How to seize the opportunity for excess returns in the U.S. stock market and make a fortune in this macro bull cycle?
Tesla's stock price plummeted after its earnings report. What implications does this have for our investment plan?
I know many people like Tesla because of Elon Musk's personal charisma. In fact, I used to like him a lot too and made a lot of money through Tesla's options. However, some of my logic and views have changed this year.
The reason I've always traded Apple's options is because of their high certainty. My biggest change this year has been seeking certainty. Everything else pales in comparison to rational certainty—it's all just smoke and mirrors.
Because of certainty, you dare to go all-in. Only by going all-in can you make money. The investment logic in the U.S. stock market is relatively simple: it's about how to hold onto your positions.
As mentioned in previous articles, this year is actually a macro bull market. U.S.-China relations are improving, geopolitical crises are easing, inflation expectations are turning positive, and the AI tech revolution continues to explode. Therefore, U.S. stocks will keep rising, so holding onto your positions is key.
Many companies with market caps of hundreds of billions or tens of billions actually have extremely high growth potential, but the journey is full of ups and downs.
Yet Tesla, as a trillion-dollar market cap company, has price movements as volatile as those of companies worth hundreds of billions or even tens of billions. So I have to be cautious in my choices. That's why companies with market caps of tens or hundreds of billions have better growth potential.
As long as these companies with market caps of tens of billions can change the world or introduce groundbreaking technologies, we can witness the birth of a leader in a field. They could become the trillion-dollar companies of the future.
For example, this year, companies in the space sector have seen massive stock price growth. RKLB's stock price has multiplied several times over because their market cap is small, but the potential returns in the space sector are enormous, with a vast market space.
So investing in them offers high potential returns—these are the companies that change the world.
Another example is the application of AI across industries. It directly transforms profit efficiency, reshapes valuation systems, and expands market cap potential. That's why I focus on AI-related companies across sectors—they're redefining profit efficiency and growth potential, making them my investment priority.
However, U.S. stock volatility is extremely high right now. When NVIDIA dropped sharply the other day, many small-cap stocks fell by 10%. If you set your stop-loss too early, you might get shaken out, only to see the stocks rebound by the close.
So everyone faces a choice: how to balance their positions. For me, the "Magnificent Seven" (excluding Tesla) are undoubtedly stable. Their business capabilities, growth potential, and monopolistic positions are unmatched globally, so investing in them is low-risk. They serve as the ballast for my portfolio.
The same logic applies to companies like JP Morgan. As world-class leaders, they're bound to attract institutional allocations during bullish markets.
Institutions always buy large companies. The biggest difference between retail and institutional investors is that retail investors can ignore risk controls and go all-in, while institutions must manage risk. That's why they prioritize large companies, which is why many big companies enjoy long-term growth.
So we should learn from institutional strategies and seek alpha opportunities on that foundation. I choose leading companies across sectors and a selection of high-growth companies for alpha, ensuring my portfolio remains very safe.
Space sector: RKLB, ASTS
Payments/Loans: UPST, SOFI, DAVE, SEZL
Healthcare: HIMS, TEM
Nuclear energy: OKLO, SMR, NNE, VST, GEV, LEU, etc.
Data centers: CRWV, APLD, NBIS
Advertising/Marketing: APP, ZETA
Insurance: LMND, ROOT
Software: PLTR, ORCL
Quantum computing: IONQ, QBTS, QUBT
2025 is destined to be a volatile year, requiring full digestion of the gains from the past two years. Thus, personal discipline is more critical than ever. Everyone should plan their position management carefully. Those who prioritize strict discipline are welcome to join our community.
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