Markets are indeed reaching all-time highs (ATHs) everywhere amidst greater volatility with the election of an unpredictable person to the most powerful role, again. It was especially a super rocky ride in Apr when the US tariff war was announced to the world.
Thankfully, I was on vacation and therefore did not panic sell as the fundamentals of the stocks I owned seem robust. My major themes for the year were and still are AI (Artificial Intelligence), QC (Quantum Computing) and Nuclear energy.
Central banks have begun to cut rates after the rapid rise in 2022, post- Covid where a surge in demand after a global shutdown caused massive inflationary upwards pressure. All except America as Powell is cautiously mindful of the tariff war that could turn inflationary and is highly unpredictable, thanks to one man.
We have had the Ukraine and Gaza conflicts continuing even as new hotspots arise. But the market is forward looking towards the tremendous potential of AI being unleashed once the energy requirement is solved with cheaper renewable energy. The stars seem to be aligned that AI will be taking humanity to greater heights.
While LLM effectiveness potential looked as if it had peaked in late 2024, China’s DeepSeek moment in Jan stunned everyone. The new paradigm shift to open source that leverages existing LLMs with automating prompting to develop better responses was a revelation. “If OpenAI, Google and Microsoft have already won the AI race as we know it, then China’s best move would not be to compete – it would be to make winning meaningless.”
The sky is the limit for AI again. Everything is being turbocharged. The race to build the next biggest and best data center with renewable energy continues.
I have a layman’s theory of how DeepSeek works and why it was so revolutionary. It is thanks to the think-out-of-the-box situation that China was pushed into a corner to develop. They had restricted access to the newer Nvidia chips and were falling behind America in the AI race. Necessity is the mother of invention, and when faced with a difficult situation or strong need, one is more likely to come up with a creative and innovative solution.
Before this moment, there was a lot of talk about how a person can earn a good salary if they can master prompting. It is but a means to create better prompts to generate superior LLM responses. One can manually expand on the original prompt to fine-tune and obtain a better result. Some ingenious dudes figured: “What if one can automate this process to squeeze more juice out of the LLM?” DeepSeek called it DeepThink – a button that you click to turn on auto prompting.
By expanding on the first prompt and creating a series of follow-up “questions” on a loop until certain criteria are met, the collective answers from various LLMs can be summarised and aggregated to provide a final superior result – mimicking the thought process of a human.
Previously, companies were racing to produce the most powerful LLM with the largest number of input parameters/variables in the billions. The world was running out of raw data to use, even as humans were producing a lot of new data every day. DeepSeek questions: “Why don’t we leverage on all existing LLMs?” The sum total of all LLMs working together would be much greater than the individual parts.
With this new exponential push for AI, the next 2 steps will naturally fall into focus to help accelerate this trend. I am talking about a huge need for more energy to power the data centers. The best bet on renewable energy is nuclear. It is the cleanest and most viable. By using a widely available material like Thorium in a safer reactor that uses liquid sodium instead of water, it will provide a safer process that can auto-shutdown if things go wrong. A SMR (Small Modular Reactor) using these principles can generate up to 300 MW and not require refuelling for up to 7 years, and will be stackable to adjust to power requirements.
By solving the energy bottleneck, this will unleash the push to greater tech breakthroughs in Quantum Computing to turbocharge AI development. We are in for exciting times where we will see breakthroughs in science, medicine and many other spheres of influence that will begin a renaissance of human development.
Moving to another topic of discussion: what is next on the global political stage? Trump is upending everything that is status quo. Is there a method to the madness? What is the ultimate objective and have we seen this being played out before? Is Steve Bannon correct to say that the strategy of “Flooding the zones” will confuse his enemies with too many distractions to focus on?
There seems to be a master grand plan to stop the ever-rising American deficit before it goes out of control and the rest of the world starts to walk away from American assets. The crazy and ever-changing tariff wars with every country sometimes do not make sense. It can hurt America more than it impacts the rest of the world. Is he trying to curb American spending as the main objective? This looks like an “ownself screw ownself” strategy though LOL…
The other obvious move is the embracing of crypto in a big way. Would the feeding of this bubble be a solution to negate the deficit? Create a new asset class that technically can pay down the loans. One BTC to USD 1 million eventually?
Is the TACO (Trump Always Chickens Out) tactic a win? Aim high for the first shot and have more room to compromise later? How can I read the tea leaves and be proactive, to stay ahead of the game and be opportunistic for money-making possibilities?
I am currently rejigging my portfolio to focus on the main themes (AI, QC and Nuclear) while taking money off the table for the non-core old and deadbeat stocks. It is a non-sentimental cutting of money-losing stocks or not in line with the major macro themes I believe in.
About 5-8% is still into cryptos, just the top ones like BTC, ETH and SOL. My cash holding is increasing in case there is a correction and pullback as an opportunity to buy the dips. I continue to see new opportunities to dip my toes into potential long-term winners that were recently listed eg. Figma, Circle, Coinbase.
Wish me luck as we navigate into the final leg of 2025. History says that Sep is a pullback month. We shall see if this year is an exception and if the most powerful man will blow us all up first. Buckle up!
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