"The bad news for a bear is I can't easily dismiss artificial intelligence. It's like selling shovels in the gold rush, and the shovel sellers are completely freaking out."ħ. They don't know what they're going to use the chips for yet. "Everyone is ordering these darn chips to facilitate AI. Then 10, or 11 weeks ago, the rest of the market gave up waiting patiently, and joined in."Ħ. The rest of the market, with its jaw hanging loose, watched as these guys went up 50%, 60%, 70%. AI completely scrambled what was a relatively well-behaved event, and set off initially 10 months of amazing rally by a couple of handfuls of stocks. "We were unraveling quite nicely by historical standards, until that infamous day when they came out with ChatGPT. "There's never been a situation where you had a bubble of considerable dimensions - one of the three great bubbles in American history - where it's been interrupted by a secondary, very focused bubble of a different kind - of artificial intelligence."ĥ. That seems pretty obvious, doesn't it guys?" 'Shovels in the gold rush'Ĥ. You never do well for a long time when you start when everything is rosy. Starting with very high prices is pretty much a guarantee that for the next 10 or 15 years, you will be disappointed. "The higher the price, the lower the return.
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If you want to have a long, impressive rally, you want to see profit margins down, unemployment up, and PEs low."ģ. There's never been a sustained rally starting from full employment. "There has never been a sustained bull market starting from a Shiller price-to-earnings ratio of 33 - it's in the top 2% of the historical range. But in equities, for some reason, they left out the rest of the world."Ģ. In real estate, everything everywhere is in a dangerous bubble.
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"The surprising thing about this entire event is how US it is.