AI is obviously a bubble.
That said, Burry has also predicted 6 of the last 2 crashes.
More like 20. Besides, most of these articles are just reporters misunderstanding Burry’s trades. Guy is a trader, in and out. By time you know his positions, he’s sold and moved on.
Calling a bubble is easy.
Calling the top of the bubble or the bottom of the crash is the more or less impossible part.
It could very well be a bubble, and come crashing down to a low point that is still higher than it is today.
I agree in principle. It’s getting harder to believe that is possible at this point.
A combination of 1) companies maturing their AI policy and ending the “infinite play time” model most have had since 2021 e.g. cutting spending and 2) open source and open parameter models becoming better and better and cheaper. Data centers will still be in demand for #2 but the ai providers will hurt.
I don’t follow this extremely closely, but didn’t most companies end number 1 at least 6+ months ago?
Just like this “bubble” has supposedly been about to pop for years.
Which one was he again? Was he the Michael Scott or the Patrick Bateman??
I’d probably have better luck shorting stocks if I could trigger a (rightful) panic like this guy can.
I’ve come to realize that I was assuming that there was a limit somewhere to “the market staying irrational”. I’m not so sure anymore
You could argue that a heavily debt-based business that requires years and years of more debt before becoming profitable would respond to rising interest rates quite negatively, but, yeah, the whole thing is already enitrely irrational.
I’m keeping some popcorn in reserve for OpenAI’s IPO.
I don’t get why they haven’t gone already.
If they don’t get their IPO off before the bubble pops, they might be losing out on a trillion with a capital T
The market has never been rational.
It’s a safe bet.
The bubble will burst, that’s our boom-bust cycle. I think we’re at the point where it is always a few bad decisions away.
I’m actually impressed that it’s still going
Coincidentally, The FED was made to stop boom-bust cycles before WWI. It’s never, ever worked, and it will never start working.
“the market cam remain irrational longer than you can remain solvent”
The AI bubble will “burst” as soon as they figure out how to inflict all the damage onto regular working people. The housing bubble bursting is what enabled the ownership class to kick a bunch of working people out of their homes and then buy up all the recently vacated real estate for cheap. Nothing about the damage that the rich did to our economy caused any of them to face any actual consequences.
The promise of AI was that it would replace all the workers, but it’s not doing that fast enough and it’s beginning to look like it never will. We’ve been hearing that the AI bubble will “burst any day now” for years at this point, but if it happened right now, the ownership class are the ones who would be left holding the bag, and that can’t be allowed to happen. When they find a way to take it out of our hides, we’ll see that suddenly the “invisible hand of the free market” will present a scenario such that the floodgates open and the bloodbath is finally allowed to proceed. I imagine that’s why they started wrapping up so many pension funds and the like in AI investments.
ownership class
pension funds
Same thing. Pension funds ARE the ownership class.
I’ve been commenting that people over 55 own 52% of the US and baby boomers as a generation own ~8x more than billionaires as a class, but I re-checked and I’d quoted the wrong number in a bunch of my comments. 52% is for baby boomers only. All over 55s added together are actually over 70%. Let that sink in.
The entire goal of the economy is to let old people enjoy the spoils of the young’s work. Even billionaires are just a symptom of a larger, systemic issue (which is not to say they shouldn’t be hunted for sport, that should still happen).
They own, but they don’t control that ownership. Their savings are used as investment funds, but very few actually know what they are invested in. That control is in the hands of the indexes. S&P, NASDAQ and the like. Just because NASDAQ blessed SpaceX with being part of their index, millions of pensions bought the stock.
They don’t control, yes - the control (on the level of the individual companies) is being handled for their benefit though. Line must go up for the shareholders - aka old people.
…handled for their benefit though.
Theoretically, yes. In reality they’re a long way down the food chain.
So shareholders are now a long way down the food chain? If that’s the case, maybe publicly traded companies aren’t as evil as we once thought.
People investing to try to have a pension at the end of their working life are a long way down the food chain.
i.e. every working person.
On an individual level: Yes. Even a thousand (median) retirees don’t own as much as one billionaire. But in total: All the old people together own an order of magnitude more assets than all the billionaires put together. Because there are so many old people. A large part of it will be their homes of course, but there’s still a metric fuckton of stock in there via retirement funds.
Go look at Amazon for a particularly egregious example of a corporation that abuses its workers. One would think Jeff Bezos owns a huge part of it, but actually he owns about 8% of it, being the biggest individual shareholder. 75% of float and 68% of all shares are owned by institutions. Then look at the biggest institutional holders: They’re all companies providing ETFs and mutual funds. Most of that (obviously not all) is retail investors and retirement funds, as a lot of rich people find such fund investments boring (average ~10% annual growth long term is not enough when line must always go up). Thus a large proportion of the wage theft by Amazon benefits people investing for retirement, or that have already retired.
Some economic systems fix this by giving every worker and every retiree an amount of money every month and not allowing anyone (retired OR working) to have any investments at all. This puts an upper limit on how much any individual person can own and spend. It affects retirees more than workers because retirees are the ones who have had time to amass wealth in their working years. There’s less inequality, but the downside is that no matter how hard you work, your retirement will be exactly the same as everyone else, including those who barely work.
There’s no perfect answer. Under capitalism, workers will naturally feel that the ownership class (mostly old people who were smart and prosperous enough to invest, or lucked into a job with a real pension) own too much. Under communism, retirees are likely going to feel they aren’t being rewarded enough for the hard work they put in throughout the years. But crucially, neither extreme, nor really anything in between, addresses the fact that most countries’ populations are aging, and the lives we’ve gotten used to, have been based on there being fewer old people than working people. That’s why I see only two solutions: We all accept that we have much less (and yes, there should be a wealth cap too), or enough work gets automated that not many workers are needed anymore AND the economic system accounts for it (doesn’t have to be communism, but it can’t be unbridled capitalism)
I have no AI investments outside of shit my pension probably buys
I am looking forward to investor focus moving to stocks I do buy though
I am not a financial advisor, and this is not financial advice.
Maybe you should check how much of your pension is invested where.
It can shock you how much of your money is invested in just 5 stocks.
Then talk to an advisor
