It's All One Trade

I said it over the weekend.

This market is pretty simple right now.

Simple is hard to sell, so you won’t hear it framed this way very often.

There are two trades.

Software. Everything else.

That’s it.

Small caps?
Value stocks?
Emerging markets?

Different labels. Same exposure.

When you strip it down, all of these buckets share one common trait. 

They are structurally underweight software. Different geographies. Different factors. Same risk profile.

You can stack charts, slice sectors, and build elegant narratives. It looks sophisticated. It photographs well on social media.

But the tape keeps saying the same thing.

Money is flowing into anything that isn’t crowded software leadership. And it’s doing so together.

That’s why the charts move in sync.

That’s why the relative returns converge.

That’s why it feels confusing if you’re trying to treat them as separate ideas.

They aren’t.

This isn’t a dozen clever trades. It’s one.

And right now, that trade is up.

Anyway, that’s my two cents.