The semiconductor sector completely crashed on Friday, but the Dow rose. Overall, the number of increases was about the same as the number of individual stocks falling. There was no panic in the market; it was just focused on semiconductors and big technology. The reason is simple. The demon stock SMCI announced financial results on 4/30, but did not give the same performance forecast as in the past. The other is that SoftBank holds 90% of ARM. Since SoftBank has already mortgaged most of ARM, once ARM's stock price falls, it is very likely to cause SoftBank to sell ARM to recover funds; SMCI's performance mainly comes from Nvidia, so Nvidia has also been questioned. Since there are too many semiconductors, it has caused a stomping phenomenon, which can be said to be a blood crash. Now we can only wait until the line improves before considering entering the semiconductor market. Next week's big tech earnings report will be another bloody storm.
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This week, I bought back some NVDL and opened positions in AMD (because AMD has launched the MI300, which is said to be comparable to the H100 or even H200. I personally think there is a higher possibility of a positive financial report for AMD). I also opened positions in energy and gold. The AI sector is expected to enter a sideways consolidation phase next. If the overall market does not fall, funds will flow into major sectors for catch-up gains. The mistakes in options trading during this cycle resulted in a significant profit retracement, which is definitely frustrating. It's really difficult to not let emotions affect trading. I will review the week over the weekend and start anew next week.
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It has been a few days since I last shared, cleared the nvdl and other callbacks, bought a long call on Google. This week, mainly participated in selling puts on djt, realizing that when volatility is high, selling puts is basically profitable and risk-free because volatility will not remain high forever. Even if the stock price falls, we can still make money. Therefore, this strategy is relatively stable. Looking back on this quarter, I made a lot of profit, but also suffered a lot of losses. After learning many strategies and engaging in a lot of short-term actual combat, I discovered that offense is not the most important, defense is. The most important skill for a mature trader should be the ability to control capital drawdown. I am no longer pursuing multiplying returns by how many times in a year, but relying on the accumulated data and practical experience to make good decisions each time to achieve long-term, relatively stable compound interest and accumulate capital.
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Today, the Fed confirmed three interest rate cuts, and the dot plot remained unchanged. Powell's speech seemed more like downplaying the recent inflation rebound in order to justify the interest rate cuts. After all, it's an election year, and no one dares to act recklessly. In summary, it's holding stocks for a rise (I entered a small position in MU at the end of the day, and the financial report is good 😁).
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Yesterday's GTC by NVIDIA overall felt like NVIDIA strengthened its moat, but did not mention the price of Blackwell and potential customer demand, so it is impossible to evaluate the sales situation in 2025. Personally, I have decided to continue holding NVIDIA and will continue to increase my position in NVDL today. Companies in the semiconductor space will undergo differentiation. Tomorrow's Federal Reserve meeting, the main focus will be on whether there are any changes in the dot plot.
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I haven't been doing much these past couple of days. The implied volatility of chip stocks is still good, so I sold nvdl's call and put options to earn some premium. I feel that most of the volatility from tomorrow's quadruple witching day has already been reflected in today's stock prices. I'm holding 40% of nvdl and 10% of smci, waiting for next week's gtc conference.
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Today's CPI slightly exceeded expectations. However, Oracle's financial report yesterday specifically mentioned that the demand for AI base stations is still far greater than the supply, indicating that the AI trend is still fermenting. I opened a call option for MU during the trading session, but did not make any significant moves. The stocks I bought at the dip last Friday, SMCI and Nvidia, unexpectedly made profits today, demonstrating the strength of the semiconductor industry.
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Columns AI bubble
Let's chat over the weekend. I think the future AI will evolve into a bubble, which will bring a wave of unprecedented opportunities, and of course it also has great risks. Without a bubble, it would be difficult for US stocks to recover significantly. Any short-term risk up to that point would be a good time to lay out. Investments surrounding this AI have also been an opportunity for US stocks for a long time.
Historically, major technological revolutions will create big bubbles. The power revolution in 1920 and the Internet revolution in the last 00 years cannot escape the formation of a huge bubble. This AI revolution also cannot escape the fate of the bubble. What is behind this is the inevitability of historical development. Perhaps these technological revolutions are all naturally prone to bubbles.
I think there are two main reasons: the technological revolution is short-lived for corporate profits. It is undeniable that the technological revolution brings about a boost in productivity, but it is generally short and has a significant effect on the company's profits in the short term. Generally, this kind of growth is difficult to maintain, because once effective, large amounts of capital will enter to compete, which will cause excess profits to be shared evenly. People think that companies that are now very profitable and growing rapidly will continue to grow rapidly in the future. This is the reason for the bubble.
The second reason is that people generally believe that individual companies will benefit from the technological revolution, so it is inferred that similar companies will also benefit. There are many examples of these markets. The most recent one was the 20-year electric vehicle concept. $Tesla (TSLA.US)$ The stock price has doubled tenfold in a year, and there are also many emerging companies, many...
Historically, major technological revolutions will create big bubbles. The power revolution in 1920 and the Internet revolution in the last 00 years cannot escape the formation of a huge bubble. This AI revolution also cannot escape the fate of the bubble. What is behind this is the inevitability of historical development. Perhaps these technological revolutions are all naturally prone to bubbles.
I think there are two main reasons: the technological revolution is short-lived for corporate profits. It is undeniable that the technological revolution brings about a boost in productivity, but it is generally short and has a significant effect on the company's profits in the short term. Generally, this kind of growth is difficult to maintain, because once effective, large amounts of capital will enter to compete, which will cause excess profits to be shared evenly. People think that companies that are now very profitable and growing rapidly will continue to grow rapidly in the future. This is the reason for the bubble.
The second reason is that people generally believe that individual companies will benefit from the technological revolution, so it is inferred that similar companies will also benefit. There are many examples of these markets. The most recent one was the 20-year electric vehicle concept. $Tesla (TSLA.US)$ The stock price has doubled tenfold in a year, and there are also many emerging companies, many...
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Today's account retracted quite a bit. I need to take a moment to reflect. My intellect told me that it would fall, and I predicted a day in advance that I would have to stop my profit and short positions for the time being. Obviously, I can avoid losing a lot of money. I clearly sold the profit and couldn't control it and took it back. The mentality of being afraid of going short interfered with my every decision over and over again. I naively thought that the experience of the past few years was enough for me to cope with all kinds of situations in the stock market, but now I discovered that it was far from enough. I couldn't even overcome my emotions, the easiest short position was not possible, and you will never be able to become a qualified trader.
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