Market maverick Mike Frazis is harnessing the power of artificial intelligence to navigate the volatile financial landscape, as his investment fund rebounds dramatically, surging 83% from its April lows. This impressive recovery follows President Trump’s declaration of a global trade war on April 2, which initially sent shockwaves through the markets.
Frazis, renowned for his affinity for growth investments, has integrated AI systems into his risk management strategy. These systems generate buy or sell signals based on price momentum and other quantitative factors, aiming to prevent a repeat of the significant losses experienced in 2022.
“We’re using AI and ChatGPT to build risk models with my full-time software developers,” Frazis told Livewire. “The models moved us to 50% cash in April, and then in late April and early May, we got buy signals on growth stocks we liked.”
According to data from Morningstar, the Frazis Fund has experienced an 83% increase from its April 17 low to July 18. This surge is attributed to strategic investments in sectors such as semiconductors, superclusters, next-gen biotech, and the social news aggregator Reddit (NYSE: RDDT).
Strategic Investments and AI Integration
Frazis highlights Nvidia as a straightforward entry point into AI investments but notes that smaller companies offer potentially higher returns. “We had companies like Credo and Astera Labs. If you look at those charts, you’ll see over 100% moves [since April]. We also bought some of the fallen angels – companies like Elf Beauty and Transmedics that dropped 60% or 70%, but then also recovered over 100% from the April lows.”
Reddit’s growth further underscores Frazis’ strategy, with the platform’s user base expanding by 21% and revenue growth reaching 78% for the June quarter. The company boasts a gross margin of 91%, making it a lucrative ad business.
“If you search on Google now, you’ll get Reddit results,” Frazis says. “That authentic conversation [on Reddit] around niche issues is also helpful to AI.”
Risk Management and Future Outlook
Frazis expresses confidence in his AI systems’ ability to manage risk, suggesting that their price-modelling signals could have mitigated the losses of 2022. “If we had these systems in January 2022, we would’ve sold and moved to cash, then it could’ve been a great year for us, as we would’ve got back into the market in January 2023,” he explains.
Looking forward, Frazis anticipates that the fund’s latest unit pricing will reflect a 41% increase net of fees over the calendar year 2025. He remains committed to a high-risk, high-return strategy, supported by a structured process to shift to cash during downturns and re-enter the market strategically.
Biotech and Future Ventures
Frazis, who holds a chemistry degree from the University of Oxford, has also capitalized on the resurgence of the ASX biotech sector. The Frazis Fund’s holdings include Amplia Therapeutics (ASX: ATX), Syntara Ltd (ASX: SNT), and Clarity Pharmaceuticals (ASX: CU6), all of which have surged following the market’s recovery post-April 2.
“In both Amplia and Clarity, we invested in their recent capital raises,” says Frazis. “We’ve now put $30 million into pre-revenue Australian biotech. Amplia is developing treatments for pancreatic cancer. It announced two complete responses in [patients] in a small trial.”
Frazis is also preparing to launch an exchange-traded fund (ETF) on the ASX, under the ticker ROAR, symbolizing boldness. The ETF will consist of 20-25 US companies with market caps of at least US$1 billion, with an anticipated launch date of October 1.
This development represents Frazis’ continued commitment to leveraging AI and strategic investments to navigate and capitalize on market opportunities, underscoring his reputation as a forward-thinking investor.
