r/InnerCircleInvesting

Unless you're living under a rock, you might have heard that we have a bit of a memory (AI) 'crisis' on our hands. And, no judgment if you are living under a rock. Sometimes that may be preferable to the current state for many of us 'over rock' dwellers.

https://preview.redd.it/fa0vfnb3xfbh1.png?width=1088&format=png&auto=webp&s=3547a9bf850594f3b922b454d5c98c2895d15c3e

$MU $SNDK SK Hynix 1-Year

It seems that all the discussion on financial sites and shows surrounds the move by Micron and its competitors and topics such as DRAM, NAND, HBM, etc. Micron's earnings were stunning without question but, as seen on the chart above, so has the stock price. What is interesting is that despite $MU's blowout numbers, the stock is now trading below the point before the huge report:

$MU Before/After Earnings

On Thursday, it closed at $975

Welcome to the stock market! Don't tell me speculation isn't a huge part of the game. With the stock now 20% off of its highs following the big earnings, it's no wonder why many stand confused and unsure of what happens next.

Over the past two weeks I've heard countless individuals call Micron the "next Nvidia." At least related to revenue printing, it's hard to argue that point. We haven't seen numbers like that, let alone the blowout over expectations, since Nvidia, at least if my memory serves. But within the comparison, you have to ask yourself is it good or bad to be compared to the godfather of AI? I think it's clear that, at least if you were in early enough, it's a great place to be. But the game has changed.

First, let's take a look at those revenues and talk about something else you may have noticed on the charts.

$MU $SNDK $NVDA $SKHY Revenue 1-Year

First, I'm absolutely loving these new "Fundamental Charts" being offered by StockAnalysis.com. They just keep making their service better and better and as long as they do, I'll shout from the rooftops about the value and functionality they provide. The ability to chart based on hundreds of metrics, with different overlays and display possibilities? Yes please! That FREE offer is a great one.

Sometimes the hardest thing to do is to be objective when you've missed a run, especially like the one provided by $MU and $SNDK. Even worse when you recognized the value, was in the stock, and then sold because you simply got ... bored.

I had a good sized position of $MU and sold in 2025 at about $90 average. Oops. I did fire my crystal ball and got a new one for its lack of functionality.

If you've purchased or looked at pricing for any consumer electronic devices, more so if they use the chips supplied by Sandisk or Micron, you've seen the impact first-hard. I've been shopping for an external SSD drive for offline backups of my files and photos but decided to wait a few months ago because the prices were elevated. Oops, again.

Fast forward to Apple specifically referencing price hikes due to chip cost, providers of DRAM/NAND/HBM products fast-tracking new fab plants and even talk of government intervention and it's easy to see the state of the product cycle related to demand. That supply-demand mechanic is not helping inflation.

And, now we have SK Hynix, South Korea's top company listing its shares as ADRs for the first time in the U.S., slated for this Friday. This is going to be a very interesting event, especially since all these stocks are up greater than 800% or more. More dilution in the names vying for our trading and investing interest. The memory space is so hot right now, but the speculation game is just as hot and it's hard to know where the value is, especially with some noteworthy names now shorting memory and AI stocks.

This would be a different ballgame if shares across the board weren't already up nearly quad-digits in %. Traders and speculators don't care about current or future valuation metrics as evidenced by MU's recent report. It's a profits and rotation game, at least at some point on the curve. This is fueling those high-profile short players to place their own wagers based solely on too-far, too-fast.

https://preview.redd.it/tvy4olgd5gbh1.png?width=1084&format=png&auto=webp&s=9d8696bf4fc4812c987f7485981269f5c98e1116

What now?

If not for selling $MU at $90 over a year ago, I might be thinking different about Micron as an investable opportunity following huge numbers and 22%+ off its high. Forward valuation still looks intriguing, even aggressive. $SNDK is in the same boat. But it's tough to purchase the tail of these tigers.

As far as the $SKHY debut on Friday. I don't know. I thought I had a plan, thought I was going to be a first-day purchaser. I already have it as part of my South Korea $FLKR ETF. Across the AI playing field, the top players have entered the woodshed. Due to speculation and ROMO, it's too hard to figure out what comes next. In my heart of hearts, I believe if you want a piece of this action, you still need to use my unit methodology to establishing the desired weighted position, even if unsure what that may be upon taking your first position. $SPCX, the most hotly desired IPO ever may be a good proxy for what can be expected. Don't forget that SK Hynix is an old company, it's availability on the US exchange, a technically speaking this is not an IPO.

In all practicality, many are treating this ADR offering as an IPO and it could have similarities, related to demand. At the same time, it's hard to ignore the fact that where we are on the curve with these companies is a bit of an unknown as last week showed.

The beginning of this week is going to be interesting as we get a better view of the game board.

Have a great Sunday!

TJ

I want to touch upon this topic because I continue to get questions about options, their use in today's market place of financial tools/opportunities and I'm seeing a general rise in interest, especially from those who don't have a lot of experience within the markets. I thought rather than blather on about the topic, I'd do it in a more Q&A style citing some of the most common questions I'm seeing/hearing. Please feel free to chime in and/or ask questions.

This can be a very complex topic and could get very long. As such, I'm trying to break it down to the basics to be more appealing for those just getting started.

Please square with the following first: You should not be considering options unless you have a good fundamental knowledge of the stock market, investing principles, stock valuation methodology and the work ethic to identify opportunities. If you are considering options because of something you saw on Reddit from user PhatStacksBro, you're making a mistake!

Q: What are options?

Options are contracts that give investors the right, but not the obligation, to buy or sell a stock at a predetermined price within a specified period of time.

Think of options as agreements whose value is derived from an underlying asset - usually a stock. Generally speaking, a single option controls 100 shares of stock.

Investors use options for a variety of purposes, including generating income, managing risk, protecting portfolios, or speculating on future price movements.

While there are a lot of things going on under the hood with options, the two most important aspects to know and understand are:

1. The strike price of the option
2. The expiration of the option

The strike price is simply the contracted price for that option for that particular stock. The expiration is simply the date that in the future at which point the contract will be settled, if still owned. Everything revolves around these two variables - what is the price and how much time do I have?

It is very important to understand that before the expiration date, you always have the option to remove the position, taking a gain or a loss. This, in fact, is what most option traders do, not allowing the option to reach maturity. This is generally because of how options behave the closer the get to expiration. This is called decay or theta.

Q: Why the interest in options?

A: To be sure, options have been around as long as I can remember and their history dates back to the 1970s I believe. That said, today's use of options is very different than their use even a couple of decades ago. In their best implementation, they are tools to hedge risk, generate income and/or reduce cost positional cost. Used unwisely, they are pure gambling vehicles - hence the rise in popularity as forms of speculation are on the rise.

The interest of options, in my estimation, comes down to one primary component: Options allow the wielder to control a much larger amount of stock with a smaller amount of capital, thereby creating leverage that can dramatically amplify both gains and losses.

Q: What other components should I be aware of?

There are many individual variables for research within the options world. If you want to go down the rabbit hole, research the Greeks related to options, start with Delta and Theta.

Beyond strike and expiration, the third most important component is the premium for each option. The premium is your cost of admission, the amount paid or received in exchange for taking the option. It's this premium that generally determines the amount of inherent risk of the option. If the premium for the option is very high, it's because the stock is very volatile and difficult to determine where it will be in the future. Greater risk often equates to greater reward.

Most importantly - Premium also represents the maximum amount that can be lost. This is a primary benefit of options. Because premiums are less than a stock's current price, there is less cost and your loss potential is limited.

Q: What types of options are there?

Options boil down to two different types:

1. Calls - Gives the buyer the right, but not the obligation, to buy shares of a stock at a predetermined price before a specified expiration date.
2. Puts - Gives the buyer the right, but not the obligation, to sell shares of a stock at a predetermined price before a specified expiration date.

I know this is a lot of information and it can seem complex, but the more you research and study use of options, the more it will click. Even more so when you have skin in the game.

Ultimately, when you look at a particular stock, ideally one you know well, you will have a belief in how well-valued that stock (company) is given its current price into the future. Are they performing well and you believe the price of the stock is too low? Is the company facing headwinds and you feel the current stock price is overvalued? Instead of purchasing stock at a higher cost, you may consider options based upon your level of conviction for the stock to be higher or lower at some point in the future. Calls, if you believe the stock will be higher, Puts, if lower.

The easiest option to understand is the simple Call option - Each single option has a cost (premium) that must be paid for the right (not obligation) to purchase 100 shares of a stock at a predetermined price (strike) before a specific date (expiration).

Example (Call):

Suppose shares of ABC stock are trading at $100.

You purchase a call option that gives you the right to buy ABC shares at $110 anytime over the next three months. Your purchase will require the payment of some premium (cost) for

If ABC rises to $130, you still have the right to buy the shares for only $110.

In other words, your call option allowed you to lock in the right to buy the stock at a predetermined price, even though the market price moved much higher.

The Put option is the reverse - Each single option has a cost (premium) that must be paid for the right (not obligation) to sell 100 shares of a stock at a predetermined price (strike) before a specific date (expiration).

Example:

Suppose shares of ABC stock are trading at $100.

You purchase a put option that gives you the right to sell ABC shares at $90 anytime over the next three months.

If ABC falls to $70, you still have the right to sell the shares for $90.

In other words, your put option allowed you to lock in a selling price, even though the market price moved much lower.

In either case, once the expiration date of the option arrives, your option will be "in the money" or it will not be, in which case you will lose the premium you paid as the option is expiring worthless.

Note, however, that we've only discussed purchasing options. Remember that if you are purchasing, another party is selling. As an options trader, you can be the one paying the premium for the option, or the one receiving the premium by selling it to the buyer. Both have their place within a well-designed options strategy.

Q: What are the best use of options?

The word "best," of course, is up for argument. Just like every investor has a style of investing, so too does every gambler have a 'system.' This is not to say that options are a pure gambling mechanism, but if used improperly, the the form and end result are the same. To me, these are the best implementations of options:

• Manage Risk & Uncertainty
• Income Generation
• Improve Entry (stock) Pricing
• Targeted & Defined Speculation

The problem for many individuals begins with the last bullet point - speculation.

If I were guiding an inexperienced investor in their first use of options it would likely be as a strategy to be used once an underlying stock position has already been established. When this condition is met, options usually take on the form of the first three bullet points. It's when options are used without owning the underlying stock that things can go off the rails and gambling becomes the result of the activity.

Q: How many strategies are there for the use of options?

Hundreds, with thousands of potential variations. But I'd suggest there are 20-30 core strategies. The options, excuse the pun, are endless and that is where much of the complexity is derived from. It's a deep hole with a lot of complexity and it's easy to get overwhelmed ... and over your head if you don't understand what you are purchasing.

Q: Given the complexity, are there option strategies your recommend?

This is a good time to re-read the question above about the "best use" of options.

Options begin to get much more complex when you start using them in concert with your existing stock holdings. Once you own the underlying stock for any options you trade, you are changing the dynamics of the trade. Thus far, we've only discussed outright buying, or "Long", options such as Calls and Puts. The construct and understanding is relatively simple - You pay a premium for the right to purchase or sell a stock at some defined price, the strike price, at some point in the future, the expiration date. As the stock price moves, so too will the price of the option related to that stock as, the greater or lesser likelihood that the option will be "in the money" at expiration.

As would be expected, if you are purchasing a Call option on ABC stock with a strike price of $80, and ABC stock is $100 currently, that option is already $20 "in the money" so your premium will be $20 + an additional amount that will pay the seller for that condition. As you extend the calendar for the expiration date, premium rises accordingly because there is more time for this stock to move higher. But this in-the-money condition is also structurally safer as the stock has already performed to a degree over the contracted strike price.

While I do use options surrounding my current positions to reduce overall cost or hedge against lower price movement due to market conditions, earnings, etc., my favorite strategy to employ is the LEAPS construct. For quite some time I didn't know that LEAPS was an acronym: Long-Term Equity Anticipation Securities.

LEAPS generally involve purchasing Calls that expire greater than one year in the future. As would be expected, because the expiration is so far into the future, the premiums are more expensive because there's more time for the option to perform.

In some cases I like to take LEAPS on well-regarded, well valued, companies/stocks like $NVDA, $AVGO, $TSM, etc., well into the future when I feel the market isn't properly recognizing the value.

For example, I recently took LEAPS in $AVGO. I purchased $300 (strike) Calls that expire on 12/15/2028 at a cost (premium) of $175. $AVGO is currently trading at $360 so those calls are already $60 in-the-money. Given that I paid $175 for each Call, and the $300 strike price, that means $AVGO needs to be at $475 to break even - A risk I'm willing to take because of their growth and the fact I have 2 1/2 years before these Calls expire.

While my favorite options play is the purchase of LEAPS, they are still inherently risky in that you are making a "bet" that that some condition will play out before your option expires.

Other strategies I tend to employ using options:

1. Protective Collar - Buying Puts against a position I own to hedge against downside. To lessen the cost, I will "sell Calls" against the stock at a higher level, bringing in premium that I use to purchase the Puts.
2. Stock Replacement - Because you can control more shares of stock with Calls, I will sometimes purchased in-the-money Calls on well-valued positions rather than purchase the shares of the stock. In most cases, I can control far more shares, but for 2/3 the cost. Example: I recently purchased $NFLX $70 12/15/28 $70 Calls for $27 each. 2.5 years of runway, with a cost of $27 over the $70 strike price for a break even of $97. I'm very comfortable with that setup
3. "Selling Puts" - Via this strategy, I sell Puts (receiving premium) on a stock I would not mind owning, but don't want to pay the current price. For example, if I'm comfortable owning $NVDA at $180/shr., I could sell $180 Puts at a point on the calendar, receiving more premium in return the longer out I go. If the stock falls to that strike price, I may be "Put" the position, meaning that I will take ownership of NVDA at $180, as agreed. If NVDA remains above $180 at expiration, I keep the premium

Those are the strategies I typically employ. I should note that #3, is also the first half of the very popular "Options Wheel" strategy that I won't go into here.

By and large, my favorite options play is to find stocks that I feel are too low based on their future potential. When I find those, I will begin establishing LEAPS over a period of time to average my cost while I wait.

Q: So where do I start as a beginner interested in options?

I generally don't recommend any beginning investor concern themselves with options. In fact, even for most investors, options are a strategy I would not recommend. There is a speculation aspect to options that cannot be ignored. You are betting that some price objective will, or will not, be achieved at some point in the future. This is regardless to what may be playing out in the markets on the way to the expiration dates. Consider that market events such as bear markets, recession, war, inflation, geopolitical events and other economic turmoil will often take most stocks lower without regard to how those companies are performing financially.

You must understand the speculative nature of options. At least with physical share ownership of stock, you always have that stock at its current stock price. With options, when they expire, whatever premium you paid for the option, could be $0, a 100% loss.

Never take your options, regardless of how long you go out in expiration, as a position you need to hold until expiration. In fact, in my mind, options are simply a way to take advantage of specific opportunities in the market, with specific stocks, on the way toward expiration ... not usually to expiration. It's often best to take your profits, or cut your losses, if the stock, and its options, are not performing.

To get started, keep your entries very small and the number of options limited. Consider 1 Call option, representing 100 shares, of a stock you feel may be undervalued. Consider an expiration of Jan. 2027, 6 months away. Perhaps something like $NVDA 1/15/2027 $180 Call trading for $33. A purchase of one call will cost you $3,300. The $180 strike price when combined with the $33 of cost makes your break-even $213.

The key point is that you are just trying to get your feet under you, it's a $3,300 education that you can exit at any time up until 1/15/27. Watch how the option moves in relation to the NVDA's price, also called its Delta. Is it falling? Is it rising? Are NVDA's prospects improving and the stock price is rising? How are you feeling with this money in the market?

It's all part of the education.

If you are going to start, you need to start small and with limited capital so as to say balanced and disciplined. But along this path, you need to study, watch videos, educate yourself and learn.

Final Word

There is so, so much I left out of this primer and it's still too long.

The fact remains that much of the activity I see utilizing options is pure gambling behavior. The selection of price objectives well out-of-the-money and with a very near-term focus related to expiration. It's a dangerous activity and one you should avoid. Profits with risky behaviors create a slippery slope that can result in financial ruin. But, if used properly, in a focused and strategic way, options can allow you to leverage more opportunity from these markets.

Once again, options are best used when used in concert with your existing holdings in one of he ways I outlined above. But those also typically require a bit more experience and understanding. Paper trading options doesn't recreate the emotions of being in them. It's a good start toward learning the movements but, in no way, represents what you will encounter when you begin using them, much like day/swing trading. This is where most fail.

Commit to the education and the cost affiliated with it. Progress slowly and study. Speak to the smartest people in the room and if they spin a cautionary tale, listen!

As yourself what you've heard that is making you want to get into options, even if you aren't a seasoned investor. If you're going to begin that journey, do so with a very deliberate and well-constructed plan for starting and limiting risk.

TJ

https://preview.redd.it/8fhs702at1bh1.png?width=1086&format=png&auto=webp&s=d0171d36366f15022b0323c2224ef1517f1ce406

Here we are, another long weekend! Last trading day of the week.

7/2 7:00 AM PST

Payrolls were weak, coming in at 57k vs. 115K forecast. Unemployment ticked down to 4.2%. This seems to be being received well due to inflation concerns. The market is not "hot" and that helps reduce chances of a Fed hike.

https://www.cnbc.com/2026/07/02/jobs-report-june-2026-.html

“The slowdown in payroll growth challenges the narrative of renewed labor market strength that has been building in recent months but, importantly, reinforces the view that the Federal Reserve is under little pressure to tighten policy,” said Seema Shah, chief global strategist at Principal Asset Management.

CNBC

This is going to be an interesting economic balancing act going forward as it relates to growth, vs. rates, vs. jobs.

Random Shots

South Korea's KOSPI index took a major hit, sending shares of SK Hynix and Samsung significantly lower. That moves the $EWY and $FLKR ETFs much lower. These types of moves have to be expected when you get moves of 300%+. All the memory names have moved so much and despite their valuations profit taking can still take place.

This is why, if you are going to add these names due to valuation, you have to do so slowly using either dollar cost averaging or my unit methodology.

Rising

• $AVAV - What a comeback! Up another 16% on the heels of yet another contract. This name shook off the "good will" accounting issue in a big way.
• $MSTR back over $100 with a 9.6% move. It's simply a trading stock on BTC.
• $HOOD - Gave a nice "are you sure?" move lower right back to where I sold in the $90s, paused, and then rocketed. News item calling them a financial hyperscaler. Up 8.5%
• $CRCL up 9.5%. Came very close to adding LEAPS yesterday. Still might
• $RKLB - Up 6.5% as space recovers again
• $ARM - So volatile, up 4.8%. This is one of those buy and hold plays despite valuation. So expensive but CEO Haas is a rocks start and this company and their royalty mode, now adding in actual fabrication, could be a HUGE long term winner. But have to grow into that P/E
• $CRDO up 6.8%. Love its space in the AI buildout
• $PLTR - Continues to bounce up another 4.8%. Lows were around $106 recently, now $132
• $IONQ - Up 5.4%. Quantum has gone a little quiet but the names still lurk
• $NEM - Haven't seen this name mentioned in a bit, up 3.3%. I'll own it for a long time but it's no longer the paid-to-wait status it was when I was getting good yield at $30/shr. I've been paid, now waiting again

Falling

• $CBRS - Down 4% as its day in the sun comes to an end. Still a nice bounce
• $META - Huge day yesterday and giving back 3.6%
• $ONTO of 3.5%, now stuck in that same range as so many others
• $MRAM - Haven't seen this name mentioned of late, dow 3.3%
• $IREN - Neo clouds got crushed on $META's news yesterday, still week with a 3.1% lower move this AM
• $TSLA reported good units, was up, no down 3.2%. It's had a good run
• $RDDT has a big day yesterday as AvS rallied. Giving back 2.6% today. Was hoping to see it over $200 by close today
• $SNDK weak again as profit taking continues, back under $2,000 and down 2.6%. Be patient
• $DELL off 2.2%. Stock has been a winner but suffering from profit taking. All normal
• $LITE back under $800 and down 2%. I started building the position but trying to be patient in hopes of getting the next unit closer to $700. No problem with business or even valuation due to growth rate, but the profit taking should be real

Misc.

• $NVDA still hanging out just below $200. It's kind of amazing to me. Largest company in the world. Growing 65%, profitability is amazing, growth amazing, metrics amazing. Forward P/E could be in the 18s. NVDA's FCF is going to be a major tool to be pulled at some point. What will they do?
• $AVGO and $TSM in the same boat. Buy one of them. Better, buy all three and wait.
• Still time on $AMZN after the drop. Up 1% today
• $GOOGL had a nice dip, down about 20%. I think this stock is going to rocket back
• $AAPL reclaims $300, up 3.3%. Mag 7 back in focus as profit is taken out of other areas and value is being bought
• AI Energy is back today but it hasn't sustained. $BE looked really interesting at $250 from highs of $350. Back at $298 now
• You know a name I lost sight of ? $ORCL on that rise as it ran away to $250 ... and over the last month slide right back down near support at $145. Probably an opportunity here
• $AMGN has had itself a month, up another 2.5% today. Yield of 2.7%, Forward valuation of about 16
• $BABA still at $96 and change. So interesting
• All photonics plays are coming down but not with great velocity. Being patient...
• $CRWV is trying to hold after coming under fire again from numerous sides on valuation, META news and debt
• I still think $IBM can be bought after the most recent mini rally but keep the units small as it finds its footing. PtW with growth and yield
• $NFLX back over $76. Only a matter of time here for the patient. I fully expect this will be a triple digit stock again and won't be surprised if its by EOY
• I've mentioned how down and out the consumer non-discret. stocks are. We've had good reports from $SJM and $GIS. Seems like it could be starting. This bodes well for all the names including $PG $UL $KHC $CAG and even perhaps $KO and $PEP. I own all these except CAG. Yield and paid to wait. I love getting 5-6% plus 20%+ upside
• $QCOM has been crushed of late, talk about paid to wait. Triple top at $250, now $180 and paying 2%. Forward valuation at 18. What's not to like?
• Really want to see a 3-handle on $TOST. It's coming I believe.
• Still frustrated with $UBER and it could be sacrificed for capital when I make other moves but trying to hold on

Final Word

I'm continuing to watch the memory complex as profits are taken. Photonics as well as I desire to build out both of these segments in my portfolio. But I/you have to remain patient. If you are going to add, do so in fractional units. The great part about it is that it still gives you that feeling that you are dong something, all the while ensuring your don't get too far over your skis ... too heavy, too soon.

Profit taking from weak hands is an interesting phenomenon and it's a very real force. Rotation doesn't look at valuation first, it often looks at profits first. Valuation will win in the end. These stocks need to split to exercise the demon of the share price tag and mask how far they've come. I'm expecting it this quarter.

Have a great long weekend

J

It sounds crazy at first, but it is not completely unreasonable.
Once people realize that $SPCX may not be worth its current valuation on a standalone basis, the next major bull case could be a potential merger with $TSLA. If that ever happened, the combined company could instantly become the largest companies in the world by market cap.
I discussed this with someone and analyzed the logic behind it. The more I think about it, the more it feels possible in some form. That may be one reason why the market is willing to value $SPCX this highly.

Absurd.

I was reading an investor briefing that took a really interesting approach to Chinese internet stocks. The assumption that was accepted was that the valuation is cheap for these names. They got it out of the way right out of the gate and then focused their survey on whether cheapness alone was enough to draw a rotation back into Chinese tech.  

That’s a more-interesting question. There is no question that the Chinese tech names are cheap. The reasons for that are complicated - geopolitical tensions, a slowing Chinese consumer, etc. But when you see how bad it has become for the $KWEB, we start to see this as a trading opportunity. The narrative is simple - margins on AI cloud growth should show up in AliBaba eventually, Tencent is a high quality compounder caught up lying in wait for AI monetization, JD is winning food delivery. That’s almost a quarter of the $KWEB and we haven’t even talked about Baidu with their chipmaking element. Now you are totally at a quarter of the ETF. 

https://preview.redd.it/pd1077runwah1.png?width=1505&format=png&auto=webp&s=74f49ad8e1ec7a709edb776d0f6a7093c061c25a

We can see how poorly $BABA, $TCEHY, and $JD have performed in the last year, but the whole basket is doing even worse. If their biggest names start to turn around, things can get interesting. The issue I always have is that I can’t find the confidence to simply pick my winner in China. I can’t get all the information or figure out what is and is not being supported by the state.

Which is where recovery in the $KWEB as a whole interests me. I come back to it often because I see the opportunity in the basket. This thing is going to pick itself up from this mat eventually - even if I can’t call this a bottom, I can definitely wait this one out with LEAPS, so I went out as far as possible on the options chain to get an idea of what the going rate is after this drop-off. Pricing is all over the place, so when I circle back to this on Monday, I’ll be able to see if I can snipe value. But we can, generally, see there is a breakeven somewhere around $28 for the cheapest ITM calls. 

https://preview.redd.it/kvn6m2iwnwah1.png?width=659&format=png&auto=webp&s=7499171528701b086e1615407f86489d7415ff1e

When you come back to the chart, we see why. Can this yellow gap fill up and then some over the next 568 days? It just so happens to be an established support level and a bit north of the short-term moving average (orange line). We are a long way from being able to say momentum has turned around with that long-term moving average still a bit away (teal line).

https://preview.redd.it/fc72f5bxnwah1.png?width=1519&format=png&auto=webp&s=18f99ee048db0e237171bbaad55019a4c06146d9

So the trade is in front of me, I’ll just need to see how things shake out over the weekend and early next week before I pull the trigger on some of the $20 calls. This one is very straight-forward, just need to be comfortable with the economic outlook for China over the next two years. At least having this framework gives me an idea of a timeline for the trade and I can start seeking some more specific answers. We'll see.

Another smallish entry on this name as I build the position on weakness. This amounts to about a .33U on the entry.

As with all the trades in the space, I have good conviction on the long-term curve and opportunity, but far less conviction on the price. Thus, I'm trying to spread purchases out either based on time or 5-10% downside moves.

$COHR 1-Year

Recently, market chatter has emerged suggesting that Microsoft (MSFT) could trade near $700 per share by the end of 2027. The speculation appears to have gained traction after reports that Michael Burry bought long-dated Microsoft call options with strike prices in the low $700s, alongside broader talk that 2027 could be a strong year for the company, I don’t really like these kinds of speculative bets, but I can still see why people would make that argument.

At today’s MSFT price around $390, a $700 target means about +79% upside and roughly $5.21T market cap using about 7.445B diluted shares.

Before understanding what the main driver behind MSFT really is, we need to recognize that most of the bull case comes from Azure’s growth, plus Microsoft’s exposure to OpenAI and Anthropic.

There is a clear market example with EchoStar and SpaceX: EchoStar was roughly a $20 stock, but its small SpaceX-related stake helped push the stock toward $100.

MSFT owns approximately 27% of OpenAI on an “as-converted” basis. Microsoft’s latest 10-Q says it has “an investment of approximately 27 percent of OpenAI on an as-converted basis,” accounted for under the equity method. It also says Microsoft committed $13B total and had funded $11.8B as of March 31, 2026.And if we use the similar way, we can obtain:

Date / Period	OpenAI valuation	Change from previous	Implied MSFT stake value at 27%	Extra value per MSFT share
Jan 2023	~$29B	—	~$7.8B	-$17.1/share
Feb 2024	$80B+	+176%	$21.6B+	-$15.2/share
Oct 2024	$157B	+96%	$42.4B	-$12.4/share
July 2025 area	~$300B	+91%	$81.0B	-$7.3/share
Oct 2025	~$500B	+67%	$135.0B	$0/share
Mar 2026	~$852B	+70%	$230.0B	+$12.8/share
Bull case	$1.2T	+41%	$324.0B	+$25.4/share
Bull case	$1.5T	+76%	$405.0B	+$36.3/share
Extreme bull case	$2.0T	+135%	$540.0B	+$54.4/share

The first MSFT bull-case chain is:

OpenAI IPO or valuation moves higher → the market takes it as proof that AI demand is real → investors believe Azure is one of the key infrastructure winners + MSFT hold a lot of OpenAI’s stock→ Azure growth estimates move higher → MSFT revenue and EPS estimates move higher ,MSFT deserves a higher multiple → MSFT stock rises.

 

Now we can talk about Anthropic. Microsoft is also investing heavily in Anthropic, but the structure is different from OpenAI.

At the Nov. 18, 2025, Microsoft/Nvidia/Anthropic deal, Microsoft’s announcement did not clearly disclose Anthropic’s valuation. Microsoft said it would invest up to $5B, Nvidia up to $10B, and Anthropic would purchase $30B of Azure compute capacity.

Based only on simple ownership math, Microsoft’s potential equity stake does not look huge:

$183B valuation → about 2.7%
$350B valuation → about 1.4%
$380B valuation → about 1.3%
$965B valuation → about 0.5%

For Anthropic, the more important bull case is the circular financing / circular demand structure:

Microsoft invests in Anthropic → Anthropic uses that funding to buy Azure compute → Azure demand and backlog look stronger → Microsoft’s AI cloud revenue visibility improves → Anthropic looks stronger because it has both funding and compute access → Anthropic’s valuation can move higher → the market becomes more confident in Microsoft’s AI infrastructure story.

 

If we plug the $700 MSFT target into the valuation table, it actually does not look as crazy as it first sounds.

Scenario	Price	Implied market cap	P/E on FY2027 EPS $19.45	P/E on FY2028 EPS ~$23.32	P/E on FY2029 EPS ~$27.90
July 2025 $4T MSFT	~$537	~$4.0T	~27.6×	~23.0×	~19.2×
$700 target by 2027/12/31	$700	~$5.2T	~36.0×	~30.0×	~25.1×
$700 target by 2028/12/31	$700	~$5.2T	less relevant	~30.0×	~25.1×

So in some ways, Michael Burry’s $700 MSFT call options are conservative.  some traders are more aggressive.  This is not investment advice, and I do not hold MSFT. But is everything really as good as the market expects?

This expanded random thought exercise has already gone off the rails, this much I know. LOL

I continue to get DMs and questions about where the market is going and how to leverage it now. The tricky part with these questions is that volatility is very high, we've had extreme moves and, by all accounts, we're bouncing along the top.

Conviction

You know what they say about the death of bull markets, right? I was recently at a wealth related event, and spoke with an individual who worked directly with Sir John Templeton who was attributed with this adage:

Bull markets are born on pessimism, grow on skepticism, mature on optimism, and die on euphoria

If you agree with this statement, then I think you'd also agree that we're in the "euphoria" stage of this bull. If you want to argue with me, then I'd at the very least suggest that we're in the early stage of euphoria, but certainly beyond optimism.

Consider that bear markets historically occur once every 5.5 years or so, loosely, with an average decline of roughly 35% - greater for the Nasdaq. Since 2020, we've had three bear markets. At the same time, we're also in what has been an incredible bull market since 2017. It started before that but the growth from 2017 has been the best on record:

From 2010

As soon as I hear two things, I know we're either at the top or very close to it:

1. This time is different
2. A tidal wave of analyst bullishness

We have both in spades!

Beyond this, we're now seeing the volatility within the movements while we bounce around the top. Extreme in-and-out action between those issues that have led, to new leadership, and back out. And then back in. Knee jerk reactions to news events, and the rotations they cause, are very evident of this phase of market we're in.

Without a positive catalyst to take us above the current range, new highs, I can't have the conviction I need that a new set of highs is around the corner. We do have the next iteration of earnings reports coming so that does dovetail our current market state, but expectations are of great importance.

Not to say these markets can't move higher, but gravity and the thin air don't bode well. The macro does not support the conviction currently being displayed.

Memory Stocks

There's no question the primary focus is on memory stocks, usually $MU and $SNDK.

The market is searching so hard for new leadership. And when it's found, there's a mad rush, a stampede, toward those names. It happens so quickly, and so convincingly, it's like a hurricane in that the energy feed on itself, creating even more energy. Until it hits the mainland.

It's funny that I can get so much pushback on topics such as "value" until that value is in focus and being used as a primary element to the performance, volatility and upside. Again, $SNDK and $MU. Taking nothing away from these two companies, they've rallied over 1,000% in a very short period of time and that does matter. Context matters. We now have those same stocks rallying or falling 10% intraday. The investment thesis has changed, whether 'value' is used or not. Is there still a compelling valuation component to these stocks? Yes. Has the context changed as an investment? Yes. The new drumbeat of $MU is that it's the new $NVDA.

If that's the measuring stick, then expect the same type of performance from when NVDA rallied its first 1,000%. I'm even willing to trade back into $MU, and maybe even $SNDK, but I'm not ignoring the context of what has already occurred. FOMO is very real here but what was the trade before $NVDA? What was the context of the trade into $MU, $INTC, $SNDK and even $AMD? If there was a "next" after $NVDA, which btw is still growing at more than 60%, what is the next after $MU. This is why we need to remain patient and not get so focused on any single stock for any given MIT (moment in time). If you ignored that, you're down 20% on $MU.

This not even to mention that companies are already trying to figure out how to get away from the big price increases they're having to endure due to the run-away prices of these memory components. I was in the market for an external SSD drive, have been for months. I just checked the pricing again - My God!

AvS (AI vs. Software)

I'm using this to prove a point about conviction, rotation and bouncing along the top - leadership. There's always leadership within every stock market move. Lost leadership usually sends markets lower, at least unless it's made up with rotation to new leadership. Not many will argue that we have significant weakness and lost confidence in:

• Software
• Consumer Non-Discretionary

Until we don't. I can say this with more conviction related to consumer non-discretionary stocks than I can with software. Sure, I'm positioned long on names like $CRM $NOW $MSFT and $RDDT because I have very consciously pushed back at analysts trying to sell a narrative - a narrative that has shown nearly zero evidence of playing out thus far by the way. That amounts to a guess. And we have guessed our way to new lows. You know where my vote is cast! I'll stick with the companies that already rode the wave via MLE in suggesting they will continue to do so.

Consumer non-discret. stocks are an economic story that will play out over time. Cycles. New lows, yield, consumer trends, etc. are all negative. Yields haven't been higher in a long time. I'm not turning my back on the yield when the stocks also have 20%+ upside. We've already seen it with $SJM, and now $GIS.

The fact is, analysts have to sell a narrative, they have to analyze, talk their books and create volume. Price targets and upgrade cycles are the weapons of that war. Until they aren't. It happens every time and when I see price targets being quoted on message boards, upgrades moving stocks 5-10% or more, I know we're in euphoria mode.

But the AvS, we'll use $IGV as the proxy, is a metaphor for the markets overall.

$IGV 1-Year

It's getting whipped around now by single news stories. We'll get into some of those names when we discuss the stocks moving today

Valuation

Valuation is fleeting and mysterious force in the markets. It takes a third-row back seat in many cases. I'm not talking this roomy, luxurious, limo-style back seat. I'm talking about this knees to your chest and get your foot out of my ear back seat of most modern day luxury SUV's style of seat. I used to drive a Honda Prelude and the front seats would slide back almost to hitting the second row seats. I used to say that the Prelude simply had back seats for insurance purposes, otherwise they'd be considered a two-door sports car. Great car by the way.

Sometimes I feel like I'm the lone soldier on top of hamburger hill. Hill 937 anyone? History buffs out there?

For all you investors out there, and yes I will die on that hill, valuation does matter. It will always matter. Without understanding or referencing valuation, you are essentially floating with the tides, a dingy with no motor. Valuation is arguably the most important reference point. Without it, you're saying the only thing matters is revenue and/or momentum. Revenues without eventually resulting in profit is meaningless at the base. Momentum without further momentum stemming from some element of valuation realization is a MIT (moment in time) event. The stock market is littered with the bodies, the empty husks, of MIT stocks.

P/E, Forward P/E, PEG, ROIC and FCF are your aces in the whole Know them, understand them and if your company doesn't have them, ask the question "When will it?" If you can't answer it, then at least understand how vulnerable it is when a valuation crisis hits the market. We can talk all day long about profitability runway, prospects, TAM, and opportunity, but without P/E, Forward P/E, PEG, ROIC and FCF, you're playing liars poker.

https://preview.redd.it/x8obv4wghnah1.png?width=904&format=png&auto=webp&s=9d24a3e003c5f9a0281cc8989792428bec93b1dd

I'm sorry ... this never gets old.

Today's Stocks

Okay, enough of this "...hairpulling and jumping about" (bonus points for that reference). Double points if you don't have to look it up. A little worthless hint. That comes from my first ever DVD that I got from one of those services where you can get a DVD for $0.01 when sign up for a service where they send you a new movie every month. Remember those?

No real order here ... I'm getting crazy since my mind is all over the place today:

• $RDDT has been signaling a breakout for a bit now. Higher lows and giving us every indication it wants to run. If we hold today's level, now p 11%, the runway is cleared. You could make an argument for the front end of a gap formation around $203 but I don't think that's important
• $META - It's amazing how stocks I identify finally at a point where I'm going to pull the trigger and I get exactly one day to do so before they rocket higher. I'm sure this is basically the understanding that TIC here is a secret society of market insider intelligence and that I've finally been dubbed the next Sir John Templeton and investment firms are saying internally "keep an eye on that guy." But for $META, looks like they are going to start selling compute. Gee, look at that, they are leveraging everything it looked like they could have been working on and now the narrative has done a 180. Up 10%
• Talking about knee jerk reactions, $NBIS and $CRWV. The two are down an average of 13% on the $META news. META's sale of compute won't strike at the big data centers but the belief is the neo-cloud space is vulnerable. This sure seems like a very short-term and knee jerk narrative.
• The likes of $NVDA and $AVGO are now pooling as I like to say. They've been stuck on the back 40 of this rotation to more exciting names. The valuation is very much there, even aggressive, but the masses eyes are elsewhere. These names, along with $TSM shouldn't go much lower without that value acting as some catalyst support.
• Right now the segments of photonics and AI energy are functioning very similarly. There's no discernable trend but wide trading ranges that you can take advantage of as long as you understand that eventually you're going to get caught when support is taken out ... or they break out above the range. These seem to be classic option wheel targets but I haven't looked at the spreads. $VST looks really good.
• $AVAV bouncing off the lows created by that accounting issue. I don't like seeing accounting issues even if it is related to Good Will. At the same time, it doesn't appear overly nefarious so I did consider an entry. But once again ... I'm a day or two late
• We missed $CORT, or at least I didn't have the conviction to hold for the double
• $CRWD and $PANW have become market darlings again in a big way. The 4:1 CRWD split is coming tomorrow! PANW has become my 4th largest position in the portfolio if you remove $SCHD, my dividend ETF
• Did you know the old $AOL is back and trading? $BSP, and Italian company that bought AOL, is trading 8.6% higher on its first day of trading. $AOL was the issue that taught me the lesson that "it only takes one" stock to change your financial life. I purchased AOL when it IPO'd back in the $90s and made something like $1,500 after trading out of it days later. If held, that same position would have been worth $5.4M. Thanks for bring that memory back up BSP.
• I'm finding I don't like being short, even though my short conviction is high. I just keep seeing capital I could be using to purchase my favorite stocks and models that I'm seeing in the market now. But the conviction I have about this market top is keeping me in the short. I'm strongly considering just pulling it off to take profits, and then putting it back on when things rally. Basically a swing trading short position that I know will eventually catch me flat, missing out on big downside.
• $PLTR with the big rise of 8.9%. I did purchase it on Monday for an alt-account. I didn't post it because it got lost in the shuffle and it's a very small portfolio
• $SPCX on the decline. Yeah, don't care. The lower the better so I can keep building. Ideally if I can get beyond the first earnings release. How long before they fold $TSLA in? It has to be coming right?
• $TOST near $29. Nice.
• $HOOD gave me a chance to get back in just under my sales price. Didn't take it. I should have. Up 8.3%.
• $EWY and $FLKR falling 6.8% and 6.5% on the memory fallout impacting $SK Hynix and Samsung as well. Great. Love it. Come to Butthead. That said, I'm waiting for the arrival of SK on the ADR in the next week or two. A lot research first.
• $GIS earnings were good, stock up 8.1%. Yield of 6.5%. This is the way
• See $WMT today? Off another 4.6% and now down about 20%. Opportunity?

Let's pivot:

Here's the YTD performance of the S&P500:

FinViz YTD

Here's the 1 Mos.

FinViz 1 Mos.

I always like to look lost leadership for the opportunities when things settle. Health care still has legs in my opinion.

Anyway, I hope you TIC'ers found some value in this post.

TJ

$CRWD now trading split-effective following their 4:1 split. Love it!

$CWRD Post 4:1 Split

The last time I traded this stock I went in with a swing trade in the $50s backed by LEAPS at the $50 level, eventually bailing out of both near $100 (as I recall). It was an awesome trade. I thought I was going to see this run away as it cleared $130s. Instead, a double top hit, the Clarity Act became a thing and, now, we have competing stable coin news.

https://finance.yahoo.com/markets/crypto/articles/circle-stock-tumbles-rival-stablecoin-222726108.html

I didn't like how it was trading as it came out of the $120s and also thought the Clarity Act news as significant that wasn't being fully digested within the marketplace.

As it got to $75 I became interested but I was much more concerned about the rotation that was gong on in the markets, creating this bifurcation within momentum of the haves and have-nots. In moves like that, it's very easy for good stocks to get lost in the rotation, let alone if there are news events which could move it lower still.

As it happened, the $85-$90 level didn't hold and it now looks like $50s could be in the picture again. If so, it could be very interesting as yet another swing trade. The technology and utilization of their stable coin is still quite favorable in my mind. The impact of the Clarity Act, however, looms. That said, passage of the bill would seemingly be great news for the stock and the company's implementation. Failure, which seems already priced in to me, wouldn't be that significant from what I have read but I don't know this space well at all.

Still a very intriguing setup here.

$CRCL 1-Year

I wanted to split this section out to expand on it today given many of the thoughts running through my mind. So, tag along as we spin around inside my mind to discuss topics I've been chewing on - always dangerous/scary.

AI

I had a home dinner with a market friend last night. We talk on the phone about the markets at length, sometimes 2-3 hours at a time. Wide ranging and deep discussions about stocks, economy, policy, opportunities and threats. In many ways each discussions is a SWOT discussion about all thing money/wealth/markets. We just don't usually get together. I haven't 'seen' him in probably 3 years.

We were discussing AI and I mentioned something I've been mulling over for some time, AI vs. jobs. I heard the ECB this AM also talk about this and really liked what I heard, and not just because I think the same thing. AI's impact on jobs is:

1. Not in question
2. Not a blip, but a path
3. Transitional

It's the way of investable market events at the hands of technological innovation, no different than the rise of the Internet in the mid-90s. And, yes, the same SWOT discussions were going on during that investable event. But for those caught in the whitewash, or rip current of the event, it's not trivial.

The impact of AI on jobs is something all of us as parents, mentors and workers should consider.

I was in my 20s when the computer revolution truly hit the business sector, and in my mid-20s when I saw the rotation from analog to digital as I'll call it. The wave was high, the path was evident and workers were left to respond in, basically, one of two ways. 1) Embrace and adapt or 2) Suffer from long term obsolescence of a fading skillset and/or education.

Currently, in my estimation, those between the ages of 22 and 29 are at significant professional existential risk if they are unable or unwilling to pivot their skillsets and training to stave off potential AI impact. In some cases, specific training and education has already been served notice. In other cases, there may be an opportunity based on unexpected AI benefit. For many others, they are caught in between and need to act now to preserve/extend their professional value and livelihood. I wonder, how many are able and willing to consider job shift, re-education and/or exploit opportunities within their chosen fields to remain viable?

Ultimately, each individual within this age range is going to be challenged like they never have been before. They'll need to consider changes, new vistas and opportunities never on the canvas previously. New cities, new countries and new/additional degrees and certifications are all going to be very worthy investments. My fear is that few are willing to make these short term changes that present challenge for months, but provide decades of opportunity and viability. Others may seek out these modifications, but do so without enough critical thought to plan effectively. Knee-jerk reactions, especially those requiring months or years of work, are rarely the best approach. Adaptation is best performed with a clear head, focused goal and a good plan.

AI vs. Young Workers

Obviously, the age range of 22-29 is not binary and is somewhat ambiguous. I'm sure many of you older may be suffering similar threats at the hands of AI impact. I'd love to hear from you in the comments if you are feeling this topic first hand.

At any age, you must consider redefinition, retraining and, potentially, reeducation. Accept it and embrace the opportunity, wherever it exists. At the very least, be mindful of how AI is impacting your chosen education, training and career. Do not get stuck with a victim mindset. I saw it before and it's occurring again. Your mindset and willingness to embrace new opportunities will be the determinant between long-term success or short-term obsolescence. Sometimes those paths which seem to be the most difficult also have the best long-term rewards.

If you're a career coach, manager, mentor or parent, ensure that those who may be under your influence hear your messaging about adapting and changing. Champion them. Old training and education isn't lost but it is very moment-in-time and subject to change. Regardless of age, there's always opportunity for new definition, re-definition. It may take investment in time or money, but "investments" usually take "now" resource for "later" reward.

Good luck out there!

J

Took the day off from posting yesterday following a short period of market/posting exhaustion. I've been doing a much better job of moderating recently, rather than pushing through and working too hard to have input, find truth signaling and make appropriate moves.

15 minutes after open:

7/1/26 6:45 AM PST

We're clearly bouncing along the top. We're going to eventually find direction from here, higher or lower. I know that sounds inane. This is a resistance point and we need a catalyst to break us out (earnings?) or we'll suffer from a form of exhaustion after such a big rise and we'll fade. I still lean toward the latter, but the earnings setup is coming more into play due to timing ... as long as we can tread water up here for a bit.

I'll be following this post up with an expanded random thoughts section where I speak more broadly on some things I'm considering, mulling and analyzing.

ECB Forum

I like Kevin Warsh, far more than I expected I would. It's important to stay objective especially in that we have a politically charged environment today than at any time in the past. Some might say we've been heading that direction for a long time and it's natural progression. I don't think that's the case. DJT has directly ushered in a contentious and fractious style that, unfortunately, has gone beyond D.C. into the our cities and towns, mainstream America. It's unfortunate but it is what it is. Each of us can resist this move - I am.

At the same time, it's important to stay objective and independent in thought. I'd like to say so much more on this thought but I, like I ask everyone here on TIC to do as well, try to walk a careful line on not going too far with political discussion. This is where my level of "Independent" thinking I think proves that it's the best position to have. It allows us to see/hear/act with an open mind without too much bias.

That said, I had great concern for the potential lost independence of the Federal Reserve as Warsh was named. I had significant concerns that he was named all the while having puppet strings attached. While this may have been the attempt, at least at this juncture, that is not what is playing out IF Warsh's past and current words are any indication. It's important. His history would seem to fly in the face of his appointment so I found that curious. That led me to viewing his appointment and what will follow with a cocked head and a wry smile with my arms folded, skepticism on my face. Remember that scene when the main character in the Polar Express sees 'Santa' in the in the window of Herpolsheimer's toy store, seeing that Santa is mechanized? He gets that "of course he is" look on his face - that was/is me.

But, thus far, I like Warsh's messaging and actions. I'm optimistic. He's trying to take the news interest of the Fed away, reduce it being a sense of 'events' and, instead, push them and their work into the background. He doesn't seem influenced in any way and, in fact, recommitted to the independence of the Fed. Very important! He's demonstrating that the Fed's role is most important, above and beyond any influence. I'd like to admonish CNBC a little here for trying to create "news events" out of this forum via her questioning, rather than understanding the importance of what Warsh is trying to accomplish. This isn't a game and I'd like to see media understand the importance of that goal and outcome. Pipe dream for sure.

I also like that the panel spoke on the topic of stagflation, talking about how rare of an event it really is and it's a lot bigger than simply GDP and inflation. Very correct and it's understood that the path is key here. I can't ask for anything more here as we navigated these very choppy economic numbers.

7/1 7:10 AM PST

We're recovering after a relatively red open.

The Fed has a very difficult job because and many still don't understand that the Fed's role is not one of being predictive but, instead, reactive. Therein lies the great difficulty in that economic impact and trends from many moving elements play out over a very long period of time, months, sometimes years ... not days. DJT is a very reactive President prone to impulse which makes Warsh's job very difficult.

But, I like what I'm hearing from Warsh and it appears DJT got the assignment right. But will HE think so a year from now. This will be key and he falls out of love with people much more quickly than he falls in love with them.

Speaking of independence, or lack of it, CNBC's Joe Kernan has a one-on-one interview with Trump tomorrow. Kernan's love fest for the President ensures it it's going to simply be a love fest. That's just the what is of the situation. As always, I'll look for important nuggets for consideration beyond the B.S. and black smoke, as I like to say.

Look for Part 2 shortly

TJ

This year has made me more and more self-doubtful. So many companies have continued to deliver decent financial reports, yet their stocks still get punished badly. It feels like an absurd market, and it constantly makes me question whether I’m the one who is wrong.
Just like yesterday, I still don’t understand why a mixed report from Nike could lead to a 9% after-hours drop.
Meanwhile, $CRM, $FIG and $ADBE are starting to bounce back too.
Patience is always the key to making money.

People hate $NKE, $LULU, and basically the whole apparel group right now.
But honestly, Nike’s earnings were not that terrible. Not great, but not a disaster either. Revenue and margins were better, partly because tariff pressure came down.
The long-term growth story is still the main concern. Nike still needs to prove the turnaround is real.
But in the short term, with the upcoming season, I don’t think the setup is that bad. If $NKE gets shorted hard tomorrow and the selloff looks exaggerated, maybe deserve to step in as short term trade, but if it is neutral, then no .

Busy week ahead with lots of little visits. Probably going to be less posting so this is your queue to do what you can to keep TIC poppin'. Thanks as always!

Here's the market as it stands at 7:07 AM

6/29 7:07 AM

Losing some o the steam from the AM pop, but that's okay. We could use a bit of settling though I'm watching to see if the ol' Mag 7 can take some leadership here after quite the fade.

Yesterday's Market Digest was one of my favorites because I thought it properly explained my current mind space related to the markets, was fun with the added graphics which wove in a lot of the current stacking negative catalysts along with the tactics and discipline needed to navigate the current environment. And even slowed down and took time to proofread it. So often I'm moving really quickly and simply aske for grace from all of you when it comes to poor grammar, incomplete thoughts or just bad sentence structure. Sometimes the informality of a message board means I don't spend enough time proofreading. Not promising more of it, but I feel better about my writing when I take the time to do it.

Random Shots

Rising

• $ASTS - Space is having a good day with this name up 7.6% and #1 on my list. I almost added more LEAPS last Friday but I don't have a lot of trust in the space, no pun intended. I have conviction as to the broad direction, but the names are risky. They are near the top for me however
• $RKLB - Up 7.5% on news that they are taking out Iridium for $8B. This also likely means even more dilution
• $CRWD - Up 6% and has been having a nice run as it tries to get back to new highs ($786). Split-adjusted trading begins on 7/2, 4:1.
• $CBRS - Up 5.6%. Finally catching a prolonged bid. If you've had your ear to the ground, there's more and more discussion about the need for faster inference chips. This is $CBRS' wheelhouse
• $PANW - Up 6%, nice move and reaching a new 52WH. Amazing that this name was in the $140s and left for dead 4 mos. ago. Thankfully I did add on the dip. Now at $322
• $AMZN - Up 5.1% as Mag 7 is back in focus. They got too cheap and this name has been on a bad slide
• $PLTR - Up 3.7% after its own slide. AvS working today. On again, off again
• $NOW - On the heels of $PLTR, up 3.3%
• $GOOGL - Was waiting for this name to perk up again. up, 3.2%. Probably the best single positioned company in the world but capex and dilution have taken a toll.
• $AVAV - Trying to hold the line here at $140, up 3.1%. I'm still intrigued but I don't like breaking rules/discipline when it comes to a stock's story and then I hear "accounting" restatement.

Losing

• $COHR - Off 8.9% as the trade comes off. I was wondering when this might happen but it's a name I'm still trying to scale into. No real conviction on the price of my entries so I'm trying to add additional fractional units as I get 5%+ declines. We'll see what it looks like toward end of day. Kind of exciting to see it come down ... needed to
• $ARM - Off 7.3%. Great company, too expensive. Believe it or not, I also think ARM is right there as one of the best situated companies. Their CEO is also a rock star. Let it come in
• $SNDK - Down 8.2%. Rotation out of this trade continues. The top was signaled with an amazing blowout run off of $MU's earnings but traders are taking profits
• $MU - Off 7.9%. My take on $MU, I thought was very accurate. Great company and it has come a LONG way. Still very cheap on metrics. But Babies can be thrown out too on when profit taking sets in - even the golden child. There's a time and place, but I don't think it's right now yet.
• $LITE - Down 6.3%. When I see $COHR at the top of the list, I expect to see $LITE. Likely nothing here except profit taking and rotation. That's fine.
• $CRWV - Down 6.3%. You're getting the theme by now
• $MRAM - Down 4.9%. Ditto.
• $IREN - 4.9%. Etc. Etc.
• $MRVL - Down 4.5% - You ever see Awakenings (Movie)? Based on a true story and such a great movie. Just watched it again. About a doctor who treats non-functional Parkinson's patients with L-Dopa and sees them all become "awake." I won't spoil the movie. Many of these stocks may be the patients in that movie.
• $DELL - Down 4.1%

Misc.

• Looking at that chart of darling $SNDK shows the struggle the markets are having right now. It has been making higher highs, but can't hold the gains. It's rubber banding where is stretches away from the $1,920 support level or so, stretches, and then eventual snaps right back to it. I'm wondering if the profit taking will set in and take this name back to $1,500s
• Just not excited about much right now as I see movement that suggests more profit taking out of the recent leadership. Sure looks like sold-off tech is rallying Mag 7 ex. $AAPL. $CBRS is having another great day and is threatening $200
• I've decided I want to add $CRDO to go with $LITE $COHR and $CLS but I'm waiting. It's down 3% which is a nice start
• $DECK threatening to fall below $100 again. This would have been a great trading stock
• $FLKR and $EWY are selling off now along with other profit taking names as South Korea's KOSPI market is under pressure at the top. That points to SK Hynix and Samsung. Fine by me. I can be patient. The lower the better
• Almost added $META late last week. Up 3.3%. The old legacy leaders are looking cheap. META arguably the cheapest
• The plight of $PLTR is going to be interesting to watch. It's a beloved stock by almost all analysts, including hedge funds. The ride down has been interesting and noteworthy. It completely lost its mojo. But when it does get it back. I think it's going to be explosive
• $TOST working its way back from lows again, back above $28. I think this is a $40 stock, maybe by the end of the year IF earnings reports continue as they have
• $TSM is one of the best positioned companies, right behind $GOOGL and in a different space. Perhaps the best positioned AI company. I think you can add them at any time you want.
• I'm still watching $USAR for a possible trade. Just waiting for all hype to fade as the stock price has. I think we may see another shot at $15-$16
• $UBER is heading back up again as realization that FCF is still king and it got too cheap. In my primary portfolio, I did stock replacement where I sold all long shares and picked up LEAPS instead that allows me to control a lot more shares while spending 2/3 of the capital.

Final Word

My eyes are very wide open as I lean back and watch these markets. That is what yesterday's Weekend Digest was all about. Personally, I think that was one of my better posts as it struck the balance of what I'm feeling. Opportunity vs. Risk.

I've been hearing, far too many, people reaching out to me saying that old metrics and historical trends can't be used in today's markets. That leads me to a quote:

If you were right, I'd agree with you

As always, bonus points for the reference! I'll die on that hill! Historical reference, especially, somewhat recent history, is not outdated, unimportant or otherwise worthless. I do subscribe that the longer the time between events, the less applicable it is but the 1990s and 2000s, in my view, are still very relevant. I've already given my reasons as to why I believe that's the case, referencing psychology, investable events, market dynamic. I have seen nothing to suggest we can't apply the lessons learned. If anything, the volume and volatility in the markets, stemming from increased demand, only increases the size of the waves as they break over the bow of our ship.

This is not to suggest that the end of the story will be the same, but the same variables in the equation are playing out from where I sit. That is keeping me cautious ... and patient.

Have a great holiday shortened week!

TJ

Good morning all, hope you've had a great weekend.

Where are we?

There are times, when looking at markets from a macro perspective, that multiple different narratives all converge, creating a confluence of events that can make for a very challenging environment. I have a high degree of continued conviction this is where we are now.

I'm an individual that does like to use some historical modeling for the anchor points of my own narratives but never leave out current-day variables from the equation. Through that methodology, I can keep perspective of where we've come from as it relates to something tethered in history ... but allow for each period in the market to be unique.

https://preview.redd.it/04fn93bp51ah1.png?width=1070&format=png&auto=webp&s=e096366c48eabbbdb15807970885f1d79db6246b

As a complete non-sequitur, consider the image above which I had KATE make for me. If you want a very easy visual and/or example for how AI is changing our world, our processes, and what's at the root of the AvS (AI vs Software) narrative/debate, there you go. If I had used Photoshop to make this image, it would have taken me many, many hours. Instead, Kate needed 30 seconds.

There are always new variables in the equation of the markets. While I've been doing this since 1989/90, I have 36 years of very close to the ground and, meaningful, experience. If it was just casual interest, I wouldn't have run a community for so long. Even though not my paid career, I consider it my life's work I suppose. It's important to passions aside from your career.

On this topic, however, I don't have enough data points to pick any particular MIT (Moment in Time) to serve as a this is it! point of reference when the markets reach an inflection point. In most cases, these play out over weeks, or months, as it churns toward some unknown conclusion. Of course, I could be very wrong as well. Sometimes market forces aren't as impactful or material as I thought they would be, some remaining very difficult to estimate (speculation) altogether. In other cases, while the orchestra plays, building to that point that ends with crescendo, something entirely unexpected can occur that changes the direction, and outcome. This can be positive or negative. For reference, consider the very first tariff announcement(s) from Feb. 2025, and then "Liberation Day" back in April of the same year. Out of nowhere, and market defining - arguably still with ripples impacting the markets. COVID is another recent example.

We are right there in today's market, I can feel it. To a large degree, I felt it back in August of last year as well if you might recall. I started raising cash, even took a few short positions, as valuations surged to a point where I didn't believe we could support the weight of those valuations and momentum into the market's underpinnings or lack of bedrock foundation. Corporate earnings have done their best to support the weight, but we're still teetering, and it feels like we've reached that inflection point.

Where are we going?

I wish I could completely outline or display all the points of contact I'm tracking and feeling, perhaps in a scorecard type of format. I've considered it, but have yet to attempt it (damn it, now my mind is spinning with the potential). But again, it's not a point in time as much as it is a period of time.

Somewhere between the very specific fundamental valuation metrics of the markets which are very what is in nature, lie the other variables that are far more amoebic and difficult to tie down:

• Level of speculation
• Capital inflows/outflows
• Analyst bullishness/bearishness
• Positive/Negative catalyst balance
• Retail fear/greed level
• Economic soup
• Geopolitical soup

There are far more than these working on the markets at any given time, but these are the primary ones in my mind. If I were to develop a scorecard for risk/opportunity at any MIT, these would be the variables in the equation, all anchored to some level of fundamental valuation to which they are all tied to - the result giving us a degree of confidence or conviction as to the markets' current level of risk to its opportunity.

I'm resisting allowing myself to think about construction of this model because, if I do, you may not see me for a month. I'll enter Rain Man mode (as I and others have called it), be out of commission, and won't look the same when I return:

Cast Away

We all know where we've come from, market-wise, over the past few years, beginning back in 2017, the point of reference I've been using for the start of this super bull market. If using the Nasdaq 100 as the point of reference, we're up about 20% on an annualized basis from 2017. The S&P500? About 15%, still better than the ~10% lifetime average. Some may not be impressed with these annualized figures and, if that's the case, you've lost all perspective. Realize we're talking about nearly a 10-year run now with nearly double the average returns on the Nasdaq and 150% of the S&P. Even more amazing if you consider we've experienced three bear markets in that time.

But I digress.

I can't tell you that we're at that point now. That we've reached a point where we can't move any higher, can't make progress, or that the stacking negative catalysts are too large and too many in number to overcome. The equation is very dynamic and ignoring the resiliency and underpinnings of this bull rally, given the current AI investment cycle we're in, would be a mistake. At the same time, we can't ignore the signs either. My mountain climber metaphor is the best I've come up with to describe where we're at currently:

https://preview.redd.it/m3fhokc5e1ah1.png?width=1087&format=png&auto=webp&s=26db9668c92b31f5bb1a18c5d72210676db7f6af

Think of it this way if you're a less visual person:

Bull markets rarely die of old age alone. But as valuations stretch, liquidity tightens, and expectations rise, the climb becomes steeper. The air gets thin. Gravity never takes a day off. The summit may be in sight, but prudent investors understand that reaching it is never guaranteed.

Furthermore, should we reach that summit, there's not guarantee that there's not another one in sight that beckons. The issue is that the higher we go, the more likely, and more damaging, the fall will be when we begin sliding. Momentum occurs both ways, up and down.

What now?

I can point, and I have been, at any number of negative catalysts threatening our climb. Whether you want to attribute our ascent to speculation, AI opportunity, market resiliency or even the small green shoots of what could be related to a new age of prosperity of the US economy, they all have a place in the equation. But so do the negative catalysts that are, in my estimation, far more real, present and impactful in the near term than their positive catalyst counterparts which have already been working for months (years?). This bull market is old and resilitent. To wit, 2 of the last three bear markets (2020, 2022 and 2025) were the shortest on record. Only 2022 was a typical bear.

The last time we were in a similar period in the markets? 1998 and 1999. What followed? The dotcom crash and planes hitting buildings which tag-teamed the markets into what became known as "The Lost Decade" (2000-2009), a ten-year period in which U.S. equity investors experienced little to no cumulative return as the bursting of the dot-com bubble and the Global Financial Crisis erased much of the gains generated between those events.

We are flying very close to the sun again it would seem.

At the same time, while some broader valuations are stretched, some core valuations of current AI leadership are very aggressively (in a good way) compressed. This stands in contrast to the what was of 1998 and 1999. This is why I'm saying I don't believe we have the same "bubble" forming as many are suggesting. Is it forming? Without question. Is it about to pop? Not in a classic sense, not yet.

The fact of the matter is that in 1998 and 1999, the poster-children for the dotcom investable event were trading with triple digit P/E ratios, not low double digits like that of today's AI leaders $NVDA, $AVGO, $TSM, $META, $GOOGL, $MSFT, $AMZN etc. Even those companies within my AI tier list outside of the "S" tier still have reasonable forward-looking P/E ratios. Today's leaders are not priced like those leaders of 1998 were at the time before the dotcom bubble burst. Market opportunity, and segment performance, is still great enough to keep growth high and valuations reasonable.

Until it isn't.

A combination of competition, speculation, capital expansion and model maturation is a dynamic set of elements that help determine when the music is about to stop. I've been watching the path and volume of IPOs as the next shoe to drop on our "party like it's 1999" point on the curve. We've started seeing the best of those private companies start to come public. To me, our current position looks much like 1998, when we had double-digit IPOs in the space, which then exploded higher in 1999. The companies that went public in the second wave looked very different than those from the first. Valuations and models were ridiculous. The explosion that took place in 2000 was a different sort of event.

The point here is that the best of the best AI companies are poised to IPO in 2026. The next wave is likely to occur in 2027. Should that hold true, that makes 2028, at least as some obscure historical point of reference, potentially noteworthy. If things were only that predictable.

If you want to read more on the late 90's setup related to these IPOs, here you go:

https://www.wilmerhale.com/en/insights/publications/internet-ipos-conclude-a-sensational-year-in-1999-december-1999

If you ask me, we're now firmly in inning two of the massive AI revolution. Without question, this is going to be a long game with significant money to be made over the long term, BUT, with significant market events dotting the curve. Speculation, fear, greed economic fortune, and misfortune, will all be primary variables in the equation making for quite the wild ride.

I'm quite confident we're at a period on this ride where there's a material drop coming. I forecasted this back in late August of 2025, and it never transpired. The only thing missing at that time was a major catalyst to start the lower cycle. You could argue that didn't occur until March of 2026 when we attacked Iran, but that was an acute element not expected. But, that is how the push that begins the slide begins - something acute, not always chronic.

https://preview.redd.it/y300sdg5l1ah1.png?width=1083&format=png&auto=webp&s=c58f1778822ad55585a0919a3e3e0340ac039349

What am I doing?

I'm a firm believer that you need to look at your portfolios, the holdings within, and be very smitten by what you see. What do I mean by that?

We all have some level of investment and cash that we're trying to balance. If you're early in your investing career, you are hopefully giving everything you can to your investment accounts, be they taxable or non-taxable. Time is your not-so secret weapon to riding out the volatility of the markets. Dollar cost averaging works. But that doesn't make us immune from the emotions that come with market turmoil.

You must look at each of your positions and love what it represents to that portfolio. The weight, opportunity, valuation, risk. It's always good to have cash, 'dry powder,' on the side to take advantage of what the market offers at any given time, but we don't all have that ability to have it, or manage it. When volatility hits, we may feel pressure to sell due to FUD (fear, uncertainty & doubt). This is why you need to love each position in your portfolio. Quality matters, balance matters. If you can't objectively see the positions in your portfolio for what you are, you're creating your own false reality as to your holdings, and you should know by now my feelings about creating your own reality.

To wit ...

When I look at my portfolios, I love what I see. When I consider the need to position my portfolio to take advantage of new opportunities, specifically in the next phase of the AI buildout, I'm finding it very difficult to divest myself of current holdings. I'm falling back onto my built cash to fund these purchases. But as my cash is drawn down I'm very aware of two things:

1. Build too fast near the summit of the mountain and suffer the consequences
2. To raise additional cash would mean selling positions I love

The positions in your portfolio were all added for a reason - a goal. You shouldn't unwind those positions unless the story has changed or, perhaps, you added them due to impulse. Boredom in positions is very real. It is what led me out of $MU as it fell into the double digits. To combat this, I try to have as much cash as possible that keeps me from needing/wanting to sell established positions that still have working and valid stories.

At the same time, I'm very aware of the mountain we are climbing as per that third image above. I'm always identifying the next companies that will make up a portion of my portfolios. But you must be aware of the reality. While theses, valuation and price-rise are very real elements of a stock's story, those same elements can be ignored as the market rolls over. Leaders that led us up, will also lead us down. When I say "leaders" I'm not necessarily talking about the largest companies in each segment, but those that are on the marquee due to price increase, popularity, thesis and/or momentum. That's a function of speculation that is playing a huge role in today's markets.

As I deploy my cash in these next-wave companies, I make sure to consider this mountain we are climbing. Most of these stocks have already risen 3x or 4x in price. Are their futures bright due to positioning? Yes. Are they exposed to significant downside when the market rolls over? Yes. This is something you must square with. The hardest thing for me to do is to ensure enough time passes in between purchases of building positions. That is why I utilize my Unit Methodology. Recently the following positions qualify in this regard:

• $COHR
• $LITE
• $CLS
• $SPCX
• $ASTS
• $FLKR
• $CBRS

All of these positions are at different points on their curve, all with attached risk/reward situations.

The hardest thing for me to do is to exude patience. To keep my hands "quiet" while I build positions in companies I'm excited about. What you don't want to do is to exhaust cash, build your average price in a position, suffer a market event and slide down the other side with no cash in reserve. That event is what creates volume and materiality in downside events. When that occurs, we either hold on for the ride or survey our loved positions as targets to raise cash. This is not ideal.

I have a high degree of conviction on many of the stocks I've mentioned over the previous weeks, those mentioned above. I see further investable events coming down the pike. I also see my cash beginning to diminish all the while I love the positions in my portfolio. It's a dangerous combination, especially in that my concern for the market continues to increase. It's in times like these where I have to remember my discipline for stock entry. Placeholder (first) positions are okay for establishing a position, but be careful about adding too quickly, exhausting cash, and seeing your hands tied when the markets suffer a setback.

My hope is that we see positive economic numbers that will carry us to the next wave of earnings reports. At the same time, those earnings reports are currently showing increase capex and dilution events that continue to pressure stocks. We have less than a month before the next wave of Mag 7 earnings begin and the current PoLR (Path of Least Resistance) still appears to be lower given the concerns. My hope is that we've found a bottom but that is not being indicated as of yet.

I'm remaining as patient as I can all the while itching to continue building these positions. It's tough for me, but it's a must. To keep myself in check, I have to physically pull myself away from the opportunity presented for many of these companies and force myself to look at where they have all come from - regardless of valuation, thesis and story.

Please remember, all the variables that have given rise to a stock are important. At the same time, they are also subject to change, influence and can be ignored when market events hit. Investors, Wall St. or Retail, with huge profits will protect those profits (trimming/selling) when macro market events strike. That's just a market fact.

Babies and bathwater often hit the streets during market events. I look for blood. That's when I know opportunities are present. But as the babies are hitting the streets in the form of profit taking, understand that it may begin with the red-headed stepchildren (high valuation & momentum). But it doesn't necessarily exclude the golden child (value and leadership) from joining them.

Have a great rest of your weekend

TJ (El Jefe/Jeff)

I've traded in and out of both of these names as momentum trades. I know Jeff is in ASTS and if I'm not mistaken has indicated that he was staying away from RKLB due to dilution risk.

Jeff - I was wondering if you might be able to expand on your thoughts on this one a bit more.

I ran the question through Claude this morning and it suggests the dilution risk is higher with ASTS. See below.

ASTS

The balance sheet looks reassuring at first — about $3.5 billion in liquidity as of March 31, 2026, after raising over $1 billion in new debt. But that cash was bought with a heavy mix of debt and equity. Shares outstanding rose roughly 24% over the past year, and the company still carries roughly $2.97 billion in long-term debt, much of it convertible — so there's a stacked dilution overhang from notes converting on top of the ATM and equity issuance. The convert structure does have offsetting capped calls in places, but the underlying problem is the burn: a $191 million quarterly net loss with ~$379 million invested in property, equipment and spectrum in a single quarter, against only $14.7M of quarterly revenue. They're funding 100+ satellites against a revenue base that doesn't meaningfully arrive until FY27. That's the classic "dilute to survive the build" profile — capital raised is consumed by capex, not growth optionality.

RKLB

Rocket Lab dilutes comparably on a percentage basis — about a 25% increase in shares outstanding over the past year — and it has an enormous facility in place: a $3.0 billion ATM common stock program registered as of May 2026, with ~579 million shares outstanding. So the capacity to dilute is large and you should expect them to keep tapping it to fund Neutron. But the quality of the dilution is different. Q1 2026 revenue was $200.3M (up from $122.6M YoY) with a net loss of only $45M, and $1.48B in cash plus a $2.22B backlog. Cash burn improved sequentially, and the $450M raised under the ATM during the quarter is what drove the cash increase. They've also reduced convertible note principal to $37.6M, so the convert overhang is nearly gone — unlike ASTS.

Net comparison

The key distinction is coverage. RKLB is diluting into a growing, contracted, increasingly high-margin Space Systems business with a narrowing loss and minimal convert overhang; the raises are funding Neutron, which is upside optionality rather than survival. ASTS is diluting (plus levering) into a pre-revenue deployment where the cash mostly disappears into capex, and the $2.97B convertible debt load means there's a second, less-visible dilution channel if those notes convert. On a risk-adjusted basis, ASTS carries the heavier dilution risk — both because the burn-to-revenue gap is so much wider and because the convert stack compounds it. RKLB's risk is more "how much of the upside gets shared with new shareholders," which is a better problem to have.

Continuing to build the position ahead of it being added to multiple indices. This was a .25U add as I build. I have about 1/3 of the position built with no deadline for the full position. I'd like to be patient to see if I can catch a dip as the market rolls over and/or locked up shares come available, but I suspect that there's enough demand here not to have a major downside event related to lockup.

Impossible to know where it's heading given any swing trading mechanic. I'm remaining to adding .25U or .5U over a long period of time.

$SPCX Max Chart

I added to Sivers Semiconductors at €6.49. I buy it through the Frankfurt listing, 2DG.F, since that is the cleanest route available to me.

This is still a speculative satellite position for me (1.5% of my portfolio). I am not treating Sivers like a core semiconductor holding. The reason I own it is narrower I want exposure to the AI optical-interconnect, and Sivers is one of the smaller public names with a direct link to that theme through InP DFB lasers, laser arrays, and external light-source technology.

The trade is really a bet that some of these relationships convert into product revenue over 2026/2027 before dilution eats the upside.

What I would like to see from here:

- Named volume orders, not just collaborations.
- Photonics product revenue growth, not just pipeline commentary.
- Gross margin improvement as product shipments scale.
- Evidence that Sivers is qualified into more than one high-volume platform.
- Cash burn coming down before the next major raise.

Until 2027 I’m sleeping easy on this.

Title says all... Once the semi/hardware sector calms down, IGV will have its time again.