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Adam Parker

Founder of Trivariate Research

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because the S P is such a AI semiconductor ETF, having energy stocks at a 40 year low on their correlation to the tech sector I think is a nice diversifying feature... their estimate achievability is above average.

we did 10,000 simulations varying the periodicity and amplitude of their earnings cycle. Kind of came to conclusion that the Stock [Micron] trades around 4 to 5 times peak earnings and 10 times normalized earnings. Right now we think that's probably a little bit too cheap.

one of the main dynamics in the last year has been the penalty for missing earnings has been way harsher than the reward for beating earnings. So if you're running a diversified portfolio of equities trying to beat The S and P, you just cannot own stuff that misses.

it's actually more the quant pods... the holding period of these is usually 3 hours to 10 days with a median of about 5 days. So almost all quant money these days is run with a 20, 30% daily turnover... the impact is massive on the equity market trading on a D[aily] basis.

the market telling us that there's a zero percent chance healthcare is the best performing sector in the market over the next five years. And I think it's like a 30 or 40% chance. And I want to arb that difference... Healthcare revenue per share has grown every year, 30 plus years in a row. The stocks are very anti correlated to AI semis.

Notes

Adam Parker

One-line summary: Founder of Trivariate Research (ex-Morgan Stanley chief US equity strategist); tracked for AI-revenue-bucket framework, earnings-regime read, and energy/healthcare diversification calls.

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