YouSaid · the spoken record

Citrini

lines on the record: 123
first: 2024-06-18
most recent: 2024-06-18
sittings or episodes: 1
sources: podcast

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“I mean, I'm definitely overweight AI in general relative to the index, but NVIDIA specifically, yeah, I don't want to have to. Increase it constantly be trying to keep up with that because that's how you eventually get hurt and eventually how there will be a drawdown and there always are, even if it's going to continue going up, there are periods of time where it underperforms. And that's when you really make costly mistakes. And I would rather be a little underweight now. And then maybe when the drawdown happens, I end up being overweight, then just try to like chase that because, you know, some index is outperforming my returns, which it's not luckily so far.”
2024-06-18 · Forward Guidance · Citrini on 2024 Election Portfolio Construction And AI “Mania” · IDENTIFIED FROM THE TRANSCRIPT
“A lot of outperformance year to date came from because that hedge you know performed really well and I was able to monetize it pretty effectively on those like big kind of like gap downs that we had and that makes up for me not necessarily outperforming the benchmark right now just because so much of the benchmark's returns are driven by NVIDIA and I'm not willing to have NVIDIA make up that much of my portfolio right now.”
2024-06-18 · Forward Guidance · Citrini on 2024 Election Portfolio Construction And AI “Mania” · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, so it gets a little more difficult to outperform the index and keep your risk within the parameters that you want it to be. It's a lot easier to If you really have a strong reason to, the most effective hedge that I had all year was if you were, I think it was April 4th, Israel had retaliated against Iran. Israel retaliated against Iran. They sent some missiles out and there was a big kind of, you know, oh, this is going to escalate into a regional conflict. And I was not playing that game. Okay. Like if that's what we're talking about now, then I am going to buy some puts and, you know, and that worked out well because not necessarily because of that reason. And, you know, I don't really like the idea of like, oh, fading stocks because of geopolitical reasons, because that doesn't work out super well historically. But this worked out pretty well, where I ended up being hedged for that whole kind of episode of inflation acceleration fears. And that is really where most...”
2024-06-18 · Forward Guidance · Citrini on 2024 Election Portfolio Construction And AI “Mania” · IDENTIFIED FROM THE TRANSCRIPT
“Because as NVIDIA goes up, you keep on selling and rebalancing it a little bit lower, keeping it at a certain weight, whereas S&P doesn't care. It's like if NVIDIA gets bigger and bigger as a percentage of the S&P, that's fine. And that's why Apple and Microsoft are so big.”
2024-06-18 · Forward Guidance · Citrini on 2024 Election Portfolio Construction And AI “Mania” · IDENTIFIED FROM THE TRANSCRIPT
“I think that in order to get the next log up, sometimes you have to send puts to put heaven. I'll let it expire and then reassess, but normally when that happens, you can say, well, I guess I didn't have to hedge, right? And if something happens, this happened in April with the kind of like that geopolitical volatility thing. And luckily around that time, my overall allocation was still kind of I think it still would have slightly outperformed even if I hadn't hedged, but there is no easier way to generate alpha than to have your base, like your equity curve goes sideways when the index goes down. It's getting increasingly difficult to generate alpha against the benchmark in like the past month. I think I'm technically underweight in video compared to the S&P. Yeah, just, I mean, yeah, how much of the SP does NVIDIA make up right now?”
2024-06-18 · Forward Guidance · Citrini on 2024 Election Portfolio Construction And AI “Mania” · IDENTIFIED FROM THE TRANSCRIPT
“Which professionals routinely do not do year in and year out? James, what do you think about, when you buy an SP, $5,200 put, is that $5,400? The S&P 500 stays at $5,400 or even goes up, or doesn't get close to that strike. And every day, the day's expiration gets lower and lower. You can sell and keep on rolling, or do you let it expire worthless?”
2024-06-18 · Forward Guidance · Citrini on 2024 Election Portfolio Construction And AI “Mania” · IDENTIFIED FROM THE TRANSCRIPT
“Right. And when you buy put on the SP, you're both making a bet on implied volatility, which is probably going to be negatively, absolutely returning vehicle because it's upward sloping. It will trade at a premium relative to realized volatility. You're going to lose most of the time, yada, yada, yada, and as well as just being short, you know, negative delta, the SV 500. As you said, it only works if you're a better stock picker than the S&P 500, which is very hard. I would say 90, maybe even 95 or 98%, 99% of people and maybe even 90% of professionals, that's not true for it. I think you may have a good reason to think why definitely in this environment, you, I mean, you have been picking stocks that are crushing the S&P 500, you hope that continues. And it may continue, it may not, but that is why it works for you. But if someone's like picking stocks in their time and then shortening the S&P against that, they're basically making a bet that they're better than the S&P.”
2024-06-18 · Forward Guidance · Citrini on 2024 Election Portfolio Construction And AI “Mania” · IDENTIFIED FROM THE TRANSCRIPT
“Well, you know, but during October, when we were going down and that kind of cynicism and skepticism was returning, would I have had the guts to buy the dip there if I didn't already have this pre-existing hedge? And I'll tell myself that the answers no because then I can go forward with the idea that I'm protected.”
2024-06-18 · Forward Guidance · Citrini on 2024 Election Portfolio Construction And AI “Mania” · IDENTIFIED FROM THE TRANSCRIPT
“You never want to be in a position where you say, Oh God, I could have hedged really cheaply. Hedge when you can, not when you have to. I've taken a pretty significant drag on my portfolio just from hedging. But when I, you know, I think probably over the past year, I've given up almost 6% or six and a half percent of my returns from just hedges. And that doesn't bother me. What I'd like to have that 6%, sure. But, you know, also, would I have made bad decisions if I were unhedged? Because everyone looks at, you know, you have something concrete, like your contribution rate from your different positions. And you say, oh, you know, this was a dumb idea, but it's a little more difficult to predict the qualitative aspect of the behavioral aspect where you say, okay.”
2024-06-18 · Forward Guidance · Citrini on 2024 Election Portfolio Construction And AI “Mania” · IDENTIFIED FROM THE TRANSCRIPT
“5400, yeah. So, okay, the SP is at 5400. I can buy the 5200, I can buy the 5200, put and I can sell the 5,000 put for the middle. Maybe you want to monetize that early because you think that the market's bottomed, and now your short leg, and oh, it's a double, but if you had just bought the long leg, you know, you would have been up 500% or whatever. But sometimes especially during the summer, and I did this last year where I just buy the spread, put like 1% of the book into it. And I know for a fact that if things are bad by the expiration date and if we go down that much, then I'm kind of covered. And I think that makes it a little easier to enjoy my summer. But, you know, I think follow is pretty low. So I don't know if I would go with the short leg on that. Yeah, I think that basically I wouldn't be doing this if I didn't think that my stock picks were going to outperform the index. And I have tried to identify tailwinds that make that so. And it's something where”
2024-06-18 · Forward Guidance · Citrini on 2024 Election Portfolio Construction And AI “Mania” · IDENTIFIED FROM THE TRANSCRIPT
“I did the same thing that I did last summer, which probably in, you know, whenever I hedge, I don't really like, I would much rather use single leg options than like a spread because a vertical spread, it looks really attractive in the beginning, right? Because you say, okay, the S&P is at, what the S&P close at on Friday.”
2024-06-18 · Forward Guidance · Citrini on 2024 Election Portfolio Construction And AI “Mania” · IDENTIFIED FROM THE TRANSCRIPT
“So you like being long rates long the two year secured overnight funding rate that's futures on that is basically interest rates so the Federal Reserve will cut as there's recession Of course, that will not protect if interest rates go up and stocks go down, but you're protecting from that recession risk. What do you think about the hedge value of volatility by buying puts on the S&P or VICS futures, the implied volatility is quite low now on an absolute basis? It may be relatively expensive relative to the very low level of realized volatility in the SP 500. I don't know, but the mix is at 11 or 12, which is not high.”
2024-06-18 · Forward Guidance · Citrini on 2024 Election Portfolio Construction And AI “Mania” · IDENTIFIED FROM THE TRANSCRIPT
“Okay, well, if these calls on TLT get zeroed, all right, my returns will reflect the fact that we haven't entered a recession yet. Or whatever it is, if it's on twos or, you know, recently I did TLT. But I think that you can use macro instruments to kind of, that's what they're for. And so I try to keep the two things separate and focus on what's affecting these companies and overall sectors. And then if I have to hedge and kind of try my best to insulate myself from a macro outcome that seems kind of opaque to me, then that's what I'm going to do.”
2024-06-18 · Forward Guidance · Citrini on 2024 Election Portfolio Construction And AI “Mania” · IDENTIFIED FROM THE TRANSCRIPT
“I think that you can look at the sofa curve, and I think that if we do kind of overshoot to the downside, basically this is another function of the election, right? So it's going to depend whether it's Trump or, because, I mean, you could imagine if we have a single tick below 2%, Trump will be out there every single day yelling at the Fed to cut rates, right? And any president will do that, but he'll do it in a way that's a lot more significant. I think that eventually if we have real economic weakness, the Fed will cut significantly more than what's priced into the curve right now. And you can buy pretty cheap protection, I think, using sofa options, or, you know, I mean, rates were almost at five percent on 10s, you know? So I wait for that to basically blow out. And then I like just owning bond calls and saying.”
2024-06-18 · Forward Guidance · Citrini on 2024 Election Portfolio Construction And AI “Mania” · IDENTIFIED FROM THE TRANSCRIPT
“Most macro trades that I make have a timeframe of like a month or two, maybe even shorter. So I don't know what the economy is going to do. And I think that that is clearly a risk. But at the same time, I think that hedging a recession is pretty straightforward right now.”
2024-06-18 · Forward Guidance · Citrini on 2024 Election Portfolio Construction And AI “Mania” · IDENTIFIED FROM THE TRANSCRIPT
“To allocate the drug, and but the whole way down, you know, Druk is confident in his thesis and he's buying the quality names like Amazon and all these companies that are kind of like getting blown out and getting way too pessimistic. So Soros covers his short, kills it drug buying the whole way down kills it over the next 10 years because he's long tag. The only people that lose out are basically the allocators who are running from manager to manager, you know, and I think that The idea of basically when the time comes, I think I'll know whether the risk reward is going to be in going short or in kind of like staying flat and then buying, progressively buying the dip. And that's going to be a function of exactly how distant from reality we get in terms of kind of valuations and stuff. Again, I'm not like a big macro pontificator.”
2024-06-18 · Forward Guidance · Citrini on 2024 Election Portfolio Construction And AI “Mania” · IDENTIFIED FROM THE TRANSCRIPT
“I'm good enough. I mean, it depends what if you want to talk about the timeframe of investment, the best story in this specific vein is the story about Draken Soros back there in the dot-com bubble, where Druk was very bullish on tech and the promise of the internet and bought the whole way up and killed it. And then Soros started shorting the dot-com bubble. And for a while that was eating into his return. So you have these allocators that are, you know, because it's like a model where you allocate to the manager. So you have all this money that's flowing from the allocators into truck because truck is killing it because those stocks are going up. And Soros is just progressively shorting this because he sees that it's unstable footing and then as soon as it starts reversing Soros starts killing it returns start suffering and the allocators immediately switch.”
2024-06-18 · Forward Guidance · Citrini on 2024 Election Portfolio Construction And AI “Mania” · IDENTIFIED FROM THE TRANSCRIPT
“Something that he said was everybody that doubted AI is now long NVIDIA. And that kind of speaks to the sheer power of a paradigm shift in technology where you don't have to defend the technology because it's doing the convincing on its own. And so that, like I said, I am very bullish on AI in general as a technology. The market is going to take it too far and then it will take it too far in the exact opposite direction. And I am excited for that because I think that that presents a really great opportunity to make a lot of money.”
2024-06-18 · Forward Guidance · Citrini on 2024 Election Portfolio Construction And AI “Mania” · IDENTIFIED FROM THE TRANSCRIPT
“But I had a friend who said something, or actually, you can follow him on Twitter. His handle is QF research. He said something pretty interesting about it. He's always comparing which people have done since this started, comparing Cisco in 2000 to NVIDIA now. And his contention for the past year, even longer than I've been in it, has been like, this is not the same yet, right? And that like if you want to see a public and get a lot crazier than this, and I think I said that myself the last time I was on is that if it's going to be a public and get more wild, and I think we've just seen it get more wild over the past three months.”
2024-06-18 · Forward Guidance · Citrini on 2024 Election Portfolio Construction And AI “Mania” · IDENTIFIED FROM THE TRANSCRIPT
“Someone comes up to you and really disagrees with you but disagrees with specific points of your argument. I would say if anyone like is listening right now and has like a really specific disagreement with something that I've said, you know, please, that's how you get better. That's how you avoid. Listen, I would much rather be like embarrassed in public for being wrong on something than be proven wrong in the order book and lose actual P&L. So, you know, it's important not to shut yourself off from people that disagree with you. But at the same time, it has been a little weird getting used to like having a larger following and you're constantly just barraged with people that just disagree with you solely because you're you or because they're positioned differently. And that is. Less helpful, obviously.”
2024-06-18 · Forward Guidance · Citrini on 2024 Election Portfolio Construction And AI “Mania” · IDENTIFIED FROM THE TRANSCRIPT
“I mean, as long as I don't have to declare it on my taxes, no, I mean, honestly, I think if you have a theory and you get significant pushback from it, that's kind of what if you can find a place where you can get quality pushback, right? Where people are not just attacking the general idea of being long technology, but where, you know, if anything, that was part of my thesis, which is just like the overarching skepticism of tech is going to make it so that this is going to be more impactful on a market level because of the idea that everyone is going to have to rush to buy these things because they are so jaded by what just blew up in their face during, you know, 2022. So that is...”
2024-06-18 · Forward Guidance · Citrini on 2024 Election Portfolio Construction And AI “Mania” · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, there's always a risk of basically ending up on the entity list like Smick, which is China's TSMC. But I think that for now it's an asymmetric bet where you just look at the entire ecosystem of like what the ecosystem looks like in the West, right? Where ASML, LAM, applied materials, and then Clack. And then you look at kind of how is China going to bring this in country and what companies benefit from that. So like Nara does deposition and etching POTEC does chemical vapor deposition and High Gon makes CPUs and Cambricon is basically could be quote unquote Chinese NVIDIA if then you can't buy Huawei, but that's one of them. Wa Wong is a semiconductor foundry. So I think that that's right now that's primarily where I'm focused on the supply side of beneficiaries of whatever China decides to do on fiscal.”
2024-06-18 · Forward Guidance · Citrini on 2024 Election Portfolio Construction And AI “Mania” · IDENTIFIED FROM THE TRANSCRIPT
“Stimulate the part of it that's primarily focused on exports and primarily very exposed to maybe Trump gets in and now everything that those manufacturers are making has a 60% tariff on it when it's sold to America? No, you're going to focus on places that allow you to bolster your own domestic economy. And I think that the biggest area of this would be in AI chips and kind of fostering innovation and keeping chips in-house and ensuring that you have your own AI ecosystem. And they're already doing this. If you look at a chart of Japanese semicap exports to China, it is a parabola, basically. And so what I've done is essentially for a while these names have been obviously getting slaughtered, right? And there's always an overhang and kind of a risk of.”
2024-06-18 · Forward Guidance · Citrini on 2024 Election Portfolio Construction And AI “Mania” · IDENTIFIED FROM THE TRANSCRIPT
“This kind of approach to China that has played out pretty well is what I've called the Chinese equity barbell, basically, where on the left side of the barbell, you have a supply side stimulus beneficiaries. And then on the right side, you have demand side stimulus beneficiaries. And then for a while, what I said, the bar of the barbell was, was we were short three or four times as much notional Chinese yuan as we were long Chinese stocks. And so I covered that specific aspect, but I'm still approaching it from there's one of two ways that China is going to do stimulus more aggressively. And right now it's looking like consumer demand focused stimulus would be the most advisable course of action, but they're still going to do a certain level of manufacturing stimulus. And, you know, if you're China and you're looking at, you know, where I'm going to stimulate my manufacturing economy, am I going to...”
2024-06-18 · Forward Guidance · Citrini on 2024 Election Portfolio Construction And AI “Mania” · IDENTIFIED FROM THE TRANSCRIPT
“Some Chinese companies basically figured out that they could do this better, and you had companies like Bitmain and Kanan, and they created application-specific integrated circuits. And the application it was specific for was mining crypto. And now that's still a function of floating point operations and not to say that, oh, if you can create a Bitcoin miner, you can create an AI chip that's going to be better than what you're allowed to buy from Nvidia. China is going to have to make some very strategic investments. And they can't just spin up a few new fabs and turn out a bunch of knockoff hopper chips. They need to create an entire stack. And that's an uphill battle, but it also involves a lot of domestic spending. So when you look at the Chinese economy and the likelihood of Chinese fiscal stimulus, I think that you, what I've been doing”
2024-06-18 · Forward Guidance · Citrini on 2024 Election Portfolio Construction And AI “Mania” · IDENTIFIED FROM THE TRANSCRIPT
“So it used to be in the very early days, you would be able to mine Bitcoin on your Celeron CPU, right? And like your Dell XPS computer. And then it evolved to basically you would buy a Melcrate and you would stick a motherboard in it and some PCIe risers and put like a terrible CPU in it. And then you would just buy six NVIDIA.”
2024-06-18 · Forward Guidance · Citrini on 2024 Election Portfolio Construction And AI “Mania” · IDENTIFIED FROM THE TRANSCRIPT
“They probably have the exact specs, and you know, corporate espionage is good enough where they probably know exactly what it is, but you need the actual infrastructure to be able to create these things. And so I see an environment where China is going to have to continue spending aggressively on WFE wafer fab equipment and redouble their efforts to create Chinese AI without this NVIDIA handicap. And this goes beyond just having AI. It's also AI's development right now is very focused on the English language. And they have to. Going to continue to be a thing until someone is properly incentivized to do something else. So, you know, the best way to kind of describe ASICs is, have you ever seen a crypto miner, like a Bitcoin miner?”
2024-06-18 · Forward Guidance · Citrini on 2024 Election Portfolio Construction And AI “Mania” · IDENTIFIED FROM THE TRANSCRIPT
“Way of catching up and are constantly at the mercy of buying the second best chip? The answer is pretty straightforward, right? You have to create your own. And I mean, but that's a pretty tall order. You know, these chips are the result of decades of R&D with a unifying goal supported by deeply engraved relationships. So basically for the for. Kind of a unique situation because China can't just copy, right? They have to create their own. They have to”
2024-06-18 · Forward Guidance · Citrini on 2024 Election Portfolio Construction And AI “Mania” · IDENTIFIED FROM THE TRANSCRIPT
“And you can buy the most advanced video chips, but not on the scale that you need to, not with all the sanctions. Sanctions aren't 100% effective for anything, but sanctions on a product that has really, really significant demand the domestic market here, you're not going to be able to compete really, although I will say that they have been relatively effective in kind of finding ways around it. And as demand kind of softens for these chips and on the less advanced side, we'll see probably more of them finding their way to China. But still, this can be perceived for China as a national security issue, right? Like it's basically a state of emergency where if NVIDIA chips are going to result in the US developing military technology that can outplay them in a physical battlefield or a virtual battlefield, and they have no”
2024-06-18 · Forward Guidance · Citrini on 2024 Election Portfolio Construction And AI “Mania” · IDENTIFIED FROM THE TRANSCRIPT
“So we just spoke about basically hyperscalers and NVIDIA having them by the balls. And that's not a great position to be in, obviously. You're very incentivized to get out from under that, especially when you're running a business or You don't want to just be at the mercy of a single company and have that be your input cost. Consider that, but on a nation state version. Right? If you're China, you know, I mean, you can buy NVIDIA chips, but”
2024-06-18 · Forward Guidance · Citrini on 2024 Election Portfolio Construction And AI “Mania” · IDENTIFIED FROM THE TRANSCRIPT
“Yep, essentially. And also, or maybe China creates its own chip. And then, you know, and then China has the decision to make, do we keep this for ourselves or do we, you know, sell it on the global market? And that's something, although that is a whole different conversation about the incentives there and whether or not they would make that decision that would take an entire other podcast to discuss.”
2024-06-18 · Forward Guidance · Citrini on 2024 Election Portfolio Construction And AI “Mania” · IDENTIFIED FROM THE TRANSCRIPT
“Those threats would be a recession. So you divide the threats into macro and non macro recession. As a threat, spending goes down as well as the non macro threat to NVIDIA is that all the hyperscalers create their own chips.”
2024-06-18 · Forward Guidance · Citrini on 2024 Election Portfolio Construction And AI “Mania” · IDENTIFIED FROM THE TRANSCRIPT
“Using AI. But does that mean that the stocks are only going to go up from here? No, of course not. It's a financial market. We will get way too optimistic and then we'll get way too pessimistic. And so I'm not going to sell because we're too optimistic. I'm going to sell because we're too optimistic and threats start materializing to that optimism.”
2024-06-18 · Forward Guidance · Citrini on 2024 Election Portfolio Construction And AI “Mania” · IDENTIFIED FROM THE TRANSCRIPT
“You start kind of saying, Well, on one hand, do I want to continue owning NVIDIA? But on the other hand, you know, what is the risk to the overall AI theme here? And because listen, I'm bullish on AI, period, right? But I'm still in the market. And if I think that stocks that are going to benefit from AI that, you know, in a year, I'll be able to buy them 50% cheaper. I have no qualms about selling and getting back in. And that's something that I think probably will happen over the next 10 years. There will be a, it's a market, right? And regardless of AI's progression, which it will be a technology that we all use in our day-to-day life, right? Right now, you can kind of make the decision whether or not you're going to use ChatGPT or maybe you're in an industry where it doesn't really make sense for you to over the next 10 years, every single person in the world will be.”
2024-06-18 · Forward Guidance · Citrini on 2024 Election Portfolio Construction And AI “Mania” · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, when you're underwater on Microsoft for 13 years, and then there's, like you said, the behavioral incentives and how likely are you to hold Microsoft underwater for 13 years and just dollar cost average into it, you need to be a really talented and have a lot of foresight if you're going to do something like that. What would cause me to be bearish on NVIDIA? In terms of the overall market environment, if we went into a recession, yeah, like I would be, I would be very bearish on NVIDIA. In terms of like intrathematic and kind of developments in AI, it comes back to basically disruption. And NVIDIA has been the disruptor. And it's a very common theme where you go from being the disruptor to the disrupted. If there's signs that there are viable products that can kind of unseat NVIDIA in this pole position, that's when...”
2024-06-18 · Forward Guidance · Citrini on 2024 Election Portfolio Construction And AI “Mania” · IDENTIFIED FROM THE TRANSCRIPT
“No, no, no. When you see a bubble forming. That's the bid. That word does a lot of heavy lifting there because I think if you said it that way, when you see a bubble by to anyone who bought the top in 2000, they're going to very significantly disagree with you. When you see”
2024-06-18 · Forward Guidance · Citrini on 2024 Election Portfolio Construction And AI “Mania” · IDENTIFIED FROM THE TRANSCRIPT
“So that's $30, and now it's at $130. So it's up quite a lot. And this is a thing that in finance, people who have a lower cost basis have different behavioral incentives than someone who buys at the highs. And, you know, likewise, if you buy a spack for $10 and it goes down to a dollar, you say, oh my God, there's no way anyone would ever sell. Because going back to our first conversation, James, you said that this is a bubble. And to quote the big fan of George Soros, when you see a bubble, the first thing you do is buy. You saw this as a very”
2024-06-18 · Forward Guidance · Citrini on 2024 Election Portfolio Construction And AI “Mania” · IDENTIFIED FROM THE TRANSCRIPT
“There are like periods of consolidation and stuff. And this kind of, when you get into the mania aspect where it starts to get disconnected from fundamentals, that's when it just starts to become a thematic kind of trend following thing where this is clearly in a very strong trend. And I'm not going to try to fight that. But I do think that there are going to be, especially especially from prices right now, there will be better opportunities for outsized returns, just like we said on Micron and kind of back when I was trading at 70, you know, and now it's at 140. And, you know, that's a double. And obviously you probably could have made the same return buying NVIDIA, but what was your risk? Not talking about ex post, talking about ex-ante. What was your risk in buying Micron when it's kind of like coming out of this cyclical trough?”
2024-06-18 · Forward Guidance · Citrini on 2024 Election Portfolio Construction And AI “Mania” · IDENTIFIED FROM THE TRANSCRIPT
“Well, I think that that's a pretty interesting that's played out. I don't know how many times where the buying pressure on NVIDIA is basically driven by people who sold it 30% ago who said it was too expensive then and then are drastically underperforming because they're underway in video relative to the index and then are forced to kind of buy it back. And then the people that are selling it to them are people who think it's too expensive now. And it's kind of this circle where the kind of price action that we've seen on Nvidia for the past couple months is something that it's not sustainable forever obviously. But it comes back again to the other side of that Jesse Livermore quote where the most expensive ace of any move are the first and the last. As long as Nbiddy is going up every day, I'm not going to sell it.”
2024-06-18 · Forward Guidance · Citrini on 2024 Election Portfolio Construction And AI “Mania” · IDENTIFIED FROM THE TRANSCRIPT
“No, yeah, absolutely. I stand by that statement. And I think that you want to talk about bringing a bell at the top when everyone is starting to say, well, semiconductors aren't cyclical anymore, that's when you want to start getting worried. It's still going to be an economic activity thing. And all this CapEx spending is still related to you have to have a certain kind of optimism about the overall environment to continue kind of spending this aggressively on new technology”
2024-06-18 · Forward Guidance · Citrini on 2024 Election Portfolio Construction And AI “Mania” · IDENTIFIED FROM THE TRANSCRIPT
“If this happens right tomorrow meta is oh, we, you know, we created our own custom silicon and we don't need to buy NVIDIA chips anymore. I think you would want to look, again, TSMC, right? Just because TSMC probably Marvell. Micron, you're still going to need some of the same components to create these chips. So that would probably shift some of the balance of power to the suppliers for ASICs rather than the supplier of the finished product chip.”
2024-06-18 · Forward Guidance · Citrini on 2024 Election Portfolio Construction And AI “Mania” · IDENTIFIED FROM THE TRANSCRIPT
“History and look at like Portugal when they invented the Archebus. That lasted maybe 15 years of 90% margins from being able to make the only musket. But eventually you get disrupted. And that's not a if question. It's a one question. is basically going to be what is the extent of this and obviously NVIDIA is winning right now and it's just something definitely keep an eye on where you're kind of well how is this going to change”
2024-06-18 · Forward Guidance · Citrini on 2024 Election Portfolio Construction And AI “Mania” · IDENTIFIED FROM THE TRANSCRIPT
“Yep, that's a serious risk and something that if you're playing this now where the margin of safety has gotten extraordinarily diminished, you really have to pay attention to the efforts on the part of the hyperscalers to develop custom silicon and basically make their own chips that can do this. The application specific integrated circuits ASICs. And also look at the efforts in China, whether or not that's a possibility or a probability. I don't know, but it's something that you absolutely have to track because, you know, what happens if NVIDIA is kind of dominance in this is disrupted by that? I don't think that that's something that's going to happen in the next 12 months, but it's something that there's only so long that you can kind of maintain these extraordinary margins selling, you know, the best and the industry. You look at, I don't know, we can like throw it back in.”
2024-06-18 · Forward Guidance · Citrini on 2024 Election Portfolio Construction And AI “Mania” · IDENTIFIED FROM THE TRANSCRIPT
“You're not short those things now You said something about the magnificent step. So, you think a lot of it will be in the Magnificent 7. So the hyperscalers, which is Amazon, Google, and Microsoft. And then there's NVIDIA, which is selling them all those hyperscalers, all of their stuff, which people have identified as a weakness, which is all of NVIDIA's increase in revenue is coming from these companies, even though these companies have tons of money.”
2024-06-18 · Forward Guidance · Citrini on 2024 Election Portfolio Construction And AI “Mania” · IDENTIFIED FROM THE TRANSCRIPT
“I did that already. I had AI winners and losers basket and when we got down to like October of last year, that was when I really basically said to everyone I was if you miss the first wave, this is the time where you want to, that was when I said on Twitter, you know, we're never going to see below 400 on NVIDIA again. Although I guess I was wrong because of the stocks. But that's around when I kind of covered the shorts and software. But some of the companies, you know, like expensify was one of them. And, you know, I don't really want to talk about that because it's like right now.”
2024-06-18 · Forward Guidance · Citrini on 2024 Election Portfolio Construction And AI “Mania” · IDENTIFIED FROM THE TRANSCRIPT
“Luxury right now basically waiting to see which of these software companies can kind of integrate best. I think that Cloudflare is kind of interesting just from the CDN cybersecurity angle. And I'm not someone that's going to be buying 52-week lows. I think that the amount of money that's been bought buying off the 52 week low list is really just astronomical. I would much rather live by that, you know, that Jesse Livermore quote, the most expensive eighths of any move. Makes it out because right now in software there's going to be some amazing, amazing buys, but there's also maybe 30% of software companies out there right now are just donuts. And I don't really necessarily feel like rolling the dice on that yet.”
2024-06-18 · Forward Guidance · Citrini on 2024 Election Portfolio Construction And AI “Mania” · IDENTIFIED FROM THE TRANSCRIPT
“I don't know The software, you can, you know, is it AI cannibalization? There are so many variables here about why software has underperformed. It's very difficult to nail down a single reason why. But I've also kind of played my hand with software. It was very underrepresented in my AI allocation. And the reason why was because back in June, I basically said that it would be too difficult to anticipate who's going to win and who's going to lose because it's not so much about having upside because of AI. It's about not having downside. And when you looked at all of these gains accruing to the hyperscalers and you had all these software companies, if you were going to say, oh, who's most likely to be harmed by AI? Well, in the long term, a lot of software companies. And I did include a couple of them, but as I've narrowed it down, I've focused a little bit away from that. I think that you have the...”
2024-06-18 · Forward Guidance · Citrini on 2024 Election Portfolio Construction And AI “Mania” · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, CRM customer relationship management also happens to be the ticker of Salesforce, which has historically been excellently performing stock. There has been a bear market in software that I think has taken a lot of people by surprise. And is it because the reason you just mentioned that why do I have to pay some company $100, $1,000 a month to do this advanced processing when I can just download a chatbot for free or very free? I don't know”
2024-06-18 · Forward Guidance · Citrini on 2024 Election Portfolio Construction And AI “Mania” · IDENTIFIED FROM THE TRANSCRIPT
“Where you have this one ecosystem, and that's where it kind of knows everything about you, and it can anticipate your needs. Whoever kind of wins this, not that it's a zero-sum game, but there is a certain aspect of that wherever makes it so that you have an AI tool that is going to be better at knowing you than any other solution, even like I said, on the business side where something like Salesforce, Salesforce was positioned to be like a pretty significant AI beneficiary, but it's also really exposed to this kind of AI infringement just anyone being able to have your own CRM and have AI do that instead of having a specific solution for it. And so these ecosystems will be created, and I don't think that Tesla is going to. Be the one to do that.”
2024-06-18 · Forward Guidance · Citrini on 2024 Election Portfolio Construction And AI “Mania” · IDENTIFIED FROM THE TRANSCRIPT
“So the way that I think that this goes forward is basically if you are not using AI and you're not kind of as listen, not like right now, although maybe in some areas right now, but as AI progresses to kind of this AI assistant agent, whatever you want to call it, there's going to be a point in time where if you're not using it, your productivity will be so much worse than the next guys. And that's why I think that these products are going to be unbelievably sticky, right? Because of that kind of inference that it's doing where, you know, Apple has the potential here to, do you know what single sign-on is? SSO. So, you know, like when you go to a new website and it's got something at the bottom that's like sign in with Google, sign in with Apple. Yeah. Yeah. So if you could imagine like an SSO, but like for your entire life.”
2024-06-18 · Forward Guidance · Citrini on 2024 Election Portfolio Construction And AI “Mania” · IDENTIFIED FROM THE TRANSCRIPT