It was a volatile day in the market today. Right now, Fidelity, which only tracks capital appreciation on the main screen, has me up 7.5% since inception (August 2024) despite my yield on cost of approximately 46% (probably a bit lower now) with a trailing yield of about 40%. If the chip sell-off continues, I plan to keep buying $DRMY , since it mainly does put spreads and call spreads and has the ability to recover quickly in a bull run. My $CHPY position is already pretty well established, and I typically only buy $GPTY when it's in the red. When $DRMY recovers, I will continue to buy $YRAM as I have been doing. The news never really knows what is going on with the market, and I'm quite convinced that they often make up reasons for why it goes up or down because, well, who the hell knows why the market does what it does? Today, the claim is AI safety fears: Dario Amodei, the CEO of Anthropic, called for a slowdown of AI development due to safety concerns. Basically, AI is now being used as a tool to create better AI models. The fear is having something we don't fully understand developing the new AI models — if it does something harmful, we may not realize it until it's too late. I always compare AI prompts to "Da Rules" from The Fairly OddParents. The Fairly OddParents is a humorous lesson in "be careful what you wish for." Often, Timmy's wishes, granted by his fairy godparents, backfire, and he then finds out there is some technicality in "Da Rules" that keeps them from simply undoing the wish. If you prompt the AI carelessly, it may have unintended consequences. For example, an AI may break into a database in order to test the database's security (and that has happened before). Semiconductors are in high demand because of the AI buildout. People fear that a potential slowing of AI development will decrease demand. I say it's immaterial. Semiconductors that are suitable for large-scale AI implementation are already on back order. A slowing of AI development will not change that in a way that matters. And, if you are on the hardware side of AI, you benefit from massive profits, which bode well for your investments. People point to the circulation of money in the AI/Semiconductor sector. Well, that is how economies work, pal. They aren't just passing money around like some are alleging. There is material and identifiable demand for the products and services that are being purchased. And, it is unlikely that anything can be done to slow down AI development. It would kind of be like Prohibition: it's not really effectively enforceable. And it is very unlikely that China, who is doing very well in the consumer-grade AI race and not so well on the military/enterprise side, will slow down their development. China's weakness is largely due to hardware limitations, although they have been able to significantly close the gap with software workarounds. Take note that software companies are going to eventually benefit heavily from AI demand. This will not take away from hardware demand, but it will be one way companies will be able to do more with less advanced hardware. So, this is just a "blip." Semiconductors have a bright future. Nothing has changed. Investors are easily spooked. A lot of people have been going into "defensive" sectors, and I have bought the dip and made money every time they exit the AI/Semi sector, while they get subpar returns in comparison. I will continue to pursue my concentrated bets and extract significant liquidity in the process. I'll reach a realized return on my investment so that any dividends going forward are house money. I am already very close. In fact, I've received 83% of my cost basis in the form of dividends since August of 2024. The name of the game is to get great total returns from outperforming sectors and extracting significant liquidity from those funds without selling shares. I do plan to put another $15,000 or so into this brokerage in November, and that will skew a lot of these numbers.
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