. We can argue about the price if success and price if failure, but this is how I’m thinking about it.

Based on this napkin maths, market probably pricing the news as a ~15% successful turnaround. Our job here is to decide whether the success rate is likely higher than 15% or not.

Given LBT’s wide industry connections (helps partnerships), reputation (helps morale), technical expertise and turnaround experience (helps investors’ sentiments), I think it’s worth a bet. I don’t think it will be easy, in fact I think there will be a lot of resistance both internally and externally, but I like the r/r.

Very speculative in nature of course (he hasn’t even taken over yet), but with these types of binary bets, I find that it’s better to build a position early (when market is already pricing in a 85% failure) and cut/add more if incremental info comes out to prove us wrong/right, than to enter only when information comes out to prove success > 50%.

Just my 2c on how I view such bets. And given LBT’s VC background, might be what he’s thinking too to risk his entire legacy on this high-profile turnaround at such an advanced age. (eg If he fails, it’s not him, it’s the company)

Friday gave us the ST bounce we were looking for in U.S. stocks. However, I don’t think that the worst is over wrt tariffs and Trump-uncertainty.

Hence I’ve gone SHORT on $TSLA and $PLTR as a hedge to my U.S. longs ($VST $BLDR $INTC $U). Exited $HOOD long as I decided momo growth stocks are still kinda risky to be in.

I view $TSLA as a real-time Trump <> market frustration meter; one of the best way to make Trump cave is through selling down $TSLA price.

Holding $FIVE short into their print tmr morning at 4:30am.

They have already reported their holiday sales # from Nov - Jan, which came in at the high end of their P.Q. guidance. Holiday sales makes up ~86% of their Q4'25 sales, and St is also already on the high end of FIVE guidance for Q4'25, so I think the print risk is small. Guess the only upside risk might come from N.Q., but I think it’ll be meh in this consumer climate.

Will add to the short if market gives a chance post-print. Still very bearish on the company in the mid term. Probably one of the few companies that face the perfect storm of tariffs and breakdown of global trade, recession, labor shortage from anti-immigration, and Temu e-commerce threat.

Not confident on the recent mgmt change too as new CEO was previously in-charge of 2 companies that went bankrupt; doesn’t spark joy. Dont think they can turn around this ship as they are still opening new stores despite downwards trending new store productivity, I think cannibalization is high. Idk, I think their entire business model is built on stilts. They’ll prob end up as predominantly discount snacks/candy/necessities stores like DG or DLTR, but with significantly less scale and distribution efficiencies. May be overly bearish, but I do have a bias against this company (hate it).

https://www.reuters.com/technology/intels-new-ceo-plots-overhaul-manufacturing-ai-operations-2025-03-17/

$INTC LBT not wasting any time

Also added $PDD long @ $125.9 to play for their earnings Thursday.

Bit of a laggard in this China run-up (maybe because of the PTSD from their prev quarter mess), but with the shift towards “allowing founders to get rich first” by the CCP and the consumption-based stimulus launched last weekend that’s targeted at low income cities/HHs — which PDD dominates, I think r/r makes sense for a long.

Shifted $1810.HK long and trimmed some $BABA to build a larger $PDD allocation; too cheap to ignore

Made use of the last few days’ bounce to build my shorts against $PLTR $TSLA. Avg cost basis is ~$83.83 and $240.62 respectively now. Shorted $NVDA @ $118.74 too.

Feeling quite comfy with the overall portfolio positioning now. General positioning is:

LONG China ($BABA $PDD $9880.HK), LONG outsized r/r turnaround bets ($INTC $U)

SHORT 2024 crowded longs with rising political and competition risk that are also at risk of a momentum unwind ($TSLA $PLTR $NVDA), and $FIVE which I explained yesterday

Cut $PDD, miss on rev but beat on EPS.

I don’t get nor like the top line miss, since other operators were reporting improvements in top line. Limiting China positions to $BABA and $9880.HK for now

On $FIVE, I actually don’t understand why it’s up 10% off that earnings. Yes they beat by a small magnitude on all metrics and Q1 guidance, but all of the fundamental issues of the company still exist.

Their attempt to branch into >$5 products is not working, and store growth is also slowing. Leadership also sounds clueless and rambles on aimlessly when answering questions…

I may be wrong but I’m staying short. Risk case is market expectations are already so low, that even regaining some minor form of stability for the company is being perceived as “large improvements”.

Getting squeezed on these shorts is painful. We were right on the incoming ST bounce (catalyst path for longs had higher r/r, and trump did eventually walked back on tariffs as we expected), but wrong on the magnitude of the bounce; execution of the trade could have been so much better.

Additionally because of the bounce, some capital flow has also reversed from China, which led to pullbacks on our longs. Overall, I think areas of improvement is 1) better understanding what is my net exposure and key risks, as sometimes long + short exposure = risk^2 — e.g. being long China/short US momo stocks makes the portfolio very susceptible to flow reversal, and 2) when it comes to a “flows” reversal trade, the magnitude can be much more sizeable than my original expectation due to squeezes. We should have pared our shorts more cautiously as the market has already corrected significantly and given the long-favoured catalyst path, and been more aggressive in holding our $HOOD long.

Gave up some gains; now at +9% YTD. We live and learn! Reduced shorts across the board to manage risk but remain short on $TSLA $PLTR $FIVE, kept $BABA $9880.HK longs on as I think China still outperforms. Also added to $BLDR as one of my core US long positions as a beneficiary of lower interest rates, along with $INTC.

Still short on key positions ($TALA $PLTR $FIVE $NVDA). I don’t think the worst is over. Just like the catalyst path for long was better 2 weeks ago, the catalyst path for short now is significantly better. I think that the market will be very volatile going into the “event” day on Apr 2 for the announcement of tariffs.

30Y US Yield is back at 4.7%, the current market clearly does not believe in Trump’s ability to “pressure “the Fed to lower rates, in part driven by his campaign promise to eliminate the deficit (ie through tariffs revenue is one way, doge is another). He has to do more if he wants the market to believe, and it’s my current opinion that this admin is very incompetent and will end up doing too much.

On the other hand, 30Y JP Yield also back >2.6%. The yen carry trade unwinding will continue to be a headwind to global liquidity imo.

Without a doubt this is very macro based, but I think this is the theme of 2025.

TLDR: Short US exceptionalism/Long China underdog & Stimulus

Will also add a long on $AMD tonight, mainly to hedge the risk on the $NVDA short.

As we move to actually utilising AI in software and agents, inference demand (vs training) will prob be key in the next 2 years. AMD benefits disproportionately from inference, vs NVDA which benefits from training w its GPUs.

Shorted even more $NVDA @ $109.4

Short $CAVA @ $86.85

Play on US consumer being tapped out. High prices for a pseudo burrito, fast casual resto being valued on a 2030 store count at peak AUV & margins; very prone to consumer downgrade behaviour

They also have a significant % of stores in Washington DC; where DOGE is hitting federal employees hard w layoffs

Seems like $CRWV IPO won’t see a pop, underwriters trying to hold the line @ $39 but book is too heavy. Very telling of investors’ sentiments towards AI infrastructure. Let’s see if $NVDA sees sentiment contagion from this IPO given the significant linkage between the 2 cos

I think we are at 60% of experiencing a growth scare. ~75% pr is the point of no return, where if we cross that, probability of getting a growth scare accelerates due to the expectations trap (consumer expectations of a recession further reinforces the likelihood of a recession due to reduced spending).

IMO, we will likely get a growth scare sometime, and maybe even a stagflation scare (see pic above).

While I don’t think trump will let it transition into an actual economical recession, but as markets are forward looking, there is money to be made being long recession/stagflation probability now (for the next ~3-6 months) and then shorting that same basket when recession probability are at peak (~6-12 months).

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In the near term tho, with the frequent back and forth from Trump admin (oh there’s tariffs, oh wait there isn’t, oh wait there actually will be tariffs), market is also starting to believe his words less, and instead starting to price in the effect of prolonged uncertainty. Case in point: no significant sustained bounces during his numerous walk backs last week.

Base case now is he’s front running the pain, but will start pushing for green markets again a few months before US midterms.

Good news is based on how “bad” or “good” liberation day is vs market expectations, will inform us on how serious Trump is; which will help greatly in navigating the markets over the next 6 months. Bad news is midterms is in Nov26; so there’s still some time for him to sink the markets — and the more he sinks it from “inheriting a Biden economy”, the more he can claim to resuscitate it.

Hence our bearish view for the short term. While we might make tactical trades around key catalysts to manage risks, such as possibly closing some shorts on Monday before “liberation day” on Apr 2, we remain structurally bearish, as incentives of all forces (Trump admin, Fed) is in pushing equity prices lower in the short term. Gonna occam razor this.

Also to note, as this short trade moves from being essentially “long # of times Trump goes on TV to yap” to “long recession probability”, I feel more comfy in holding shorts for longer periods, as a growth scare will see more sustained downtrends and are likely less volatile in nature, vs tariff talks which may see walk backs.