The Capital Allocator retweeted
I think we've reached the anxiety stage of the bear market.
The psychology of a bear market:
Every bear market is experienced as a sequence of emotions, and the sequence is remarkably consistent from one cycle to the next. Financial advisers have long used a version of the diagram below to describe it.
The cruelty of the cycle is in its alignment. Confidence peaks when prices, and therefore risk, are highest. Fear peaks when prices, and therefore expected future returns, are most attractive.
An investor who acts on feelings will reliably buy near the top and sell near the bottom.
The Capital Allocator retweeted
History will show that no one did more to promote left-wing ideas than Donald Trump, and no one did more to advance the Palestinian cause than Benjamin Netanyahu.
The Capital Allocator retweeted
US Vice President Vance just broke up with Trump, blaming him over Iran and gas prices, in bid to maintain his 2028 Presidential Candidacy chances.
One of the things the data analysts on our side obsessed over was "composition"—whether the electorate looked close enough to 2024 for Republicans to win. And despite polls that showed a Democrat blowout, the data kept on telling us the same story: in some states turnout was merely OK, in other states it was downright amazing, and in no state was it catastrophic. There was a genuine sense of optimism on our team: our people were showing up.
So, I asked the smartest data guy I know, does that mean we're going to shock the world? "No," he told me. "We might do better than the polls suggest. But the data is telling us that a lot of Trump/Vance 2024 voters are pissed and planning to vote for the other guys. Our voters are turning out, but they may not vote for us."
Well, that looks prophetic now. Our voters did show up. In Florida, for example, the electorate was 9 points more Republican than Democrat, just a couple points worse than 2024. Undoubtedly there were places we could have done better on turnout. But the main problem is not turnout. The main problem is that many people who voted for Trump/Vance in 2024 voted for Democrats in 2026.
There will be a lot of infighting and arguing over what happened and why that is. One of the pollsters I really respect told me that our economic messaging wasn’t sharp enough down the stretch. I’m sure that’s true.
But the real reason we lost is obvious to almost everyone.
Another pollster—one of the smartest people I know in politics, told me yesterday we’d lose the generic ballot by 13 points. I felt negative going into Tuesday, but even I was shocked by this. In his polling, he saw that a lot of Trump 2024 voters were angry and planning to vote for Democrats. He asked those voters who had abandoned us what would cause them to come back on our team. The top four answers, accounting for nearly all of the responses were:
1) End the war
2) Focus on cost of living/inflation
3) Put America First
4) Change our relationship to Israel
Our voters showed up. And the above four reasons are why many of them voted for Democrats. This is according to a pollster who nailed the results. While many spent Monday attacking Rachel Campos Duffy for calling for a diplomatic resolution to the conflict, it turns out her political advice was sound. (She’s also a great person.)
In the next few months, there's going to be a lot of gaslighting. Expect to hear any number of establishment politicians say the solution to our woes is amnesty. I'm open to the idea that we should change enforcement—by focusing more on businesses that hire illegal labor, for instance. But anyone pushing amnesty is lying to you.
The reason we lost is the war. The president himself said so last night.
If you'd like to argue it was worth it, that losing the Senate for the next 6 years was worth it, then do so. Argue it was a worthwhile cost to pay. Agree or disagree, that's at least honest.
But everyone knows why we lost. And any honest conversation about where we go from here must start there.
I remain hopeful about our country. To the people who are pissed off and want to say, “I told you so”: you’re right, you did tell us so. Take that energy into electing Republicans who share your worldview. To the people who are just pissed at the results, you should be. Let’s take that anger and get back to the work of saving our country.
The Capital Allocator retweeted
Absolutely brutal liquidity data on private capital…
25% of Venture Capital funds take over 18 years to fully liquidate
Average time to fully liquidate for PE funds is now 14 years. Only 12% liquidate within a decade.
The Capital Allocator retweeted
Current SPX drawdown for historical perspective.
NB - You don’t want to see this chart going back to 1900. :-)
The Capital Allocator retweeted
Markets seem tired, tired of the uncertainty.
They gave major RS and resiliency for months on end, but instead of seeing it like some temporary goodwill, it was taken by POTUS as a sign that he was doing everything right.
The rubberband broke, with all that goodwill coming in due.
The market is tired of the lies.
We are now experiencing the market showing the admin enough is enough.
We had the biggest technological revolution of all times, a strong economy and everything lined up for a massive republican win.
Instead they abused markets, abused the economy and now there is absolutely nothing to show for it.
People are struggling, all promises were broken, allies are gone, the AI theme is tanking....
The Capital Allocator retweeted
Fun fact: 73% of the companies in the S&P 500 in 1996 are no longer in the index.
And this is exactly WHY you index.
The Capital Allocator retweeted
Steffi Graf has a legitimate GOAT argument over Serena Williams.
22 Slams, 377 weeks at No. 1 (Serena had 319), 8 year-end No. 1 finishes (Serena had 5), and the ONLY Golden Calendar Slam in tennis history.
Serena has 1 more Slam, but Graf has a serious case for the GOAT
The Capital Allocator retweeted
Some guy buying the SP500 every month, grilling burgers in his backyard right now, and doing 0 research, will outperform a shocking number of people who spend 8 hours a day analyzing the stock market.
The Capital Allocator retweeted
Big Tech has been cutting staff, keeping headcount stable or declining even as business booms. The latest: Microsoft offering buyouts to 60,000 employees. Are tech workers uniquely exposed to AI disruption, or are they an example of what's to come? bloomberg.com/news/articles/…
The Capital Allocator retweeted
This is it.
Everyone is excited about AI.
I'm not.
AI is the biggest commoditizer of human capability we have ever built. Doctors earn more than cleaners because expertise takes a decade to acquire and judgment to apply. AI is going to make most of that expertise available to anyone, at marginal cost.
The gap doesn't go to zero. But it shrinks. And the same thing happens in almost every knowledge profession. Programmers. Lawyers. Analysts. Traders. Designers. The taxi driver replaced by a robotaxi is the easy case. The harder ones are people who spent twenty years training to do something a model can now do in a second.
The one corner of human life I don't see this hitting is sport. Nobody pays to watch a robot beat a human. The whole appeal is humans competing against each other. That's why nobody watches Deep Blue play chess anymore.
From an investing perspective, the next decade plays out in three phases.
Phase 1 is the buildout. Hundreds of billions in capex on chips, data centers, and energy. This is what's driving today's market.
Phase 2 is the deployment. Productivity rises sharply, then deflation sets in as the cost of knowledge work collapses. Jobs disappear faster than the economy can replace them.
Phase 3 is the social adjustment. Capital becomes more powerful than labor. The biggest winners are likely to sit where AI cannot reach. Real assets. Energy. Commodities. Precious metals. Scarce land.
And there's something deeper than the economics. The Japanese have a word for it: ikigai. The reason you get up in the morning. Your vocation. Your purpose. The work that makes you feel needed. AI is coming for that too. Nobody has yet figured out what a healthy society does when most of its members no longer feel needed by anything.
I might be wrong. I hope I am.
If I'm not, the world is about to change faster than most people are ready for.
The Capital Allocator retweeted
Leopold liquidated - Markets bottomed
Burry covered his shorts - Markets topped.
Market is ruthless.
The Capital Allocator retweeted
US consumers owe ~$19T in consumer debt.
If AI disintermediates jobs as advertised/feared, every 5% of that ~$19T in consumer debt that defaults is ~40% of the total equity capital of the US banking system (~$2.6T).
That’s a problem.
The Capital Allocator retweeted
Wake up.
Every profession deemed white-collar, the middle class dream, is about to be decimated by AI, at a much faster pace than anticipated, with monstrous social consequences.





























