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- Trends With No Friends and Trends With Too Many Friends...The Degenerate Economy, Berkshire, Leopold, AI, Prediction Markets, South Korea and Shame
Trends With No Friends and Trends With Too Many Friends...The Degenerate Economy, Berkshire, Leopold, AI, Prediction Markets, South Korea and Shame
Howard Lindzon
August 09, 2026
Happy Sunday..
I am back in Coronado and it feels good.
It has been an intense couple of weeks of travel, work, cycling and reading (I will share a few links as we go today). Of course, I only fell further behind in everything. AI only intensifies this feeling because my two jobs are intertwined with the AI trend.
I am learning to be at peace with falling behind at everything. I have no choice as I near 61 years if age next month. I just can’t keep up.
I find myself saying ‘two things can be true’ more than ever as the world around me seems to be spinning out of control. For example…I am a never Trumper, but also might be a never Democrat based on the DSA popularity. Trump handed these asshats a playbook which has created a runaway trend in shamelessness. Trump said he could shoot someone on 5th Avenue and get away with it. The DSA believe that the American Trump talks about shooting had it coming and hopes he/she is jewish. Here is the stupid, shameless, simp co-chair of the DSA in her and their own words.
I am hoping we get a hold of ourselves and can reverse this trend.
Up next, Leopold again, who can both be a very smart 25 year old, and also a complete putz…
Leopold Aschenbrenner’s fund, Situational Awareness LP (SALP) started in late 2024 when he was 23. He raised $225mm and, through the use of leverage and being right as hell, rode a legendary heater with assets at peak over $25B about a month ago.
His portfolio concentrated heavily on hardware and chip shares of CoreWeave, Nebius, Bloom Energy, Iris Energy, Micron and the Korean company SK Hynix, as well as a sizable private stake in Anthropic. Meanwhile, he was shorting traditional software companies. You only need to pull up the charts of his longs and shorts to explain how his returns had been so stellar.
Many of his longs peaked in late June. On July 24th, he sent a memo to investors stating that the fund "has not been immune” to recent market volatility. He invited existing investors to commit fresh capital effective Aug 1, citing the most attractive opportunity set since early 2025.
Within the week, SALP would proceed to lose 2/3 of its assets and liquidate its public portfolio to Citadel.
(Do read the full piece ‘The Sound of Inevitability’ which is a great essay on risk, leverage, concentration and a reminder that nobody is bigger than the market.)
In AI it is 50 things, not just two things that can be true. I use AI more and more everyday, but I am more and more skeptical of it as well. I say this often, but most of it feels like a magic trick to me. I stumbled onto this AI essay by Terry Bollinger shared by a Stocktwits user after posting the essay above which confirmed my ‘more magic’ feeling about AI. In it, Terry points out the obvious and the reality of AI so far. First the obvious…’Stop trying to squeeze milk from the picture of a cow. It doesn’t work, no matter how much you hyperscale the picture’.
Second, which relates to the reason more and more people think AI is a bubble…the reality…
So, Where is Real AI?
Finally, here’s an incredibly simple point that keeps getting lost in discussions like this one in the All-In podcast: Real intelligence, as performed by biological brains, is unbelievably energy-efficient. A Portia spider with a brain the size of a pinhead can come up with complex and devious hunting strategies better and faster than an entire field of nuclear-powered LLM server farms.
For investors, ultra-low-power is your real AI future. That’s the path that admits that LLM server farms can never be anything more than an unbelievably inefficient way to take a database snapshot of human knowledge as it currently exists.
In South Korea, if I am to believe what I have read on the internet, ONE MILLION people were liquidated (because of leverage and concentration in theAI/ ‘memory trade’). The South Koreans learned that this trend had ‘too many friends’ all doing the same thing (leverage and concentration).
I study trends all day and while I prefer to ride ‘trends with NO friends’, I find myself riding ‘trends with TOO MANY friends’ like everyone else. The job is to NOT overstay your welcome. Because most investors are indexed to the S&P which is just a form of momentum investing based on market capitalization, we are all overstaying our welcome. The concentration from the S&P index risk is not the same as what South Koreans just experienced, but leverage will still crush you if you rely on it.
So, what is an example of a ‘trend with NO friends’?
In the public markets I look for these all day. On Stocktwits we have a dedicated stream you can follow now that spits out ideas - ST Relative Strength. One stock that has been on the list that I follow but ignored is Revolution Medicine ( $RVMD ( ▲ 3.71% ) , now up nearly 400 percent since I first mentioned it in July 2024. It hit more all-time highs last week, has a market cap of $47 billion and still just 2,900 followers on Stocktwits. In comparison, the ‘triple leveraged’ South Korean ETF has more followers.
In 2026, we are all South Koreans and Leopold’s. This the ‘degenerate economy’ (now global degenerate economy) that we live in. If you have any remaining doubts about how ‘degenerate’ we have become here at home, read this excellent ‘state of the prediction economy’.
But, two things can be true even in this ‘degenerate economy’.
Last week we learned that Warren’s Berkshire Hathaway was BUYING stocks the last three months. Warren is no ‘degenerate’. Berkshire was raising cash the last three years as degeneracy exploded. Berskshire likes ‘fundamentals’. I imagine they like the fundamentals they are seeing in the financials which have been going up smoothly for months. The fact that Berkshire has been buying stocks likely explains the relatively smooth uptrend in financials. The fundamentals Berkshire is likely attracted too…banks borrowing at low rates and lending at high rates. Not too complicated.
We all know that the banks and bankers are all ‘degenerates’ and ‘South Koreans’, so mind your leverage and concentration as you follow Warren and Berkshire.
Enough for today…have a great Sunday.
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