Hedge fund flips a 225% gain into a 40% loss in a month. Dimon warns market leverage is dangerously high. Shiller P/E is threatening to break dot com bubble records.

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One hedge fund turned a 225% winner into a 40% loss in a single month, and it may have marked the low.

A long/short momentum trade inside US tech returned 225% in the year to June, then shed nearly 40% in July as Situational Awareness, Leopold Aschenbrenner’s AI fund, imploded and dumped its entire book.

That was forced deleveraging. The earnings never cracked. Microsoft and Amazon printed fine, and hyperscalers have already ripped back to records.

When leverage blows out, it clears the runway. The stop-out handed everyone else a cleaner entry into semis.
$SMH

 

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