The Market Is Splitting In Two — How Do We Navigate it?

Summary

• Equity alt season is here and it’s a late-cycle tell, says Jonah: HP and Dell ripping as “catchup trades” while Google comes off, Microsoft and Meta struggle, and Nvidia lags at around +10% — “one way to tell that the rally is coming to an end is when people are buying the things that are derivative plays and not necessarily the direct play itself.” His crypto analogy: “it’s like the equivalent of EOS running in April of 2018 after Bitcoin had topped.” Playbook: high cash plus concentrated single names, buy Mag 7 down another 20%, Google near 300, Nvidia near the 185 yearly open.
• Avi’s rebuttal: this isn’t a bubble while physical DDR4 memory keeps ripping. The DRAM Exchange index 9x’d from ~$8.50 to ~$78, sold off 30% in the spring, and is now rallying again (+10% in a week) — “this is physical demand… as leading as it gets,” “the squeeziest physical asset there is.” Dell at 23x forward earnings is fine until that chart breaks down.
• Jonah tax-loss harvested his Bitcoin bought above $70k and deliberately didn’t rebuy: Sailor is “just selling $2 billion worth of Bitcoin… he’s obviously facing a survival crisis,” and he won’t rebuy “in the first inning of that unwind.” The companion trade both hosts endorse: long IBIT / short MSTR at 1.2x NAV — “I bet it goes to a discount pretty soon… that’s a no-brainer.”
• Crypto shows the most dispersion Avi has ever seen: the Sailor front-running flywheel worked one month, then sellers used his buying as exit liquidity (“a little bit of a Ponzi product”), and now HYPE, ZEC and VVV crush it while the majors bleed. Trades: short BTC against long alts as pairs, and XMR/ZEC with “probably another 50% to go.”
• “Just delete the word crypto. Just call yourself a trader” — Jonah tells protocol employees (likely HBAR, Polka Dot, Cardano) to quit and pivot to AI, and warns “don’t get stuck in the permanent underclass by holding Bitcoin forever.” Avi’s transfer trade: after software’s 25% short squeeze, short software as a mega trend — AI hammers those businesses over three years — and maybe start building a short in Worldcoin, up 35% today.
• Avi’s supply-event warning: OpenAI and Anthropic listings bring “up to $3 trillion of additional supply for the AI thesis” — part of this rally exists only because people can’t buy direct AI revenue, so the IPOs “definitionally… will dampen the ability to rally.” Layer on inflation data and Trump already threatening Kevin Warsh.
• Iran is a bigger risk than April because weak hands now hold the market: “people are holding things because they are going up,” making them shock-sensitive; $200 crude means equities down 30–40% — “you need the wheat, you need the oil long before you need the LLM call.” On the next drawdown Avi scales into robotics (“a pretty massive mega bubble”), space and energy, and less memory.

Deep dive

1. Alt season has hit equities — when the derivatives run, the rally is ending

• Avi’s opening warning, followed by Jonah’s equity-alt-season thesis: raise cash. The S&P is up ~7% year to date, but the actual drivers are stalling — Google coming off, Microsoft down, “Meta struggling,” Nvidia up only around 10% — while massive moves hit HP and Dell as “catchup trades.” “One way to tell that the rally is coming to an end is when people are buying the things that are derivative plays and not necessarily the direct play itself.”
• Jonah’s crypto translation: “it’s like the equivalent of EOS running in April of 2018 after Bitcoin had topped.” Exhibit A is RKLB, which he loved, owned, and sold: “it literally went from a 4.5 to 9 billion market cap because it signed a $90 million contract… that’s just nuts. That tells you there’s a lot of retail money chasing.”
• The instruction to anyone up 3x–10x on memory stocks: “if you traded like a god, it’s time to pay yourself like a god. You can’t just sit on that UPNL forever.” Desired entries: Google back to 300 (“tough, I think”), Nvidia around the 185 yearly open, Mag 7 down another 20% = “absolute screaming buys.”

2. Avi’s pushback: watch the DDR4 chart, not the P/E

• “I disagree with you that we’re in some kind of crazy bubble alt season.” Dell’s 50x trailing P/E looks scary, but 23x forward is the relevant number because earnings are rising — the trailing multiple compares today’s price to “what they were earning before they were selling all this new stuff.”
• Avi’s $4k/year DRAM Exchange data: a DDR4 module went from ~$8.50 last August to ~$78 — a 9x — sold off 30% between March and May ($80 to $58), and is now rallying again, +10% in the last week. “To me this is the most leading indicator. This is physical demand… as leading as it gets… the squeeziest physical asset there is.”
• The falsification condition, stated plainly: he’s not worried about Dell at 23x forward “unless those forward earnings are going to revert to what they looked like in the past. And that won’t happen until this chart goes all the way back down.”

3. Bitcoin: harvest the loss, don’t rebuy until Sailor is done

• The Jason Williams tweet that moved Jonah: buy one Bitcoin at 126,000, watch it hit 89,000, sell and rebuy six seconds later — same coin, $37,000 realized capital loss, because crypto is IRS property with no wash-sale rule. Avi’s corollary: this mechanic is why crypto tends to sell off more in the last week of December and get bought back in the new year.
• Jonah sold every lot bought above 70,000 — “and guess what I didn’t do, Avi? I didn’t buy it back 6 seconds later.” Why: Sailor’s escalation from “selling $35 worth of Bitcoin just to prove it has value” to “$2 billion worth” — “he’s obviously facing a survival crisis… I’m not going to rebuy Bitcoin in the first inning of that unwind.”
• The episode’s title thesis: people will hang on to winners and puke losers for tax losses, then have the same gut check — “the market is splitting in two,” a K-shaped tape.
• The trade both endorse: MSTR still trades at 1.2x NAV — “I bet it goes to a discount pretty soon as everybody gets blown up.” Execution: long IBIT / short MSTR on Robinhood — “that’s a no-brainer.” The speaker’s terminal backtest called it “Rough trade, bud” over three months, which the speaker reads as encouraging: “it hasn’t already played out.”

4. Crypto’s record dispersion — Sailor’s buying became exit liquidity

• Avi’s post-mortem on the breakout: Bitcoin ranged 62–71k from February to April, then broke out on the Sailor flywheel thesis (front-running STRC’s equity-issuance buys, as articulated by their friend Tiki). It worked one month; the second month “people used Sailor’s buying to basically get out” — “markets always adjust” — and holders realized the product was “a little bit of a Ponzi product.” Add quantum fears and the majors got chucked.
• The result is “maybe the most dispersion that I’ve ever seen in my entire life”: HYPE, Zcash and VVV “absolutely crushing it” while BTC and ETH do poorly. Funds remain overweight majors purely for liquidity, but a convergence is underway — alts growing in market cap relative to majors “because they’re good assets”: TON on the Telegram integration and rename to Gram (likely), with likely Pavel integrating it more into Telegram; NEAR as “more of a narrative play — I’m not so sure about that long term.”
• Trades for the nervous: put on short BTC / long alts as pair trades, and XMR/ZEC — privacy plus XMR being quantum resistant “far before BTC”; it’s up 10% against ZEC today and “probably has like another 50% to go.”

5. “Delete the word crypto” — the skills transfer, the identity doesn’t

• Jonah’s message from a crypto-industry dinner where “people feel very stuck”: you’re not. If you work for a protocol — “let’s just say HBAR (likely), Polka Dot, Cardano — quit your job… pivot to AI.” If you trade: “just delete the word crypto. Just call yourself a trader.” And “don’t get stuck in the permanent underclass by holding Bitcoin forever.” It’s why the show is now 25% crypto, 75% everything else.
• Crypto’s edge, per Jonah, is that unlike oil — where a “little coterie” has all the winning information and “the 99%” is at a ludicrous disadvantage — it’s retail-optimized and democratized: “you could be a profitable trader at Wintermute or a profitable trader in your pajamas working remotely from Thailand.”
• Jonah’s transfer trade: apply crypto narrative frameworks to equities — in a retail-flow bull, buy the underallocated and heavily shorted. That was software, now up 25% as “all the shorts got blown out.” The next move is the other side: short software as a mega trend, because AI hammers those businesses over three years — “the same way that Worldcoin is probably an entry right now because it’s up 35% today. Maybe you want to start building a short.”
• Why not trade physical memory itself: certification is the moat. Dell will buy from ANET over “Zephyr with an NFT profile pic” even at a third of the price, because one counterfeit diode can stop an assembly line for weeks — which is why the X “memory traders” (Jonah names Zephyr of Citrini Research) are larping.

6. AI is the retail edge — but guide it to the leading indicator

• Avi’s process: ask the terminal what’s underperformed → healthcare. Novo Nordisk down 44% in 2025 at a four-year-low P/E of 14; Oscar Health down 50% from its highs despite guiding to massive 2026 growth. His contrarian angle: insurers are “huge winners of the AI revolution” — a new cholesterol drug could substantially reduce the cost of servicing long-term contracts.
• Jonah’s note of caution — worth keeping: beware “step one AI, step two question mark, step three profit.” An unstructured euphoric prompt “will just self-reinforce your ideas and tell you to buy.” Instead, find the squeeziest physical leading indicator for your basket — DDR4 went vertical in October–November while Dell trended down, bottomed at $125–110 in February, then ran to $475 — study the lag, and “sanity check it with your meat computer.”
• The underlying discipline: “most fundamentals are mean reverting… unless there’s such a crazy paradigm shift that you break the range” — the whole job is deciding which regime you’re in.

7. AI supply could dampen the rally

• Avi’s structural call: part of this rally exists because investors can’t buy the companies earning direct AI revenue. When OpenAI and Anthropic come on the market, “up to $3 trillion of additional supply for the AI thesis comes on the market… definitionally that will dampen the ability to rally.” He rejects the objection that this is consensus — “true among smart traders and allocators,” not among “the vast majority of people trading in this market.” Maybe one more push into the IPO, then a slowdown.
• Stack on inflation data, consumption data, and Trump already threatening Kevin Warsh (“you better do a good job”).
• The positioning conclusion: “the bull market is in like 30 companies” — so skip the index, run high cash and high concentration, and buy dips: Mag 7 down 20%, uranium at a 42 level — “load the boat there again.”

8. Iran risk into weak hands — and robotics as the next mega bubble

• Avi’s asymmetry: fresh strikes on Keshum Island, Iranian drones damaging Kuwait’s airport, and stalled talks are “a lot more dangerous than in April,” because April’s holders had already derisked while today’s holders “are in it because they are going up” — a leveraged, high-dispersion market of weak hands. His daily exercise: “figure out who’s holding what and for what reason.”
• Jonah’s analogy for Bibi (likely Netanyahu): caught eating his kids’ marshmallows, the lizard brain says eat them all faster — “cross the likely Litani River and whack a few more terrorists before Daddy Trump comes and ends the show.” He still believes no global oil stockout (“my timing has been horrendous… but the way I expressed it has been freaking fantastic” — long equities, his biggest position), but if crude hits $200, equities fall 30–40%: “you need the wheat, you need the oil long before you need the LLM call.”
• The ideal asset is one held by deep value investors that later catches a narrative — that was memory; next, Avi thinks, is robotics: “a pretty massive mega bubble” with almost no access except Robbo Strategy (a stock, he stresses, bought on the open market). Next drawdown he scales into robotics, space, and energy over memory — “probably not buying as much Intel as during the Iran war. I went overboard on that one.”

Verification Notes

• The terminal backtest speaker is unresolved in the raw captions, so it is attributed generically.
• The raw captions identify the robotics interview subject inconsistently as Andrew King and Andrew Kang; the first mention is retained as Andrew King.