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birb_cromble  2d ago (text post)   314 thread views

Weekly Finance Thread - 2026-07-18

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So I made a successful tech play and I am trying to decide whether to (1) cash in; (2) re-balance; or (3) let it ride.

The background: I normally invest in boring Vanguard style mutual funds, but a year or two ago a buddy convinced me to take a modest chunk of my overall investments and basically make an AI play. The thinking was that this is analogous to the dot com bubble and people who got in early on "infrastructure" type investments as well as the leading companies ended up doing very well. Some of the investments fizzled, some did rather well, and some did extraordinarily well. Probably the best example is Sandisk which went up more than 50-fold. The upshot of this is that my tech portfolio is now worth a little less than $4 million. It's no longer a small chunk of my overall portfolio but instead is a slight majority of the total value.

At this point, the obvious thing to do is to take some chips off the table, but the tricky part is that part of me thinks that AI is more than just a bubble, that it will have economic impacts which make the Internet seem like pet rocks, hula hoops, and Dutch tulip bulbs. So basically I am left with a question that has been kicking around here for a while: investing in a situation where there is a huge range of possible outcomes, up to and including the possibility of a full on technological singularity. Thoughts?

Even if you believe this is all going to work out and semiconductor, memory etc demand is going to continue to skyrocket, eventually the Chinese are going to get good at making SSDs and RAM (if not the most advanced GPUs, although I suspect they’ll get there too) and margins will fall through the floor. Involution is the way they do business. They’re selling cars and solar panels at -20% margins to compete with each other for market share.

When Apple and Dell and Microsoft and all the data center and hardware companies are lobbying the US to let them buy cheap Chinese parts that are getting better by the month, the US isn’t going to restrict them so that Korean billionaires get richer. What do you think will happen?

At this point, the obvious thing to do is to take some chips off the table, but the tricky part is that part of me thinks that AI is more than just a bubble, that it will have economic impacts which make the Internet seem like pet rocks, hula hoops, and Dutch tulip bulbs.

This can be true at the same time as your investment declining/underperforming. You're not betting purely on AI being more than just a bubble, you're betting on this specific list of companies continuing to benefit off this narrative. Realistically, you caught a huge chunk of the move already, missing another 2x from here may sting but if you exit now you're booking solid profits and the money you take off (minus taxes) can be distributed into other assets that will still continue appreciating.

In general, I think it's a good time to start taking some chips off the table when you start having urges to post something like this. $4m being slight majority of your portfolio, you must be worth around $7m? The volatility of AI stocks is insane, will you able to stomach 30-60% drawdowns? Has the idea of having this net worth set in as new baseline in your mind? Only you can answer these questions. If I was in this situation, I'd take off 50-60% here, put it in the bank for a month or two, get used to seeing this number. And only then start thinking what to do with it.

The volatility of AI stocks is insane, will you able to stomach 30-60% drawdowns?

His SNDK shares are already down around 40% from peak, so the answer to that question seems to be yes. ;)

Congrats. Even with the additional context you've provided, as long as you're soliciting opinions, I do think there's some value in a partial exit, assuming you're optimizing for taxes etc.

I don't know how often you've failed to sell at a peak and lost, but it doesn't feel great. Cashing enough to cover that right now and then rebalancing might be good. If it's memory now, what's next? The PMCs mowing down NIMBYs blocking data center builds?

From a psychological perspective I'd say pull half your winnings out and distribute it hedging against some scenarios you can think of. If AI goes off and the tech stocks don't reap the outside gains what might? A broad index of companies like the S&P500 might get commodity priced intelligence for very cheap and become much more valuable because their size and market position give them the best chance to leverage the boons. Other inherently scarce commodities like minerals and land will likely preform well in any scenario where labor, both physical and intellectual, falls to marginal. So mining companies with mineral rights and REITs might pay off. I'm sure you can think of some other scenarios. In most worlds these investments aren't big winners, but in the worlds where they are you'll be very happy you halved your direct AI exposure, which will be plenty anyways if it pays off, to hedge in them.

Congrats on the success.

I suppose my 2c is that continuing to invest in tech stocks in expectation of AI being a crazy world shaking event seems a bit counter-productive; at the level of disruption that'd need to happen, it seems much more likely to me that value ends up accruing in completely unexpected places, that property rights themselves stop making much sense or even just straightforward doom as you say, rather than straightforward "AI investors rule, everyone else drools".

If there truly is going to be an aristocracy, it seems extraordinarily unlikely to me that it's going to be made up of random people who had a few mil in tech stocks pre-singularity, when society is already made up of interests much more powerful than "upper % retail investors".

YMMV, just a random largely risk-averse guy online.

Honest question - what's your number to retire today? Because for me a least, $4 million is fuck you money. Do you really need more?

Honest question - what's your number to retire today? Because for me a least, $4 million is fuck you money. Do you really need more?

I'm already semi-retired in the sense that the business I run has stopped accepting new projects, at least temporarily and possibly permanently. The other wrinkle is that I am engaged and my fiancee is from a wealthy family so she may end up being on the high-maintenance side of things. But anyway, my question is more about making the most of the big changes which seem to be on the horizon as opposed to budgeting for retirement.

I'm pretty confident that absent some doom type scenario, we'll all end up collecting UBI. My concern is that there is going to end up being some kind of permanent or semi-permanent aristocracy. Which would kind of suck, but if there's going to be an aristocracy, I think I'd rather be one of the aristocrats.

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