On Wednesday the Dow rose 3%. Some of our holdings did the opposite. The companies that make the power equipment for data centers fell hard. GE Vernova, which builds gas turbines, fell 9.3%. Vistra, a power company, fell 13.8% to a 52-week low. Constellation fell 6.7%. We own all three, and we want to be plain about why they dropped and what we did, which was nothing.
The reason is the same one driving the data-center story. Voters backed slowing new data-center construction. Those centers are where the new demand for electricity comes from, so the companies that would power them fell too. Siemens Energy dropped 8%, Caterpillar 5.2%. Smaller names fell harder. One engine maker lost about 20%, another 11%. On-site power providers for data centers fell double digits. For one day, the market treated anything tied to the AI build-out as the same trade, and sold it.
What we did, and the one open decision
We hold GE Vernova in 30 of our model books, Vistra in 17 and Constellation in 9. All three were part of the first third of our North Star reserve, which we put to work on Saturday, Oct. 17. We trimmed none of them Wednesday. A theme doesn't stop being right because it has a bad week. The case for more electricity, from AI, from factories, from electrified everything, didn't change because of one vote. There may even be a tailwind coming. An energy permitting bill with some bipartisan support could speed the build-out of pipelines and transmission lines, though its fate isn't clear and politics could delay it.
One decision is genuinely open, and it's the owner's to make in writing. The North Star plan set aside a second third of the reserve to deploy at a lower market level or in the week of Nov. 3, which is now. The vote happened. The decision hasn't been made, and this edition doesn't make it.
Our read
This is an Investments and Risk story, module IN04, and it's close to home because these are our names. The honest lesson is about what you can stand to hold. A theme you believe in for five years will still hand you weeks like this one, where the thing drops double digits on news that doesn't change the five-year case. If a 13.8% day in a holding makes you want to sell everything, that's not a signal about the stock. It's a signal that the position was bigger than your stomach.
So here's the check for your own portfolio this week. Look at your single largest holding, whatever it is, employer stock, a favorite fund, a theme you love. Imagine it falling 14% tomorrow on news that doesn't change your reason for owning it. If your honest reaction is calm, the position fits you. If it's panic, the position is too big, and the fix is to trim it on a good day, not a bad one. We're holding our power names because the size was set for exactly weeks like this. The North Star's next step is a written decision, not a reaction to a rough Wednesday. If you want to pressure-test the size of your own largest position, that's a worthwhile fifteen minutes.