Ishares China ETF has tanked below 2004 price by -45percent.
The S&P500 has went up 280percent since this period.
Both tell a cautionary tale of bull vs bear. One is only smart when the tides in their favour.
I’ve been thinking about what would really Pop the Ai Bubble. It could be a number of different things but what is clear to me is that it’s certainly a bubble
**China could very well be the instrument that pops this euphoria.**
I’ll list several examples that could completely devastate the US Market.
1. China releases an AI model better than any US model. This would devastate investor enthusiasm….Jensen Haung Himself claimed China is way closer than most people realize. With all the US Stocks with AI priced to perfection, this would be catastrophic news.
2. China Invades Taiwan which would completely hault production. They have WW2 claims and Ukraine/Russia tells us we’re not past land disputes. China would immediately gain 10trillions dollars of assets and the factories that make those chips. Which would halt US production causing a big crisis
3. China Builds GPU’s 10 percent worse but 90percent cheaper which again would devastate the outlook of many highflying AI chip companies and it memory producers like AMD,Micron etc
**The US Stock Market is ridiculously overvalued**
We’re sitting at 245percent on the buffet indicator
Extremely absurd leverage/margin ratios
The stock market feels more like a gambling company than an investing platform.
Everyone seems to believe in compound growth without being able to accurately and mathematically make sense of how that math would work. This time is different? Apparently it’s bigger than the internet but ironically that’s entirely speculative.
Nearly all billionaires are having orgyfests around AI with constant marketing campaigns to push their own agendas but you’ll rarely hear any real pushback on their claims about AI. AI is real but not sentient. Tell me what a JPEG is, tell me about software engineering and the coding for AI before you claim like “the godfather of ai” claims that it’s conscious because a machine can copy algorithms 🤦🏻♂️
While buffet is sitting in Cash like nearly every time before a significant drop, many people believe these companies can infinitely grow. If that sounds insane you’re aware. If this hurts your feelings that AI stocks are overvalued, here’s a reality check. The Nasdaq feel 82percent from 2000-2002. There are real risks to these stocks.
**They removed 3 of my points….made about China and AI**