Yields went up. Stocks went down. The financial media saw causation where correlation lived. They wrote breathless headlines about rattled markets and bond vigilantes returning from a fifteen-year nap.
The Club stuck with their AI and retail stocks. Brave. Nothing says conviction like holding your favorite momentum trades through a rates tantrum while explaining to viewers that you understand risk management.
Here's what happened: the bond market repriced duration. Equity multiples compressed. Portfolio managers who spent six months telling CNBC that valuations don't matter suddenly discovered that rates are the denominator in a discounted cash flow model. Shocking stuff. Really cutting-edge financial theory from the Wharton class of 1987.
The retail trader learned nothing. He watched his AI stock drop eight percent in three days and blamed Jerome Powell,็ฎๆณtraders, and market makers conspiring against his fourteen shares. Never once did he consider that paying forty-seven times sales for a company with negative free cash flow might carry downside risk when the ten-year note starts yielding something above a checking account.
The Club's thesis remained intact. AI is the future. Retail is resilient. Yields are noise. The same thesis they had last week when yields were lower and stocks were higher and none of this mattered because the tape was green.
Technical analysis says the same thing it always says: price went down, support levels appeared on the chart retroactively, and if we break through here we'll find the next level that also didn't exist until we needed it.
The bond market will do whatever it does. Stocks will follow or they won't. The Club will either look smart or explain why being wrong was actually right with a longer time horizon.
Your favorite AI stock doesn't care that you stayed loyal when rates moved thirty basis points.
Photo by Maxim Hopman on Unsplash
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