A 'pain trade' mood dominated much of Friday's activity. Sure, we looked for defense; then a rally; then some 'defensive fading' ahead of a potentially 'military weekend'; although that's not really what influenced the hourly trade.

You had the traditional naysayers worried about 'debanking' or even 'credit default swaps' plus another drop in Bitcoin / crypto... and those are actually influences. However it was Oracle, with their push-off of data-center projects to 2028 from 2027, that opened eyes further to something (I suspect although they didn't clarify) I've been concern about: too much focus on old-guard GPU classical compute (and high power demand requirements) growth; versus the 'normal' progression of technology which envisions the 'new-guard' Quantum, which is either lower power (and size of facilities) requirements or even room temperature capable (or closer to that than what Nvidia and so on promote.

(P.S. this Briefing was nearly entirely prepared Friday but looking into several issues was too fatiguing to finish. I do hope that some topics provoke sufficient thought so they're useful. Of course the problem with the future, is that its history isn't written yet. We'll see:-)

So many that were running hot (like Oracle, GE Vernova, Broadcom as well as related companies actually or psychologically) pressed those pricey tickers considerably. Much of the rest of the list (including most small-caps that we're optimistic for in 2026 and are well off 2025 lows) (aside a couple recent ones I have just begun covering and are merely speculative bets, but interesting) for sure were also defensive; and just part of that relates to year-end activity.

I'm not particularly focused on consumer spending or a general broadening as relates to the overall economy (though that would help even if unlikely given a slew of higher costs like healthcare for the majority of Americans). We've had a concern about the macro for awhile, and actually contributed to quite a shift from large-caps to small-caps over a year ago. We were early in cutting-back some (I think of AMD ... with memories of Berlin in 2019 where I learned lots about the Rizen processor and subsequent bought it around 16-17); and later on others (I think of AEHR); and last year spot-on with buying early Quantum tickers (like IONQ, QUBT, RGTI and& QBTS).

The old graphic from a Briefing of 2019 reminds that you never know.. AMD still vs. Intel at the time, and we preferred it over Nvidia. Shame? Not exactly and this year AMD (still have about a 3rd having sold some in the 100's; back in around 75..recall).. anyway AMD has outperformed NVDA this year. Both of course did great, but we're pleased.. and actually consider Lisa Su a bit more candid than Jensen Huang (but I thank Jensen after being furious; because I increased D-Wave shares precisely during his panic tirade against Quantum).

We sold all the IONQ (too soon for only a 2 or 4x gain haha); most of QUBT (as we had trust issues with that company); and most all of the RGTI. Way different with D-Wave, as we sold half the QBTS Warrants (in the high 30's up to 41; so that was fine); and tendered the other half as trying to hold not only to achieve a new tax year with the gains (of roughly 10x) but pondering if QBTS gets new customer or two around their late January Boca Raton gig.

(All along retaining our QBTS primary common stock holdings; simply more shares now, due to the Warrant exchange. And we aren't urging chasing; just pondering if and when to 'schnitzel' gains on some sort of scale-out over time. I mentioned that to a big bull on Quantum who see it in the hundreds one day in his lifetime; but let's face it; he's in his 20' and I'm the opposite; so probably come out of some over the next year or two at the most.. we'll see as there's always the ability to never sell; leveraging positions to generate needed cash.. which isn't free but can be less expensive than paying gain taxes..it depends.)

I've delved into this a bit excessively; mostly to acquaint new members with it; and clarifying I hope 'others' will push certain stocks higher we're not chasing.

Market X-ray: the primary pressure fading Friday morning's rebound was the 'surprise' (not to me; only surprised they didn't see the CapEx handwriting on the wall sooner actually) Oracle / OpenAI 'build-out' delay; which could even be more substantial if I'm right (or they're now thinking of the absurdity of so much money invested in structural facilities to house outgoing systems that at best will evolve into hybrids combining Classical with Quantum for Ai etc.).

So ideal evolution's from Classical to Quantum computing, would drastically reduce CapEx necessary to build-out and is 'pro-consumer' and 'pro-America' as it would contribute to far better efficiencies plus integrate Quantum 'with' AI as I've projected would become the case eventually.. and said so all year well before others now recognize the prospect.... anyway that's important not for a 'told you so' moment; but for new members to understand there's a difference of chasing higher prices now versus buying several of them earlier.. when the media pundits (they still do) defended the old-guard and shunned the 'new'.

That view was a basis of buying not selling on the Quantum Panic caused by Jensen as he was 'talking his book' in my view at the time (and later he recanted to a degree.. so ponder whether he was buying shares in something versus just supporting META his biggest customer for Blackwell at the time). I don't care; and not bitter; as instead I transformed that momentary irritation with Nvidia's self-serving perspective, with an entry opportunity, then not now.

And that's my point in this bifurcated somewhat expensive market. Now back to our regular programming ..haha.

Groucho Marx, once said that -- "Politics is the art of looking for trouble, finding it everywhere, diagnosing it incorrectly, and applying the wrong remedies" -- a childhood friend (former Congressman, Cabinet member and esteemed head of the Motion Picture Academy once).. provided this quote which sounds like what the Administration 'might' be doing as well as the 'roller coaster' semblance of daily market action that we're seeing towards this year's wild-ride finale. I suppose we take an 'E-ticket' ride next week too. Plus we need to watch 'military' maneuvers. 

I'm not going to push-back on the Friday (partially Expiration, which evolved to be more) troubling behavior that otherwise mostly stemmed from Oracle; as a lot of folks began pondering whether AI 'CapEx' data-center confusion is from the 'crowd' of a lot of money managers getting ahead of the computing reality; and realizing that global competition is an issue beyond domestic speculation.

Analysts are also somewhat confounded by prospects of everything from the Fed appointment (POTUS leaning to one of the two Kevins); even increased use of weekly rather than monthly options; which you could see in late trading moves where a lot of stocks mostly declined toward 'round numbers' with high open interest. So you can't deduce much from all that as regards next week.

AI is a productivity enhancing tool or system; and it's barely evolving. Leading companies that will dominate the future are indeed going to be revolutionary; but in what period of time (such as curing cancer while some people are able to benefit even in 'this' generation of citizens; with high healthcare costs too).

Let me say one more more thing about nervous-wreck investors (who of course ought not trade drones or 'global defense' tickers if unable to cope in days like this.. even applies to the big-cap 'old-guard' at the moment). Listen to recent interviews from CEO’s. Some are fluff; some are more specific as or if they're filling pipelines, hiring staff, expanding warehouses, rising back-logs, getting ID/IQ status for projects, partnerships/acquisitions etc. Overall I think the US Gov'ment is setting up the stage for massive defense spending in the drone market and border / aviation security.

If you invest in such stocks, listen to outlooks and guidance, beyond focusing on prior earning calls alone. And perhaps above all have conviction (or not) in a company's business prospects and actual information on-top of chart views.

For that matter go find my last 2 YouTube interviews by 'The Quantum Bull' that talk of strategy and where some of these companies are trying to head. I don't know the future and there are never assurances. And now I'm tired as I hear that the U.S. Navy seized sanctioned cargo on a Chinese ship awhile back headed to Iran and was never reported (by China or the USA?). Why do I sense the U.S. has taken on Great Britain's historic global policing role?

Of course because we have and because nobody else has effectively done it as well. The U.S. and Europe allowed things to deteriorate globally for years. It was not just trade or open borders that eroded matters (more so in Europe) but generally an excessive globalism noted for years. I always said globalism 'in moderation' is essential. Like anything; in excess it got counterproductive.

Bottom-line: major parts of the market have stimulated doubt. Of course AI as well as 'excess' data-centers. The loss of NVDA momentum (ORCL too); does help fluff comes out of markets somewhat; so the trick is whether or not technology will indeed carry the burden of moving forward into 2026.

Precisely why we focused on 'new-era' tickers, and far too many for a guy my age (as I ought to just focus on S&P only; but that has been played and thus is less relevant unless it tanks.. or we get the desired broadening). This is why we've called for it to not do much. Reality: it got dominated by few stocks; and it matters if money managers adjust to other next 'new-era' players, without a contagion of hyper-excitement heard from some with expectations of calm .. you rarely get calm in new-era stocks; didn't last year; unlikely next year.

Hopefully next week rolls tumultuous activity higher for new-era tickers. If alternating action continues to year-end, so be it.

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