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A 17-page research report on what broke in this week's tech sell-off and why the skilled money was ready for it. The Nasdaq 100 fell 2.9% in a day, about $1.2 trillion of market value, its biggest daily drop since 5 June, while the equal-weight S&P 500 closed higher and the Dow finished flat: an AI-trade sell-off, not a market sell-off, with money rotating into staples, utilities, healthcare and the banks. The report reads out Goldman Sachs' prime brokerage data: hedge funds shorting US stocks at close to 5-year highs, about 5 short sales for every purchase, short leverage at the 99th percentile and the largest 2-week net selling of global tech in more than 10 years of records, plus Japan's Nikkei entering a technical correction. It then looks at the debt under the AI boom: about $105bn of project finance borrowing this year, roughly 4 times the old record and almost all of it for data centres and chips, the extra interest junk-rated data centre borrowers pay more than doubling since late June, Morgan Stanley's 20 project finance-style junk bonds worth about $46bn with 7 naming CoreWeave as tenant, and Bernstein's $76bn funding hole at CoreWeave. With the 10-year yield at 5.00% and Goldman's AI Leaders basket now moving almost in step with the S&P 500 (correlation up from 0.73 to 0.91), the report explains why AI down now means everything down for the fund inside most pensions. It closes with a seven-point checklist for your own portfolio, from counting the giants and checking fund overlap to setting a cash buffer, and a plain-English glossary. It is an educational explanation of a mechanism, not a prediction of next week's prices.

Goat Academy is an online financial education institution founded by economist and former investment banker Felix Prehn.