Yesterday, the market once again seized on negative rumors about AI ARR, but none of this is new to me. As early as last Saturday, I had an in-depth discussion about the topic with Mr. Huang, and my initial assessment at the time was that it was most likely due to differences in statistical methodologies. Yesterday, I also publicly shared the details of my trades in our discussion group. In the face of this wave of negative sentiment, I did not panic-sell.
However, I learned that quite a few retail investors chose to exit their positions in the AI semiconductor sector at a loss yesterday, and some even turned around and opened short positions. Setting aside the sector’s solid fundamentals and currently low valuations, many retail investors and KOLs tend to overlook the crucial step of calculating valuation. Relying solely on price action or simply watching candlestick charts is clearly very limiting. From a strategic perspective, with the midterm elections approaching, shorting the AI technology sector—an area strongly backed by the U.S. government—is an extremely unwise decision. In this kind of contest, your actual counterparty is the dominant force in the U.S. stock market: the U.S. government. Keep in mind that the success or failure of the AI narrative is closely tied to the overall health of the U.S. economy, and any unfavorable shift in the narrative could be forcefully reversed by macroeconomic forces.
Truly going with the trend means aligning yourself with the broader macro direction. This trend is not determined by the subjective opinions of some retail investors or a few KOLs; it is deeply rooted in the AI industries that are closely integrated with the U.S. economy and its real-world industries. Even if we assume that a bubble exists in the AI sector, it will not burst right now—especially not during this critical period before the midterm elections. In short, in October, I advise everyone not to be too quick to turn bearish on the AI sector.
However, I learned that quite a few retail investors chose to exit their positions in the AI semiconductor sector at a loss yesterday, and some even turned around and opened short positions. Setting aside the sector’s solid fundamentals and currently low valuations, many retail investors and KOLs tend to overlook the crucial step of calculating valuation. Relying solely on price action or simply watching candlestick charts is clearly very limiting. From a strategic perspective, with the midterm elections approaching, shorting the AI technology sector—an area strongly backed by the U.S. government—is an extremely unwise decision. In this kind of contest, your actual counterparty is the dominant force in the U.S. stock market: the U.S. government. Keep in mind that the success or failure of the AI narrative is closely tied to the overall health of the U.S. economy, and any unfavorable shift in the narrative could be forcefully reversed by macroeconomic forces.
Truly going with the trend means aligning yourself with the broader macro direction. This trend is not determined by the subjective opinions of some retail investors or a few KOLs; it is deeply rooted in the AI industries that are closely integrated with the U.S. economy and its real-world industries. Even if we assume that a bubble exists in the AI sector, it will not burst right now—especially not during this critical period before the midterm elections. In short, in October, I advise everyone not to be too quick to turn bearish on the AI sector.