AI crash call not looking too genius

[jonnyfrank]

The AI crash seems to be delayed. Are these stock markets about done with this run up?

[MarkD]

I would suggest the projection for "crash" is not necessarily indicative of immediate cascade or drawdown. I recall some discussion regarding the huge sum of cash the big players now control, like 93% of the market. Which means slow death imo when considering how long it may take for a major correction to unfold.

Is this an accurate assessment, dunno. But a lot of sales and earnings between large tech are not wide spread throughout corporate America/foreign companies. They are selling to one another, hence, concern that if non-tech/other entities aren't buying, how will this closed business loop resolve? Reminds me of that broken window fallacy by Frédéric Bastiat. But the following is interesting regardless and is more to your point.

https://ibb.co/pBDSZcvQ

And there are indications the product they are producing is being warehoused. Which, if true, this is stale product in a short period of time (months) as advancements in hardware continue to evolve.

https://x.com/kakashiii111/status/2045629763772174519

Also recall the 2000 collapse when dot bomb occurred. Lots of internet built out but no revenue. Seems to me this one is carefully crafted so the balance sheets look healthy but sales beyond this group isn't happening yet.

My other perspective is that Bessent has to refi the entire US debt over the next couple of years. Meaning lower rates for longer HAS to occur. So, how and when do US treasury rates usually come down?

LT US treasury rates have likely bottomed (this is few years old but important - blends into Sol's teams strategy of why value/commodity based vs tons of tech stock selections). Down periods for rates can be directly tied to US dollar weakness, leading to increased cost of commodities and sideways stock market performance (1968-1982). But the 1980s economic miracle was also aided by a weaker dollar regime (The Plaza Accord). And the % of commodity stocks is at a historical low point of the S&P.

From Adam Tooze a few fortnight ago shows the gradual collapse of commodities (energy and materials sectors) in US stock market sector capitalization. Very much at a LT low even today.

https://adamtooze.substack.com/p/chartb ... et-turmoil

This is a monthly LT chart which shows how I perceived the market. Bonds lead (already dropped hard), Stocks follow bonds, commodities follow stocks, and the dollar indentifies potential turns in bonds (as rates drop, bonds go up and the trade weighted dollar goes down).

https://ibb.co/wr8Qm75B

https://ibb.co/v4YqdgdT

This is my way of saying I wish I understood all of this back in 1960s during the Nifty 50 stock period. I would be so far ahead of the game even without direct knowledge of actual historical events.

And if this means anything, guess who else is back in town.

https://www.thestreet.com/economy/henry ... rket-shock

In closing, a close professional colleague of over 40 years just read Sorkin's book on 1929. He was aghast that the same organizations that created that mess are still running the show. I replied with the fact I have a library full of books which outline their behaviour before, during and after The Great Depression.

[jonnyfrank]

With the utter silence on this board, I am thinking the Dolphin Club boys are getting the two week jump on the real info while we get the scraps. I have noticed this since the deal with the Dolphin Club.

[SOL]

The image below says more than a long explanation ever could. It shows how quickly things can turn, especially for those still buying near the top.

Right now the AI sector relies on new buyers to keep pushing it higher. That works until it doesn’t. It’s usually cleaner to focus on sectors that are being ignored or just starting to get attention, where the risk-reward balance is more in your favour.






Housing peaked in mid-2006, but the real break didn’t show up until late 2008, after credit stress had been building for over a year. The dot-com peak came in March 2000, yet a sharp rebound into September gave the impression things were stabilising. In both cases, the top was a process, a slow distribution phase, not a single moment you could circle on a chart.
AI is showing a similar pattern. Liquidity can keep the move going longer than expected, but it doesn’t change how it ends.

We’re not chasing it. Profits are being taken elsewhere, and capital is being moved into areas where expectations are still low. Trying to short a crowded trend too early is where most people get hurt.

If you look at the Vector portfolio over the past six months for example, it has held up better than most AI names. The goal should never be to nail the exact top or squeeze out every last move. Those who tried that in 2000, 2008, and similar cycles paid for it.

[MarkD]

I am somewhat expecting a 1968-1982 market for equities, up and down multiple times.

https://ibb.co/B2PVnJfT

And here is gold, proxy for commodities in general.

https://ibb.co/HTVDqK4M