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Upcoming Book Club Meeting: "Suicidal Empathy" by Gad Saad - Main Points & What It Means For Trading
For our next book club meeting, we are reading "Suicidal Empathy" by Gad Saad.
It's not a trading book. But after reading it, I realized it explains a lot about why traders lose money.
Here’s a quick breakdown before we meet to discuss.
What Is The Book About?
Gad Saad’s core argument is simple: Empathy is a good emotion, but when empathy is weaponized and taken to an extreme without reason, it becomes self-destructive. He calls that "suicidal empathy."
His main points:
- Empathy Hijacking: Our natural instinct to feel for others can be hijacked. When we feel so much for a group or a cause, we stop asking logical questions like "Is this true? Does this work? What is the cost?"
- The Death of Common Sense: Suicidal empathy makes people defend ideas that hurt them, because defending the idea feels morally good in the moment. Logic takes a back seat to feeling virtuous.
- Parasitic Ideas: Ideas spread like viruses. Some ideas survive not because they are true or useful, but because they make the host feel like a good person for believing them. They use empathy as the entry point.
- Loss of Boundaries: Healthy empathy has limits. Suicidal empathy has no limits. No screening, no risk assessment, no "what happens next?" It says feeling good now is more important than consequences later.
- Reason Must Lead, Empathy Must Follow: Saad is not anti-empathy. He is pro-reason. Empathy without a rational framework is dangerous. Reason should be the filter.
How This Applies Directly to the Stock Market
Reading this as a trader, I kept thinking - this is exactly what happens in our trading journal.
- Suicidal Empathy With Your Losing Position
You buy NVDA at $180. It drops to $165. Logic says cut it. But you start to empathize with your own position. "It tried so hard. It will come back. I don't want to hurt it by selling." You hold a loser because you feel bad locking in the loss. That's empathy hijacking your risk management. Great traders don't empathize with a ticker. They follow the stop. - Empathy For The Narrative Instead of Price
A CEO is inspiring. A company is "doing good in the world." You want them to win. So you buy the stock even though price action is breaking down. You traded your empathy for the story, not your plan. The market doesn't care about your feelings for the company. Price is the only truth. - Needing to Be The Good Guy in a Trade
Many traders won’t short, or won’t take profit because "what if someone is on the other side losing?" Or they hold a charity position: "I can’t sell this, I believe in what they do." That’s suicidal empathy in trading form. You are trying to be virtuous, but your account pays the price. - No Boundaries = No Risk Rules
Saad says suicidal empathy has no limits. In trading, that looks like: No max loss per day. No max trades per day. No hard stop because "maybe it will turn around if I give it more time." Healthy trading has strict boundaries. Unchecked empathy removes them.
The Trading Fix: Reason Leads
For our discussion, I want us to focus on this question: Where in your trading last month did empathy override reason?
Saad’s fix is our fix: Reason must be the filter. Empathy can be there, but it never gets to make the decision.
Before our meeting, track this:
Write in your journal after each trade: "Did I follow price and plan, or did I follow how I felt about this stock?"
If you stayed in a loser because you felt bad selling, flag it. If you chased a story stock because you loved the mission, flag it.
The market rewards rational behavior repeated over time, not emotional virtue signaling trade by trade.
Looking forward to discussing it with everyone at the next meeting. Bring one example from your journal where empathy cost you money, and one where reason saved you.
Recent Trade Review: NetApp (NTAP)
Last week, we identified and executed a trade in NetApp, Inc. (NTAP), a leading provider of enterprise data storage, hybrid cloud infrastructure, and data management solutions. The opportunity was featured through our Earnings Power Trader (EPT) service and discussed during Thursday's Live Trading Room.
What makes this example particularly interesting is that our Dynamic Power Trader (DPT) model also identified NTAP as a market-neutral opportunity. While the EPT service focused on its specific trading setup, the DPT model highlighted an alternative approach designed to reduce dependence on a strong directional move in the underlying stock.
This distinction is especially relevant in the current market. With interest rates elevated, earnings season approaching, and technology stocks experiencing frequent rotations, identifying a fundamentally attractive company is only the first step. Investors must also consider volatility, market direction, entry timing, and the appropriate strategy for the prevailing environment.
NetApp operates in an increasingly important area of the technology market as corporations expand their investments in artificial intelligence, cloud computing, and enterprise data infrastructure. However, even companies benefiting from attractive long-term industry trends can experience sharp price swings when broader market conditions become unstable.
That is why we emphasize using different trading models to evaluate opportunities from multiple perspectives. A directional trade may be appropriate under one set of conditions, while a market-neutral structure may offer a better fit under another.
You can review our recent trades and analysis through the Live Trading Room recordings.
This also highlights one of the major differences between our free educational content and paid trading services. While our free resources provide market analysis and potential trade ideas, paid subscribers receive timely SMS alerts with entry and exit instructions based on our trading strategies. These alerts help subscribers follow the intended trading process rather than relying on headlines or emotions when market conditions change.
Current Trading Landscape
Stocks finished another volatile week on a positive note, with the major indexes posting gains despite mounting concerns about inflation, interest rates, and geopolitical uncertainty. The S&P 500 approached record territory, while the Dow and Nasdaq also advanced as investors shifted their attention toward third-quarter earnings and the next round of economic reports.
The market's resilience is encouraging, particularly given the recent turmoil in the bond market. The 10-year Treasury yield climbed toward 5.35%–5.37% during the week, reaching levels not seen in more than two decades, before easing toward 5.24% on Friday. The broader trading range remains approximately 4.5%–5.5%, and these large fluctuations continue to influence equity valuations, investor sentiment, and sector leadership.
Higher interest rates remain the most significant threat to the bullish outlook. With government bonds offering yields above 5%, equities face greater competition for investment capital, especially companies trading at elevated valuations. Rising borrowing costs also pressure housing, consumer spending, and businesses dependent on financing to support expansion.
The Federal Reserve faces a difficult balancing act. September's quarter-point rate increase brought the benchmark rate to 3.75%–4.00%, reflecting continued concern about inflation. However, recent employment figures point toward slowing economic momentum, with September payrolls increasing by only 29,000 jobs and unemployment reaching 4.2%. Weekly jobless claims remain relatively low, suggesting that hiring has weakened without a corresponding surge in layoffs.
This combination complicates monetary policy. The Fed must prevent inflation from becoming entrenched without tightening financial conditions so aggressively that it triggers a more serious economic downturn. While markets have recently reduced expectations for another immediate rate increase, further tightening remains possible if inflation readings disappoint.
Energy markets present another challenge. The continuing conflict with Iran has disrupted supply expectations and shipping activity around the Persian Gulf, contributing to oil prices above $100 per barrel. Although crude prices eased somewhat late in the week and reports of potential Russian diesel supplies offered some optimism, the geopolitical risk premium remains elevated.
Higher energy costs affect more than gasoline prices. They increase transportation and manufacturing expenses, reduce household purchasing power, and create additional pressure on corporate profit margins. Recent weakness in consumer sentiment suggests households are becoming increasingly sensitive to the combined impact of inflation, borrowing costs, and elevated fuel prices.
Technology stocks have also experienced significant volatility. AI-related companies rebounded late in the week after investors reassessed concerns about valuations, infrastructure spending, and the timing of future AI revenue growth. The long-term investment cycle remains attractive, but the market is increasingly demanding that companies demonstrate tangible financial returns rather than relying exclusively on optimistic growth expectations.
Despite these challenges, corporate earnings remain a powerful source of support for equities. Third-quarter S&P 500 earnings are expected to increase by more than 30% from a year earlier, potentially marking a third consecutive quarter of exceptionally strong profit growth. This momentum, combined with historically favorable seasonal patterns during the final months of the year, provides a compelling argument that the current bull market could continue.
However, expectations are already elevated. Strong results alone may not be enough to lift stock prices if management teams signal slowing demand, rising costs, or weaker profit margins. Forward guidance will be particularly important in determining whether investors can justify current valuations.
The coming week will provide a critical test. JPMorgan Chase, Goldman Sachs, Citigroup, and Wells Fargo begin reporting earnings Tuesday, October 13, followed by Bank of America and Morgan Stanley on Wednesday. Their results will offer insight into consumer financial health, credit demand, lending activity, and the impact of higher interest rates on businesses.
Wednesday's Consumer Price Index report could be even more influential. Investors will be watching whether September inflation confirms persistent price pressures or suggests that the Federal Reserve may have room to pause its tightening cycle. Producer prices, retail sales, and industrial production will provide additional evidence about the direction of the economy later in the week.
A favorable combination of moderating inflation and strong earnings could extend the current rally, while disappointing inflation readings or cautious corporate guidance could quickly revive concerns about higher interest rates and recession risks.
The VIX remains near 16, reflecting relatively contained expectations for near-term volatility despite the challenging macroeconomic backdrop. However, markets have been trading near important intermediate-term technical levels, including the 50-day moving average, and relatively subdued volatility should not create a false sense of security ahead of several potentially market-moving announcements.
I remain firmly in the bullish camp. The longer-term market trend remains intact, and I believe SPY can advance toward the 780–810 range over the coming months, with shorter-term support near 740–750. Strong earnings, continued investment in artificial intelligence, and favorable seasonal tendencies should help support equities, provided that inflation and Treasury yields do not accelerate significantly higher.
At the same time, the risks are becoming more pronounced. Interest rates remaining higher for longer, elevated energy prices, and signs of slowing economic activity could contribute to increased volatility and higher recession probabilities.
This is not an environment where investors should assume every stock will participate equally in a market rally. Sector rotation, earnings quality, balance-sheet strength, and individual company fundamentals are becoming increasingly important.
The opportunity remains attractive, but the margin for error is narrowing.
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Sector Spotlight
The semiconductor industry remains at the center of the artificial intelligence investment revolution, and despite recent volatility, I believe it continues to offer some of the most attractive long-term growth opportunities in the market. As companies expand their investments in AI infrastructure, data centers, cloud computing, and advanced computing applications, demand for increasingly sophisticated chips continues to create opportunities throughout the semiconductor supply chain.
The VanEck Semiconductor ETF (SMH) provides exposure to many of the industry's most influential companies, including Nvidia, Taiwan Semiconductor Manufacturing, Broadcom, Advanced Micro Devices, and Micron Technology. Together, these businesses represent critical components of the AI ecosystem, from the design and manufacturing of advanced processors to memory, networking, and the equipment required to produce increasingly complex semiconductors.
What makes the current environment particularly interesting is the divergence between long-term industry fundamentals and short-term investor sentiment. Semiconductor stocks have experienced sharp fluctuations as investors question the sustainability of AI infrastructure spending, the valuations assigned to leading companies, and the amount of revenue that will ultimately be generated by these enormous investments. Recent concerns surrounding AI revenue projections contributed to selling pressure earlier in the week, although technology shares subsequently rebounded as investors returned to growth-oriented opportunities.
These concerns should not be dismissed. The artificial intelligence industry is committing extraordinary amounts of capital to infrastructure, and investors are increasingly demanding measurable returns. If future demand fails to justify current investment levels, semiconductor companies could face slower order growth, margin pressure, and valuation compression. Elevated Treasury yields add another challenge, particularly for companies whose stock prices reflect substantial expectations for future earnings.
Nevertheless, the underlying demand for computational power remains compelling. AI applications require increasingly sophisticated processors, high-bandwidth memory, networking technology, and advanced manufacturing capabilities. Even outside artificial intelligence, semiconductor demand is supported by cloud infrastructure, industrial automation, automotive technology, and the broader digital transformation of the global economy.
Recent corporate results suggest that investment in AI infrastructure remains substantial. At the same time, the semiconductor sector has significantly outperformed many other technology industries this year, demonstrating the strength of investor enthusiasm and earnings expectations. The challenge now is determining whether corporate results can continue supporting that outperformance as valuations become more demanding.
I favor SMH as a way to participate in the semiconductor industry's long-term growth potential without relying entirely on the performance of one company. The ETF provides exposure across several important segments of the semiconductor supply chain, although its substantial weighting toward leading AI-related companies means that concentration risk remains significant.
The next several weeks could prove especially important as earnings season provides new information about semiconductor demand, AI capital expenditures, profit margins, and management expectations for 2027. Strong earnings and constructive forward guidance could reinforce the sector's leadership, particularly if inflation begins moderating and Treasury yields stabilize.
Conversely, disappointing earnings, rising interest rates, or signs that large technology companies are scaling back capital expenditures could produce additional volatility. After such a substantial advance, investors should also remain alert to the possibility that some of the anticipated growth is already reflected in current valuations.
My outlook on SMH remains bullish, and I favor buying the ETF as a way to participate in continued semiconductor and AI infrastructure growth. However, I would approach new positions with appropriate risk controls and avoid aggressively chasing rallies ahead of major earnings announcements or inflation reports.
For investors, the opportunity is not simply about betting on artificial intelligence. It is about identifying the companies providing the essential infrastructure behind a technological transformation that could continue reshaping corporate investment for years to come.
Trade of the Week: NetApp (NTAP)
This week's Trade of the Week is NetApp, Inc. (NTAP), a leading provider of enterprise data storage, hybrid cloud infrastructure, and intelligent data management solutions. As artificial intelligence continues driving investment across the technology industry, businesses capable of managing the growing volumes of information required to train, deploy, and operate AI applications are becoming increasingly important.
NetApp operates at an attractive intersection of several major technology trends. Corporations are modernizing their data infrastructure, expanding cloud deployments, and investing in systems capable of supporting increasingly demanding AI workloads. These developments create opportunities for companies offering high-performance storage, data management, and integrated infrastructure solutions.
Recent financial results demonstrate the strength of this demand. NetApp reported record fiscal first-quarter 2027 revenue of approximately $2.03 billion, representing 30% year-over-year growth. Its all-flash storage business generated approximately $1.3 billion in revenue, increasing 47%, while public cloud revenue climbed 28% to approximately $206 million. The company also raised its full-year revenue and earnings guidance, reflecting improved expectations for continued growth.
These figures are important because they demonstrate that the investment thesis extends beyond enthusiasm for artificial intelligence. NetApp is translating infrastructure demand into measurable revenue growth while expanding its position in enterprise storage and cloud services.
The company has also taken steps to strengthen its AI infrastructure capabilities, including its acquisition of DataPelago and the introduction of its next-generation NetApp Novus storage architecture. These initiatives are intended to address the growing requirements of AI factories, advanced data centers, and organizations processing exceptionally large volumes of information.
The market has begun recognizing this opportunity. Earlier this week, Evercore ISI upgraded NTAP to Outperform and raised its price target from $210 to $300, citing improving growth prospects and the company's expanding opportunities in AI infrastructure. This development helped reinforce investor confidence in NetApp's longer-term earnings potential.
NTAP closed Friday near $237, approaching its recent 52-week high after a substantial advance throughout the year. That momentum reflects strong investor interest, but it also means expectations have risen considerably. Investors initiating new positions should recognize that even strong companies can experience sharp pullbacks following extended rallies.
The broader market environment introduces additional risks. Higher Treasury yields continue to pressure growth-stock valuations, while uncertainty surrounding AI infrastructure spending has created volatility across technology companies. NetApp also faces competition from established enterprise infrastructure providers and must manage component costs, product development expenses, and changing customer demand.
Nevertheless, I believe the company's improving fundamentals, expanding AI-related opportunities, and strong earnings momentum make it an attractive candidate within the technology sector.
An important distinction is that NetApp is not a semiconductor company and does not belong to SMH's portfolio. Instead, NTAP offers complementary exposure to the broader AI infrastructure ecosystem. While semiconductor companies provide the computational technology powering AI applications, NetApp focuses on the storage and data management systems required to support increasingly complex enterprise workloads.
This creates a compelling relationship between our Sector Spotlight and Trade of the Week. Both opportunities benefit from continued AI investment, but they participate in different segments of the infrastructure market.
This week, I am adding NetApp, Inc. (NTAP) to my portfolio.
With the stock trading near recent highs, I favor disciplined entry timing and appropriate position sizing rather than chasing short-term momentum. Continued earnings growth and constructive management guidance could support further upside, but investors should remain attentive to valuation risk, technology-sector volatility, and the possibility of broader market corrections.
In a market increasingly driven by earnings quality and individual company fundamentals, NetApp represents the type of opportunity I believe deserves attention: a business benefiting from powerful long-term industry trends while demonstrating tangible financial progress.
As always, successful trading is not simply about identifying a promising stock. It requires evaluating the opportunity within the broader market environment and maintaining a disciplined approach to risk management.
Looking Ahead
The market is entering one of the most consequential stretches of the fourth quarter, with corporate earnings, inflation reports, Federal Reserve expectations, and geopolitical developments all competing for investors' attention.
My longer-term outlook remains bullish, supported by strong corporate profitability, continued investment in artificial intelligence, and historical seasonal trends that have frequently favored equities during the final months of the year. However, the economic backdrop is becoming more challenging, and investors should prepare for the possibility of sharper market fluctuations as new information becomes available.
The primary concern remains the risk that interest rates stay elevated for an extended period. Persistently high Treasury yields, combined with expensive energy and slowing employment growth, could eventually weigh more heavily on consumers, corporate earnings, and overall economic activity. Recession risks are increasing, and even a healthy bull market can experience meaningful corrections when financial conditions tighten.
Nevertheless, periods of uncertainty can also create attractive opportunities for investors who remain disciplined. Strong companies with sustainable earnings, healthy balance sheets, and favorable technical conditions may continue performing well even as weaker businesses struggle.
This is definitely a stock picker's market, and risk management should remain at the forefront of every investor's strategy.
At YellowTunnel, we believe successful trading requires more than simply anticipating the direction of the market. Our AI-driven forecasting models, technical analysis, and professional market research are designed to help investors evaluate opportunities within both the broader economic landscape and the fundamentals of individual companies.
By combining those analytical tools with systematic trade selection, timely execution guidance, and disciplined position management, we aim to give subscribers a more structured approach to navigating changing market conditions.
No forecasting model can eliminate risk or guarantee profitable trades, but having a consistent process can help investors avoid emotional decisions and remain focused on opportunities that fit their objectives and risk tolerance.
I continue to believe the market's longer-term bullish trend is intact, with SPY potentially advancing toward 780–810 over the coming months. The key will be whether corporate earnings remain strong enough to offset higher borrowing costs and whether inflation begins showing enough improvement to stabilize the bond market.
For now, the best approach is to remain constructive without becoming complacent. Focus on quality opportunities, maintain appropriate risk controls, and be prepared to adjust as economic data and earnings results reshape market expectations.
There is still reason for optimism, but the investors best positioned to benefit will be those who combine that optimism with patience, discipline, and intelligent risk management.
And one more thing! Our track record speaks for itself from the standpoint of a Winning Trades Percentage, Average Return Per Trade, and Net Gain. Just take a look:
The consistent performance of our services is just incredible. My historical stellar performance is made possible by being right on 82.28% of all trades that I made, with an average profit of 39.79% per trade on our collective trade recommendations. To my knowledge, this trading performance is one-of-a-kind and stands alone in the marketplace for superior trading advice, where our numbers and results speak for themselves.
For the rest of 2026, the market is entering a more selective and demanding phase. On the surface, major indexes remain resilient, but underneath, investors are navigating a more complicated environment shaped by geopolitical tensions, tariff uncertainty, uneven megacap earnings, sticky inflation expectations, and renewed pressure from interest rates. At the same time, labor market data is beginning to soften at the edges, creating a setup where discipline, timing, and data-driven decision-making are becoming more important than broad market optimism.
This is exactly where YellowTunnel becomes essential.
In a market where leadership is narrowing and volatility can return quickly, investors need more than headlines and guesswork. YellowTunnel’s AI-powered tools are designed to help you cut through the noise, identify high-probability setups, track changing market conditions, and stay aligned with the strongest pockets of opportunity. Whether you are looking for real-time trade ideas, advanced stock and options analysis, predictive market data, or a more disciplined trading process, YellowTunnel gives you the structure and clarity needed to act with confidence.
As conditions tighten heading into Q4, the difference between reacting emotionally and following a proven, data-backed approach can be significant. Our goal is to help you stay prepared, stay selective, and stay focused on the opportunities with the strongest risk-reward potential.
Whether you are focused on short-term trades, portfolio positioning, options strategies, or improving your overall trading mindset, YellowTunnel provides the tools, insights, and guidance to help you navigate this market with greater precision.
Let’s work together to make the rest of 2026 a stronger, smarter, and more disciplined period for your portfolio. As always, successful investing begins with informed decisions, proper risk management, and a clear understanding of your personal goals and risk tolerance before entering any trade.
Wishing you a productive and profitable trading week!
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