Jerry Wang

Reflections on today’s market action: 1. What happened: Following the midterm elections, both chambers of Congress shifted decisively to the Democratic Party. The market’s initial relief—driven by the reduction in policy uncertainty—quickly gave way to concerns over potential restrictions on AI development. This triggered a massive, panicked sell-off, with all three major indices falling by 3–5%. 2. What history tells us: Looking back over the past 20–30 years, the three major indices have historically shown a high probability of significant gains in the six months following midterm elections, even while experiencing an average maximum drawdown of around 15%. 3. Why today’s sell-off occurred: High concentration in the "Mega 7" stocks, the dominance of passive funds (which amplifies volatility), and a rush to lock in profits after a two-year, AI-fueled bull run all converged. Market sentiment swung into extreme panic, fueling a wave of reactive selling. 4. Key assumptions to monitor: Have the core premises changed? Consider factors such as U.S. corporate revenue and earnings growth, the current stage of the AI ​​technological revolution, the potential for AI to drive future gains in productivity and efficiency, and whether current market valuations contain a significant bubble. 5. Trading strategy: If these core assumptions remain intact, the best approach may be to hold steady—or even selectively add to positions in a measured, incremental way. You might also consider diversifying away from an over-concentration in tech stocks by increasing exposure to non-tech blue-chip assets (such as those represented by the DIA ETF). In the grand sweep of history, human progress does not grind to a halt because of a single day’s trading. We are living in the best of times.

These past couple of days, I've been wanting to write something, but I've been busy with work in New York, so it’s been delayed a bit. Here are a few thoughts to share for reference. 1. Stick to long-termism: The essence of market fluctuations lies in the future development of the underlying assets. U.S. stocks correspond to the world’s best companies; the cryptocurrency market corresponds to the wave of web3. There are no signs indicating any fundamental reversal; the general direction of human development and historical progress remains unchanged. 2. Seize market opportunities: Once the trend direction is clear, any pullbacks not caused by fundamentals are great entry points. 3. Manage risks: Options, leverage, and similar products should only be used for position protection, not as investment vehicles. Losing once could wipe you out. 4. Persist in doing things that are right in the long term; most are difficult, but difficult and correct things often hold the greatest long-term value. 5. U.S.-China relations will not collapse; they will dynamically adjust and balance. The cost of a lose-lose situation is something neither side can accept.

这两天一直想写点东西，在出差忙纽约这边的事，拖了一点时间。分享几点想法仅供参考。 1. 坚持长期主义：市场波动的本质是标的资产未来的发展。美股对应世界上最好的公司；虚拟货币市场对应web3的大潮。没有任何迹象表明有任何基本面的反转，人类发展、历史进程的大方向不变。 2. 抓住市场机会：在明确方向趋势后，任何的非基本面引起的回调都是很好的入场时机。 3. 控制风险：期权、杠杆等产品仅可以用于持仓保护，而非投资行为。输一次倾家荡产。 4. 坚持做长期正确的事情，多数是难的，难而正确的事才往往有最大长期价值。 5. 中美关系不会崩盘，会动态平衡调整。双输的代价谁都无法接受。