Overall Performance:

Year-to-date performance:

It is time for a hedge. It is time for me to stick to my conviction but listen to markets a little more as they scream this AI/Chip cycle is bigger than all that came before it. I am buying a 7% position in SOXX. Is this chasing? Maybe. I’m sure some will conclude that. And I candidly do hope this marks a top in the hardware craze. The reasoning behind this investment is not because I think I'll make a ton of money on it. If this does poorly, it will probably coincide with the rest of my portfolio doing well. This decision isn’t being made because I think the risk/reward here is great. I don't. I think that's true in software. And this is not me morphing into an AI infra super-bull. The arguments I’ve been making for a year (that again haven’t yet worked) are the same. This is a hedge. I continue to think these names are very overheated and still very cyclical. I just need to guard against the possibility that this cycle could rage on even bigger and longer than most think. That is what has played out thus far. I cannot continue to run a portfolio with no exposure (besides Google/Amazon as a piece of their businesses) while the S&P has 16% direct exposure to the sector. I need to close that gap a bit to make sure the portfolio is holding its ground better if software keeps struggling. I don't want 16% exposure. But it needs to be higher than 0%. Markets have currently decided software & hardware are inversely correlated. I reject that notion, but it’s the present mindset and I need to respect that. What fundamentally changed to make me respect it more? Mega-cap earnings season happened. Every single one of them talked about spending a lot more in 2027. That CapEx is high-margin revenue for these companies. I was also able to chat with a few institutional friends this weekend about the meetings they’ve been having with memory and compute giants. They're uber bullish. The big caveat is that they always are. They'll never tell you when a cycle is peaking. They'll be the last to admit it. But? This is supported by explicit forecasts from their largest customers, and this time does look different. Not because there isn’t a sharp correction coming at some point (still cyclical). But because the length and sheer size of this boom is clearly different than the rest. My timing for cutting this hedge will depend entirely on mega-cap commentary. I don't care if Micron or AMD executives keep saying the cycle will never end. I care about CapEx guidance from their largest customers. As soon as I hear a mega-cap talk about pulling back on CapEx or maybe not needing as much as they think they do, I will be fully out. That could be in a week (probably not). That could be in a year. I continue to think these are highly cyclical assets with margins vastly propped up by ephemeral shortages that will inevitably end. But this… again… is my hedge against being wrong about durability and longevity of those tailwinds.In terms of where this cash is coming from, a few places: