I'm Buying Every Share I Can.

Key Concepts

• Market Shock: A dual-front crisis involving geopolitical instability and AI industry volatility.
• Strait of Hormuz: A critical maritime chokepoint for global energy, currently closed, impacting oil prices and supply chains.
• Pricing Power: The ability of a company to raise prices without losing customers, a key metric for surviving market downturns.
• Hyperscalers: Large-scale cloud providers (Amazon, Microsoft, Google, Meta) that drive the demand for AI infrastructure.
• Fear and Greed Index: A sentiment indicator used to identify market extremes; low levels suggest panic (buying opportunity), high levels suggest overvaluation.
• EUV Lithography: Extreme Ultraviolet lithography, the specialized technology used by ASML to manufacture advanced semiconductors.

1. The Dual-Front Market Shock

The author argues that the market is facing two simultaneous, under-reported threats:

• Geopolitical Front (Energy/Supply Chain): The closure of the Strait of Hormuz has caused oil prices to spike by over 50% in two months. This threatens the energy-dependent semiconductor industry, particularly in Taiwan and Korea.
  • Taiwan/TSMC: Imports 97% of its energy. TSMC has only 11 days of natural gas and one week of helium (essential for cooling chip-making magnets) on-site.
  • The 60-Day Window: President Trump’s authorization to deploy forces expires on May 11th. The market is not pricing in the potential for escalation, withdrawal, or legislative extension, all of which carry significant economic consequences.
• AI Industry Front (OpenAI/Infrastructure): OpenAI is facing a "shaky" financial situation characterized by missing revenue targets and a high-stakes lawsuit from Elon Musk.
  • Financial Exposure: OpenAI has committed to $1.4 trillion in future infrastructure spending against a $25 billion revenue run rate.
  • Legal Risk: Elon Musk’s lawsuit seeks to force OpenAI back to nonprofit status and reclaim $134 billion. If successful, this could "vaporize" Microsoft’s $130 billion investment and force a massive payout that would bankrupt the for-profit entity.

2. Investment Methodology: The "Sniper" Framework

The author advocates for a disciplined, data-driven approach to investing rather than emotional trading:

1. Take the High Ground: Zoom out to analyze macro data and historical trends.
2. Track Targets: Maintain a short list of high-quality stocks rather than monitoring the entire market.
3. Wait for the Shot: Use the Fear and Greed Index to identify moments of extreme fear to initiate positions.

Historical Context:

• Bull markets last ~4.4 years (avg. 151% return); bear markets last ~11 months (avg. 32% loss).
• Recovery from a bear market bottom takes an average of 24 months, providing ample time for investors to build positions.

3. Target Stocks and Strategic Rationale

The author categorizes target stocks into two groups: those with extreme pricing power and those with massive cash reserves.

• Micron (MU): The only U.S. memory manufacturer. If Korean competitors (Samsung/SK Hynix) are squeezed by energy shortages in the Strait of Hormuz, Micron gains significant pricing power. Forward P/E is under 8.
• ASML: A monopoly provider of EUV lithography machines. Because chipmakers cannot produce advanced chips without these machines, ASML maintains pricing power regardless of supply chain shocks.
• TSMC (TSM): Controls 90% of advanced chip manufacturing. In a supply crisis, they will prioritize high-margin customers (like Nvidia), effectively passing costs down the chain.
• Nvidia (NVDA): The "cook" of the AI revolution. While exposed to hyperscaler spending pullbacks, they hold 90% of the data center GPU market and remain the top priority for fabs during supply shortages.
• Mega-Caps (Amazon, Microsoft, Google, Meta): These companies possess the "war chests" to survive market shocks. They are the first stop for institutional capital when rotating back into the market. If OpenAI fails, these companies have internal AI strategies (Gemini, Llama, etc.) to capture the displaced demand.

4. Notable Quotes

• "The market is currently fighting a war on two fronts."
• "When your customers don't have a choice, you don't have a problem." (Regarding ASML’s monopoly position).
• "If ASML makes the ovens, then TSMC controls the kitchen."
• "You actually want to be buying when there's blood in the streets, even if some of that blood is your own."

5. Synthesis and Conclusion

The current market is characterized by record-level greed despite looming geopolitical and corporate risks. The author concludes that the "biggest buying opportunity in years" is approaching. Investors should avoid panic selling and instead prepare to deploy capital into companies with high pricing power and massive cash flows when the Fear and Greed Index signals extreme fear. The key takeaway is that market shocks are not immediate "game-overs" but rather cyclical opportunities for those who have prepared their watchlists and cash positions in advance.