00:00What do you do? Genuinely? It's so noisy out there at the moment. Do I just put my fingers in
00:05my ears and stick with the tech trade? I don't see obvious answers.
00:09Basically, yes. The key word right now is rotation. So literally everybody knows tech stocks are crowded and expensive.
00:16What you don't want is you sell tech, but you also sell everything else. That higher correlation environment at either
00:21a single stock or a sector level.
00:23That's where you get these dangerous turns in markets.
00:26You've got three things that are really going on. The first is exactly the part you talk about, and that's
00:31the macro side.
00:32So that is oil prices, which of course is driven by nervousness about the Middle East.
00:36Second, you've got the fundamentals, which is the earnings and the earnings power and what that might look like.
00:43And then on the third, you've got the crowdedness of positions.
00:45It is really a rather extraordinary period of volatility in Korea, which in itself is going to constrain position size.
00:52You have Kospi Wall trading above 80 for an extended period of time.
00:57That's three times more than, say, Hong Kong, for example, and multiple, five times more than the VIX, right?
01:04So if you're going to have your biggest, most high conviction positions in an 87 Wall index, you will have
01:10to reduce the size of the index, size of your position.
01:13Korea?
01:15Just Korea?
01:18Like, we're in a bear market. How did that happen?
01:20I mean, I think you need to scale bear markets differently in the same way that you're not really in
01:24a bear market when your standard deviation moves.
01:26So what is a bear market? What is a bear market for the Korean market?
01:28It's funny you're defining it right here on our set.
01:30You have that power, Skylar.
01:32I think it's persistent negativity, and I think what you're seeing in Korea in particular is that there's still that
01:38kind of dip buying within retail.
01:40Yes, you may have had some profit-taking post-Samsung results, et cetera.
01:44That means that you have downside.
01:46But until I think you see persistent weakness over multiple days, multiple weeks, I wouldn't really call it a bear
01:52market.
01:52We are selling memory stocks.
01:53Some people going back into hyperscalers.
01:55Some people casting the nest a lot wider, thinking about pharma, banking stocks.
01:59How are you thinking about AI and how it relates to the rest of the market at this point?
02:03It's going through sentiment cycles, and I think that's a bit what we're dealing with.
02:06The dispersion is just shocking what you see between some of the Mach 7 even.
02:10In the very near term, I would not be surprised if the Mach 7 or the hyperscalers will trade a
02:15bit better,
02:16and if the semiconductors continue to be quite volatile.
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