I am not here to debate the bubbliness of it all, or the merits or demerits of AI and all that, or the timeline on which it will collapse. my original bet (made in late 2023) was buying NVDIA, Snap, and Palantir puts that will expire worthless in two weeks unless I spend more to roll them. which I will not, so this is obviously not financial advice, as I am not qualified to give it. and my timing sucked. io am however, hedging in other ways.
I just want to share thoughts on how I am hedging for what I think is going to be an AI bubble burst. again, this is not financial advice, I am a monkey randomly hitting buttons here, and will soon resort to avian augury to divine my path through the market. anyways.
generally, I think tech and anything AI especially are in a bubble right now. their market value keeps going up, and their use generally is staying the same, if not optically decreasing- to that last point, more are more people are starting to see what is and what is not vaporware in the ai space now, and understand the limitations and value proposition of ai than they did a few years ago when this all started. AI has uses, but when I say AI in terms of the bubble and industry, I am talking about generative AI. I think that AI is one of the tools of the future, just not the pure generative kind. machine learning, and other forms of AI that we have been developing for a long time are, I think, where the long term bet is at vis a vis AI as a stable market force rather than AI the generative AI industry.
to that end, I do have positions in TSMC, as I believe that regardless of where the tech industry goes, they, other fabs, and the people who supply them will be the ultimate winners of this bubble, and they who will lose the least when the dust settles.
Venezuela does put a slight damper in my "the US wouldn't be that impatient, and china is way too patient, right?" mantra about Taiwan and TSMC, but I'm convinced Venezuela is an oil play, and the orange man hates anything to do with computers or people who he can't bully.
politics aside, I think that companies like NVDIA and AMD will still be businesses after the dust settles, as long as NVDIA isn't doing an ENRON, but I just dont see their moat as impenetrable. and even if it is, is it protecting as big a hoard as they thing? we saw with deepseek that there are efficiency improvements to be found, which could seriously cut into NVDIA's bottom line.
it is only a matter of time until the market has to reckon with the fact that generative AI just does not do what we want it to do. it is not worth trillions of dollars at the moment in terms of return on investment. days, months, years, I'm not sure, but here are the things I think that are actually making the world a different, better place, and will change the world. basically, good things to invest in, for better, or for worse, that are not AI.
Geospatial tech. I think things like LIDAR, improved GIS networks, long range networks and network access are going to become huge. they already are, but they represent incredible breakthroughs in how we understand the world, and how we interact with it. also huge for how companies provide services
BIOMED- Crispr and mRNA (and similar) vaccines and therapies, and the combination therein. right now the main thing holding these incredible technologies back from being something super commonplace in medicine is
1. no real regulation on using it on embryos and fetuses, or about engineering embryos (there is a ban, but at some point, we will have to address the reality of the probability of use while trying to figure out what is medicine and what is eugenics- quite the sticky wicket, wouldn't you say, since it could both very rapidly add to or detract from human genetic diversity in ways that are impossible to predict, except that they have the potential to alter the evolutionary course of Homo sapiens and everything else on this planet)
2. the process of using it now, though effective, is brutal, and limited I think that the recent sickle cell cure requires someone with sickle cell anemia to undergo bone marrow removal, chemo and radiation, and then the marrow is replaced? I dont know, but it sounds like something not everyone will be able to undergo yet, unfortunately.
3. its so expensive. so so so expensive. millions of dollars for individualized treatment expensive. insurance may or may not cover it expensive.
4. the political climate in many of the wealthiest developed nations vis a vis vaccines and biomedical breakthroughs is not favorable. it is setting us back years or decades from cures.
chips and batteries- I dont know about large scale 50000k a pop chips but more and more computer chips are going in more and more things. I mean lego just chipped the brick. so my guess is more chips, and eventually, AI integration into things that people actually want to/like to use en masse. that means more battery life being used by the average device. even with battery breakthroughs, it will be decades before the lithium battery in some form is replaced just because the infrastructure is so large, and the demand is so rapidly growing. who knows whether we will all be using iPhones, androids, or whatever the next trend in phone or computer or electronic is, but it will likely use batteries, and it will likely use chips. If NVIDIA goes the way of Enron, I think tsmc will still have a waitlist.
hemp and marijuana- I have both optimistic and cynical reasons for these picks. plenty of etfs around for cheap that have invested in OTC or private enterprises that are harder to invest in but profitable if things become legal and/or more widely adopted in the western world. I think marijuana legalization would be a very bread and circuses move for a certain western leader or two, and I think hemp has real potential in a resurgence for use in building materials and fiber applications, among other things. I think that it is inevitable, given the economics of hemp (even big corporations at some point will have to admit using a weed for a lot of things is cheap, someone will figure out the gummed up machinery thing soon I imagine (interchangeable milling and harvesting heads? but I digress) and I am very slowly investing with the hope that inevitability comes relatively soon. that is more of a Hail Mary, and totally at the mercy of political winds.
china- I'm not here to debate china's ascendence to the world stage as one of the top superpowers. its been around a long time, it will be around a long time, and I kinda believe that. I think that they are a stability hedge with growth potential. not to be stereotypical, but china is ahead of the western world in almost every metric that seems important to a healthy future as a nation besides their political system (which is honestly the most democratic its maybe ever been in its long history, though this is mostly concerning problems of allegations of forced labor and some real systemic xenophobia?as an American, I shall not throw stones at glass houses) and I believe that their economy is set up for success, in that I believe that economies in a capitalistic world economy are only as successful as both the gross amount of resource that they exploit, and the rate at which they exploit it. china has an incredible amount of natural and human resource to exploit, and are rapidly increasing their capacity to exploit it in the long term via education and research, renewable energy initiatives, and policies meant to support the environment. I make no ethical judgement there, some is good, some is bad, again as an American, can't speak to that one (we have national parks. we also created the conditions for them to burn to ashes uncontrollably, with the best of intentions). anyways, I think china's industry and economy in general is something I want to invest in, trying to stay away from companies that even have a whiff of slave labor about them.
things I'm not investing in
AI
Social media, though reddit as a pick and shovel play for ai is interesting to me
precious metals: I have in the past, seems to popular these days again. the stability was in the relative unpopularity vs. fiat
crypto: dont get me started.
things I should be investing in:
land
myself <3
would love to hear everyone's thoughts.
again, no financial advice here, just me musing out loud, we are all a Boltzmann brain floating in space....