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Hello everyone, this is Yaho. I'm MarkruptionTrading. Today is November 14, 2026, and it's 11.
52am here in Japan.
Yesterday, the November Nikkei Options settlementcame in just above 6100. So today, I'd like to
review what happened in the market, discuss thedeflationary pressure emerging in the global
economy,
and explain why I believe artificial intelligenceand the space industry could become two of the
most important investment themes over the comingdecades.
Let's start with Japan. Since the tariff shock inApril 2025, Japanese equities have experienced an
extraordinary rally,
despite some temporary setbacks, includinggeopolitical tensions in the Middle East. Earlier
this year, the Nikkei eventually climbed above 7300, but the rally has now entered a major
correction.
At one point, the market fell to around 5600before recovering toward the November settlement
level of 6100. A significant portion of the unrealized gains accumulated during the rally has been
realized.
What's interesting, though, is how the optionsmarket responded. Even before the decline
accelerated, good options were already relativelyexpensive. That means the potential returns from
buying downside protection were not particularlyattractive compared with previous market shocks.
In the opportunities I was tracking, even the mostsuccessful trade offered returns of around 20
times the initial premium, rather than the half-fold returns, 100-fold returns sometimes seemed
during the geniusly unexpected crashes.
To me, that suggests something important. Theoptions market had already recognized a
considerable degree of the vulnerability in theunderlying equity market. In other words, this was
not necessarily a completely unexpected shock.
Some of the risks had already been priced in. Andthat's an important distinction. A fragile equity
market does not automatically mean good optionsare cheap. So, for an option trading, the
relationship between the underlying marketvulnerability and the price of the insurance is
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fundamentally mismatched.
Looking globally, Japan has suffered largecorrections in the United States, partly
reflecting the strength of its preceding rally.Gold has also struggled to regain momentum,
trading around the 4,000 level.
I'll continue tracking these markets togetherthrough my models, focusing on the interaction
between Japanese equities and U.S. equities andgold.
Now, let's move to the global economy. For sometime, I have been discussing the possibility that
household consumption is weakening and inflationary pressures are beginning to emerge.
Recently, I've noticed several developments thatappear consistent with this view. One is the
decline in vegetable prices in Japan. Of course,agriculture prices are affected by the weather and
harvest conditions and supply infractions.
But I also think it's worth examining whetherweaker demand from the restaurant industry is
contributing to this trend. After years of therising price, households have increasingly strong
incentives to reduce this discretionary spending.
One obvious adjustment is eating out lessfrequently and preparing more meals at home. If
restaurants demand weakness, that could putdownward pressure on part of the food and supply
chain.
Another interesting development is the recentannouncement of a price reduction by Marugame U
don, one of Japan's major restaurant chains.
A single company's pricing decision doesn'testablish an economy-wide trend, but after a
prolonged period of the price increase, suchdecisions may indicate that consumers are becoming
more price-sensitive and businesses are beginningto respond.
What I'm watching is whether this becomes a broadtrend. If more companies begin competing on the
lower price rather than simply passing throughhigh cost, we could be witnessing a meaningful
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change in the inflation environment.
But I believe there's another, much more powerfulforce emerging, and that's artificial
intelligence. In my own work, AI has alreadydramatically increased the amount of work I can
accomplish.
I can assist tasks to one AI system, reviewing theoutput of analysis, and use the time in between to
think more deeply about strategies, analytics, anddecision-making.
The result is not simply faster work. It's acombination of greater productivity, higher
output, and potentially better quality.
That has profound economic implications. Thinkabout it this way.
Suppose an employee receives the same salary asbefore, but AI allows the person to complete five
times as many tasks, and the labor cost allocatedto each task has effectively fallen by 80%.
Even if the employee's salary increases, the unitof cost of production can still decline
dramatically. That's what I mean by AI-driven depletion.
Not necessarily immediate decline in consumptionprice, but a structural reduction in the cost of
producing individual units of the work.
I believe this is already happening across manywide-scale activities, even if it is not fully
visible in corporate earnings or traditionaleconomic statistics yet.
Implications are enormous.
Tasks that once are required entire times mayincreasingly be performed by half a handful of
people, supposed by a sophisticated AI system.
Some businesses will become dramatically moreefficient, as they may lose their competitive
advantage altogether.
The economic structure itself could begin tochange.
However, there is an important contradiction inthis story.
AI may allow productivity to expandextraordinarily late, but its physical
infrastructure cannot expand without limits.
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AI requires electricity, computing capacity, acool system, semiconductor manufacturing, and
enormous amounts of supporting infrastructure.
All of them operate with the physical constraintsof the earth, as AI becomes more powerful and more
widely adapted.
The demand for these resources could growdramatically.
Eventually, the challenge may no longer be simplyhow to build better AI models.
It may become how to provide enough physicalinfrastructure to support the civilization these
models make possible.
And this is where I believe the next greatindustrial opportunity begins.
The next phase of human development may be definedby our ability to expand beyond the physical
constraints of the earth.
This is why I find the broader industrial strategysurrounding Elon Musk particularly interesting.
Across companies such as SpaceX, Tesla, and XAI,we can see development in artificial intelligence,
robotics, analogy systems, and spacetransportation.
These are distinct businesses, but theirtechnologies could become increasingly
complementary.
AI provides intelligence. Robotics provide theability to act in the physical world.
Analogy infrastructure provides power.
Space transportation expands the environment inwhich these systems can operate.
Ultimately, this combination could supportindustrial activity beyond the earth.
This might include lunar infrastructure,autonomous construction, space-based analogy
systems, and potentially computing infrastructurein space.
Space-based data centers remind speculativeconcepts with major challenges including cost,
thermal management, and maintenance.
But the broader idea is comparing.
If humanity wants to sustain exponentialtechnological development over a very long period,
expanding its physical operating environment maybecome increasingly important.
Now, there's another dimension to this. Employment.
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As AI replaces or automates an increasing numberof traditional tasks, some industries may require
substantially fewer workers.
We could see major changes in white-collaremployment, business structure, and distinct
distribution of economic value.
At the same time, AI may enable entire newindustries that previously seemed economically
impossible.
And I believe space could become one of thoseindustries.
Building infrastructure beyond the earth requirestransportation, communications, power generation,
robotics, manufacturing, and entire new supplychains.
Many of these activities would be highlyautomated, so space will not necessarily absorb
displaced work on a one-for-one basis.
But the development of a much larger space economycould create new sources of investment,
employment, and economic opportunities.
In that sense, AI may similarly disrupt existingindustries and enable the creation of new ones.
And this reminds me of cyberpunk.
In that fictional world, corporations such asAlaska and Melitech operate across defense-adv
anced technology and security and globalinfrastructure.
Of course, fiction is not a forecast, but theconcentration of capabilities across AI, robotics,
and defense, energy, and space
resemble some of the individual structuresbeginning to emerge today.
What's particularly interesting is that space isno longer simply about exploration.
It's increasingly connected to national security,communications, energy, and infrastructure of the
future economy.
And I believe that SIFT could become one of thedefining investment themes of the coming decades.
So, brining everything together, here's how I seethe current environment.
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In the near time, Japanese authorities haveexperienced a significant correction following an
extraordinary rally.
We may now be entering a period of wider tradingrange, greater volatility, and reassessment of the
market valuation.
At the same time, consumer demand appears to beweakening in some areas, while AI is beginning to
reduce the cost of producing many forms of work.
Over the longer term, however, I believe the mostimportant question is not simply which jobs AI
will replace.
It's what new economic activities AI will makepossible.
So, my central hypothesis is AI-drivenproductivity growth will eventually create greater
demand for physical infrastructure, energy,robotics, and access to environments beyond Earth.
And that's why I'm increasingly focused on therelationship between AI and space.
AI could become the engine of the nextproductivity revolution, and space could become
one of the frontiers that allows the revolution tocontinue expanding.
For investors, the opportunity may lie not only incompanies developing artificial intelligence, but
also in those building the physical infrastructurerequired to support this growth.
That's the big picture I'm watching.
And as an option trader, I'll continue looking foropportunities where the market pricing of the risk
differs from the underlying economic reality.
That's all for today.
If you enjoy exploring markets from a differentperspective, consider following this channel as a
long put on conversational wisdom.
That's all for today.
Thank you for watching.
