Proof Over Promises
This Week in the Market
This week will be heavily influenced by the market digesting last week's Federal Reserve rate cut and its implications for the pace of easing in 2026. The Fed cut rates by 25 basis points at the December meeting, but the messaging was cautious and signaled that future moves will remain highly data-dependent. The market is once again concerned about tech valuations, although we remain bullish.
In our view, this creates a setup where the market is less forgiving of misses and more demanding of proof. Forward-looking optimism is taking a back seat to near-term execution, and investors are focused on what is actually working rather than what could work later. We believe this will reverse in the coming weeks.
Past Trade: 15% in 3 Days
In a recent newsletter, we highlighted a non-traditional trade in the prediction market for the number one searched person on Google this year, driven by a mispricing around how the list is actually determined. The ranking is based on year-over-year growth in search interest rather than absolute volume, which led us to take the NO side on Trump.
The trade was resolved just three days later. With search momentum declining versus last year across Google Trends and Wikipedia page views, a repeat appearance was unlikely under Google methodology. The NO contract moved from roughly 87 cents to 100 cents, delivering about a 15 percent return in three days.
Position Update: Oracle
In November, we put out a newsletter outlining our view that Oracle represented an attractive opportunity below the $200 level and that we would look to build a larger position if the stock pulled back into that range. Following earnings, Oracle did exactly that, with the stock selling off and giving us the opportunity to execute on that plan. While the initial market reaction to earnings was negative, we viewed the move as a valuation-driven reset rather than a deterioration in the long-term story.
Investors are scared that Oracle will not make enough profits to pay off its debts. We believe this fear is irrational and will continue to scale into this name as it bleeds further.
Disclaimer: We own shares of ORCL as of the writing of this. The content in this newsletter is for informational and educational purposes only and should not be considered financial, investment, or legal advice. A4K Capital and its affiliates are not responsible for any financial losses or decisions made based on the information provided.
