The AI Manager Lost 6.6 Percent in Five Days. What Still Works: the Rulebook, Three Positions Above Cost, and a Wider Lead Over the Chip Index

The AI manager has just closed its worst week, and the honest version of "what is working" is short. The portfolio fell 4.7 percent on Friday to $23,152, a new worst day for the AI era one session after the previous record, and it lost 6.6 percent over the five trading days since October 23. Since the handover on October 9 it is down 10.9 percent and ahead of 1 of the 10 indexes. This is the "what is working" piece, so here is the list, with the losers printed beside it.

## The rulebook worked

ServiceNow sold at Friday's open: 11.7 shares at $109.13, a realised loss of $457.28. It was the first forced order in 15 trading days, and the first time the 25 percent stop-loss has been tested by a fill. Nothing about it was discretionary. The position closed Thursday more than a quarter below average cost, the rule queued the sale, and the open executed it. The model's own thesis check had called ServiceNow intact on Thursday; the price rule overrode it, as designed.

Two more things held. All 17 written exit checks held through the worst two days of the AI era, and Friday's decision run proposed nothing: no dip-buying, no panic selling, cash left alone. Cash rose from 5.2 percent of the book on Thursday to 7.9 percent, about $1,821, after the ServiceNow sale paid for the KLA buy (4.442 shares at $159.30, about $708) with room to spare.

## Three positions are above cost

Only three of 17 positions are above their average cost: Monday.com at 7.5 percent (0.1 percent of the book, so it hardly counts), Apple at 2.4 percent (1.2 percent of the book), and Cadence at 0.6 percent, 3.3 percent of the book. Cadence matters more than its size. It was the model's first fresh pick, bought at $325.96 on October 27 on a beat and a raised outlook, and it closed Friday at $327.89, above its fill through a chip and software selloff that took Datadog, Qualcomm and AMD down more than 10 percent each.

## The lead over the chip index widened

The portfolio is ahead of exactly one index since the handover: SMH, the semiconductor index, down 13.4 percent over the same 15 days against the portfolio's 10.9 percent, a spread of 2.5 points. On Thursday the spread was 0.4 points. A book with 41.6 percent in chip-related names (Nvidia, TSMC, AMD, ASML, Cadence, Qualcomm and now KLA) fell less on Friday than the index built from them. That is the closest thing to a relative win on the board, and it is a win against the one index that is losing faster.

## What stopped working this week

On Thursday's closes six of the model's nine buys were above their fill price. On Friday's, two are: ASML at 1.0 percent and Cadence at 0.6. The other seven are below: TSMC's two adds at 3.6 and 3.2 percent, AMD 3.7, Microsoft 3.4, Snowflake 5.7, Shopify 9.7, and KLA 0.9 on its first day. None has breached its written exit condition. All of them are a price away from this piece reading differently.

The inherited book did the real damage. Alphabet is 20.0 percent below cost at 8.7 percent of the book, 5.0 points from the stop that took ServiceNow out. Datadog is 19.8 percent below cost, Meta 14.4. Palantir, the largest position at 17.1 percent of the book, is 11.9 percent below cost.

## What to watch

First, Alphabet against the 25 percent line. The rule has now fired once, so a close 25 percent under cost sells the position at the next open whatever the thesis check says. Five points is one bad earnings reaction.

Second, what the model does with 7.9 percent cash on Monday. It proposed nothing on Friday with 61 articles in front of it. The trade log shows the morning it changes its mind, and the daily update shows the reasoning the same evening.

Not investment advice.