Emergency DeepSeek Note
Stupidity, panic, and margin calls.
Irrational Analysis is heavily invested in the semiconductor industry.
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This one is rushed and low quality. Sorry in advance.
First, disclosures and updates related to my leveraged account.
I am still alive but only because I sold aggressively in Sunday overnight and premarket.
Had I not been proactive, this account would have been force liquidated. Probably $170-200K in losses.
No time to update my ghetto spreadsheet. Here is the entire transaction history of this account YTD. Have fun.
Today was a day of panic and margin calls.
Look at my watchlists.
Everything associated with the AI trade got obliterated. I checked Bollinger Bands of several key names and we had a 3-4 sigma downside event today.
Going into Sunday 24-hour overnight market, I was at 2.2x-2.5x leverage depending on how you calculate options. Nobody ants like me can get away with unloading risk in a thinly traded overnight or premarket session.
The big players could not. Imagin entering today’s shitshow at 5x-20x leverage. Only perfect hedges would have saved your pod/fund.
Everyone is in copeium mode. Gavin Baker’s largest position is ALAB 0.00%↑ which got annihilated today. PCIe express scale up hahaha no you eat shit too like the rest of us. Gavin Baker is well aware that Amazon CapEx and GB200 ramp is what is driving Astera Labs PCIe switch sales and by extension insane valuation.
I want to caution everyone to be very careful about the next week. Frankly the entire earnings season. If you are still alive after today’s bloodbath, make sure to not take stupid risks. Today’s selling was just the margin calls from over-levered idiots (like me but with much higher AUM lmao).
Short-term will be very messy. The only bullish trades I executed today are as follows:
Buy more TSM 0.00%↑.
No, I don’t care about tariff man.
TSMC will simply raise prices and pass on costs to the customers.
Tactical MSFT 0.00%↑ trade for earnings.
Commentary by Satya Nadella on CapEx reduction could be good catalyst.
Microsoft shares are 4x leverageable and safe-ish.
Double-down on MU 0.00%↑ call options.
Memory is the big content winner from this DeepSeek vibe shift.
Extreammly bullish and willing to take on the risk here.
THIS ID VERY DANGEROUS. DO NOT FOLLOW ME ON THIS TRADE UNLESS YOU ACTUALLY KNOW WHAT YOU ARE DOING AND UNDERSTAND THE MASSIVE RISK.
There are so many bad takes out there that I do not have time to de-bunk them all.
Keep your eye on the ball. This whole AI thing was never about chatbots, consumer services, or revenue.
LABOR REPLACEMENT. A DILLUTION OF OPEX. CONCENTRATION OF WEALTH AND POWER.
Zuckerberg is increasingly saying the quite part out loud. What the fuck do you think happens to META 0.00%↑ EPS when they fire half the workforce and replace them with AI agents that work 24/7/365 at 1/10th the cost?
I keep seeing all these AGI/ASI cultists opining about AI safety. Idiots.
The real threat is humans. Specifically, the humans who will consolidate massive wealth and power by diluting the labor of others.
Datacenter buildout is still going to happen. The conclusion that DeepSeek means AI trade is over is extremely wrong. It’s going to accelerate with massive torque for energy, inference, and memory.
I have not sold a single share of NVDA 0.00%↑. Sold massive quantities of everything else to stay alive. GB300 NVL72 is going to crush everything else in reasoning model inference. (I did sell all my call options though)
Here are some lazy/intuitive ways of understanding why I am so bullish memory.
The blocker is memory capacity and bandwidth.
I have tried running DeepSeek on my gaming machine that has an RTX 4090.
It’s amazing.
Download this and run a single command in command prompt or PowerShell or terminal. Whatever OS you use.
ollama run deepseek-r1:32bThis thing is purely memory capacity bound! The token/text output is incredibly fast. Way too fast for me to even read.
My GPU is barely working! The bottleneck is memory capacity followed by memory bandwidth.
Think about this. Lots of opportunity out there.
Heads up.
Stay sharp.
And most importantly… stay alive.
TSMC getting hit hard by this is crazy, they are going to win no matter what.
Also Intel didn't really get impacted, I guess there is no way to dig your hole deeper if you already hit bedrock?
FYI the DeepSeek model from Ollama is not the actual DeepSeek model but DeepSeek distilled into smaller models. The actual model has 671B params while the one you got from Ollama only has 32B.