I thought it would be fun to write personal little memos and stream-of-consciousness style personal thoughts instead of drafting long-form articles all the time.

These memos will be infrequent but serve as a digital diary and journal for the day.

I am quite blown away at the Citrini article causing the mass market sell-off, and it appears that the AI doomer loop thesis which has been discussed widely among sharp circles is now becoming mainstream in Wall St. The Great Sorting section on my article, Maya, has briefly touched on this, and this I would expect this trend to continue. Are fears of AI overblown? Probably. I do NOT think that AI = AGI, but rather than thinking of this in terms of intelligence, I frame this as an explosion in productivity and lowering barriers of entry for much of white-collar work available today.

The best video to watch on the overall AI landscape and what is happening in today's world is probably Capital Flow's video primer on AI.

The overall trend remains the same; the great sorting is here.

Anyways, it is always fascinating to me to see historical fractals play out in real time. History does not repeat but it sure rhymes.

The AI run is essentially the railroad mania of 1920s; railroads and trains ended up revolutionizing transport all over the world. What about the speculators of the mania? They ended up being left in the dust.

"Throughout the country, journals and pamphlets proclaimed the railways as a revolutionary advance unparalleled in the history of the world; economic benefits and widespread effects on civilization were emphasized."
"The public was gripped by the possibilities within the collective imagination, especially when it was argued that railway shares would remain safe in midst of panic; shares for companies that proposed to build out lines skyrocketed even before they had laid down any metal."
"There was an abundance of oversupply in terms of proposals for the very same rail-lines; each of these stock companies would all trade a premium even though it was known that only one of them would succeed and actually be allowed to build."
"Once again, most speculators knew that a crash was inevitable, but all of them believed they would be able to get out before it happened."

These comments (broadly summarized from Chancellor's Devil Takes the Hindmost) are reminiscent of Michael Burry's critique of supply-side gluttony on the AI capex issue. The parallels to Burry's CSCO mania narrative being similar to NVDA rings true today, and I would argue that the railroad mania is another rhyme from history.

Sounds familiar? John T. Chambers, Fortune Magazine, 2000
Sounds familiar? John T. Chambers, Fortune Magazine, 2000

Politics

Resurgence of right-wing populism in USA has peaked post Epstein-release and poor messaging on Trump end; nobody cares about stock market performance except boomers; structural unemployment among the youths and housing affordability remains inadequately addressed. Polymarket bets on Democrats winning House have already priced this in.

Left-wing economic populism is the theme among the normie youth this decade. I personally think a counter-trend rally in socialism is very likely and it will NOT be of the millennial zeitgeist talking points centered around virtue signaling and social progressivism but because of Gen-Z crashing out on the rich-poor divide in an AI heavy world.

Ethics-based signaling as a social status only rose in popularity during the Woke Era and peaked after COVID/George-Floyd. This energy is not coming back as virtue signaling is now Reddit, "unc" coded, and simply put, irrelevant as millennials decline in their cultural dominance.

AI doomerism and people getting rightfully scared and angry about the haves and haves-not will become immensely popular; it is very easy to frame Girard's scapegoat on the ones who own all the capital/resources/leverages and are making the tools that are displacing you.

Wealth taxes and capital gains taxes on even supposed tax havens will become a reality in the next few years (Netherlands is the first example of this). Sane normies will push for more free-gibs, the demoralized ones will become left-wing extremists; Luigi Mangione was the first expression of this; watch for more news of data centers being shut down/sabotaged. As @edgefills once wrote, kill the normal distribution and the normal distribution ends up killing you.

We are already seeing signs of this with the unhappiness on housing prices all over the world and AI deflationary doom loop bust will only exacerbate this.

Interestingly enough the right-wing pendulum has only begun for the rest of the Western developed world, in particular Europe; UK/Ireland and France are not far off from 1848 style revolutions due to backlash from reckless immigration policies; odds of civil war/big riots are not that far off.

Positioning

As an expression of these following ideas, these are available and I put my money where my mouth is.

Some degenerate Polymarket bets: Democrats sweep House 2026, Restore Britain 2028 when the upcoming markets go live.

I am heavy on cash, gold, copper, and mostly own EWY and the companies set to benefit if AI adoption continues (e.g. SK Hynix, Alibaba, may build a position in other bottlenecks). However, as I believe US stocks dominance is likely over and the equity run of the past decade is approaching a tail-end. Intra-day stock volatilities and the fear around software only reinforces my idea that the markets are on a knife's edge right now, which calls for defensive positioning. The hot money rotation from Mag7 to GPUs to CPUs to HBMs to ex-US equities and anything narratively involved in the AI race (Toto Ltd for example) speaks to me of late-stage cycle. Size down, risk more.

I believe that energy/industrials/defense and commodities and the stuff that builds out our very little dystopian Panopticon will of course, continue to do well despite broader market selloffs.

For the wealth-tax/socialism resurgence, what happens when the wealthy have to leave their countries as asset owners increasingly become society's scapegoats?

Housing (illiquid) is not the answer, and neither is transporting tons of gold across borders. The market has not reflected this yet, but BTC will be a better value prop than gold in the coming decade despite currently trading as a depressed asset. I also like building a long-term position in privacy-themed positions like Monero and Zcash will pay off as surveillance on our online activities and asset tracking increases.

As for the hypergamblification/perpfication of finance thesis, Hyperliquid remains, imo, the best horse in the race and is still one of my largest notional portfolio allocation on a 3yr time horizon.

And as always, not financial advice :)

-fin-