A very good week for bonds and the so called doomed software.
The bond call goes back to October 1st, when I wrote on Twitter:
And on October 8th, I followed up with:
I had been making the argument on here too. The market was pricing too much additional Fed tightening when the long end was already doing a substantial amount of work tightening financial conditions for them. I gathered there was money to be made as those expectations adjusted and it worked well.
As shared last week, I realised an 87% gain on the 10 year calls, and have put on another trade for November since.
Software has been particularly satisifying too, considering how much time we spent hearing that AI was going to kill it as well as the amount of pushback I received when my Phase 3 basket launched back in late March. I put that basket on at 20% weight. It has been my largest position ever since so it has had a meaningful effect on my books YTD PnL.
It’s now up 50.69% since inception. Last week it gained just shy of 11% against 6% for IGV, while SPX fell 0.47% and NDX fell 0.79%.
And all this has happened while the AI names many spend their lives writing about and worshipping have materially underperformed. The irony is that the businesses that were meant to be eaten by AI have been a considerably better allocation than much of the trade doing that said eating.
Anyway, enough of the victory lapping… There’s plenty to update on. Especially positioning, which is the most bearish I have seen in quite some time. Which leaves me thinking that it’s a good time to start selling…
