Category: lenS & thoughtS

What concerns me (3)

Is that today’s major platforms like X and TikTok/Douyin can be used as “thought weapons”.

People/organizations can push a post (twit or video) to millions of people if it fits their interest, regardless of who creates the post in the first place.

At certain scale and with enough repetitiveness, this action can alter a person’s or a group of people’s thoughts.

This influence is sold.

People/organizations can buy the influence without disclosing the intention.

Common folks are blindfolded.

It’s not like an influencer wants  more people to see his/her posts to grow impact.

It’s paying for “thought weapons” to achieve certain goals inexplicitly.

And sometimes, these goals could be evil, or self-interested.

Meanwhile, users who “owns” the attention “sell” their attention for nothing; payers pay to the platforms – they are not even bribing the ones that have original ownership.

What concerns me (2)

Is that current companies or leader of companies at the frontier of AI and robotics talks about advancement everyday, but they said little about ethics, at least in the public domain.

Who to provide jobs if factories are run by robotics? and decisions are made without human in the loop?

How to preserve humanity in a world with automatic war machines / weapons?

Interesting levels

Security Apr. 30 close Recent bottom close Bottom vs. Apr. 30 Intraday trough vs. Apr. 30
SK Hynix (000660) ₩1.286m ₩1.322m on Jul. 30 +2.8% −3.1% at ₩1.246m on Jul. 29
QQQ $667.74 $661.73 on Jul. 29 −0.9% −1.0% at $661.14
SOXX $461.44 $465.00 on Jul. 29 +0.8% +0.6% at $464.08
SMH $506.72 $504.22 on Jul. 29 −0.5% −0.6% at $503.63

These names bottomed at end of Apr levels.

From capex to backlog

For the past few quarter, capex figures and related comments from hyperscalers are the key metrics to watch, especially for gauging future demand for semiconductor companies.

The higher the capex number, the higher the revenue estimates.

This worked but became less useful lately.

Investors don’t like it if only the capex is growing, which pushes hyperscalers free cash flows to negative territory.

Investors want to see higher demand signal, which can justify these higher capex numbers.

Thus, backlogs or RPOs (emaining performance obligations) are more important now.

 

Quarter AWS backlog Microsoft commercial RPO Google Cloud backlog Oracle total RPO
1Q25 189 315 90 130
2Q25 195 368 106 138
3Q25 200 392 155 455
4Q25 244 625 240 523
1Q26 364 627 462 553
2Q26 496 678 514 638

Another thing to watch is the weighted-average backlog duration of these backlogs – within how many years will backlog become revenue?

Microsoft explicitly commented about 2.3 years.

RPO, including OpenAI, has a weighted average duration of 2.3 years. And roughly 30% will be recognized in revenue in the next 12 months, up 37% year-over-year. The remaining portion recognized beyond the next 12 months increased 112%.

– MSFT FY4q26 earnings call

In addition, utilization is also an indicator.

Amazon said “lion’s share” of AWS compute capacity for 2027 had ⁠already been reserved during 2q26 earning call, which is very good to hear.

Samsung common vs preferred shares

Samsun Electronics has two ticker in South Korea: 005930 (common stocks), and 005935 (preferred shares).

The main difference is voting rights – 005935 has no voting rights.

Common Preferred
Korea ticker 005930 005935
Voting rights One vote per share No voting rights
Business exposure Samsung Electronics Same Samsung Electronics
Dividend Standard dividend Almost identical dividend—only ₩1 more annually
Liquidity Higher Lower
Typical valuation Trades at a premium Trades at a discount

The discount is large. Recently it’s larger at over 25% or 30%+.

The main reason is probably ETF buying.

Passive funds, index futures hedging and most Samsung-focused ETFs direct their purchases into 005930, not 005935.

And for some strategic investors, voting rights is meaningful.

However, this is still a large discount – Google Class C vs Class A common shares discount is within 0.5%.

ETFs buy both Google A and C.

The World Cup curse

A widely cited study covering World Cups from 1950–2006 found that the U.S. market lost an average 2.58% during the tournament’s defined “effect period,” versus an average gain of 1.21% over comparable-length periods outside World Cups.

The 2022 Crash: During the 2022 Qatar World Cup, the global stock market fell by 4.6% and the S&P 500 dropped by 5.4%.

Why might it happen?

1. Losses hurt more than victories help.
Fans become significantly more pessimistic after elimination, but investors do not become equivalently optimistic after an ordinary victory. During the knockout stage, every match creates one disappointed country, so the negative mood effects may accumulate globally.

2. Investors are distracted.
When a national team is playing, investors watch football instead of markets. Research covering 15 countries during the 2010 and 2014 World Cups found that trading volume could fall by as much as 48% during national-team matches. Domestic markets also temporarily reacted less to global-market news.

The current 2026 World Cup looks fine so far, although Nasdaq is weak in recent days.

The weakness started when US restarted strike on Iran over the Jul 11-12 weekend, after US team’s exit on Jul 6 (defeated by Belgium).

 

Index June 10 July 17 World Cup return
S&P 500 7,266.99 7,457.69 +2.62%
Dow Jones 49,918.78 52,146.42 +4.46%
Nasdaq Composite 25,169.50 25,520.24 +1.39%
Russell 2000 2,835.46 2,962.22 +4.47%

 

China’s Jim Cramer?

This Weibo guy, called Feng Ge (Brother Feng), said on July 8 that he can’t withstand the loss and cut positions (in tech mainly).

The next day July 9 stock market came back strong.

On the very strong July 9, he said he bought back (fully invested).

Then on Jul 10 stock market was in a bloodbath.

After Jul 10 close, he said he wouldn’t quit this time – tech is the future and will rise again.

On July 15, he commented that innovative drugs is interesting, which marked the end of a few weeks rally of HK biotech/healthcare stock.

On Jul 16, he commented that “tech has bottomed” / “correction is done”, which is actually the peak of the day.

China’s retail investors have found their Jim Cramer.

 

Opportunity cost vs sunken cost

Interesting that retail investors care much more about sunken cost than opportunity cost.

For one thing, sunken cost can be easily measured – how much you bought and how much is the unrealized p/l.

Opportunity cost is harder to measure, as you need to constantly have a view on various things.

Perhaps money market fund rate is the most obvious opportunity cost rather than S&P 500, although I believe the latter is more important.

However easiness to measure shouldn’t matter.

As I think sunken cost can be ignored while opportunity cost should be the only thing that matters.

Except that you think you are playing poker with multi round game theory – easy to fold makes you more likely to be bluffed in future.

SK Hynix 2q investment profit is more than 1q operating profit

For 1q26, SK Hynix posted ₩51.6 trillion won profit before tax.

Among that ₩51.6tn, ₩37.6tn is operating profit and ₩9.88tn is investment valuation gain, mostly related to Kioxia.

SK hynix owns convertible bonds that can be converted into substantially all the voting rights of BCPE Pangea Cayman2, and that vehicle holds the 77.4 million Kioxia shares, which is about 14% of Kioxia.

Kioxia’s closing share price was ¥19,080 on March 31, 2026 and Kioxia closed at ¥89,680 on June 30.

77.4m×(¥89,680-¥19,080)×₩9.5194=₩52tn​

52 trillion won of Kioxia investment paper gain in a quarter.

The Kioxia investment gain alone is more than 1q26 operating profit of ₩37.6tn.

While Bain Capital needs to sell as a PE fund, SK Hynix can hold much longer.