Pre Market Thoughts and an evaluation of June - 1 Jul 26

Welcome to the start of July!
As part of my journaling, I would like to look back on my calls on June to assess what i did well and where i can do better.
Reviewing through - Here is the list of calls i made
On the 3rd of June - I made the call to “gross down exposure and shore up cash….probably the best times to be bidding protection”.
On 4th of June - during the mkt open - i called for “the selling pressure into the open quickly reverses and we would end up green on the day”
The market ended up V - reversing with NBIS continuing to be strong.
On the 5th of Jun 26 - I said that “today the picture right now looks alot more murkier….would recommend grossing down exposures”
On the 9th of Jun 26. I called for the “start of the new wave of the rally in semis”
And i continued to bang the drum for the rally on the 11 of Jun and there after.
Until the 15th of Jun 26 - where on my telegram channel i posted that these are good areas to trim before going into FOMC (sorry got too busy, didnt post on X - this is why you should be in Tele. I get too busy sometimes)
On the 22th of June 26 - I then made the case to “reduce down leverage going into end of June ….flows wise this current period will be met with headwinds”
On the 26th of June - I told everyone that “I see the current pain and sell off in the sector as technically driven….that these are the levels you should be bidding…areas of interest for me NBIS 240s, ALAB 360s, CRDO 240s, SMH 605s”
I also posted some of my public purchases….because fortune favors the bold.
Lastly in my weekly review , i explained that BE and CRDO puked because of “mechanical flows” and that “they can offer some good opportunities”. Since my post, BE is now up 25% and CRDO up 12%.
I also have been calling for Compute and Memory pooling to be leading the next rally instead of everyone’s favorite memory. Thus far this has been playing out.
All my posts on X are time stamped. Likewise on my telegram channel. Everything is free. I do not intend to charge for my posts nor knowledge. If you enjoyed it, i am happy.
I want to say that in terms of reading flows for June, i have done pretty well for myself, calling every single move.
Where can i do better? I think i can become even more patient. My execution last week could have been better for sure. I also could have managed my cash position a lot better.
Alright - that’s all for the June review.
Before we touched on Asia markets today. A quick recap yesterday on the quarterly rebalance. KOSPI was said to have a huge rebalancing yesterday, however price action remained firm towards the close - this was a good indication to me that a great deal of rebalancing has already happened and this would likely be the case for the US markets.
Indeed, US equities were extremely firm - while memory was stagnant in performance, we saw NBIS leading in the neocloud sector before the entire neo sector rallied into the close.
This has shown up in today’s Asia markets. KOSPI was relatively weak - down 2% while NKY was barely up. Again, KOSPI has a huge memory weightage, hence it is more reflective of the memory beta than any other risk factor.
One post that has caught some attention is by Andrew Curran that “there has been a significant break through in architecture - specifically around memory efficiency”
This has been picked up by Citrini that DRAM prices “are not going to keep going up the way”
From a trading perspective, i can see the flows softening into memory. On 25th of June, I said that “I think the forward looking traders are seeing this and will rotate out of MU which is why i believe that memory will NOT be the next leader for the rally ahead. Humans are smart and will try to find workarounds via expensive solutions.”
Now - from a fundamental perspective, this probably does NOT dent FY28 earnings. We are still in a structural shortage that will last through to 2030 especially if robotics comes into play. However, the market as you know is deeply irrational and trades more on vibes in the short term.
Again - if you dont understand nuance. Let me be simpler, memory will not be leading the next rally.
On neoclouds and compute. Dylan of Semianalysis has revealed that “Anthropic’s margin on an Opus 4.8 API token is north of 80%”
Hey - this is actually crazy. Please. Re read it again.
The frontier labs are no longer ponzis. Anyone that says that is not seeing reality.
The frontiers labs have basically shaped themselves into a position where they are earning 80% margins. “Anthropic excluding SBC was net income profitable in Q2 2026. Potentially profitable including SBC by Q3.”
This came alot earlier than many people are expecting. I thought it would come far later.
The market needs more compute.
At this point Situational Awareness portfolio is mostly in neoclouds. Why? People need to really understand that a neocloud bet is NOT a bet on current revenues.
It is more like a bank - the valuation of a neocloud is the NPV of ALL the projects it will take on in the future.
Currently, any compute will be taken up. Given that Anthropic is earning 80% margin on tokens, I can see the compute market to stay heated for MUCH LONGER.
For readers who come from crypto - this is slightly similar to a DAT. Except instead of taking your cash to buy useless tokens, this is taking your cash to construct +EV, +NPV projects.
One lever that nobody talks about is that people are arguing that 5 years depreciation is too lenient. Like Burry.
But A100s are still being rented out, these came out 6 years ago. If a GPU life is much longer than 5 years, this is an additional lottery windfall for neoclouds. This is NOT being priced in at the moment.
Of course, no 2 neos are alike. Execution is key.
It is like running a bank. You can have 2 banks with the same deposit base. But they can be valued differently based off how well they are run. See ICBC vs JPM.
I wrote about this in my note on SHAZ 1.98%↑ yesterday.
You can read more about it there.
Trading wise, this is a short week. Seasonally, this week is characterized by an upwards drift.
Things i am looking for - NBIS breaking 300.
Good luck!