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Situational Awareness down 67% in July in AI stock rout

wsj.com

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

#131

Post by bigstrat2003 »

uncivilized wrote: post #55
2PqboPPmKegvanx wrote: post #47

Earlier quoted context omitted.

>Now another EA has followed the path of making a lot of money relatively quickly and losing it just as fast let's be clear here - he didn't actually "lose" a ton of money. he was up 439% net in the first half of 2026. his issue was getting margin called due to being short on software (which went up) and long on AI infra (which went down) - getting margin called != losing money.

Yes he lost a ton of money. He went from being up as much as you said to up only 80% and getting liquidated at that point. If it weren’t for Citadel stepping in to buy his investments who knows how much worse it could have gotten. The only thing you can argue is realized vs unrealized.

Unrealized losses do not count as losing money (and similar for gains, of course).

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

#132

Post by reisse »

Diogenesian wrote: post #97
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…

I strongly suspect it's closer to the latter; CNBC says they had to sell rapidly to meet margin requirements and it couldn't be confirmed if they actually succeeded. Suggests there was a lot more than $250m in collateral on the line. https://www.cnbc.com/2026/07/30/leopold-aschenbrenners-hedge...

Nah, if they reinvested realized profit they can still be in the green overall

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

#133

Post by bagacrap »

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.

Well micron is up 165% on the year so he could have just bought a single stock and done a lot better. The point being that you wouldn't consider someone a genius if they did that, just lucky.

Not sure why anyone thought he was a brilliant investor to begin, as there's always going to be at least one investor of all the millions out there who makes a radical bet and is up 1000%, just like powerball has winners.

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

#134

Post by bagacrap »

ymolodtsov wrote: post #62

I like how Matt Levine formulated it. His thesis was correct. The problem is, his thesis was measured in years if not decades when his funding was measured in days and hours.

I mean that's always the case... we all know that stocks in general are going to be up 30 years from now. But we don't all leverage up 400%.

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

#136

Post by quickthrowman »

Ekaros wrote: post #117
vessenes wrote: post #28

Earlier quoted context omitted.

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?

Situational Awareness filed a 13F that lists a hedge fund’s long and short positions with the SEC. It’s public information, forcing an overleveraged fund to liquidate by pressuring the instruments they’re exposed to is not market manipulation, leverage cuts both ways and all of the people/institutions involved are professional/sophisticated investors

Here are all the SEC filings from Situational Awareness courtesy of SEC’s EDGAR: https://www.sec.gov/edgar/browse/?CIK=0002045724

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

#137

Post by bagacrap »

francisofascii wrote: post #41

Which AI stocks suffered a rout?

https://www.cnbc.com/2026/07/31/why-leopold-aschenbrenner-si...

Nebius, SanDisk, sharonai, etc

Rout is relative as they are still up big yoy. The problem is that he saw them triple in value and THEN added more leverage.

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

#138

Post by bagacrap »

I don't understand why this thing is called a hedge fund. Usually, a hedge fund makes many non-correlated bets across many markets (commodities, stocks, bonds, public and private markets).

This guy made exactly one bet, which is that AI would eat software (long AI hardware stocks, short Adobe etc), leveraged it to the tits, and kept adding more leverage even as the trade moved in his favor.

Where is the "hedge"? Normally we just call this a "fund".

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