While everyone's rushing into beaten-down AI stocks, nuclear plays, and quantum names after they got trampled the last few weeks, I'm doing something that shocked my own team in a closed-door meeting: I have zero long-term stock positions.
The market rallied hard today after this morning's selloff. People are calling it "buying the dip."
But when they asked me point blank what stocks I actually own long-term, the answer was simple:
Nothing.
I don't even own SPY right now, which I sometimes hold for periods.
I am not long anything in terms of buy-and-hold positions.
But I'm Still Trading My A*s Off
Let me be clear - I'm not sitting in cash doing nothing. I'm actively running my strategies every single day. In/Out Spreads, Christmas trees, Shadow Clocks, Earnings Flips and Catapult Trades.
Working with Gianni on the Million Dollar Challenge.
I'm trading around volatility for 30-55% gains. That's different than being long Apple because I think it's going higher next year.
I've got real estate investments and other assets. I'm just not making any long-term directional bets on equities right now.
Why I Won't Touch These "Dips"
You have one company - NVIDIA - worth $4.5 trillion holding up the entire S&P. NVIDIA's up 34% this year. The spiders are up 14%. You got Microsoft, some Google. Meta's flat on the year. Tesla was up 25% a few days ago, now it's gone.
It's a string holding the market up.
The argument isn't whether AI is a bubble anymore. The argument is market cap. Even if this rotates into other AI stocks, that's bearish for the S&P unequivocally.
For the life of me, I can't find something in here that I'm even attached to and worth buying long-term.
The Psychology That's Fooling Everyone
Here's what's wild - we're 3% off all-time highs and people are treating every dip like the world's ending, then celebrating every bounce like we're saved.
The marketplace isn't gonna snap overnight. It's gonna constantly rally back like today and make people believe they can be somebody, then it's gonna take you apart.
This is exactly what it looks like when you start to believe your own BS - that you'll always get a bid back, except every bid back is lower. That's drawing you in, drawing you in.
What I'm Actually Doing
I've been massively long stuff for years. This isn't some perma-bear position. But my tactical trading is different. I'm working butterfly spreads for 450% gains.
I'm shorting financials because they're gonna get pummeled when AI unwinds. I'm short Google because if tech comes unwound, they're coming for the mega-cap names.
But buying quantum computing because it dropped 40%? Buying nuclear because it got cut in half? Not me. Not now.
Today we got that correlation I predicted this morning. Energy sector that started with a bid? Gone.
Financials trying to rotate? Dead. Then the bounce back that made everyone feel smart again.
When everyone's trying to time the bottom in beaten-down names, I'm asking: Can this concentration sustain itself mathematically? What happens when 90% of products trade to one side?
People are buying these dips thinking they're getting AI and quantum at discounts. I'm trading volatility while they're catching falling knives.
Sometimes the best long-term position is no long-term position.
To your success,
Don Kaufman