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Situational Awareness down 67% in July in AI stock rout

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Re: Situational Awareness down 67% in July in AI stock rout

#111

Post by bwfan123 »

cmiles8 wrote: post #68

An inexperienced portfolio manager that’s never seen a down tech market in his life has created a massively leveraged position on frothy assets in a bubble and the bubble is looking ill. What could possibly go wrong. Many of these AI plays are massively entangled and leveraged. It all looks good until it doesn’t and when there’s a hiccup things unravel quickly and exponentially. I fully expect in the next 12 months w…

> What could possibly go wrong

A barometer of the mania and one for the history books. A 23 year old wunder-kind publishes a 156 page prophesy with a catchy title which was lapped up by the silicon valley elite and funded to the tune of 10s of Billions. And, not sticking to his lane, the wunder-kind enters the finance world thinking his brilliance translates there too, and he was promptly taken to the woodshed by the wall street sharks.

Re: Situational Awareness down 67% in July in AI stock rout

#113

Post by windexh8er »

cmiles8 wrote: post #92
asats wrote: post #10

>Even including July's losses, the fund remains up about 80% on the year Spectacular blowup and a lesson on leverage, but let's not miss this line.

You’re missing the core story which is that they don’t have a returns crisis they have a liquidity crisis. Finds don’t blow up because they have bad returns. Funds implode because they have no cash to cover their calls and other needs for cash.

But that's not what they want to see. They want to see that AI is a savior for all. The psychosis of what AI is, especially in these comment walls, is unfortunately and spectacularly real.

Anyone who's done any amount of investment can see this through the lens of history and I'm right there with you. This is the Lehman Brothers stage of the game and SA could be that "one". But Bro, we're still up 80%! - even WSB isn't filled with this level of ignorance.

Re: Situational Awareness down 67% in July in AI stock rout

#115

Post by cmiles8 »

forgetfreeman wrote: post #106
cmiles8 wrote: post #68

An inexperienced portfolio manager that’s never seen a down tech market in his life has created a massively leveraged position on frothy assets in a bubble and the bubble is looking ill. What could possibly go wrong. Many of these AI plays are massively entangled and leveraged. It all looks good until it doesn’t and when there’s a hiccup things unravel quickly and exponentially. I fully expect in the next 12 months w…

I'd be excited for the show myself if I had any idea how to prevent my portfolio from tanking when this clusterfuck finally unravels.

Stay market diversified and you will be fine in the long run. The AI bubble popping will be painful for all in the short term but a blip on the radar in the long term.

These hedge funds get wound up in complicated, leveraged, illiquid layered stacks of (often private) investment vehicles that go from highly profitable to financial nuke overnight. Thats how they just get wiped out while everyone else just has a bad day.

Ironically the whole point of “hedge” in hedge fund is for this to NOT happen but we’re seeing increasingly inexperienced players like here just building a financial nuke and then acting all surprised when it lights off.

Re: Situational Awareness down 67% in July in AI stock rout

#116

Post by cmiles8 »

bwfan123 wrote: post #111
cmiles8 wrote: post #68

An inexperienced portfolio manager that’s never seen a down tech market in his life has created a massively leveraged position on frothy assets in a bubble and the bubble is looking ill. What could possibly go wrong. Many of these AI plays are massively entangled and leveraged. It all looks good until it doesn’t and when there’s a hiccup things unravel quickly and exponentially. I fully expect in the next 12 months w…

> What could possibly go wrong A barometer of the mania and one for the history books. A 23 year old wunder-kind publishes a 156 page prophesy with a catchy title which was lapped up by the silicon valley elite and funded to the tune of 10s of Billions. And, not sticking to his lane, the wunder-kind enters the finance world thinking his brilliance translates there too, and he was promptly taken to the woodshed by the…

Wall Street eats these types for breakfast and then moves onto another meal for lunch. Once more sophisticated players smelled blood in the water they just had a field day here. There are many more setups out there like this and there’s a whole army of folks just salivating for when they can blow up more AI over-leveraged financial nukes inexperienced and FOMOed investors have assembled.

Re: Situational Awareness down 67% in July in AI stock rout

#117

Post by Ekaros »

vessenes wrote: post #28
changoplatanero wrote: post #4

Earlier quoted context omitted.

Say more about how citadel made this happen with their trading?

To be clear, I'm not claiming Citadel created double digit drops in SK Hynix / Samsung. I am saying that as market vol hits, vol traders might choose to make it worse. And when word hits the street someone has a liquidity position, prop traders WILL come and pressure. SA's filings were clear how concentrated they were, and this was known. In this case, Citadel (hedge fund) bought, while I imagine Citadel Securities w…

It really sounds like market manipulation... But oh well it is the biggest boys doing it so it can't be that illegal... Free markets and everything for them right?

Re: Situational Awareness down 67% in July in AI stock rout

#118

Post by malfist »

baggachipz wrote: post #70
malfist wrote: post #12

Earlier quoted context omitted.

Why are you promoting content by Martin Shkreli? You know, the guy who committed securities fraud to rip off desperate patients?

He's an absolute ghoul, and to see sibling comments praising him breaks my heart. Yeah, he "did his time", but he also took advantage of sick people for immense profit. You don't get a pass for that.

He's a person that has told the whole world who he is, and some people, especially temporarily embarrassed billionaires on this platform, love him for his unmasked self.

Re: Situational Awareness down 67% in July in AI stock rout

#119

Post by bwfan123 »

cmiles8 wrote: post #116
bwfan123 wrote: post #111

Earlier quoted context omitted.

> What could possibly go wrong A barometer of the mania and one for the history books. A 23 year old wunder-kind publishes a 156 page prophesy with a catchy title which was lapped up by the silicon valley elite and funded to the tune of 10s of Billions. And, not sticking to his lane, the wunder-kind enters the finance world thinking his brilliance translates there too, and he was promptly taken to the woodshed by the…

Wall Street eats these types for breakfast and then moves onto another meal for lunch. Once more sophisticated players smelled blood in the water they just had a field day here. There are many more setups out there like this and there’s a whole army of folks just salivating for when they can blow up more AI over-leveraged financial nukes inexperienced and FOMOed investors have assembled.

> leveraged financial nukes inexperienced and FOMOed investors have assembled

A lot of debris waiting to happen in data-center debt for sure. The next several years are going to be interesting with more of these type of blowups. This is a canary in the ai-wreck coalmine.

Re: Situational Awareness down 67% in July in AI stock rout

#120

Post by andy_ppp »

tyre wrote: post #104
vessenes wrote: post #3

This is everywhere. For reference, former FTXer and OpenAIer raised $225m into a hedge fund structure, went long and short, and reportedly peaked at $40bn of value; leverage bit hard this week and they sold their entire-ish portfolio to Citadel at $10bn. (Which, I imagine was very likely aiming at this outcome in their trading in the last few weeks). Not reported anywhere -- was additional money raised in to the fund…

You’re talking about the same fund. They were open about their gains. It was the margin calls and illiquidity that got them, not going negative. Some of their assets, like Anthropic stock, isn’t worthless, it’s just illiquid.

“isn’t worthless” is still to be decided IMO. Until you can sell it it defines worthless!
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