In this Weekly Wrap released August 7, 2026, Steven Discusses Correlated Bets, Evaporating Free Cash Flow, Earnings, and his personal TV Must Watch List With 150 Recommendations
Market discounting The War
The Iran war is on and off again and the Straits are open or closed, nuclear is not being discussed, and in the meantime, markets responded by rallying to all-time highs while oil fell below $80.
The fatal combination was 4x leverage on a portfolio that had a R Squared correlation approaching 1. They matched their potential AI winners like Hyperscalers against their AI losers like software and convinced themselves they had a winning strategy. Maybe eventually this was a sure bet. But time ads uncertainty and stocks don’t move in a straight line to correlate to a hedge fund’s thesis. They were not protected when the AI trade reversed which is exactly what happened.
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