In this week's column, we're going to look at the similarities and differences between betting on horses and investing in stocks — and then share our outlook on the growth trade selloff that began last week. We're coming off a fun weekend here in Saratoga Springs, N.Y. following the running of the Belmont Stakes, the third leg of the Triple Crown. Local trainer Cherie DeVaux became the first female trainer to win both the Kentucky Derby and the Belmont Stakes. Unfortunately, she skipped entering her winning horse Golden Tempo in the Preakness, so no Triple Crown this year. How is this relevant? While waiting for my wife to choose a dress and hat for the event, I found myself with some free time contemplating the similarities and differences between betting on horses and investing in the market. I had enough time to write a full blog post on it, which I'll link below. The summary goes like this: with horse racing, you can study the bloodline of the horse, past race stats, and the trainer's history to inform your pick. Right up until the gates open, you can watch the odds shift as money flows into the market and make a last-minute bet. But once the horses are in the gate, your bet is locked. There's nothing you can do to manage risk from that point forward. Investing is different. Like horse racing, you can study a company's financials, future projections, management team and addressable market before placing your bet. But that's where the similarities end. After you've committed capital to a stock, you can watch your analysis play out in real time as the company navigates incoming data, changing market conditions and macroeconomic developments — and you can adjust. You can size up, size down or exit entirely. Think about how many variables arise in a horse race — track conditions, your horse's temperament that day, how the field is running, the quality of the start — that would send bettors rushing back to the window if they could. Investors have that window. It never closes. I'm belaboring this analogy because it's exactly what happened to us last week. I spent weeks preparing tactical position adjustments to our flagship growth portfolio, Tactical Alpha Growth (TAG), including a significant increase in our exposure to the AI growth trade. I was set to deploy those updates on Friday, June 5 — until a stronger-than-expected nonfarm payrolls report hit the tape and shocked the market. The headline number was well ahead of expectations, compounded by an upward revision to the prior month, catching a market that had been anticipating softer job growth due to AI-driven displacement. The Nasdaq posted its worst week since April 2025, with semiconductors down more than 6% in a single session. Our new horses were in the gate and ready to run — but I told my team to hold off and watch how the market handles the new course conditions: specifically, the uncertain timing of a potential Fed funds rate hike. We have not yet pulled the trigger on the portfolio updates as it seems the market continues to act heavy. Monday formed an 'inside day', defined as a trading session with highs and lows that are contained within the prior day's highs and lows. It's a sign of indecision. Tuesday, the market was acting well on the open but is beginning to fade. I'm wondering if the market needs a pullback to the 50-day moving average at around 7200? Or, possibly down to the 7000 breakout level from April? Active management is all about doing your research based on past data, forming a plan and then watching how the market responds in real time to your analysis and adjusting accordingly. If the market action confirms you're on the right track, move ahead. If the market disputes your assessment, we must engage and rely on our EQ (emotional intelligence) and set aside any bruises to our IQ and ego. A smart investor does her best to thoroughly assess the now and embrace that predicting the future is useless. That's trading with EQ and not an overly inflated view of our own IQ. An important but subtle difference. We're watching closely and with some more confirmation that the market, and particularly the growth trade, is trying to carve out a low, we'll deploy our new portfolio of horses. Below are the sector adjustments and allocations compared to the prior portfolio, as well as the S & P 500 weightings we are planning to make IF we see the market stabilize. The big standout is technology with a prior weighting of 23.50%, now slotted to move up to 39.50%. Of the 12 positions we're adding, nine of them are technology. One, specifically, I want to focus on is Astera Labs ( ALAB). ALAB is one of the purest plays on AI infrastructure buildout in the semiconductor space. According to the company website: "Astera Labs' co-founders share how the company is leading the transition to AI Infrastructure 2.0 with a complete portfolio of purpose-built silicon hardware and software solutions grounded in open standards" The company reported Q1 2025 revenue of $309 million, up 93% year-over-year, with Nvidia -like gross margins expanding to 76% and non-GAAP operating margins of 36%. These numbers aren't just a top-line growth story, it's a company that is scaling efficiently. On the last earnings call, CEO Jitendra Mohan stressed that hyperscalers, AI labels and sovereign entities are all signaling the buildout is still in the early innings, underpinned by real monetization, and return on investment — not on speculative demand. Analysts are projecting 81% revenue growth in 2026, to $1.546 billion, and then expanding to $2.194 billion in 2027. Of the 26 analysts that cover the stock, 8 are at 'hold', 11 at 'buy', and 7 at 'strong buy'. Technically speaking the stock is simply in a consolidation above the 20-day MA, well above the 50-day MA and 200-day MA. If the S & P 500 can stabilize amid this uncertain inflation and interest rate outlook, we'll set our new stable of horses free to run and hopefully tear up the race track. Here's the blog post mentioned above https://insideedgecapital.com/our-insight/the-belmont-stakes-horse-racing-and-why-im-not-betting-big-on-the-pullback-yet/ — Todd Gordon, Founder of Inside Edge Capital, LLC We offer active portfolio management and financial planning for retail investors, as well as regular market updates like the idea presented above. Visit us at www.InsideEdgeCapital.com/CNBC DISCLOSURES: Todd does not yet own ALAB personally or for clients of his wealth management company Inside Edge Capital, LLC. 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<small>Source: CNBC</small>
