Exits, 1/24/2024

How we did on the trades we exited this week.

Dids/Pexels

This Week’s Trade Exits

As soon as I exit a trade, I note that in the comments of the post where I first mentioned the trade; at the end of the week, I try to track them all in one post. Starting in July, 2024, I have also been tracking them in this spreadsheet. These are the trades I exited this week.

Stocks or Exchange Traded Products

None.

Options

1. Puts on Nvidia ( NVDA 0.00%↑ ). Bought for $0.75 on 1/24/2025; sold (half) on the same day for $2.25. Profit: 200%.

2. Calls on Kratos Defense and Security (KTOS 0.17%↑). Bought for $1.25 on

   12/12/2024; sold (final two thirds) at $5.65, on 1/22/2025. Profit: 352%.

Comments

Stocks or Exchange Traded Products

No exits this week, but our core strategy of buying our top ten names, putting trailing stops of 15% to 20% on them, and replacing them with current top names when we get stopped out, continues to perform well, driven by the performance of our top names.

Options

A couple of nice exits this week, but the Nvidia one is the more important story. I may expand on this in a subsequent post, but the tl;dr version is this: a Chinese company built a competitor to Open AI’s ChatGPT called DeepSeek, reportedly with $6 million in funding.

This poses an $18 trillion question ($18 trillion is the current market cap of the Magnificent 7 stocks): 1) did the Chinese really do this with just $6 million in funding, or 2) are they secretly using tens of millions of dollars of Nvidia chips that they can’t disclose due to export restrictions? If they answer is 1), it suggests the market needs to radically lower capex estimates for artificial intelligence, and, consequently, lower Nvidia’s valuation.

If you are long Nvidia or other AI equipment stocks, you may want to use the Portfolio Armor iPhone app to hedge. You can download it by aiming your iPhone camera at the QR code below (or by tapping here, if you're reading this on your phone).