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S&P 500 is 'bizarrely overvalued' and could crash 49% as recession sets in, elite strategist says
(markets.businessinsider.com)
Be a great time to buy then.
this post was submitted on 17 Mar 2024
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Still waiting for that padded recession the news mentioned a month ago. Padded for the rich investor assholes, but not for the average American.
This "elite strategist" is welcome to short the S&P 500 if he's so confident and not just trying to get attention. The net of all people with money in the stock market disagree with him so he could make some good money if he's right.
Curious, isn't it, that recession talk is coming back right when an election is heating up...
Predictable
AI and related companies are here to stay for the most part. Overvalued in the short term but not in the long term, as again, this stuff is going to stay.
What AI companies are in the S&P500?
Google? Amd? nvidia?
They're not nearly making the money that is being put in yet. It's a giant bubble for now.
The internet was here to stay as well. https://en.wikipedia.org/wiki/Dot-com_bubble
And yet I see a huge difference, as most of these current overvalued companies are solid. They might be overvalued in short term, as the upcoming revenue doesn't reflect the huge pile of investor money yet, meanwhile the dot-com bubble was mostly build on companies without any real value behind. It will get a short drop off at some point because of disappointed investors, but no bubble. AI will replace a ton of jobs and companies will want a piece of this money pile and they'll keep investing into it.
And yet I see a huge difference, as most of these current overvalued companies are solid.
No they are not. They are losing far more money than they are making. They are 100% running on VC funding made possible by cheap loans. Once inflation hits too hard this will all crash.
We do not disagree that AI has a future, however currently AI is not yet automating away all these workers. It's still not used very often in professional settings aside from programming. And it's nowhere near capable to replace humans yet.
AI will replace a ton of jobs and companies will want a piece of this money pile and they’ll keep investing into it.
Current AI companies are not the be all end all. In one year time multiple startups managed to beat OpenAI's GPT4 model. The head start companies currently have is not that big. If the market crashes another company can easily take over. Nobody uses Netscape and Yahoo anymore either.
What companies are you even talking about? Certainly not those in the S&P500 then, this is all about. Of course this is no golden rule, but a few exceptions don't mean bubble.
AI is now integrated in people's office packs and into every coffee machine. It's also already used by a lot of people, students write their thesis with them. People buy AI images from high quality AI sources. Music will be replaced next. Video is in line.
If anything, large companies like Google, Meta and Microsoft, have made sure no startup will ever catch up on this ever again. In AI image and video creation, the gap is widening already, as large companies wall off their sources, have more money for bigger servers and only provide those services by paying. Any remaining ones currently free, will cost money in near future, once people got hooked. No startup will have access to those huge data piles of the big players, who already out speed any smaller competitors.
As we speak those big lobbies bring laws in place, to stay at top. Like overlay pricey regulation no startup can maintain etc.
Then you have all the hardware and service companies managing this for the big players, they have value behind to a certain level of course. If say Meta for instance, cancels their Nvidia order, sure it hurts, but it's not a dot-com total failure.
AI is now integrated in people’s office packs and into every coffee machine. It’s also already used by a lot of people, students write their thesis with them. People buy AI images from high quality AI sources. Music will be replaced next. Video is in line.
Yes but who pays money for them? This is exactly what i mean. Just like with the early web, companies are providing "free" services using VC funding. If that dries up who is going to fund these fun enterprises?
Nvidia is a key player here that they will certainly survive the fall, but OpenAI and others are the first to get cut when there's a crisis. They make no profit, yet they cost money
OpenAI and others are the first to get cut
OpenAI isn't in the S&P 500.
Microsoft is which is basically OpenAI's parent company now.
Yes which supports the op's claim that it is different because the companies doing ai hype are S&P 500 giants with multiple revenue streams, not startups with nothing to fall back on.
For example, MS's stock was at $300 before the AI hype and now it's at $400. It's stock jumped after several quarters of exceeding expectations on revenue from their cloud services- which have little to nothing to do with AI.
Gonna keep contributing monthly like always.
Dollar cost averaging baby!
pushes up glasses ACSHUALLY. Ok, JK.
But for real, DCA usually implies one has a choice. "Do I lump sum this or DCA?" In this case, I don't have a lump sum, I just add money from my paycheck every month.
If I did have a lump sum to put into the market, I would not DCA since DCA does worse ~66% of the time. Most of the time, one would be better off putting the entire sum into the market all at once.
Dollar cost averaging, as in contribute regularly, you’ll buy when things cost less you’ll buy when things cost more it won’t matter over time.
Just keep contributing and the numbers will go up over time.
I'm curious what makes this man an 'elite' stategist.
maybe he was a beloved space exploration game released in 1985?
Hah!
He has slightly better weapons and armor but if you do manage to take him down he does have more loot as well.
I feel like I should gauge people based on this system more often. I'm pretty sure I'm just a commoner with trash loot though
That means you got nothing to lose buddy. High five!
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