Holdings Letter: Closed WMT, bought PWR and RIO

This week's market weather: expensive valuations / loose liquidity / euphoric sentiment.

One-line translation: the drums outside the temple are loud, and everyone on the street is talking about where the gold is. My feeling this week is the opposite: don't reach too soon.

Three things worth remembering this week.

First, Trump's visit to China temporarily pinned down the macro rhythm. The panic phase of U.S.-China conflict has passed for now, and the market has moved from fear of trouble to fear of missing out.

Second, the CPU and memory chain is hot. MU, AMD, and INTC all rose sharply. AI is still the main engine behind this new high, and money keeps flowing into compute and hardware.

Third, Claude and OpenAI completed historic financing rounds. Great companies raising big money is not surprising. But when everyone starts believing “this time is different,” the bubble often starts getting thicker.

The AI names above may rise faster and attract stronger media momentum, but when the market turns, half the crowd will not get out in time.

My own positions changed this week. The current market is telling me that the consumer defensive cycle is ending, while the physical AI cycle is beginning.

So I closed WMT, trimmed TJX, and bought PWR and RIO. PWR is a picks-and-shovels play on the U.S. grid and energy infrastructure. Whether it is renewable grid connection or AI-driven power shortage, grid upgrades are unavoidable. RIO is a global giant in iron ore, copper, and aluminum, and its dividend capacity gives me a safety cushion.

My biggest adjustment this week is this: macro does not switch from one large block to another. It jumps back and forth among several states. The response should not be all-in or all-out, but matching different positions to different states.

For the AI stocks that have surged, my view is simple: everywhere looks like people are getting rich, but that does not make it a good opportunity. I choose to move less, wait for a real pit to open, and then pick up the cheap gold. Steadily capturing the upside is already a good kind of happiness.