Alexander Campbell
· Campbell Ramble
· May 12, 2026 at 16:56
· ⏱ 15 min read
| Read on Substack ↗
Summary
Alexander Campbell argues that while it's unknowable whether we are in a bubble, the best ways to position are to find a 'wedge' (e.g., rising rates), short a 'victim' with convex downside, or wait for trend confirmation. He personally hedged by shorting SPX and HYG ahead of a CPI print and sold some Canadian bank exposure, but cautions against shorting the bubble directly.
•The author shorted 5% more of SPX and 10% of HYG as a hedge before the CPI print confirmed rising inflation.
•He identifies three ways to short a bubble: find the wedge (rates), short the victim (non-convex correlated asset), or wait for trendline confirmation.
•Canadian banks trading at 3x book with negative amortizing mortgages are on his watchlist as a potential wedge, though he could not get desired options.
•He believes the AI revolution is real but cannot tell if current price action is a bubble; he feels underinvested long yet hedges due to drawdown risk.
•Shorting a bubble directly is difficult because exposure grows exponentially and options become expensive (160 vol).
•Evergrande is cited as a past example of shorting the victim rather than the bubble itself.
•The author did not short semiconductors because core demand remains intact.
•He sold 5% of his Canadian bank positions as part of his risk reduction.
Read time15 min
Length15,346 chars
Categoryfinance
Trade Ideas
Alexander CampbellFounder & CEO, Rose AI; ex-macro investor, Bridgewater
Hedging against bubble risk via the wedge of rising rates; SPX short as a macro hedge.
Alexander CampbellFounder & CEO, Rose AI; ex-macro investor, Bridgewater
Shorting high-yield bonds as a wedge play; credit markets vulnerable if bubble pauses.
This newsletter, published May 12, 2026,
features Alexander Campbell
discussing SPY, HYG.
2 trade ideas extracted by AI with direction and confidence scoring.