preface.
these last two weeks the words just haven’t been coming at me with their customary vigour. something’s been wrong. holding me back. the rhythm gone. my mind distracted. i’d sit down to record and i could hear myself immediately trying too hard. that’s never good because once effort becomes audible the whole exercise feels contrived.
i killed the recording twice.
twice.
walked away from it irritated. really fucking irritated. because back at the beginning of march i wrote a paper called the end of the software age. and since then prices have done exactly what price always eventually do. they’ve only gone and exposed the constraint.
back at the end of february, nobody wanted that trade. software was getting destroyed. nvidia ignored. oracle butchered. hyperscalers looked reckless. the nasdaq looked sick. meanwhile the first nine hundred missiles and sorties were raining down across iran and suddenly every idiot on television became a geopolitical strategist talking about oil, escalation, the yield curve, the strait of hormuz, all the usual theatre people drag out whenever they need to explain price action after the fact.
but the market itself was saying something completely different underneath all that noise. the voices in my head deciphered one thing only. that software was no longer scarce. that was the real news. code had started writing code. compute was becoming revenue. and once that happens scarcity migrates upstream into the physical. transformers. cooling systems. fibre. electricity. copper. aluminum. systems that can’t expand quickly enough once demand arrives all at once. constraint. that’s my go to. always reduce the world to thinking about who’s constrained and how badly.
that was the atmosphere inside bar select in gustavia. mike sitting perfectly still watching what he calls the machine while i paced around conducting imaginary charts in the air like a fucking lunatic. and none of the exchanges between him and i are invented. mike genuinely trades tiny windows. one day sometimes. sometimes less. he watches behavioural stress. panic. whether sellers can still force price lower after bad news. whether buyers can hold ground for more than five minutes before getting strangled. he barely moves.
i’m the opposite. too much movement. too much voltage. i either become manic or i disappear into myself completely. there’s no middle setting in my nervous system. mike absorbs pressure. i attack it. and somewhere between those two approaches the trade usually reveals itself.
eventually it did. five weeks earlier hyperscalers were supposedly reckless idiots destroying shareholder value with insane capex. then price turned higher and suddenly the exact same expenditures became visionary infrastructure positioning. same reality. different price. i try explain what happened.
five weeks later the same people who called spending reckless started calling it genius. you see, markets decide long before the narrative can explain what’s going on. its always like that. the market isn’t explaining the world. the market reveals where the system cannot absorb pressure. where flow cannot pause without something breaking. that’s where the opportunities are.
and that’s why i wanted to revisit the paper. not repost it. re-enter it. go back into the atmosphere of those tropical days properly. the uncertainty. the pressure. the strange sensation that the world was physically reorganising itself while most people were still trapped discussing software multiples and comparing barrels of oil and the yield curve.
today the world already feels different. compute is revenue now. not metaphorically. physically. somewhere in memphis a privately owned machine consumes enough electricity to power a city. in kentucky they’re pulling strands of glass thinner than human hair because intelligence itself now depends on bandwidth density. trillions of dollars quietly repositioning around infrastructure that barely mattered eighteen months ago. systems that must keep moving or break. that’s the trade.
and maybe that’s why the recording fought me so hard because i wasn’t trying to explain events after the fact. i was trying to capture pressure while still standing inside it and there’s nothing neat about that process. confidence is not prediction. confidence is surviving the trade while the market humiliates you.
anyway my fellow acides, we finally got there. i think i captured something this time. something rougher. more intimate. less polished and therefore probably more true. not commentary. financial drama grounded in price and behaviour and stress. and you know what. rewatching the takes. there was absolutely nothing wrong with them. the problem was rumination. over thinking and not feeling the moment.
share your thoughts with me. did you nail the move or were you disabused by the fake swoon in march prices? what about now. are you contemplating selling the move?
and there’s still much more colour to come during the five nights we’re going to share together at summer camp 4 from august 2nd through to the 6th. st barts. warm air. cold drinks. traders and lunatic(s) vibrating at different frequencies while the world reprices around us.
remember, if you don’t own assets, you are the asset.
see you soon.
hugh.
p.s. i’ll publish the audio podcast version later and there’s even a video version from bar select.
