Live Recap 1: Why Ross Cut AI Exposure Before the Sell-Off — Inside a Fund Manager's Risk Framework
1. Live Review Introduction
Tiger Brokers livestream featuring Ross Dong, Founding Partner at Morning Cloud Asset Management, specializing in macro trading and U.S. equities. Ross shared how he combines top-down and bottom-up analysis to navigate market cycles — including why his fund reduced AI and semiconductor exposure before the July correction.
His key message:
Being bullish on AI long-term does not mean ignoring short-term market risk.
Disclaimer: The views expressed are those of the guest speaker and do not represent Tiger Brokers or its affiliates. This content is for education and discussion purposes only and does not constitute financial advice.
More from the livestream recap series
2. "Everything Has a Cycle"
Ross's market experience began with gold and silver trading before he later studied mathematics at Columbia University and entered professional trading.
That experience shaped one of his core principles:
Everything has a cycle.
From precious metals and memory chips to semiconductors and AI, no asset permanently escapes changes in supply, demand, expectations and valuation.
AI may be a major long-term transformation, but Ross still sees it as part of a market cycle.
3. Every Trade Needs a Review
Ross believes both winning and losing trades should be analysed.
For profitable trades, he asks what drove the result:
-
Macro conditions
-
Fundamentals
-
Technical and positioning
For losing trades, he focuses on what assumption or layer of analysis went wrong.
This process of attribution, review and adjustment helps refine his investment framework over time.
4. Two Cycles Drive Ross's Framework
Ross organizes his investment approach around two major forces:
Technology and Industrial Cycle
AI is the clearest current example, reshaping industries and driving a major investment cycle.
Political, Monetary and Financial Cycle
This includes monetary policy, liquidity, elections, geopolitics, and broader financial conditions.
When both cycles strengthen together, markets can become highly bullish. When both weaken, downside risk increases.
When they move in different directions, sector selection and timing become more important.
5. Why Ross Cut AI Exposure in June
Ross said his fund began reducing AI and semiconductor positions in mid-June, exiting the remaining exposure around June 25–26.
Three key warning signals supported that decision.
🚨Signal 1: Credit Markets Showed Stress
Ross closely tracks:
Liquidity + Credit
He saw warning signs emerging in lower-quality credit markets, suggesting risk appetite was weakening beneath the surface.
🚨Signal 2: South Korea Weakened First
The Korean market began correcting in early June, ahead of the broader semiconductor decline.
Ross views Korea as a useful leading indicator, given its importance to the global semiconductor and technology supply chain.
🚨Signal 3: Institutional Hedging Increased
Ross's proprietary put-hedging indicator showed a surge in institutional protection.
His team follows roughly 15 quantitative indicators, and more than two-thirds were showing warning signs during June.
With multiple signals pointing in the same direction, the fund chose to reduce risk.
6. Long-Term Bullish ≠ Always Fully Invested
Ross remains constructive on AI over the next three to five years.
But long-term conviction does not mean AI stocks will rise continuously.
He separates:
Structural conviction:
Where could the industry be several years from now?
Tactical positioning:
Is the current risk-reward attractive today?
The long-term AI story can remain intact even while short-term conditions justify reducing exposure.
Closing Takeaway
Ross's framework shows that investors do not have to choose between believing in AI and managing downside risk.
Strong trends can become overcrowded, and strong companies can become expensive.
His June decision captures the core principle:
Understand the cycle, not just the story.
Next, we move to the macro picture — inflation, employment, interest rates, Jackson Hole and the outlook for U.S. equities.
7. Post-Event Resources
Viewers can follow @Ross_Macro_Trading on the Tiger Community, his YouTube channel TMI Partner, or his X account, Ross Dong. More of his market views and research are also available through his official website, tmipartner.com.
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.
