Defense Against the AI Crash
Charles Brun@charlesbrun
+4.8%
since Oct 6
The idea
I believe AI and tech stocks have gotten overheated and are due for a correction within the year, dragging the broader market down with them while money rotates into steadier names. This basket leans into that rotation, holding consumer staples, healthcare, regulated utilities and cheap dividend blue chips, plus Treasury ETFs that tend to hold up when stocks fall. No single stock is more than a small slice, and about a fifth stays in cash so there is dry powder to buy in once things get cheaper. No AI, no expensive tech, no gold.
What it owns
- Demand for food, hygiene products and groceries stays steady regardless of market conditions. · Coca-ColaBeverage consumption remains consistent whether markets are rising or falling, supporting predictable sales., WalmartWhen households tighten spending, shoppers often trade down to discount retailers, boosting its volumes., Procter & GambleIt sells essential household products like detergent and toothpaste that consumers buy through all market conditions., General MillsAffordable packaged food trades at modest valuations and pays a dividend, characteristics defensive investors seek.19%
- Medicine and medical products are purchased in any economic environment, providing stable cash flows. · Johnson & JohnsonIts pharmaceutical and medical device businesses generate steady revenue independent of economic cycles., MerckIts drug pipeline generates consistent cash flows that historically hold value when expensive growth stocks decline., AbbVieIts large dividend is supported by pharmaceutical revenue streams that perform independently of economic growth., AmgenIt combines established biotech drug sales with substantial dividend income, attracting investors seeking stability.18%
- Government bonds tend to rise when stocks fall, offering a cushion against broad market declines. · iShares 1-3 Year Treasury Bond ETFThis fund holds one to three year Treasury bonds that move minimally when stocks fall, serving as a cushion during market crashes., iShares 7-10 Year Treasury Bond ETFMedium-duration Treasury bonds typically appreciate during market stress, providing upside with moderate volatility., iShares 20+ Year Treasury Bond ETFLong-dated Treasury bonds have historically rallied significantly when investors flee equities for safety.16%
- Regulated power companies earn returns set by law rather than market sentiment, supporting reliable dividends. · Duke EnergyRegulated utility returns are set by state commissions, making the dividend resilient to stock market stress., Southern CompanyIt provides regulated electricity across the Southeast, a business insulated from technology sector weakness., American Electric PowerRegulated power transmission across multiple states produces steady returns disconnected from tech valuations.14%
- Established dividend-paying companies often attract capital during market downturns when investors seek stability. · ChevronIt offers an attractive dividend yield and trades at modest valuations typical of cyclical blue chips., McDonald'sAffordable quick-service meals remain accessible even when consumer spending tightens, supporting traffic stability., VerizonWireless and wireline bills are recurring essential expenses with high payment priority across economic cycles.12%
- Cash20%