Play Your Game

There was a front page article in The Wall Street Journal [SUBSCRIPTION REQUIRED] on Tuesday about the newest star investor, 24 year old Leopold Aschenbrenner whose hedge fund is called Situational Awareness. As far as I can tell, Aschenbrenner has done the best of anybody in the world in capitalizing on the AI buildout.

In 2024, Aschenbrenner wrote a 165 page essay titled “Situational Awareness: The Decade Ahead” that presciently foresaw the path of AI’s development. According to The Wall Street Journal article, Situational Awareness returned ~200% in 2025 and now manages more than $20 billion.

Aschenbrenner is clearly a brilliant young man who had the right knowledge at the right time. Unfortunately, I’m not Aschenbrenner and I don’t have his technical knowledge about AI. Don’t get me wrong: I wish I did. But I don’t. For me to try to do what he’s doing would almost certainly result in massive losses. That’s not my game.

It’s not Warren Buffett’s game either. Buffett is notoriously averse to investing in technology because he doesn’t understand it. He missed Microsoft despite his close friendship with Bill Gates though he did have an extremely successful late career investment in Apple.

One of Buffett’s core principles is Circle of Competence. You have to know what you know and what you don’t and stick to the former. Otherwise, you’re gambling because you simply don’t have the ability to deeply understand the business.

I got coffee yesterday with a friend who is very knowledgeable about technology. When I first met him in 2014, he told me that his number one stock pick was Avago. That turned out to be quite the pick. So when he mentioned that he likes Cerebras’s (CBRS) technology I paid attention. I couldn’t really follow what he was saying about how innovative what they’re doing is but I did check them out when I got home.

The company went public about a month ago. It has a market cap of $47 billion and in 2025 revenue was $510 million and net income $88 million according to its S-1. So this is not a value stock. My point isn’t to say it’s a bad investment. In fact, I suspect it may be a huge winner because of my friend’s brilliance and track record. But it’s uninvestable for me because it’s outside my circle of competence. If I bought it, I would just be relying on my friend’s judgement.

The poker player Paul Wasicka, who finished 2nd in the 2006 WSOP Main Event, once said that he became a successful player when a friend told him: “Play your game, not someone else’s.” Once he stopped trying to be like everyone else, he could focus on his own unique skillset and edge – and he started winning.

The things that I’m investing in – commodities to play secular inflation, REITs, software stocks, quality consumer businesses – are not the things that the market is focused on right now. Sometimes it feels like I’m irrelevant in this AI moment because I have no value to add there.

But I’m confident that the precious metals miners will continue to work as inflation keeps the gold price high, that commodities have been underinvested in for a long time and prices will remain high, that software stocks currently represent a good risk reward, that UBER is being underestimated due to the narrative about autonomous vehicles, and that my REITs and quality consumer businesses will continue to perform solidly if not spectacularly over the long term. It might not be exciting, it might not make fast money, but that’s where my circle of competence and edge are, that’s the value I can add.

I have another friend who always says that he’s focused on “playing my game”. When I asked him what he meant by that, he said he’s not worried about beating the benchmarks on a quarterly or yearly basis. He’s not worried about what other people are doing. He’s focused on investing in the stuff that makes sense to him and has worked for him over the years.

Charles Kindleberger wrote: “There’s nothing so disturbing to one’s well being and judgment than seeing a friend get rich.” A lot of people are getting rich right now piling into the stocks of the moment and it’s very difficult not to join the party. I want to buy DRAM too! Perhaps AI will revolutionize everything and these will continue to be great investments. Perhaps not. I don’t know. And that’s the point. Play your game, not someone else’s. Otherwise you’re just gambling.