From the desk of Anthony, our CFA and the person who spends his days (and often nights) digging into the market noise. When something big and unusual happens on Wall Street… like the rapid, high-profile unwind of a concentrated hedge fund, we pay attention. Not because we chase the latest drama, but because these moments are live stress tests of portfolio construction, position sizing, and risk management. They remind us, in real time, why the principles we follow every day actually matter.

Wall Street this week went through the orderly unwind of the publicly traded stock positions of the Situational Awareness hedge fund.  The fund was not available via the RJ Alternatives platform.  Former OpenAI staff member Leopold Aschenbrenner launched the fund in 2024, after fundraising on the success of his viral paper, “SITUATIONAL AWARENESS: The Decade Ahead.”  I remember reading this paper and thinking the predictions seemed outlandish at the time, and now many of those predictions are coming true.
 
However, an idea is only a reason to get invested.  There is no substitution for portfolio construction, position sizing, and risk management.  “The value of assets owned by Situational Awareness had plunged from $45 billion at the start of July to about $10 billion.  The fund, run by Leopold Aschenbrenner, had to liquidate positions to meet margin calls.” – Bloomberg, “Citadel’s Big Buy Halts Downward Spiral in Still-Frothy AI Trade”
 
Details of the unwind are still emerging, and I’m sure there is enough there that Hollywood scriptwriters are on it. Leopold Aschenbrenner is getting married this weekend to Anthropic’s Chief of Staff.  Situational Awareness still has $10 billion in private assets from early Anthropic stakes and other private investments.  

By some measures, July 1st – July 29th was the worst month on record for high-momentum, high-beta stocks.  Some baskets of stocks were down ~40% collectively in that time frame.  Meanwhile, the S&P 500 was down only 2.32% during this period, while the Equal Weight S&P 500 was up 1.39%.  The QQQ did drop 10.14%. To us, this is yet another reminder of why the diversification mantra that Adams Wealth Partners practices and preaches is so important.
 
From 30,000 feet, this episode is less about one fund or one set of AI-related stocks and more about a timeless truth in financial planning: concentrated, high-momentum bets can create spectacular upside, and equally spectacular forced selling when the tide turns. The wide gap between the S&P 500, the equal-weight S&P, and the tech-heavy QQQ in just a few weeks shows how quickly leadership can shift.

That is precisely why Adams Wealth Partners emphasizes broad diversification, disciplined position sizing, and a plan built for a range of outcomes rather than a single narrative. Markets will keep issuing these reminders; our job is to ensure your portfolio is prepared for them.