Feeling Bear-ish + Portfolio Updates
It's time to trim my tech stock gains, Google goes bananas with tokens, Bitcoin throws an alarm, and TMO outperforms the S&P 500 again this month; we're beating it by 2.84% YTD!
Welcome to this week’s edition of The Macro Obsession.
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Issue #48—Week of June 1st, 2026
It’s Getting Frothy In Here
One Quadrillion Tokens! (Redux)
The Bearcoin Ratio
June 2026 Model Portfolio Updates [Trade Alert]
It’s Getting Frothy In Here
It’s only been two months since I wrote “Calling The Bottom” (TMO #38), but I’m no longer as bullish as I was then. At that time, tech shorts were at highs and retail sentiment was at its lows; you can get the whole picture in “Sell, Mortimer, Sell!” from that issue, but it ended with me doubling down on tech stocks behind the paywall.
Boy was that a good idea. Here’s the S&P and the tech sector from the publication date of that newsletter. I was a tad bit early to the actual bottom.
But times are a-changing, and now that we’ve run up as much as we have, I’m starting to see signals of froth—it’s giving me a similar feeling that made me bullish around the bottom.
Risk appetite is making fresh peaks at above the high marks on the standard deviation axis, similar to past top moments.
Margin levels are hitting new all-time highs (AdvisorPerspectives), although I’m not so worried about that in the short term.1
There’s another form of leverage that scares me more: options. Retail investors are loaded to the gills on call options, with the top 100 stocks hitting froth levels on their aggregate inverted call skews—more calls than puts, meaning investors are bullish.
Retail is playing price-maker too, with cash levels at a record pace, even higher than the 2020 stimulus months. They’re leveraged up on call options, but they’re also moving cash into the money markets.
That’s bullish on face value, but I’m worried about institutions not being happy playing price-taker. They’ll only accept that for so long, as it’s been the whole month of increased cash activity.
Currently, hedge funds are still shorting tech stocks at all-time high levels (Reuters), while retail is plowing straight into long tech stocks specifically.
The clash is coming head-on. So I’m going to be pairing back and taking my wins before the institutions have their way (they usually do, eventually).2
More on that in the last story with the portfolio update, since TMO invests directly in the Tech Sector ETF (XLK 0.00%↑) as part of the sector rotation strategy.
One Quadrillion Tokens! (Redux)
Quick and direct follow-up to “One Quadrillion Tokens!” (TMO #20), where I discussed Google’s (GOOGL 0.00%↑/GOOG 0.00%↑) ravenous stuffing of every token they could possibly cram through Gemini and the rest of their “surfaces,” as they like to call them.
What was one quadrillion then is now 3.2 quadrillion. They’ve tripled their token throughput in six months, which is an insane growth rate. This is what covering the planet in data centers looks like.
This is absolutely insane. In that time Google has not seriously monetized its AI efforts and I expect AI to be a loss leader for Google for the foreseeable future. It’s probably going to be a loss leader for most companies offering AI services, which is really concerning.
I covered this last week in “Computing for Profit” (TMO #47), so I won’t rehash it. That issue is still free and you can just go read my argument against frontier AI labs there.
This is bearish for Google and basically all companies subsidizing AI. This sudden growth is indicative of more usage, but what growth we can see from user accounts is pretty flat. That tells me it’s existing users using more and abusing the fact that Google is using AI as a loss leader. Power users are going to ruin this for all of us.3
My theory: the people who love AI love it so much because it’s really cheap for them to do a lot of stuff. It’s only cheap because Google is paying for all these tokens. If we saw the real prices of using Claude or ChatGPT, many current power users would use a lot less.
Obligatory: long GOOGL.
I can’t wait for Gemini to become Google’s $1.50 hot dog & soda. So long as that’s still in the cards long term, I’m still bullish on Google. But I won’t be betting on any frontier labs anytime soon.
The Bearcoin Ratio
I stumbled across this in my feed this week, which was a bit ominous, and I thought to include it given my general theme. This is the BTC/SPX ratio against the S&P 500 with a 45-day lead, so the dates atop each other are staggered.
In the past, I’ve called Bitcoin a proxy for risk-taking in the market, and I think this chart exemplifies that. When Bitcoin trails the S&P 500, the S&P 500 usually follows in time, and vice versa. Currently, we’re at a huge divergence and we’re seeing a decoupling of the pattern.
Pull this back the last ten years and I find it less compelling. I can see why crypto people will say that the 2024-forward data is better since it’s post-ETFs and the full financialization of Bitcoin for global investors, yada yada yada…
The important part is that when we get big plunges like what we’re seeing right now, it’s typically not good for equities.
If one were superstitious and thought that these charts were compelling, then there’s good reason to be bearish on risk assets. It’s a big red flag.
Good thing I don’t believe in crypto.4
More Below, But ICYMI
June 2026 Model Portfolio Updates
Here at TMO, I share with my premium subscribers my model investment portfolio, the 10 ETF allocation I hold with my own money.
It’s built for simplicity and low turnover with an active component, benchmarks against a 70/30 portfolio5 without holding bonds passively, and has beaten the S&P 500 since its inception in August last year while taking less risk.
This past month was a solid notch in the portfolio’s belt, notching 3.5%. March 2026 continues to be the only losing month for the portfolio so far.
Free subscribers, this is where we part, as I keep discussions of the individual assets involved in the portfolio reserved for premium subscribers. If you’re using this to make money, then you can afford it.
Heads up, this is the last time I am going to do this: if you’d like access and are on the fence, here’s a discount link that works for life:
Thank you, and I’ll see you next week.
Premium subscribers, welcome beyond the paywall, and thank you for your support.
Use the link below to track the TMO Model Portfolio, see all of its transactions (including the trades made this month), and its live holdings:
