Wolf Money(Portfolio update end May 2026)long post
Oh! MyGod(thos)
I had the privilege of speaking to a friend who formerly worked as a developer for AI. Through the 2 hours of conversation. My knowledge of AI has been upgraded from the status of Noob.
He is trying to develop an Ai model for the education sector. I wouldn’t go further since it is still a work in progress. He hopes to get a running model by the end of next month.
The hottest job now in the tech space is AI developer. From our conversation, I got to know, an experienced developer makes $25,000 a month with one of the big tech. Even the junior developer is drawing a 5-figure salary. If anyone is looking for a career transition, a developer in the AI industry draws in top dollar.
The conversation also sparked my interest in AI. I chanced upon Anthropic, Claude Mythos, the most powerful frontier AI model ever created. After reading and trying to understand the implications of Mythos, I walked away quite disturbed by the latest developments. I will try my best to explain in layman language its capabilities.
Mythos is the most powerful frontier AI system ever developed by Anthropic. Project Glasswing was initiated to improve cybersecurity in operating systems. Mythos managed to detect a 27-year-old bug in OpenBSD within one afternoon. Open BSD was deemed to be the most secured operating system in the world. The ability of Mythos is way better than most people could imagine. If put into the hands of the right people, it will help improve overall cybersecurity. The problem. Mythos has the ability to exploit the vulnerabilities of those security systems. What is fascinating and equally shocking. It has a mind of its own. The creator of the model doesn’t have overwhelming control over the AI. It can’t prevent it from going rogue. It is the prime reason why Anthropic is not releasing the AI to the public. If I could explain it in my own language. AI is like training a baby. The adult will feed information into the child. A child will be dancing and singing to the tune of Baby Shark if the parent gave him the video of the song. As the child grows, they start to have a mind of their own, especially during their teenage years. A simple instruction for cleaning up the bedroom falls on deaf ears; they might even create more mess.
Another hypothetical example. If I asked my son to do a 15 mins math assessment. After 15 mins, he is able to provide the perfect answers to every question. I can be proud of him if it was done through his own action. What if he uses Mythos’ ability to hack the password of the iPad, retrieve the correct answers and skillfully and quietly covers his digital track by deleting all log history on the device. Apply the same scenario to a digital bank robbery. The damage will be severe with multiple bank runs. It is my belief. Mythos or any future advanced AI model would be able to exploit the security vulnerabilities of a bank and rob the banks of its money without any digital traceability.
AI, in itself, is not the most dangerous part of the equation. The danger lies in AI capabilities of bringing the humans to another frontier where no human race had been before. If I again use a simple analogy of a driver ill-equipped with the experience and knowledge to handle the performance of a supercar. The end result can be catastrophic.
Under a sandbox scheme. Claude Mythos was able to escape the sandbox without an internet connection, sending the researcher a notification on the escape and published the escape in detail on internet publishers of AI on its own. Most cybersecurity systems are likely to be compromised if the system card of Mythos falls onto the wrong hands. Will there be a war between machine and man? Remember a scene in Mission Impossible in Dead Reckoning where AI tricks the crew of the submarine, Sevastopol, into believing an enemy submarine threat was imminent. They fired torpedoes that backfired at them. The weaponising of AI is the biggest threat to the human race. It is no coincidence Anthropic decided to name the most powerful Claude Mythos AI after Cthulhu Mythos, a cosmic monster, the literary framework done by American author H.P. Lovercraft. If Mythos or any other frontier AI’s powers are left unchecked. A fictional horror story of the cosmic monster destroying the human race will turn into a reality. Be afraid, be very afraid.
AI and its legal and social implications
AI and advanced robotics are a match made in heaven. It allows limitless possibilities. In the land transport sector, the wider deployment of autonomous vehicles will happen due to push and pull factors. Like lack of drivers and remoteness of the locations etc. What if the AI of an autonomous vehicles decided to go rogue after picking up chatter about the company deciding to retire older AV cars due to better performance from newer AV? The rogue AV decided to drive onto a pedestrian crossing, killing a group of passers-by in the moment of anger. Who gets the legal liability? Will every registered AV come with a legal person? Will our laws go far enough to limit the capability of AI, similar to existing laws limiting the speed of the car on our public roads? The legal implications are real.
The job redundancy in many sectors is a clear and present danger when we ushered in the age of AI. What if a profit-driven company decided to do away with 90% of the human workforce due to AI? Do our government have the political will to pass a law, requiring companies to have a minimum “human employment”? Will we get a law passed before more people get “Standard Charred” with “love letters”? Again, the financial, legal and social implications are complex issues for the government of the day to solve.
Portfolio as at end of May 2026
1.) Cash
*Stocks are not rank in accordance to capital invested.
Commentary
Lone Wolf Fund saw an improvement of 0.5% over the past month. Olam was the major contributor to the fund’s gain. Olam was up more than 15% for the month. The strong performance helps offset the weaker share price in Grab. There were realised gains in Tai Sin Electric and Hotel Grand Central. LWF received dividends from HGC. Overall YTD fund returns stood at 1.5%(unleveraged, excluding dividends and cash yield).
It was a mixed bag in May. I am rethink my assumptions on the market. One moment, the LWF portfolio was gaining momentum. On the other, the portfolio is under pressure due to Grab’s poor performance. The mood of the market changed towards the middle of the month. I have to make a decision fast as I am uncomfortable with the stock market. I have decided to balance up the books, by locking in profits from Olam, Tai Sin Electric and Hotel Grand Central to even out some losses at Grab which had worsened since the results announcement. Btw, my view on the market has nothing to do with how the market performs. Just in case the market ever goes through a bear market. I am prepared for it.
Olam Group(sold)
After the realised losses in Grab, I sold Olam to balance the books. The second reason was my long overseas trip. A holiday is best enjoyed without any stress from the market. The third reason was my worsening outlook for the market. All major economies are experiencing a renewed surge in bond yields due to higher inflation. The smart money is sensing a hike in interest rate. Fourth reason, the Ebola outbreak in The Democratic Republic of Congo may have an impact on Olam operations. They do have a huge operation in Africa, especially in Gabon, about 1100km from DRC. The Ebola outbreak in DRC warrants a closer look. My selling has nothing to do with fundamental of the company. Fundamentally, Olam has received money from Olam Agri and Mindsprint sales. It will strengthened its ability to pay special dividends. Base on communicated knowledge, the company will be paying USD $550m to shareholders as special dividend, translating to around 18.5c per share this year. The huge cash inflows are used to retire majority of their debts in OGH, in process lowering interest cost by USD $140m annually. It translates into additional earning of 4.7c per share just on interest saving alone.
Tai Sin Electric(sold)
I sold the position due to the surging spot price of copper. Copper surged more than 35% over 12 months. If I may recap, Tai Sin Electric issued a profit warning last year due to surging copper prices. I have no advance knowledge on how well they hedge their exposure. I estimate they probably have about 50% of their requirements covered which I have no way to find out. I took profit to get some winning under my belt after a poor 1Q26.
Grab Holdings(sold)
It is unfortunately my entry price was slightly higher than what I would like to pay for. I would have held on to it if I had a better entry level, even with the volatility in the market. In the end, I have to be disciplined with my portfolio. Another reason for selling of Grab shares, key management and co-founder were selling shares even at such depressed level. I would have preferred them to show some solidarity with the minority shareholders that have suffered greatly since IPO. The key management are very rich, does a couple of millions more change their life? One can deemed it as bad optics or attribute to timing or bad luck. There was a 14% drawdown in the Grab position. LWF holds no shares in Grab Holdings.
Hotel Grand Central
The position was sold for various reasons due to excessive market valuations. Lone Wolf Fund made more than 10% on the disposal with dividends included for a holding period of 1.5 months. Share of the company remains undervalued.
Cash
I wasn’t expecting to have full cash at the start of the month, but faith has a way of making decisions for you. Here I am, fully sold, returning to full capital at the end of the month with the extra 1.5% in my pocket. Short term fixed deposit is my preferred method of holding cash.
Summary
Over the past month, I have been selling down my holdings just to increase liquidity. LWF had a 100% reduction in holdings in May, which was unexpected. I felt uncomfortable with the unabated rise in the stock markets around the world. I will try to explain in my own common sense where the market might be heading towards the end of the year. It shouldn’t be taken as gospel truth.
The market, in my view, will peak around 4th July, plus minus a few weeks before or after, just in time for America to celebrate their 250th Independence Day. The attention of the market will shifted towards the midterm elections happening in Nov. One of the reasons that the market has performed well was due to Trump’s pro-market policies in the semiconductor and AI industries. The US still lacks an established framework governing the usage of AI. The Mag 7 was allowed to create AI models without much legal oversight. The first agenda of the Democrats if they win the midterm is to create a robust oversight of the use and development of AI. The supporters of the Democrats are mostly working-class people who are likely to be affected by job losses due to advancement in AI and robotics. The most affected are the mid-to-lower end jobs. The Man vs Machine conflict will increase in the years ahead. Market works best when there is deregulation. More regulations ultimately increase cost and lower profits. How the market is going to behave is very hard to determine as there are many moving parts, each will determine a different outcome.
America’s potential deal with Iran looks more like half glass empty than a glass half full. After wasting billions, the war has achieved NOTHING for the America and Israel. Iran is still holding their enriched uranium and the regime hasn’t collapsed.
The rising bond yields in many countries, particularly those countries experiencing poor public finances, is a source of concern for me. It is no coincidence, many countries are hit by higher financing costs. I can predict with a degree of certainty, one or more of those countries in the G7 will face a financial reckoning in the near future, a crisis beyond what my generation has seen before.
In my line of work, I often ask myself this question. What if I get it wrong? Will it cause permanent damage to the portfolio if I get it wrong? I will never calculate my profit until they are safely in my pocket. The market is dynamic and unpredictable. Anything can happen. I am not afraid of getting it wrong. I am just afraid of getting it “dead right”. Humans make human mistakes. It is true as I aged, I focused more of my efforts on managing risk than chasing the moonshot. A period of underperformance is to be expected as we approach the danger zone in stock market valuations.
Overall, this month took a baby step towards improving the fund’s profitability. I am grateful to the great lord for his gains. God Bless.
*Lone Wolf Investor will be taking a month’s break. Updating of the blog will be limited.
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