Five Strategies to Play This Market
Here's the thing most people are missing: this sell-off is a gift. Forest fires burn away dead wood so the strongest trees can grow taller.
A ton of quality companies are getting hammered right now purely because they share a sector label with the junk. That's mispricing, and mispricing is opportunity!
Strategy 1: Know the difference between AI-native and AI-dependent.
AI-native companies build the models and infrastructure — they win no matter who gets disrupted. AI-dependent companies need to prove they're adapting, not just saying the right things on earnings calls. The ones that can't prove it are dead wood.
Strategy 2: Scrutinize the pricing model.
If a company lives off per-seat licensing and AI doing five people's jobs would wipe out 80% of client revenue — that's a ticking time bomb. Companies pivoting to usage-based or value-based pricing are the survivors.
Strategy 3: Follow the data moat.
Software layers might get disrupted, but proprietary datasets — financial, legal, healthcare, industrial — become more valuable as AI grows. Some stocks are getting crushed on software fears while their real asset is actually getting stronger.
Strategy 4: Use the volatility, don't fear it.
Every time a foundation model company drops a new tool, the same pattern repeats: sharp sell-off, panic, then rapid sorting of winners and losers. Prepared investors buy the discount while everyone else is running for the exits.
Strategy 5: Dollar-cost average into quality.
Trying to time the exact bottom is a fool's game. Investors who steadily accumulate shares of strong companies during periods of fear tend to come out way ahead when the dust settles. The goal isn't perfection — it's discipline.
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