Everyone's Watching Stocks. The Real Bubble Is AI Debt

52 pointsposted a month ago
by zerosizedweasle

34 Comments

pjb88

a month ago

Any ideas of where to invest just now?

Seems like there's lots of warnings about equity bubbles, bond/debt problems, economic issues that will affect inflation (UK/EU), and gold is mega high. Seems like everywhere you look it's doom?

krupan

a month ago

Long term or short term investment? One time lump sum investment or investing a little each paycheck? What's your risk tolerance? The answers to those questions are needed to answer your overall question well

pjb88

a month ago

Long term. Like normally I do a mix of index funds wide diversification plus bonds 80/20, but even vanguard (despite always saying "get a plan and stick to it, tune out the noise") are all of a sudden saying they're under weighting growth stocks.. (Which I think is a bit strange that they don't acknowledge that it's different from their normal strategy)

krupan

a month ago

Long-term is easy, and what you describe you are doing sounds fine. The hardest part is when you forget it's for long-term and worry about short-term events like recessions and bubbles. Don't let those short term things shake you! It's going to be fine

nitwit005

a month ago

If everything seems too expensive, and you're confident enough the prices will go down, you should just hold cash and wait.

saulpw

a month ago

This is specious advice. Never hold 100% anything.

Especially cash. Maybe/likely the US Fed will pump trillions of new dollars into the economy in random places and cause massive inflation.

So let's say we hold 25% cash, or even 50% cash. We still have to allocate the other 50-75% somewhere. Where?

rchaud

a month ago

Allocate it to a bank account with deposit insurance and go long on "peace of mind". Losing 3-5% of purchasing power over 12 months' time is better than losing 15% or more in an overnight crash and have to wait for the government to intervene and prop values back up.

deepserket

a month ago

Just buy an all-world ETF (or another similar instrument, depending on your local tax laws) for the long therm.

Who cares if there is a bubble or not. The world economy will still grow.

user

a month ago

[deleted]

therobots927

a month ago

Spain. $EWP. Also pretty much any other developed nation stock index.

It’s the new flight to safety after gold.

csto12

a month ago

Why Spain?

therobots927

a month ago

Who knows. But thats the country up the most last year.

sph

a month ago

Ah yes, the good old investment advice: if a stock has been going up, it’s time to buy.

Good luck with that strategy.

bdangubic

a month ago

I heard this about NVDA in 2020 and 2021 and 2022 and 2023 and 2024 and 2025 and now 2026… if the stock is going up it is 100% time to buy if you know what the F you are doing. if you don’t know what you are doing then you sell when the stock is going up :)

sph

a month ago

If you know what you are doing, you do not rely on external random and irrational signals like market price.

Also, past performance is not an indicator of future performance. Hindsight is always 20/20.

bdangubic

a month ago

> you do not rely on external random and irrational signals like market price.

I don’t, but too many people do :)

therobots927

a month ago

Oh and what’s your strategy Mr. Buffet?

sph

a month ago

For one, Mr Buffet coined the aphorism “be fearful when others are greedy, and greedy when others are fearful” and here you are suggesting the literal opposite.

therobots927

a month ago

I don’t think one year of outperformance counts as greed. There’s a reason I didn’t recommend gold.

hippo22

a month ago

During the dotcom bubble, Alan Greenspan recognized that irrational exuberance was driving the market to unsupported valuations. He said this in 1996. The bubble wouldn’t pop for many years. In fact, the deepest nasdaq market correction was still above the nasdaq value when he initially made his comment. The point is, time in the market > timing the market (at least for most people).

aagha

a month ago

He then went on to create the housing financial crisis.

cornhole

a month ago

the one Japan blog post recommended the Nikkei 225 while the yen is still dogshit

user

a month ago

[deleted]

tabs_or_spaces

a month ago

interesting that no mention of nvidia in there?

also really surprised that tech companies have more debt than cash on hand. would be really interesting to know how apple fares in this comparison too.

zerosizedweasle

a month ago

Not really surprising that the debt is greater than cash on hand. The buildout has gotten really extreme at this point. Basically eating everything in economy from credit to RAM.

dinofp

a month ago

Can't get past the paywall but who the F already didn't know this for over a year? Go read Ed Zitron, Bloomberg, you're drunk.

lovich

a month ago

I’ve read Mr. Zitrons articles and recently exited a 10 year old position I held with Nvidia due to his analysis, but this part of the article was news to me

> The investment requirements are so large that equity financing alone won’t do. The balance sheets of many of the major players have been altered significantly. Looking at Meta’s annual statement before ChatGPT was released to the public in November 2022, it had over three times as much cash as debt on its balance sheet. Last quarter it had 15% more debt. Microsoft had 30% more cash than debt pre-ChatGPT. Now it has almost 20% more debt. Amazon, which has traditionally had a more leveraged balance sheet, now has over 50% more debt than cash

I was still under the impression that all the faangs had more cash than liabilities, I wasn’t aware that had flipped

VirusNewbie

a month ago

Why hold cash when you're a money printing machine about to go into an inflationary period?

therobots927

a month ago

Even if you’re correct about entering an inflationary period that doesn’t mean money is better in chips than cash. Chips can depreciate faster than cash even in an “inflationary environment”. They’d be better off buying back shares.