“We have scarcity and we have abundance. And right now you want to be short abundance and you want to be long scarcity.”
Commodities, energy, materials and hardware are the new alpha as growth gets rerated in a 2007-style super-cycle
“I think credit spreads were too tight, and I think now we're moving into a different world … the credit cycle is in a downturn. There is no doubt about it.”
Credit cycle is in a downturn; high yield spreads were too tight and are widening as the liquidity tide goes out
“chemicals, semiconductors, optical fiber, the whole rack in energy infrastructure, plus the other names— these are all hardware-related names.”
Hardware-related names (chemicals, semis, optical fiber, energy infra) are the rotation winners, in uptrends not bear market
“oil is not going to create a recession in the United States … if oil were to stay at $100+ for the entire year, we'd have a global recession for sure”
Oil spiking on Iran/Hormuz war; even at $150 no US recession but headline inflation surges
“I still don't think people realize how big a trillion plus dollars in spending is for AI and how that will override anything that's happening.”
NVIDIA leads the hardware boom as AI capex is a trillion-dollar-plus structural boom; compute still scarce
“The Black Widow trade was trying to be short Q's and long IWM. … it was a 4% outperformance for IWM over Q's”
The Black Widow hedge trade is broken: small caps outperforming Nasdaq signals deleveraging that hurts hedge funds
“I continue to believe that the hyperscalers, for a variety of reasons, should not be looked at as longs … First time we've closed below it on a weekly basis…”
Hyperscalers are software companies getting disrupted and rerated, not longs; Microsoft broke 200-week MA first time since 2013
“I will say it again and again, the hyperscalers are software companies. They get disrupted as well.”
Hyperscalers as a group are software companies that get disrupted; should be shorts or at best market performers
“here's Oracle. CDX. Their CDX blew out last week. I've mentioned Oracle before. They had earnings, stock traded up.”
Oracle's CDX blew out and stock zoomed to new lows as AI debt risk repriced
“Private credit defaults accelerating … liquidity is the major story and I think it's going to continue because there's no way to solve this problem other than…”
Weakest private-credit BDC, just cut to junk on rising non-accruals, reprices lower as the liquidity squeeze grinds on.
“Financials are already factoring deeply negative earnings growth and severe estimate cuts … are they going to start taking some reserves?”
Financials face severe earnings cuts from software disruption and credit stress; possible short cover rally if reserves not taken
“If you ask me what I'd rather own, Salesforce at 10, 12 PE or Micron at 3, 4, give me Micron all day long, especially for the next year.”
Micron at a 3-4 forward PE is mispriced hardware, not software, with a year-plus of memory demand ahead
“I think a lot of the bull market names on energy and power and materials and all of that stuff are there … the market is starting to discount things.”
Energy, power and materials names remain in a bull market as the market starts discounting recession fears