sport football: Tomorrow: Big T's New Buy Alert

In less than 24 hours, Big T is holding a special briefing.

Where he will reveal the name and ticker symbol of his newest buy recommendation.

He’s predicted some of the biggest moments in financial markets…

When he picked Apple in 2003, even Steve Jobs was dumping Apple stock. Today, Apple is worth over $4 trillion.
Called Nvidia in 2015, before anybody was talking about AI… a call that’s soared 28,600%.
When he pounded the table on Bitcoin at $400, most people never even heard of cryptocurrencies. Bitcoin’s soared as high as 39,900%.

And he believes he’s about to do it again.

In short…

He recently got confirmation from the Federal Reserve that the wealth gap in America is growing at an unsustainable rate.

Most people don’t know the Federal Reserve keeps tabs on the financial health of U.S. citizens.

But their latest report confirms the vast majority of people are falling behind. Over 90% of people won’t have enough to fund a comfortable retirement.

However, Big T discovered something odd in this report…

Inside, he found a few ordinary people getting filthy rich… amassing 7-figure fortunes on ordinary salaries.

Like people worth $1.5 million on $50,000 a year salaries… or $2 million on $100k a year… and folks making $150-$200k a year sitting on almost $5 million.

Big T launched an investigation to discover why.

And tomorrow, at 8 pm ET, he’s going to share his findings for the first time ever during a new special briefing he’s calling The Wealth Gap Nightmare.

When you join Big T, he’ll…

Reveal how a small group of ordinary people escaped the growing wealth gap in America to become - on average - 25 times richer than their income peers (proven in over 80 years of data collected by the Federal Reserve).
Give you their entire playbook for making 2 times… 5 times… and more than 10 times more on popular stocks, including a free recommendation.
And show you the pattern in the stock market that this approach capitalizes on. When it appeared this year, gains of 263%, 410%, 691%, 1,838%, 4,170%, 9,792%, and 14,450% followed.

Get all the details here.

Let the Game Come to You!

Big T

In case you missed it, here’s Big T’s Digital Asset Daily

Wall Street Liquidated AI’s Boy Genius

I got married in June. On my list of worries the week of the wedding: Will guests like the food? Will the DJ get my family out on the dance floor? What if I forget how to speak when the officiant says, “Do you, Houston, take…”?

Not on my list of worries: Losing $35 billion (with a B) two days before the wedding.

That’s what just happened to AI’s boy genius, Leopold Aschenbrenner. His hedge fund, Situational Awareness, went from $45 billion at the start of July… to just $10 billion this past Thursday.

How? Here’s Yahoo Finance with the scoop:

Leopold Aschenbrenner's hedge fund, Situational Awareness, lost roughly $35 billion in assets after margin calls from its prime brokers forced a distressed sale of its publicly traded holdings to Ken Griffin's Citadel, according to CNBC.

That’s a lot of Wall Street jargon to say the fund’s lenders came knocking for more money. When Aschenbrenner couldn’t pay up, he had to unload his stocks at fire-sale prices.

Among them? SanDisk, CoreWeave, and Nebius Group. Each of these positions fell over 50% over the past month.

That’s a tough loss, but it doesn’t explain a $35 billion collapse. What happened is the fund used as much as 400% leverage. That means the fund made bets several times larger than the cash it actually had.

We wrote about Aschenbrenner in our flagship advisory, The Asymmetric Edge, back in early June. He had built one of the hottest funds in Silicon Valley around a simple idea – not too different from the one we’ve been pounding the table on in these pages since late last year.

He believed the biggest AI winners would be the companies controlling the bottlenecks underneath the industry. Memory, chips, data centers, electricity… the physical infrastructure every AI company needs.

I still think he got that part right. The problem is that he wasn’t just long these companies. He was long with leverage. And when you use leverage, it doesn’t matter how smart you are. If you don’t time the trade perfectly, you can lose everything.

The Market Is a Shark

The market is like a shark in the water. When it senses blood, it bites.

The week prior, Aschenbrenner had sent out a letter to his investors telling them it was a great time to invest more money into the fund. The fund had also met with lenders to raise additional capital and even offered investors the option to buy assets in the portfolio.

Situational Awareness has to disclose its holdings every quarter, due to its size. So Wall Street could see the portfolio melting down catastrophically.

Pair that with a fund publicly hunting for fresh capital, and the distress signal couldn’t have been clearer. Wall Street knew the banks were about to call their loans in… and Situational Awareness was about to become a forced seller.

So what did the market do? It moved to the price that would take out the weakest investor.

Aschenbrenner had taken huge leveraged positions in many of the hottest parts of the AI trade. Since the start of the year, the top memory and neocloud companies had exploded as much as 885% and 260% higher, respectively.

Then the stocks fell, the margin calls mounted, and Aschenbrenner was forced out of his own positions… just as he was supposed to be enjoying his wedding weekend.

Wall Street Picked Up the Crumbs

Ken Griffin’s Citadel ended up buying a large piece of Aschenbrenner’s portfolio.

That shouldn’t surprise anyone who has followed Griffin’s career. He's the Great White of the markets… the top predator, first to any blood in the water.

Citadel has shown up around plenty of booms and busts.

In 2006, it bought Amaranth Advisors’ energy portfolio after its $6 billion collapse. A year later, when E*Trade was collapsing under $3 billion of toxic subprime debt… Citadel stepped in to buy the assets at 27 cents on the dollar.

When a weak player gets into trouble, Griffin is often there to pick up the pieces.

There was also a strange event in the days before Aschenbrenner’s liquidation…

On July 27, Citadel Securities published a report suggesting the Federal Reserve could deliver a surprise interest-rate hike. (Citadel Securities is the market-making arm of Griffin’s empire.)

Almost nobody else expected that. On Tuesday, the swap market was putting the odds of a rate hike at roughly one in three, according to Bloomberg. A surprise hike would’ve been bad news for risk assets.

After Citadel’s call began circulating, the market started pricing in a greater chance of a hike. AI stocks like Nebius, SanDisk, and CoreWeave fell as much as 17% overnight. That added even more pressure to Aschenbrenner’s leveraged positions.

I’m not saying anyone deliberately caused his fund to collapse. But after 16 years studying these markets (and much of that time under Big T’s mentorship), I know how Wall Street works.

Once the market realizes you need to sell, it will hunt you. It will keep pushing until you’re out. Then the stronger players come in and pick up your assets for pennies on the dollar.

The Stocks Rallied After He Sold

By Thursday morning, news hit the tape that Citadel Securities had bought up Aschenbrenner’s positions. Suddenly, the forced seller was out… and the stocks he owned took off.

Most of them jumped 10-20% in a single day. Some of his biggest positions, including Nebius, SanDisk, and CoreWeave, rose as much as 28%.

That may sound backward. A major investor is forced to dump his positions… and the stocks go up? But that’s just how it is sometimes. A forced seller has to get cleared out before the market can move higher.

It’s like a store-closing sale. Nobody pays full price while they know more forced markdowns are coming. But once the shelves are cleared, the excess supply is gone and normal pricing can return.

It’s a weird dynamic, but we’ve seen it before. Bitcoin bottomed 10 days after the FTX collapse in 2022. And in 1998, the S&P 500 bottomed weeks after banks took control of Long-Term Capital Management’s portfolio.

You Can Be Right and Still Lose

None of this means Aschenbrenner is wrong about AI.

I believe many memory stocks, chip companies, and neoclouds could do extremely well over the next five to 10 years. The AI infrastructure buildout isn’t suddenly over because one fund blew up.

But there’s a big difference between being right about a company over the next decade and surviving the next month.

When you own a stock with your own money, you can sit through a 20%, 30%, or even 50% decline. You may not enjoy it, but nobody can force you to sell.

When you borrow money, the lender controls your timeline.

The bank doesn’t care what your stock might be worth five years from now. It cares what your collateral is worth today. If that value falls too far, the bank calls, and you have no choice but to sell.

That’s why leverage is so dangerous. It turns a long-term investment into a short-term bet. You can get the entire long-term story right and still lose.

Watch What Happens When the Biggest Bull Gets Taken Out

When the biggest character in a boom gets taken out in a body bag, pay attention.

That does not automatically mean the bottom is in. But it can tell you that a large amount of excess has just been cleared from the market.

First, South Korean investors were liquidated. Now Aschenbrenner has been forced out. And many of the stocks he owned immediately bounced once his liquidation became public.

That tells me the underlying assets may not have been the real problem. The leverage was.

Still, I’m not rushing to chase stocks after they’ve jumped 20-30% in a day. We’re still in a downtrend. But these liquidations tell me we could be close to turning a corner.

Before I pick up the pieces, though, I want to see these stocks form a base. That means the swings calm down and prices move sideways for a while.

Once that happens, the strongest memory, chip, and neocloud companies could become attractive buys.

Just don’t use leverage. The next decade could offer one of the biggest wealth-building opportunities of our lives. But you can only profit from it if you remain in control of when you sell.

Don’t Watch the Future Happen. Own It!

Houston Molnar

P.S. Recently, I uncovered a power producer with long-term contracts already signed to sell electricity directly to the giants of AI. It generates the kind of steady, around-the-clock power data centers can't function without. Yet it trades at a fraction of the valuation investors are paying for the popular AI names.

Based on my research, this stock could climb as much as 261% from here.

Teeka and I published the full write-up in our July issue of The Asymmetric Edge. If you’re already a subscriber, you can access it right here – including the name, the ticker, the contracts, and why we think it’s one of the best-positioned ways to own this trend.

If you’re not an Asymmetric Edge member yet, I encourage you to watch this briefing Teeka recorded about the top companies that win no matter which tech giant wins the AI race. That is how you own a revolutionary technology without letting the excitement consume your nest egg.