This best be HBF-related and not mis-messaging about the company’s 1yr spinoff anniversary from $WDC… 😤

$SNDK

Yesterday’s sell off (and really the entire past 2 months) has reflected this: there is no certainty in terminal value anymore, especially when that’s effectively just a numerical tweak in a dcf

How can stocks be trading at 100+ NTM p/e and be expected to grow into that valuation — in an environment where a new 0.1 bump in model capabilities or a new product launch by the frontier labs (who are btw also in an arms race to fight for share - thus more incentive to release good products fast) effectively halves the expected future growth for an entire basket of stocks overnight? See Anthropic’s new cybersec tool and the effect on cybersec stocks like CRWD/PANW/ZS

Honestly, I don’t even think it’s an overreaction yet. $MNDY still is valued $3b too high. Many of these cos are still trading at >40x p/e.

This is an existential threat and an actual reason to selloff many of these companies, maybe gone are the days where software companies are rewarded with high multiples. Advice to just bin the entire sector until we truly get a catalyst for reentry, rather than knife catching

One of the best environments for stock picking in years, or even decades

$NVDA print later - I have a well-sized long from @ $185 going into this. Stock has chopped around for months despite compute demand skyrocketing, all while its ecosystem rallied. This is in line with the wider breadth divergence seen since Nov 25 for small caps vs large caps. But I think we may finally see Nvidia catching a sustainable bid after this print

Also built out a bunch of Jap longs mostly focused on memory/optics value chain. Asia resurgence gaining steam, I’m probably not the earliest to it but just paying the generalist tax.

While I’m not a firm believer in the Asia resurgence narrative (don’t think geographical valuation gap ever closes etc etc), I think JP markets most closely resemble the laissez-faire / stimulus-heavy / geopolitically insulated characteristics of US markets.

$285A.JT
$5801.JT
$6834.JT
$3110.JT
$7012.JT

Preliminary thoughts on $PSTG print as am on a break these few weeks

Can’t help but feel like we’re living on an exponentially accelerated timeline and I can’t afford to take any time off; everyday there’s new things & launches and my FOMO wrt building/experimentation/idea generation/research has never been so high.

$AXTI may not just be a meme retail play..

JP stocks levered to optics doing well today too

$6834.JT
$5801.JT

I have no strong views on the current Iran/SoH crisis. While Fintwit has now magically transformed into geopolitical/oil experts (ex-software/SaaS experts), I’m aware enough to recognise that this isn’t my domain.

I can see both sides of the argument:
- Bear case is Trump didn’t plan for this, and now can’t wiggle out of this as he’s set off irreversible dominoes that has been in the making for more than 3 decades.
- Bull case is both sides are incentivised to off-ramp after a sufficient display of power; Trump needs to save the midterms (time is running out), and Iranians want to buy time to complete their nuclear program.

Given the volatility and uncertainty, yes I agree that the responsible thing to do wrt managing money is to degross to a manageable quantum.

That said, sentiments are overwhelmingly negative right now. The uncertainty now sets up a future catalyst path, as they will one day resolve back into certainty again.

From my limited experience, bulls REALLY love to climb a good wall of worry. A wall of worry works because it keeps sidelined investors from piling in all at once, thus saving incremental bidders to drive the market higher over time as certainty gradually resolves.

NVDA GTC day! I'm focusing mainly on implications for CPO, NAND and CPU.

Built one of my largest short positions in $TSLA @ $396

- robotaxis story increasingly commoditised by Waymo and Uber partnerships
- robotics/Optimus story; if Tesla can’t move EVs at a premium, what makes us think that they can sell Optimus at a premium? And if premium doesn’t work, then I don’t think they stand a fighting chance against China in the mid/low-end markets
- moving into fabs? Not sure when that actually materialises given Musk’s timeline esp with the complexity of building leading-edge fabs
- most imptly, it’s trading near 200x fwd p/e. Yes the stock has never traded on fundamentals/valuation but instead more on vibes, and exposure to Musk. So how much of that Musk’s premium gets diluted when SpaceX IPOs at $1.25tn? $1.25tn.. that cashflow has to come from somewhere.. Not to mention how Musk treats Tesla shares like his personal piggy bank..
- also memory headwinds
- also Musk <> Trump’s close relationship makes this a good hedge for Trump losing midterms

Lumentum also released their target financial model, which surpasses even my own model estimates (I think also other buyside bogeys)

- this target does not include the additional $5b revenue potential from their new fab
- target model did not extend into CY28, which is ironically when scale-up CPO really ramps. so what could CY29/30 look like with a scale-up ramp, if CY27/28 looks like this without a scale-up ramp? the photonics wave could be just starting

$LITE

Bought $GLD @ $408 and $SLV @ $63. On the other side of a forced seller is a happy buyer.

Have also had good luck trading with Silver in the past, so if it would be so kind as to let me buy the bottom for the third time…

Optics names have been bid hard these 2 weeks

Small (embarrassing) story: a month ago, I was very confident on the optics narrative going into GTC and OFC. So I bought lots of LITE, TSEM, AAOI, AXTI and some Jap optics names. Blinded by greed, I became overly concentrated / levered.

You can see where this story is going. Then came the U.S. strike on Iran, and the SaaS short squeeze… etc etc. Around the same time, my broker also increased the initial margin due to the heightened volatility of the largest winning stocks of the year, many of which are my largest positions like SNDK LITE. As a result, my buying power decreased and not only could I not buy more of the optics names when they corrected, but I was also forced to delever many names near the bottom.

If you asked me what I learnt from that episode, I would say nothing; because I already knew not to be so concentrated/levered, and also believed a SaaS short squeeze was coming. But this is a classic example of having the right idea, but the wrong execution. If I was not a forced seller 3 weeks back, I would be far above my YTD ATH today with the optics bid.

I’m not too hard on myself, mistakes happen and I am learning from it. Thankful also that I did manage to build back my positions in optics before OFC, though not to the amounts that I had had — a conscious decision to not be overly concentrated again (and thus by extension, to underperform).

It’s a dilemma right, like there’s alpha in concentration (when you’re right), but if you’re heavily concentrated and right, then you inevitably become heavily levered to momo, especially if you’re not playing some niche turnaround events with long duration. Many view momentum as inherently risky/bad/volatile, but I think it’s not so clear cut.

So is the right approach to trim as the market realises your thesis and price rises? Or should you double down PRECISELY because your thesis is being proven right? What’s the right balance? Still figuring this out but I believe there is no right answer - only one that fits to your own personality, duration and risk mgmt.

Anyway, no moral of the story, but just thought to share that sometimes you can be very right and yet very wrong at the same time; the market (which is an extension of the collective personalities and moods of the participants) is a funny thing