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The š„H.E.A.T.š„ Formula
AI Driven Insights to Spark Your Portfolio
3 New Launches Today:
2X Long ARM (ARMU)
2x Long DJT (DJTU)
2x Long RBLX (RBLU)
The H.E.A.T. Formula is a radically different way to look at investing your portfolio.
āH- Hedges, you should always have hedges and be agnostic as to being long or short. Bonds are not a hedge
āE-Edges, you should always look for edges. Preferably these are edges with some sort of psychological underpinning, structural edges, or some sort of barrier to entry.
āA-Asymmetric. Everything you do, be it trades or your overall portfolio, should be designed so that heads you win a lot, tails you lose a little.
āT-Themes. You should always be invested in the top themes. Most everything else is just noise.
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Market Recap
Was hoping that wouldnāt happen, but thought it could. So Iām not arguing that Trumpās policies are right or whether they will be effective or not, thatās above my paygrade. I do think he cares about main street over Wall Street, and he cares about interest rates, but he doesnāt care about the market at the moment. He would rather pursue policies that he believes will bring back middle class jobs, than policies that the market may favor.
From Mike OāRourke last night basically saying the same thingā¦.
Last Thursday, we asserted that the President is seeking a structural shift in the US economy that pivots back towards benefiting Main Street and away from Globalized Corporate America - "Through globalization of the past three decades, the US traded GDP growth and jobs for low consumer prices and high corporate profits. ...He wants factories and surrounding businesses that support them opening here in this country. That is not good for corporate profit margins, but it is great for Main Street America and US GDP growth." Today the President himself stated "They can't come in and steal our money and steal our jobs and take our factories and take our businesses and expect not to be punished. And they're being punished by tariffs. It's a very powerful weapon that politicians haven't used because they were either dishonest, stupid, or paid off in some other form." There should be little doubt that such a structural shift will create friction, dislocation and uncertainty. The reason the tariffs on Canada and Mexico are so important is because they are our closest trading partners, they share our borders and they are our allies. This is very different than the China tariffs with whom we have an adversarial relationship, and China is essentially the lowest cost producer in the world. If the President takes such a hard line with our closest trading partners, it does not bode well for any other nation.
From Jefferies this morning, plays right into the European Defense themeā¦.
EUROPE UNITED BY TRUMP! Trumps actions already had been making Europeans realise that they need to work together in this new world order ā where strength in terms of military and financial power seems even more relevant. Feedback from clients in Europe is that no European leader would want to be in a situation in which Zelenskiy found himself in last week.
DEFENCE (TO BEGIN WITH): The disastrous interaction between Trump/ Vance/ Reporters vs Zelenskiy has led to Europe swiftly coming together to ensure increased defense spending - cEUR500-600bn defense funding over next 3 years, driven by a combination of EU and German funding.
GERMANY & BREAK-EVEN WORK-AROUND: It is increasingly assumed that Germany could potentially use a workaround by excluding defense from the debt brake provisions.
SPY currently sitting on a support area, if this breaks then you look at $575.35, which is the Jan 13 low.
Next support for QQQ is the 200 dayā¦
Watch Bitcoin around the 200 day, Iād probably be a buyer on an undercut and rally, you could short a break (I probably wouldnāt as the easy money has already been made on the short side)ā¦..
Selling that rip in Sunday was a fairly obvious move. We knew they would eventually announce a crypto reserve and doing it on a Sunday when volume is lower was pretty much guaranteed to create a reaction.
Not really seeing anything buyable at the moment, and with the tariff uncertainty, anything that looks good one minute, doesnāt the next. I took profits on GDS, had an amazing run but probably time to cut back a bit on China, I trimmed more Mag 7 (luckily before the big leg down), and also trimmed some hedges-not because Iām bullish now, but was in danger of tipping net short, which I prefer not to do. Iāve been experimenting with my no bleed tail risk ETF strategy (hopefully filed this week), great timing, which has been providing more protection than I thought it would.
I think Apple has a chance to be one of the huge winners from AI, but they have to execute. Unfortunately for them they are falling behind. I had GPT do a detailed analysisā¦ā¦
š§ Strategic Recommendations
Apple is at an inflection point akin to Microsoft during the internet revolution of the mid-90s, or IBM during the PC revolution in the 80s. Nobel-level economics thinking teaches us that tech companies must master network effects, ecosystem integration, and innovation diffusion. Appleās next steps must be:
Radically Accelerate AI Integration: Prioritize unified, conversational, and context-aware AI throughout the ecosystem urgently.
Strategic AI Partnerships: Immediately leverage third-party AI leaders (OpenAI, Anthropic, Google Gemini) while developing in-house capabilities.
Reorganize AI Leadership: Bring in new visionary leadership or empower effective existing executives, and overhaul management structures to speed up innovation cycles.
Significant CapEx and Talent Investment: Immediately increase CapEx on GPU computing clusters and aggressively recruit top AI talent from competitors.
Consumer-Focused Innovation: Shift away from "nice-to-have" gimmicks to deeply integrated, user-friendly AI that enhances everyday tasks (communication, productivity, personal health).
ā Overall Apple AI Potential Score: 6.0 / 10
Summary: Apple currently lags severely behind competitors, creating near-term risk. Yet its powerful ecosystem, unmatched resources, and enormous installed base mean a decisive turnaround remains possibleāif executed aggressively and promptly.
š Final Verdict:Apple has substantial potential to win in AI, but the window to execute effectively is rapidly narrowing. Immediate strategic realignment is essential for Apple to regain AI leadership and secure its legacy as a transformative technology company. Potential rating: 6.0/10
AAPL could be a short here if it canāt get back above the 50 dayā¦..
In a sea of bad news this seems like a good thing, GPTs takeā¦..
š Overall Rating of Implication (Scale 1ā10):
Strategic Significance: 10Positive Impact on AI Infrastructure: 9Potential Winnersā Upside: 9Impact on Competitiveness & Domestic Innovation: 9Risk Reduction (Geopolitical): 9.5
š Conclusion and Recommendation for Investors:
This development is profoundly bullish for U.S.-based AI infrastructure stocks (especially Nvidia, AMD, and semiconductor equipment suppliers). Investors should overweight positions in these clear beneficiaries, while maintaining caution around Intel and legacy players that may face increased competitive pressures or resource constraints.
The TSMC announcement strongly supports a thesis of long-term structural growth in domestic semiconductor infrastructure and AI, which offers high strategic clarity for investment decision-making in the technology sector.
GPTs takeā¦.
Short-Term (1-2 months): Hold with careful monitoring of monthly data (China, Europe, US), tariff implications, and sentiment indicators.
Medium-Term (3-6 months): Accumulate on evidence of sales normalization, AI catalysts, or sentiment improvement.
Long-Term (12+ months): Maintain structurally bullish bias given unique long-term potential of Teslaās AI businesses.
Tesla is experiencing real, tangible brand and cost challenges in the near-term due to Muskās politicization and trade-related pressures. However, Tesla remains structurally advantaged due to its unparalleled AI capabilities, providing significant optionality and upside. Stay disciplined and tactically flexibleābe ready to aggressively buy once near-term headwinds stabilize or AI catalysts crystallize.
Still holding the 200 dayā¦ā¦
If that doesnāt hold, you have the election gap up low of $275.62, you also have some support in the 260ish area.
Before you go: Here are ways I can help
ā
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