---
title: 'Portfolio Thesis Update: Positioning for Market Uncertainty'
source: 'https://youtube.com/watch?v=KNOw7zuR00E'
video_id: 'KNOw7zuR00E'
date: 2026-09-10
duration_sec: 1104
channel: 'Meet Kevin'
---

# Portfolio Thesis Update: Positioning for Market Uncertainty

> Source: [Portfolio Thesis Update: Positioning for Market Uncertainty](https://youtube.com/watch?v=KNOw7zuR00E)

## Summary

This video provides a portfolio strategy update, focusing on sector allocation amid geopolitical tensions and market uncertainty. The creator discusses the potential for cybersecurity and rate-sensitive stocks, while cautioning against overvalued AI plays and low-quality consumer stocks.

### Key Points

- **Market Fear Peaks** [00:12] — The market is experiencing peak fear and uncertainty due to geopolitical issues with Iran, with the situation escalating from a memorandum of understanding to a potential 'forever war'.
- **Stimulus Checks Risk** [00:51] — The video was filmed before Trump's suggestion of $5,000 stimulus checks, which drove yields higher, highlighting the risk of new inflation-inducing measures.
- **10-Year Yield at Peak** [01:33] — The 10-year yield is at a peak, making it dangerous to call for a top, but the creator suggests there are opportunities for long-term portfolio positioning.
- **AI Scenarios** [02:39] — The creator outlines two scenarios: one where AI reaches AGI, benefiting data centers and cybersecurity, and another where AI commoditizes, with token costs trending to zero, also benefiting cybersecurity.
- **AGI Skepticism** [04:11] — The creator calls AGI a 'big fat lie', arguing that AI is probabilistic math trained on human emotion and logic, leading to hallucinations and limitations.
- **Peak Rates Opportunity** [07:24] — The creator suggests we may be close to peak rates, presenting an opportunity to pick up rate-sensitive stocks like solar, cars (Tesla), and mortgage companies, which are currently unsexy.
- **Cyber Diversification** [09:19] — The creator recommends diversifying between lower-valuation cyber stocks and big ones with moats, noting that CrowdStrike and Cloudflare are expensive but could be early like Palantir.
- **Avoid Low-End Consumer** [09:45] — The creator hates investing in low-end consumer stocks, citing Cheesecake Factory and Red Robin as examples with poor financials, and prefers higher-end products with margins.
- **Data Center Plays** [13:16] — Data center-related stocks are cheap, with Broadcom and AMD at juicy support levels, potentially leading to a 'hardware 2.0 rally' around Anthropic's IPO.
- **Allocation Strategy** [14:56] — The creator advises to 'invest like the party never ends, but position like the power's about to cut', meaning allocate as if no recession but prepare for one.
- **Real Estate Near Cycle Lows** [17:26] — Real estate is near cycle lows, and if a recession hits, rates will drop to zero, making real estate look good, unlike AI which has toxic leverage.

### Conclusion

The creator advocates for a balanced portfolio with exposure to cybersecurity and rate-sensitive sectors, while being cautious on AI and avoiding low-quality consumer stocks. The key is to invest for the long term but stay prepared for a potential recession.

## Transcript

It's time for a portfolio thesis update, and this is just going to be a quick check-in on positioning, and kind of what I think about sectors and the market overall right now,
mostly because we're getting a lot of sort of peaks in terms of fear right now, where obviously a peak uncertainty in terms of geopolitical issues with Iran.
I mean, we are literally from memorandum of understanding to the complete opposite now. this is not going to be a quick war, this is turning into a forever war. Trump says, we don't even want to negotiate with them anymore. The Iranians, we don't even want to negotiate anymore.
I kind of feel like that's exactly what you say right before you announce, by the way, we just have a deal, like how much worse can it get? This segment is about portfolio strategy for the stock market and allocating money.
However, this was filmed before Donald Trump said, we might be saving $5,000 stimulus checks, which then, of course, immediately had the effect of driving yields up even higher, which was exactly one of the risks we mentioned,
that, who knows, maybe Trump will somehow figure out how to come up with another way to induce inflation. I mean, they could get a nuke, I guess. Oh, I don't know why I laugh about that.
I'm just saying, like, in terms of extremists, like, you need something to tank your portfolio? There you go. How about a nuclear weapon? That'll tank it. But anyway, and I don't mean nuclear power either. 10 years at 4.845. Maybe I just need you to see, zoom out on the 5.
Here, just zoom out, baby. We are sitting at the peak of 10-year yields, right? So there's this, it's very dangerous, obviously, to call for a top in yields, and that's where I think it's worth just talking roughly.
How do we feel about a longer-term portfolio? I think there's a lot of greed in the market right now, so I still think that there are massive opportunities opportunities to put 85 cents of every dollar you have into real estate, you know, some of that into
stocks and some of it into cash, probably a lot of that rest into cash, just you have that optionality. And that's how we operate. Okay, so we make money with our software that we sell,
our memberships that we sell, and then we throw most of it back into real estate and a little bit we diversify. Now, why, you know, today was an interesting day because Cloudflare was up like 10%.
You know, they partnered with Cursor AI over at SpaceX, and they partnered with OpeningEye as well for cybersecurity. And so I want to touch a little bit on how you can build a portfolio around how all of these things intersect.
So let's keep it simple. First, I believe we kind of have to optimize for the potential that there is artificial intelligence and that there is, that is going towards AGI and that there's not AGI.
So in scenario number one, where we have artificial general intelligence, obviously data centers win here, but I actually think that's a massive win for cybersecurity companies because the AI gets so damn freaking good
that you need more cyber protections for domains, that's websites, application layers, web apps, iPhone dual apps, iPhone apps, Android apps, Mac apps, whatever. Everything's got a freaking app.
Endpoint management for everybody who's running agents. those are different logins, those are different devices from different logins, pass, he-match, all this kind of crap, right? And then you have penetration tests that kind of verify that you're not getting screwed.
Some cyber firms do pen tests. Some cyber firms also just sell you software that say, we will identify and correct cybersecurity issues fast, or we'll block them before they even get in. That's like a cloud flare.
That's like a cloud strike. That's like a Sentinel-1. That's like, and I've got exposure to the news, So, you know, I don't want to just, like, come across as, like, undisclosed man or talking book. I'm just saying, there are endless options. Palo Alto Network.
I don't have exposure to all of these. Palo Alto Network is another one. There are endless cybersecurity options out there. Smaller plays, bigger plays, whatever. The point is, they all, I think, win if artificial intelligence goes towards AGI. But most of you know that I think AGI is one big, can I do this backwards?
One big, fat AGI. lie. Oh, wouldn't it be cool if I edited in lie right there? You know, I'm not, I don't have that much effort or time for it. So, too cheap to hire an editor, I guess, huh? But anyway, AT lie. I think this is bullcrap, okay? This is nonsense.
Artificial intelligence is probabilistic math okay It trained on human emotion it trained on human logic or the lack thereof And that why you get hallucinations when artificial intelligence goes into different domains
and it tries to make connections that just don't work that well. That's why earlier we talked about how there are five things to have AGI. You need to be able to reason in brand new situations, move across different domains,
know when to course correct, manage your own goals, and understand real-world constraints. Most AI don't come anywhere close to the bottom three, and many argue they don't even have the top two.
So, in that case, what if AI commoditizes? And we see an S-curving of progress, where we cap out, we're reaching a limit of ceiling of progress. I believe that'll happen.
With artificial intelligence, I think we already are. So, token usage will go up, but we'll reach a limit of improvement. But then costs will actually reach a limit of zero. Token costs will basically come towards zero.
And, like, eventually it'll just be the energy that goes from your solar panel into your own 5090 GPU that you already own, or your Blackwell, or your H100 that you already own, paid for, fully depreciated. The marginal cost is literally the sun's energy hitting your panel,
getting absorbed, and it costs you nothing to do tokens, okay? Selling tokens, commodity business, that's the only one. In that case, guess what also does well? Cybersecurity. You're going to have to protect domains, apps, endpoints.
So cyber, I actually think, is part of a good portfolio. The issue is, you know, some of this is already, by some stocks, decently priced in. CrowdStrike and Podflare are freaking expensive.
Like, on any fundamental basis, they just really just consistently turn profitable. So in fairness, this could be really early, like a Palantir, right? where it's like, you know, Palantir, oh man, it looks so overvalued at these lower levels,
you know, I thought AI or Palantir was one of the OG AI plays back when it was like 14 bucks, I'm like Palantir, Palantir, Palantir, and we're buying Palantir, we're liking Palantir, and then it gets to like 60 bucks, and I'm like, oh, this bastard's overvalued,
you know, and then three years later, I'm like, damn, this looks good at 118 dollars, You know, it's like, you idiot, Kevin. That happens, right? And it's like, it looked good at 118, and you picked up the game from 118 to, you know,
170 or whatever it is now, but then it's like, ah, but what about from 60 to 118, right? It's fine. You know, we bought real estate. We did good things. We took advantage of other opportunities. Fine. Okay, whatever. That's called investing.
But I think there's a chance cyber is kind of going to feel like that palantirification in the long term. So I really like cyber because of that. I also believe that we might, and I'm not going to call it,
but we might be getting dangerously close to peak rates, where, you know, the 10-year is just convinced this war is going to go on forever, and it's not. And the 10-year is convinced that we're going to have hyperinflation forever,
well, maybe not forever because of the five-year break-even rate and the five-year and five-year break-even rate, like the four or five-year. Both of those are actually relatively stable. So I think the 10-year is more reflecting today we're going to be stuck with this inflation regime
probably for the rest of Donald Trump's term. I kind of think that's a little overblown. And so I think there's an opportunity to start, and this is not like by call options this is going up tomorrow, right?
I don't think that at all. But I think there's an opportunity to start picking up rate sensitives. What are your OG rate sensitives? things you finance, like solar panels, cars, yes, Tesla,
mortgage companies, all of those are going to get hurt. Every day the 10-year goes up. If you want to know why a mortgage company is going down, look at what the 10-year is doing. It's probably up. They go down when 10 goes up. It's almost algorithmic.
It's so freaking straightforward. But I think in the long term, those become one of those opportunities where the people who had exposure to the rate sector will look back and go, hell yeah, best performing structure. No guarantee. and I'm listening to this video,
it's personalized financial advice. And the people who didn't have exposure are like, damn, those came out of nowhere. Because it's the most unsexy sector right now. So you can kind of like add the least sexy sector
in the interest rate or in the stock market right now. You know, call this a one out of 10 and call this like a 10 out of 10. And then guess what? You marry a five. Okay. So you got a little bit of both And then maybe who knows maybe that averages out but I actually think even though the sex appeal is like this here and like this here I actually think they both a score okay
I just recognize this, you have to be touchy here, and I think you get diversified between some lower valuation cyber ones, and then the big ones. The big ones have a moat, though, because they have more data, more companies work for them, more data you have,
so there's a little bit of a benefit there. I really like prosumer, higher-end products. I don't, I hate investing in consumer low-end stuff. I think, like, a company like
Cheesecake at 3% margins, absolutely hate it. It's done very well as a stock in the last, like, year, but so has Red Robin. Red Robin is a big
bad wolf blow away from bankruptcy. The financials are utter trash. The worst financials, I think, out there in the food industry, and it's gone from like $2.50 thanks to a bailout loan to like $8. That doesn't make it
a good play. And that's unfortunately what happens with short-term investing is there is a lot of enthusiasm around, oh, well, Red Robin Gourmet Burgers went from $2 to $8. It must be a fundamentally
good buy. This is great. No. It's a low-liquidity trash stock. Look at the financials. Study the financials. There's not even hope. They are mostly exposed to leased properties in dead malls, and they can't get out of them.
If somebody bought the company, they would be sandbagged with all the leases. They'd have to go bankrupt on the company, and then every shareholder is going to sue them for going bankrupt. It's almost like I almost wanted to acquire this when it was $40 million.
And then I'm like, nah, dude, I ain't getting into that toxic crap hole. That'd be crazy. But my point is, like, oh, they got bailout financing. and then you get a little bit of buying and then it moves.
So the stock moves a lot on non-fundamental things. Look at the balance sheet, study it, it's horrible, it's scary, and I just don't like this kind of consumer stuff. I love me the stuff where people can sell stuff to consumers
that are, you know, money consumers. So a higher-end money consumer, yeah, I mean, you could think of, like, to some extent, meta-glasses. You could think even luxury goods. You could think Apple.
or you could think, I don't know, whatever, luxury tech products, whatever, doesn't matter. Any of the higher end stuff, I like that more because there's margin, and you could protect your investment with margin.
Software value winners are a little bit more touchy. There are big winners you can have here, but there are also red flag losers. Like, Ubiquity, not Ubiquity, UiPath looked really good at $9,
but, you know, then it went to $18 and they reported earnings and we're like, oh, oh man! And it wasn't even what they said in the earnings. If you had to look at their earnings and compare it to a different period,
not the last year, and then you would see this hole, this black eye, it's like, they're not even talking about this big leaking in the ship right here. And so, you know, we were a little disappointed in our course number livestream on that.
But there are some that are going to be value winners for now. Like, even though we crashed it on Salesforce, and, you know, I think we're doing very well overall in this idea of a Q3, Q4 software bottoming, is there not still a risk that if Salesforce is now onboarding everybody headlessly, their data via Anthropic, that Salesforce ends up getting replaced?
And they're already telling us they're having trouble signing bigger contracts with their customers. That's a problem. That's a red flag, right? See, I talk crap about stuff I have exposure to sometimes, and like, I mean, honestly, I talk crap about a lot of things all the time.
I'm just going to give you, give it to you straight. Look, if it goes up or down based on what I said, I care zero. I'm not trying to trade these puppies on posting a video. I think that's borderline unethical.
Let's focus on data centers, then. Anthropics, the canary in the coal mine. We've talked about that in other videos. I'm not going to belabor it, but my thesis when it comes to the data center plays, anything data center related, okay?
I think a lot of them are very cheap right now. On Friday, I said, guys, now, Broadcom, AMD, they are at juicy support levels. These have a really good jump inside of them.
And AMD went from like to what like It was like a line movement since Friday since we mentioned it Friday morning And that great
I actually think what we can really see is we could potentially see this, we'll call it the hardware 2.0 rally. So 1.0 was post-3-4 moves. I think we could have a hardware 2.0 rally around the enthusiasm,
around opening eyes IPO, anthropic. Yes, there'll be a suckening. but what matters more is not the suckening it's the rally afterwards and the rally afterwards gets killed when anthropics numbers start rolling over
if they do, maybe they don't so that's where could it make sense to have data center exposure going into hardware rally 2.0? sure if we give you 4 hopefully when we get you 4 on hardware almost makes me feel like we want a trailing stop
but then does it make you feel like if hardware is going to roll over you trailing stop out of everything because the whole thing is going to go belly up. And that's kind of where I look at it, and I'm like, well, I'll just have way less exposure overall to stocks. Invest in stocks as if there's no recession, but allocate to stocks
as if there's recession. Ooh, that's juicy. Oh, I like that. I could probably even make that better. You know what I mean? Let's think about that, okay? All right, so in your portfolio,
allocate as if no recession. Okay? So you just invest for the long term. You make your good decisions or whatever. So it's in your stock portfolio.
Okay? Allocate. So, yeah, let's see. Allocate as if no recession in your portfolio. We like that. Okay. Allocate to your stock portfolio
prepared for recession. I could probably make that sound a whole lot better if I didn't try to figure that one out live. Make this sound better.
I'm going to run it through Gemini Flash. Here we are talking about AI and recession. My point is, this is why I'm a 7'6", I'm a bare-bulls girl. It's like, cautious, but not like trying to go all in, right?
All right, here we go. In your stock portfolio, allocate as if no recession is coming while staying fully prepared for it. That's not good. That's stupid. No, uh, punchy and fun version. You suck. Okay, I don't need to say that. Punchy and fun version.
Uh, let me try, we'll do like a quad flash as well. We'll do it together really quick, because it's fun. Uh, make this sound better. Okay, can I get a, uh, quick, let's see here.
Oh, we're not going to do extra. We'll just do low. Fable low, that's what we'll do. Okay, uh, invest like the party never ends but position like the power's about to cut oh oh
that's just like right up my alley I kind of like that one invest like the party never ends you know when you're at the party you party baby but you position like the power's about to cut okay okay
play for the bull run but wear a helmet that's lame allocate for the upside armor up for the crash nah that's not fun build your portfolio for sunshine but keep a sturdy umbrella in back that's so lame Okay, option one is good. Invest like the party never ends, but position like the power's about to cut. Honestly, that might be it. So, table one, low effort. It really sucks. All of those were really bad. I'm going to stick with option one. Invest like the party never ends, but position like the power's about to cut. There we go.
And I think overall, it's not clear yet. We've already made this thesis, just to be like exceptionally clear, that I think real estate is near cycle lows. Because if we go into a recession, rates are coming to zero.
And real estate is going to look really good. And it's not at the point where it's like toxic leverage. Whereas in AI, you have some toxic leverage. Stocks are probably here. I don't know. Maybe it'll prove that we're already here.
In which case, well, damn, it shouldn't be allocated. That's probably why we're 7-6 instead of, you know, 10, right? Uh, yeah. Let me know if that sort of little piece of something is useful.
All right. Goodbye, good luck. No coupon. Don't even advertise these things each other, Theo. I feel like nobody else knows about this. We'll try a little advertising and see how it goes. Congratulations, man. You have done so much. People love you. People look up to you.
Kevin, Pat, Russ, and I, and YouTube, us, me, Kevin. Always great to get your take.