July Stock Picks & Position Cuts
Morning kings.
Man it’s hot as hell where I live this week. My indoors project of the week was buying my young son a Betta Fish at Petco. Forgot how much I used to nerd out on designing aquariums. When I was younger my mom never let me get a Leopard Gecko which was world shattering and I still harbor that trauma today.
Anyways hope the little guy makes it past the 48 hour marker or I will be hard pressed for entertainment during this heat wave.
Some quick housekeeping items:
I will be dropping a 250th anniversary MERICA post for all subs this weekend for those who want a quick commemorative edition of Arb Letter
If you missed it I dropped The United States of Socialism earlier this week detailing the concerning surge of socialist support in the US, local election outcomes, and what this means for the West
I think it is an excellent time to revisit our post The Next Generational Wealth Opportunity as tokenization activity continues to explode during this bear market in crypto
Some excellent matches for futbol fans around the world over the last two weeks. Polymarket has France as the current favorite to take it all with a whopping 35% chance currently, followed by Messi’s Argentina and the lackluster Spaniards.
I was pulling for Ivory Coast solely based on the good memories I had playing FIFA with Drogba in my college dorm.
Markets & Equities
Small breather yesterday.
Semiconductor stocks were hit as investors took profits in some of the market's biggest AI winners. After the monster rally we've seen over the past several months, a pullback in chips was almost inevitable.
Software, financials, and communications names held up much better, with META 0.00%↑ Meta standing out after unveiling plans to monetize excess AI computing capacity through its own cloud infrastructure.
That announcement reinforced a theme we’ve been talking about for months.
The red hot AI story is gradually shifting from companies spending enormous sums on infrastructure to figuring out how to generate meaningful returns on those investments. Not too concerned, just think we’re seeing some profit taking and reallocating of capital ahead of today's jobs report and the long holiday weekend.
Markets will be closed tomorrow in observance of the Independence Day holiday.
Micron MU 0.00%↑ pledged a $250 million investment in Trump Accounts for America’s 250th birthday
7 out of 10 market peak indicators have now been triggered according to Bank of America (Unusual Whales/BOA)
This week Anthropic officially relaunched Claude Fable 5 worldwide
President Trump has declined to renew the US-Mexico-Canada trade agreement
Boston Dynamics CEO said this week that “America’s next 250 years will be built by robots”
Robinhood HOOD 0.00%↑ is set to launch crypto trading in UK
San Francisco startup Weave Robotics officially launched Isaac, an AI-powered home robot designed to autonomously fold laundry
The US economy adds 57,000 jobs in June, well below expectations of 114,000 (Kobeissi Letter/BLS)
OpenAI has proposed giving the Trump Administration a 5% stake in the company (Financial Times)
Super Micro MSCI 0.00%↑ found itself back in the headlines this week after fresh scrutiny surrounding the company's AI server business. Authorities in Taiwan are investigating an alleged network that may have routed servers equipped with restricted Nvidia AI chips into China, raising new questions about export compliance throughout the supply chain.
Coming on the heels of last year’s accounting controversy and ongoing governance concerns, the market is showing very little tolerance for additional uncertainty.
Short term this sucks for our position BUT I am still not convinced there isn’t some value to be had here (more on this later).
Crypto
Crypto sits in a pretty interesting spot right now in my opinion.
President Trump has faced some intense scrutiny this week over what some people are calling exploitative behavior in crypto markets since his administration began.
Financial disclosures revealed that crypto-related ventures have become one of the largest contributors to his personal wealth (he reportedly earned more than $1.4 billion from crypto-related businesses over the past year).
This includes over $600M from the TRUMP meme coin that rugged a generation of retail lol. Don’t even get me started on MELANIA.
Outside the drama I am cautiously optimistic as Bitcoin moves back to $61,000 and Ethereum shows a little bit of fight in it today.
Data from Santiment has revealed a handful of encouraging signals suggesting the market could be getting closer to a meaningful bottom.
The crypto data firm has pointed to widespread trader exhaustion, collapsing trading volumes, and extremely negative soyboy sentiment. These are all conditions that have historically developed as selling pressure begins to run its course.
Bitcoin whales have also reportedly scooped up about 270,000 BTC in the past 30 days.
Bitcoin ETFs have seen $8.475B in net outflows since May 6th (CoinTelegraph)
Metaplanet recently bought 2,823 Bitcoin worth $170,000,000 (WatcherGuru)
Total crypto card deposits have officially crossed above $10 billion for the first time in history (Kobeissi Letter)
Binance has failed to obtain a license to operate in the EU (WSJ/Unusual Whales).
I think $65,000 could come sooner than most expect.
I added some AAVE and Bitcoin DCAs this week.
Fresh Stock Picks & Names I am Cutting
At this point I think it is wise to try to find some good plays beyond the AI madness, although chips are now mooning in premarket.
Doesn’t mean we ignore it, but it could be good to supplement the hype and chaos with some other ideas.
Additionally I think we can afford to reduce exposure to some laggards or under-performers to free up cash for these new plays.
One theme I am beginning to pay attention to again that has done well in the past seems to be gaining momentum again and there are a few ways to play it.