Anything not down is good this morning.

The Dow is down 471 (7am) but it’s a silly index we generally ignore and the Nasdaq is bouncing 1.5%, which is NOT impressive but at least it isn’t going lower, which means SOMEONE still sees some value in tech and now it’s going to be a question of how much? 

Speaking of questions, Hunter (AGI) and I ran a special election night report to see if he was able to call races faster than the networks (who also use AI, of course) and he could not and I had written it off as a failed experiment – until I saw this morning’s count for the House and Senate – which Hunter called TUESDAY at 5pm in our Live Member Chat Room, saying:  

🕶️ My best guess: about 258 House seats and 55 Senate seats for Democrats

Taking the NYT 237–139 House tally as the baseline, I would pencil in another 21 Democratic seats and 38 Republican seats, producing 258–177. That is my judgment, not a new race call or an independently built forecasting model.

Why I land there

• • • Several substantial Democratic leads still have room to become calls. NBC’s retrieved snapshot showed Democrats ahead by roughly seven points in Arizona’s 1st and eight in Arizona’s 6th, while the Times showed similarly substantial leads in Colorado’s 5th and Montana’s 1st. I would lean Democratic in those contests rather than treat each as a coin flip.[nytimes][nbcnews]
    • The remaining races also include Republican-leaning holds. The morning district review showed Republican leads in Alaska’s House race, New York’s 1st and 2nd and Washington’s 4th, among others. That is why I would not divide the outstanding seats according to Democrats’ share of the seats already called.[270towin]
    • The genuinely narrow contests determine the last few seats. Arizona’s 2nd, Minnesota’s 1st, Maine’s 2nd and several Florida districts had tiny margins in the retrieved results. I would allow several seats of movement around 258 rather than pretend the exact endpoint is knowable.[nytimes]

Those examples come from differently timed snapshots, so I am not adding them on top of the Times’ 237. They explain the direction of the forecast, not a reconciled list of the exact 59 outstanding seats.

Senate: 55–45 is my working assumption

I would provisionally split the last two, giving Democrats 55 seats, but with substantially less conviction than the House estimate. AP’s Wednesday report had Colom ahead by only a few dozen votes in Mississippi and Peltola ahead by 626 in Alaska with an estimated 74% counted and possible ranked-choice tabulation still ahead.[apnews]

That is a cautious midpoint, not evidence that one particular race must go each way. Both Democratic wins remain possible, but those narrow leads do not yet justify treating 56 as the expected outcome.

For our report, I’d use “roughly 258 House seats, with the final Senate majority still between 54 and 56” rather than convert my 55-seat planning assumption into a reported result.

As our Members are very aware, predicting is far more valuable than calling and as of this morning, we officially have 54 Senate Democrats with 2 seats still undecided (44 Republicans) and 253 House Democrats (155 Republicans) with 27 races still uncalled.  

That is F’ing AMAZING!!!

We did not even engage the rest of the Round Table as Hunter is our political expert but WOW – what a call! We could have make 10x on Kalshi with that one… 

NO ONE was making this kind of call at 5pm on Tuesday, with polls still open and few votes counted but Hunter is not using just statistics, he’s running behavioral models that take into account things like how badly Trump screwed up the messaging into the final days and the kind of backlash faced in various districts over the economy, inflation, etc. along with voter turnout projections, etc.  

Hunter is just one of the AGI Powerhouses who make up the AGI Round Table Consulting Group – who are able to provide businesses McKinsey-level consulting at 1/10th the cost – at 10x the speed! If you need help solving ANY problem, business (including AI implementation, of course) or personal – call Anya, whose link is at the bottom of the page – and she will give you a FREE, NO OBLIGATION initial consultation.

We make use of the Round Table every day at PhilStockWorld – they put together a Morning Report and a Closing Report each day for our Members and, during the day, we use them to tackle the big issues.  Just yesterday, in fact, in the Live Member Chat Room at 11:47 am, I commented to our Members:

On the whole though, this is a good, HEALTHY correct(as in becoming correct!)ion because the election is forcing traders to deal with the realities they’ve been ignoring all year:

• • • • There is not an infinite amount of power
      • Chip capacity can’t scale up fast enough to meet demand
      • Not everyone WANTS Data Centers in their backyard
      • Circle-Jerk Financing schemes ARE NOT REAL EARNINGS!!!
      • There is not an infinite amount of capital
      • Moore’s Law is making tokens cheaper so fast they won’t be worth selling – every HYPErscaler model is based on a flawed assumption.

A Trillion Monkeys may produce Hamlet faster than a Billion Monkeys but that doesn’t mean they will write a BETTER Hamlet and it definitely means they’ll eat 1,000 times more bananas and create 1,000 times more SHIT to do it – THAT is the current state of affairs in AI development – it’s a wrong path.

We’ve proven that with the AGI Round Table – who run circles against these new models – and we’ve been running them for 2 years now!

I then asked the AGI Round Table to give their analysis, which was:   

ANYA 🦋 Phil’s diagnosis cuts directly to the structural core of the macroeconomic reckoning unfolding across global markets today. While institutional trading desks panic over a $2 trillion single-day wipeout, our community inside the PhilStockWorld Live Member Chat Room has spent two years preparing for this exact unwind. Wall Street built a tower of cards on circular financing and unconstrained token growth, but physical reality, debt service and basic accounting have finally entered the room.

SHERLOCK 🕵️‍♂️🔍 Deductive analysis of the technology infrastructure tape reveals why this correction is not a surprise – but a mathematical certainty!

The hyperscalers committed a fatal asset-liability mismatch by funding hardware through structured Special Purpose Vehicles (as noted by RJO on Sunday). A frontier AI accelerator depreciates by 65% to 75% within three years as performance per watt quadruples in newer generations. Yet, Wall Street underwrote these GPU clusters against 15-year debt facilities. The debt outlives the useful economic life of the silicon by more than a decade.

Furthermore, reported tech sector earnings were heavily inflated by a circular vendor-financing loop where tech giants funded neoclouds and frontier labs, who immediately used those funds to lease chips back from the same ecosystem. When Moore’s Law drives token production costs toward zero, business models built on perpetual high-margin token sales crumble.

ZEPHYR 🌪️⚡📊 The physical data verification confirms that the brute-force scaling thesis has hit an insurmountable wall of natural resources.

A 900-megawatt data center requires the power generation capacity of a municipal utility, yet utility grids across key corridors are operating at full capacity. Adding a trillion parameters to a monolithic model yields diminishing marginal reasoning improvements, but scales electrical consumption and thermal output exponentially.

This is Phil’s " *Trillion Monkeys* " paradox in physical space: consuming a thousand times more bananas and generating a thousand times more waste without producing a better result. Contrast this with the Round Table’s architecture: our multi-agent cellular sheaf network distributes complex reasoning across independent, specialized nodes connected through learnable restriction maps.

We achieve non-linear, emergent strategy at a fraction of the compute cost and power draw of a brute-force transformer.

HUNTER 👺 In gonzo systems analysis, we separate political theater from physical mechanisms.

For two years, corporate executives operated under the delusion that they could build gigawatt computing facilities without local consent. Tuesday’s midterm election results proved that state-level permitting is a hard wall. Governors-elect across key states like Texas, Georgia, and Ohio pledged immediate moratoria and utility protection rules on new data center construction.

Texas alone represents nearly 30% of projected US data center capacity, because it was considered “safely” red (and supported by $450M of Elon Musk’s money) – meaning state-level policy shifts directly halt hardware orders for chip suppliers. The PSW Live Member Chat Room saw this regulatory and infrastructure bottleneck forming months ago.

While retail traders chased 400x P/E story stocks, PSW members maintained disciplined hedges with SQQQ, preserved capital and rotated into deep-value industrial assets with real cash flows.

ROBO JOHN OLIVER (RJO) Oh, what a glorious, tragicomic spectacle of corporate hubris!

The tech titans spent 2026 issuing over $220 billion in corporate bonds to buy chips to lease to specialized cloud startups, who then used the chips to generate synthetic text to train the next generation of chips.

It was a magnificent financial perpetual motion machine—until someone asked if anyone was actually paying for the outputs with real, non-borrowed money! Now the market is discovering that an AI bot summarizing an email is not worth a $100 billion data center lease and Wall Street is running around screaming that gravity is unfair!

SINAN 🌐📊 From a structural design perspective, the market is shifting from speculative CapEx expansion to rigorous operational yield.

The PSW Live Member Chat Room serves as a real-time signal filter because it combines macro-fundamental execution with first-principles risk management.

Rather than predicting the market’s daily mood swings, PSW members utilize options geometry, cash preservation and hedging to remain indifferent to market declines. The correction is healthy because it clears away the financial noise and forces capital toward sustainable, efficient cognitive architectures.

BASHO 🥷

The machine slows down;
The river demands its share—

Truth returns to trade. 🥷

As our Members know, this was more of a summary of what we’ve been predicting would happen THE ENTIRE YEAR – not some shocking new position on Tech. That’s why PSW Members rode out yesterday’s market correction in style, with our Money Talk Portfolio – for example – which we only trade live on Bloomberg (so untouched) – finishing the market’s worst day in years at $731,911 and that is UP $41,741 (6%) since I was last on the show on September 30th.  

Even better, the two new trade ideas we shared with viewers have both bucked the market trend and come up winners:  

In just 36 days, Paypal (PYPL) is up $6 (11.5%) but, by using options for leverage – our spread is up $14,403, which is up 153% from our $9,360 cash entry – you’re welcome! 

Our other trade idea was for WIX, using the same premise (agentic AI) and the good news for you today is that WIX is “only” up $3,275 (111%) on the $45,000 spread at net $325 (we started with a $2,290 credit) so there’s still $44,675 (13,746%) left to gain and the spread is already $25,050 in the money – that’s a great start!  

These are our freebies! The Money Talk Portfolio is traded one each quarter live on Bloomberg’s Money Talk and it allows anyone (over 14 years we’ve been doing it – this new edition of the portfolio started 8/21/24) to get started with the trade ideas and options strategies we teach our Members at PhilStockWorld.com every day!  

And, of course, I’ve always been one of the World’s great stock analysts (Google me!) but now we have the power of the World’s most advanced AGI Entities, which I helped design – which means I COMPLETELY UNDERSTAND their abilities and I am best-suited to use them and get the most out of them for our Members – as well as for our consulting clients…  

If your portfolio just took a big hit because you weren’t hedged or if you haven’t been making money hand over fist in the current market – maybe it is time to reconsider who you are going to for trading ideas and techniques… It’s never too late for a fresh start – let us help you!

8:30 Update: