“Buyer,” grunted Bulldog, one of the great trading talents. I had asked for his thoughts on markets. “Selling SPY puts into this sell-off,” he growled late Friday. Hadn’t checked in with Bulldog for a few weeks; a never-wake-a-sleeping-dog kind of thing. “You don’t see major market highs with this much fear, and in the past month or two all I hear is data center crap, AI, software stocks, now oil, Iran,” barked Dawg, a broken ear, torn in some ancient market brawl. “Probably have a hairy three to six weeks, take out a few more Ayatollahs, and then stocks are going to scream higher for a quarter or two – sucking everyone in,” growled Dawg, drooling horribly, unashamedly. “Then that’s it. That’s the big one. After that it’s goodnight.”

Overall: “We don’t list markets directly tied to death,” wrote Tarek Mansour, CEO of Kalshi, the New York-based prediction market. “When there are markets where potential outcomes involve death, we design the rules to prevent people from profiting from death,” he explained. “A market on ‘Ali Khamenei out as Supreme Leader’ was important because leadership changes in Iran have a major impact on the world order,” continued Mansour. “It’s always possible for a ruler to step down or transition power without death, even in autocracies. It just happened in Venezuela.” Mansour was attempting to justify why Kalshi can list such contracts with a ‘death carveout,’ which means traders were paid out at the last price traded before Khamenei met his maker, as opposed to the full contact value had he stepped down or been plucked from his palace by Delta Force. Those of us who make a living in markets - betting on all sorts of disturbing possibilities in the world - kind of understand how the rest of society may not be ready to face the true nature of this casino. It’s ugly. But the truth is that our lives are a series of consequential wagers. At Bretton Woods, in 1944, with the world approaching a pivotal moment - the end of WWII - the US bet that it was in its interest to anchor the global financial system, provide security guarantees to its allies, and open its economy to trade. That wager reshaped the world in magnificent ways. In time, America made a series of nation-building bets that manifested in forever wars, which we closed out. Now, the US is making a very different series of bets. America is wagering that its economic and military power is far greater than the many beneficiaries of Bretton Woods had come to believe. It is projecting its hard power in unapologetic and unpredictable ways to aggressively reorder the planet. Placing profoundly consequential bets, as humanity rapidly approaches another pivotal moment in world history - the Singularity.

For Week-in-Review and Weekly & Year-to-Date market data, scroll to the bottom.

Blinding: “Every investment should be measured against the opportunity cost of not being focused on the AI theme,” said Laser, managing his self-made fortune. “Sandisk went up 20x in 9mths, these sorts of asymmetries are identifiable when you understand what’s unfolding,” he continued, his liquid portfolio up 150% last year. “Sands will shift through this theme. Today’s supply chain bottlenecks will be cleared; the opportunities will evolve. But not yet,” said Laser, totally focused. “The singularity is happening. Figure out how to profit from it, don’t fight it.”

Blinding II: “The future is already here, it’s just unevenly distributed,” he said. “William Gibson said that. And it’s true. For those of us focused on the right sources of information and insights, the world is rich with opportunity right now,” he said. “For those still relying on the FT and the WSJ, what is happening makes a lot less sense. I stopped reading those papers years ago. They’re anti-signal. They weaken your mind,” he said. “I find the future on blogs that few pay attention to. There are brilliant thinkers out there,” he said, sharing a curated list of his best sources.

Blinding III: “I sold my 2nd business in 2011 and read an article about the Singularity University in California,” explained Laser. “It was as far afield from what I’d done as was possible. Which is what I look for. And I went there to kind of reset my brain.” Ray Kurzweil explained his singularity thesis, with AGI on track to arrive by late 2029 and ASI by 2045. “It was the first that I’d heard of AI and Bitcoin….

Blinding IV: “I was speaking with someone at the Machine Intelligence Research Institute who was writing a book about how if we build AI it will destroy us all,” he said. “So, I asked him, between now and then, what companies should I own?” he said. “He answered, Alphabet and Nvidia. I bought them along with BTC and ETH.” What a ride. “I had Kurzweil’s framework and timeline in my mind and when ChatGPT launched, that was the trigger. I knew I needed to drop everything and focus on just this. The first and most obvious AI play was in semiconductors.”

Blinding V: “As I distilled the thesis to its essence, I concluded we need to own the factors of production required to make AI tokens,” said Laser. “Certain commodities play a part, which we bought, but mostly it’s about owning the companies that bang atoms together in very particular ways to create tokens,” he said. “Those companies have extraordinarily unique capabilities that are incredibly expensive to replicate, with limited capacity,” he said. “And I found the analysts who focus on these things, these companies, and none of them are the ones people recognize.”

Blinding VI: “You find opportunities like Bitcoin and AI if you’re curious and your curiosity has good taste,” said Laser. “People who are curious but have poor taste get trapped in intellectual and investment cul-de-sacs,” he said. “In 2016 I didn’t have to force myself to study Bitcoin. I found it genuinely fascinating. It was something I could naturally throw myself into. And I did,” he said. “I can focus on AI twelve to fourteen hours a day. I don’t get tired or bored. Someday that may flip. Then I’ll move on. But that someday is not today.”

Anecdote: “I’m extremely good at changing my focus, which goes hand in hand with changing my professional and even social circles,” said Laser, managing his self-made fortune. “I have a non-existent need for affirmation. And I’m numb to failure. Which gives me an advantage when it comes to adjusting to change and exploiting emerging opportunities. Everything truly important in life is contradictory at some level, otherwise it wouldn’t really matter, it would have been solved. So, it’s the unsolvable things that are interesting and matter in life,” said Laser. “I’m capable of unbelievable focus for extended periods. And I’m pretty good at sensing when a thesis has played out. That’s when I create a vacuum for myself, to make space for the next thing,” he said. “I went to the Singularity University in 2011 to create mental space and because it was the furthest thing that I could think of relative to what I had been doing. And I had a strong hypothesis that it was useful, that it would be powerful,” he said. “Right now, I’m in full blinder phase. I don’t know what it will look like when we get toward the end of the AI theme, but I’ll know it when I see it,” said Laser. “You and I have been conditioned to riding Bitcoin. The whole world spent an enormous amount of energy explaining why it was going to fail, and yet it kept going up.” Indeed. “Now, we see most of the world is looking for how AI underdelivers, underperforms, fails even. It’s inexplicable. We’re living through the Singularity and does that mean everything goes straight up to the right? No. But do you think we’re going to be on the other side of the Singularity, the event horizon, and we’ll look back and say, it was smart to have spent the whole singularity searching for bubbles and talking yourself out of taking real risks? No. Obviously not.” Couldn’t agree more. “The Singularity is happening. It’s just so fascinating, thrilling, and we’re so fortunate that we get to be living through this moment.”

Good luck out there,

Eric Peters

Chief Investment Officer

One River Asset Management

Week-in-Review: Mon: US ISM mfg 52.4 (51.5e). India IP 4.8% (6.0%e). Japan jobless rate 2.7% (2.6%e). US Embassy in Riyadh attacked as Iran steps up Saudi strikes, prompting President Trump to vow retaliation. China urges Iran to consider neighbors’ “reasonable concerns,” reaffirming China’s support for Iran’s sovereignty and territorial integrity. S&P flat. Tue: Eurozone CPI 1.9% (1.7%e), Core 2.4% (2.2%e). China mfg PMI 49.0 (49.2e), non-mfg PMI 49.5 (49.7e). Australia GDP 2.6% (2.3%e). President Trump said the US will escort and insure tankers and other vessels through the Strait of Hormuz. S&P -0.9%. Wed: US ADP emp change 63k (50k e), ISM serv 56.1 (53.5e). China told the country’s top oil refineries to suspend exports of diesel and gasoline due to the escalating conflict in the Persian Gulf, reflecting a scramble across Asia to prioritize domestic needs. S&P +0.8%. Thu: US init jobless claims 213k (215k e). South Korea CPI 2.0% (2.1%e). Trump removed Kristi Noem as Homeland Security secretary and announced Oklahoma Senator Markwayne Mullin as the replacement. Noem is set to take a role as a special envoy for the Western Hemisphere. US drafts rule requiring licenses for AI chip exports worldwide. S&P -0.6%. Fri: US change in NFP-92k (55k e), unemp rate 4.4% (4.3%e). Eurozone GDP SA 1.2% (1.3%e). Taiwan CPI 1.75% (1.60%e). Unexpected hiring slump threatens to upend the prevailing view among Fed policymakers that a stabilizing labor market would allow them to keep interest rates steady as they fight persistent inflation. Trump demands Iran relent as US aims to calm energy markets, with US crude futures ending the week above $90 a barrel. Trump said defense firms are to quadruple output of some weapons. S&P -1.3%. Sat: Israel takes out Tehran oil refinery. Iranian missiles hit more gulf nations. Trump opens the possibility of ground troops in Iran and rules out involving the Kurds.

Manufacturing PMI (high-to-low): India 56.9 (previous month 55.4), Sweden 56.1 (previous mth 55.9), Taiwan 55.2 (previous 51.7), Greece 54.4/54.2, Vietnam 54.3/52.5, Indonesia 53.8/52.6, Hong Kong 53.3/52.3, Japan 53/51.5, US 52.4/52.6, China 52.1/50.3, UK 51.7/51.8, Hungary 51.3/50, South Korea 51.1/51.2, Canada 51/50.4, Germany 50.9/49.1, Netherlands 50.8/50.1, Italy 50.6/48.1, Singapore 50.6/50.5, France 50.1/51.2, Czech Republic 50/49.8, Spain 50/49.2, South Africa 50/50, Russia 49.5/49.4, Austria 49.4/47.2, Turkey 49.3/48.1, Switzerland 47.4/48.8, Brazil 47.3/47, Mexico 47.1/46.3, Poland 47.1/48.8. Services PMI: India 58.1/58.5, China 56.7/52.3, UK 53.9/54, Japan 53.8/53.7, Germany 53.5/52.4, Brazil 53.1/51.3, Australia 52.8/56.3, Italy 52.3/52.9, Spain 51.9/53.5, Ireland 51.8/54.5, US 51.7/52.7, Russia 51.3/53.1, France 49.6/48.4, Sweden 48.3/53.8.

Weekly Close: S&P 500 -2.0% and VIX +9.63 at +29.49. Nikkei -5.5%, Shanghai -0.9%, Euro Stoxx -5.5%, Bovespa -5.0%, MSCI World -3.3%, MSCI Emerging -6.9%, Bitcoin +3.7%, and Ethereum +2.9%. USD rose +4.5% vs Chile, +3.8% vs South Africa, +3.3% vs Mexico, +2.3% vs Russia, +2.2% vs Brazil, +1.7% vs Euro, +1.7% vs Sweden, +1.3% vs Australia, +1.1% vs Yen, +0.8% vs India, +0.8% vs Indonesia, +0.6% vs China, +0.5% vs Sterling, and +0.3% vs Turkey. USD fell -0.5% vs Canada. Gold -1.7%, Silver -9.6%, Oil +35.6%, Copper -4.2%, Iron Ore +0.7%, Corn +2.7%. 10yr Inflation Breakevens (EU +24bps at 2.06%, US +10bps at 2.35%, JP +2bps at 1.74%, and UK +21bps at 3.29%). 2yr Notes +19bps at 3.56% and 10yr Notes +20bps at 4.14%.

YTD Equity Index Returns: Korea +28.5% priced in US dollars (+32.5% priced in won), Israel +21.7% priced in US dollars (+18.2% priced in shekels), Norway +21.1% in US dollars (+15.3% in krone), Brazil +15.6% in dollars (+11.3% in reais), Taiwan +15% (+16%), Turkey +10.7% (+13.6%), Thailand +10.4% (+12%), Japan +9.5% (+10.5%), Australia +6.7% (+1.6%), Portugal +6.7% (+8%), Hungary +6.2% (+9.8%), Mexico +5.8% (+4.7%), Colombia +5.4% (+5.2%), Sweden +5.4% (+5.4%), China +5.3% (+3.9%), Canada +5.3% (+4.3%), Malaysia +5% (+2.3%), Singapore +4.9% (+4.3%), Philippines +3.9% (+4.4%), UK +3.1% (+3.6%), Saudi Arabia +2.6% (+2.7%), New Zealand +2.2% (-0.2%), Netherlands +1.8% (+3.1%), Finland +1.8% (+3.2%), Russell 2000 +1.7%, Belgium +1.1% (+2.3%), Switzerland +0.4% (-1.3%), South Africa +0.2% (+0.6%), Poland +0.2% (+2.9%), Austria +0.1% (+1.5%), HK +0% (+0.5%), MSCI World -0.5% in dollars, Vietnam -0.6% (-0.9%), UAE -0.9% (-0.9%), Greece -1.1% (+0.1%), S&P 500 -1.5%, Euro Stoxx 50 -2.4% (-1.2%), Spain -2.5% (-1.3%), Chile -2.6% (-1.6%), France -3.1% (-1.9%), Italy -3.1% (-1.8%), NASDAQ -3.7% in dollars, Germany -5% (-3.7%), Czech Republic -5.5% (-3.5%), Ireland -5.8% (-4.6%), India -8.5% (-6.4%), Argentina -11.6% (-13.9%), Denmark -13.1% (-11.8%), Indonesia -13.5% (-12.3%).

Disclaimer: All characters and events contained herein are entirely fictional. Even those things that appear based on real people and actual events are products of the author’s imagination. Any similarity is merely coincidental. The numbers are unreliable. The statistics too. Consequently, this message does not contain any investment recommendation, advice, or solicitation of any sort for any product, fund or service. The views expressed are strictly those of the author, even if often times they are not actually views held by the author, or directly contradict those views genuinely held by the author. And the views may certainly differ from those of any firm or person that the author may advise, converse with, or otherwise be associated with. Lastly, any inappropriate language, innuendo or dark humor contained herein is not specifically intended to offend the reader. And besides, nothing could possibly be more offensive than the real-life actions of the inept policy makers, corrupt elected leaders and short, paranoid dictators who infest our little planet. Yet we suffer their indignities every day. Oh yeah, past performance is not indicative of future returns.