Sam Badawi
How a Pro Manages Risk in Market Chaos | YieldMax Strategist & CNBC Fast Money Host Michael Khouw
9/19/2025, 8:09:18 AM
Economic Summary
- The Great Financial Crisis began as a credit-market collapse in 2007 tied to securitized mortgage products and aggressive lending, culminating with Lehman Brothers in 2008; credit problems tend to precipitate large systemic market events.
- Modern markets are dominated by algorithmic trading (well over 90% of volume), which increases the speed and severity of flash events but also changes market microstructure compared with prior crises.
- Large, asset-light technology firms (e.g., NVDA, MSFT, AMZN, META) display unusually high net margins and rapid revenue growth, meaning index performance increasingly depends on a handful of high-profit secular growers.
- When volatility (VIX) spikes and policymakers respond with aggressive fiscal and monetary support, those moments have historically marked attractive buying points for equities as interventions compress risk premia.
- Policy uncertainty—such as abrupt tariff announcements—can produce outsized, case-by-case impacts on company valuations and investor behavior, increasing short-term market dislocation risk.
- Commodities reflect strict supply/demand realities; the 2020 WTI negative-price event demonstrated delivery and logistics constraints can drive extreme price moves unrelated to broad equity fundamentals.
Bullish
- NVIDIA-level secular winners with outsized margins and growth can sustainably lead market gains.
- High VIX combined with aggressive fiscal and monetary intervention historically marks strong buying opportunities.
- Broad participation (most S&P constituents rising) signals a healthy, risk-on market expansion.
Bearish
- Tariff and trade-policy uncertainty (e.g., Trump-era announcements) can sharply disrupt global corporate sales and valuations.
- A blow-off top characterized by gap-to-new-high then sharp intra-day reversal could signal a major peak.
- Rising volatility even as prices increase is a warning sign that momentum may fail and drawdowns could accelerate.
- Credit crises (like 2007–2008) can cascade through markets and liquidity, producing severe systemic damage.
Bullish tickers
NVDAMSFTAMZNMETAAMDAVGOORCLHOODMSTR
NVDA
Bullish
Extraordinary net income margins (~55%) and strong secular AI/hardware tailwinds support robust growth and leadership.
Bearish
High valuation and reliance on continued exceptional revenue growth make NVDA vulnerable if growth or margins decelerate.
MSFT
Bullish
Large, profitable business with secular growth drivers contributing to broad market leadership.
Bearish
Elevated multiples could be pressured if tech breadth narrows or growth slows.
AMZN
Bullish
Scale and growth across retail and cloud provide powerful earnings and revenue expansion potential.
Bearish
Operational leverage and high expectations leave AMZN exposed to disappointing revenue or margin outcomes.
META
Bullish
Strong secular ad and platform advantages underpin continued revenue growth potential.
Bearish
Speculative investments and shifting user monetization could pressure near-term profitability.
AMD
Bullish
Product competitiveness supports participation in the broader semiconductor-led upside.
Bearish
Competitive pressures and cyclical semiconductor demand risk weighing on AMD's expansion.
AVGO
Bullish
Diversified semiconductor/software franchise benefits from secular enterprise and connectivity trends.
Bearish
High expectations for Broadcom could lead to sharp moves if enterprise spending moderates.
ORCL
Bullish
Enterprise software and cloud transition provide steady revenue and cashflow tailwinds.
Bearish
Transition risks in its cloud/business model could create near-term volatility.
HOOD
Bullish
Rapid customer growth and product expansion (e.g., social features tied to accounts) support upside.
Bearish
Regulatory, competitive, or monetization execution issues could hinder growth after rapid scaling.
MSTR
Bullish
Crypto exposure and unique business positioning can drive outsized returns when digital-asset markets rally.
Bearish
If referenced as the MicroStrategy exposure, crypto-linked risk and volatility can amplify downside.
People mentioned
Michael CaoVlad TenevAndrew Ross SorkinDonald TrumpRay Chiaffi