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@rohanpaul_ai It works both ways, of course. If compute becomes plentiful and cheap, SpaceX revenue will drop.View quoted post on X
No crying in the casino for either party.
I’m not sure how you can observe what just happened over the past week and takeaway that anybody should be leaning into “old school” stock picking but let’s unpack why a bit:View quoted post on X
"buying cheap companies": lets start with the fact that in a world where a larger share of the market's x-sectional vol is factor vol vs. idio vol (x.com/0xFaust12/stat…) that "cheap" is not a sufficient criteria for an investment to follow your thesis. Being blind to factor exposures of the position, counterparty dynamics like crowding, and short term fundamental trends are all forces that can/will move your position against you even if you have long "duration". In practice, buying a "cheap" company means holding a position(s) with negative to neutral momentum, positive residual volatility, negative perhaps negative profitability which are generally deleterious bets to be making and will present a drag on your total return during your holding period.
"accepting volatility and holding for 2-5 years": I don't have too much new to say here other than the fact that it is more likely your "long duration" horizon will result in you holding 50-60% drawdowns vs. 20-30% ones (you can confirm empirically), so in trying to be more clever than the pods you will in fact have constructed a much worse quality return stream for yourself (cough cough Lone Pine, Eminence, etc). Moreover, old school fundamental investing does not make use of risk models in the modern sense and, per the above, in a market increasingly trading less on fundamentals, your approximation of risk will be even less relevant leading to the deeper than expected drawdowns noted above.
I couldn't get the thought out of my head so I had to map it out.
This chart shows the COVID winners from April 2020-Dec 31 2021 plotted against the AI Bottleneck 40 from April 2025-today.
Look at the overlay and look at the correlations, it's jaw-dropping!View quoted post on X
I said at the time - and repeatedly since - that things changed in November 2025, that the pace sped up, and that we were on a new trajectory. There's no denying now that was true. So, for the record: things changed again in September 2026. We are on a new trajectory.View quoted post on X
