At this juncture, the potential rewards of AI are more than fully priced, and the risks are extremely underappreciated. From Matthew Piepenburg at vongreyerz.gold:
With a NASDAQ and S&P 500 (narrowly driven by seven, mega-cap monopoly powers) enjoying a seemingly immortal ride North, all feels eerily normalized in the land of Wall Street Oz.
Surfing the S&P Wave
An entire generation of wide-eyed investors and a string of clueless policy makers have conditioned themselves (and others) to assume there is no dip that the Fed can’t save, valuation be damned.
In such a seductively sunny backdrop, retail investors are increasingly jettisoning risk management (and risk managers) to passively ride this market wave on ETF-indexed surfboards with very little fear of drowning.
Rocks Beneath the Water?
Meanwhile, a minority of market veterans (Grantham, Buffett, Dalio, etc.) bravely (but in vain?) continue to warn of historical market risk greater in scale than the Nikkei of ’89 or the DOW of ’29 as insiders (Bezos, Zuckerberg, etc) quietly dump billions in private shares in a topping market…
So, whose right or wrong in this bear-bull circus of hidden risks and open optimism?
Are the bears just crying perpetual wolf in a world where the centralization of “once-free markets” by central banks of endless liquidity has outlawed the very laws of stock market gravity?
Madness of Crowds?
For years, the risk-focused bears have been shaking their experienced fingers before what we (and Charles Mackay) have called “the madness of crowds.”
AI is the audacity of hype.
Real world results and facts mean nothing to the demoralized.
(H/T-Yuri B)
Reading about an AI lawsuit when youngster killed himself over no human relationships.
There is no New Man or workers utopia.