Key insights
- The author suggests taking profits in semiconductors and tech due to excessive FOMO and risk-taking behavior. They highlight the narrow market leadership of AI-related stocks and weakness in other sectors like consumer and healthcare. The author is rotating into defensive and energy names, signaling a cautious outlook on the sustainability of the current rally.
Just took profit after today’s insane session. Maybe the market keeps ripping and maybe I miss out on more gains, but honestly I’m okay with that. Not calling for a crash or anything dramatic, I just think people are getting way too comfortable taking crazy risk right now.
We all feels the same way that if a company mentions AI, semis, data centers, power infrastructure, cooling, or anything remotely tied to the AI buildout, the stock instantly moons. Meanwhile most other sectors have either been flat or dead for months/ year. The charts don’t lie. Outside of AI/tech related names, a lot of stuff like consumer / retail/ healthcare / etc.. looks cooked or dead
Seeing way more people yoloing into call options, chasing momentum, and suddenly acting like every dip is guaranteed free money.
Personally I’d rather lock in gains than get greedy chasing the last leg higher. I already beat the index by around 3x this year thanks to of course "AI and semiconductor name" , so I’m happy building up a nice cash position and rotating some money into more defensive and energy names. Maybe the market keeps running , who knows. But when everyone starts believing something only goes up, that’s usually when risk is higher than people think.
Don't catch a falling knife in bear market, but also don't climb too high in a 1 sector bull market either