Cash Is a Position: Trimming Before the Anthropic IPO

Colin Santucci (0:00)

Welcome to the Rigatoni Capital Podcast. I'm your host, Colin. It is pre-market Wednesday, October 21st. Extremely sunny, sunny day here on Wall Street. We have markets that kind of bounced overnight, which is nice, you know, semiconductors and industrials, and the AI infrastructure trade has been beat up pretty good versus the broader market, right? That does have something to do with the market breadth. It does have something to do with the everybody that is in some of these neo clouds got whacked, for example. And, you know, we know the names, we know the names, we know Oracle, the neo clouds, you know, some of these, you know, there has been some contagion into a land research and a caterpillar that, you know, those stocks don't look so hot. We can go down the list on top of that. It's my opinion that, you know, caterpillar we can use as an industrial, right? But look at defense and aerospace companies getting whacked. They have been getting whacked. You know, they claim the narrative is claiming that it's due to a Democrat Congress that may take over the House and Senate, et cetera. I really I think that is a lazy part of the news story. A lot of this has to do with uncertainty, of course, and with defense budgets, but it has to do with supply chain issues, whatever you want to call it. Inflationary pressures, you know, not being able to get refineries, not being able to do stock buybacks. We talked through it on a post I did over the weekend. We'll get into that. We'll also get into the idea of me who, you know, claims I'm a passive investor, which I am, right? I have a 401k. I have passive investments in that. And, you know, it's kind of like a dollar cost average system over there. But I claim that the Rigatoni Capital portfolio is a.

What would you call a long term?

Buy and hold, right? Long term buy and hold. What happens was is that, you know, I don't think I could have survived another version of COVID and the year 2022 combined. So what that would have looked like is a bear market like 2022, but it would have happened very sharp. And if it would have gotten hit, that we were in some kind of AI bubble, meaning that Nvidia, which is the captain of the bubble, you know, got hit hard, that stock got hit hard. I mean, my portfolio would have not done so well, you know, it wouldn't do so well, it would take a while to recover. So I want some cash on the sideline. That's what I've been trying to do. It's going to take some time, you know, and yes, I have been on margin as well. So, you know, cleaning up that margin balance before another Fed hike in December, or maybe in October, we don't know. I mean, I just think that we're in a tightening cycle. I think that AI stocks in general need to take a breather and we'll kind of walk through my thinking there and why I wanted to sell some stocks that I just had bought recently, some I had owned for quite some time. You know, I would say my core holdings for the most part are still intact and we can look at my portfolio in a little bit. I also made some buys because I think industrials, meaning more so defense and aerospace specifically, you know, and semiconductors, I think they're due for just a short-term bounce. And I think we might be getting that this morning. You know, I know the cost speed has gotten beat up. But you know, as you can see, it did have a little bit of a bounce here last night. You know, Bitcoin is back to 83 and a half. The Nasdaq 100, it's almost back to like all-time highs. It's not. And we're at 721 right now. We were at 724 last time I checked. 722, the Nasdaq 100 QQQ that is. So we, not all-time highs, that doesn't make any sense. But we are definitely on our way to maybe a bounce, a short-term bounce, right? Before midterms, which is early November, man. It's only like two weeks. Do we have the election here in the US?

Okay, now what I wanted to talk about as well was some of my thinking on how I think it's good to maybe have a lot of cash on the sideline for a future dip, right? Because technically, if you're a professional buy-the-dipper, if you don't have cash, you're not really a professional buy-the-dipper. And that's what we jokingly call ourselves on the show. We like to buy the dip. I'm long only. It's fine if you're not. But I'm long only and I like to buy dips only. So, I needed to find cash wherever I could get, okay? Like, I had a Coinbase account many years ago where I owned Bitcoin in it and I sold out of that. So, I took some money off the table on Bitcoin, for example, because I need the cash. I need the cash to be able to deploy when we have a market, a bear market in this country. I don't care about other countries just because my portfolio is based on buying the Nasdaq 100, you know, that's what I'll be looking to buy. If I buy more semiconductors or industrials or financials, that's a possibility too. And this portfolio is kind of centered around the hope. Hope isn't a strategy, but we kind of have to hope that we think that the Nasdaq, meaning just tech in general, broad tech, that includes all the big cap stocks, software stocks, can hopefully beat the S&P 500 alongside financials, because there's no financials in the Nasdaq 100 And industrials, there's not a lot of industrials in the Nasdaq 100 So with those three, we think that we can beat the market because there are themes on where we see the future. I can't predict the future, but I'm making a bet that the future in stock prices will be capital, will be flowing through financials in this country, industrials in this country, and in tech still. So it's kind of like a repeat of what it always has been, right?