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Alright, lemme get this straight. We're supposed to believe that AI, this magical black bo...
Alright, lemme get this straight. We're supposed to believe that AI, this magical black box that nobody *really* understands, is going to save the world? Give me a break.
AI Bubble 2.0: Are We Really This Stupid?
The "Next Big Thing" Always Is... Until It Isn't
GMO, this $64 billion investment firm, is out here saying AI is a classic investment bubble. And honestly, they ain't wrong. We've seen this movie before, folks. Dot-com boom, housing crisis, crypto craze... the script never changes. Hype, speculation, inflated valuations, followed by a swift and brutal correction. Rinse and repeat.
Ben Inker at GMO calls it a bubble with "very high valuations and signs of rampant speculation." He's not even trying to sugarcoat it. And why should he?
These firms are comparing it to the dot-com bubble. Remember Pets.com? All those companies that promised to revolutionize the way we buy dog food or whatever, and then vanished into thin air? Are we really any smarter now? Or are we just throwing money at the "next big thing" because we're afraid of missing out?
And the quantum computing stocks shooting up 1200%? Seriously? What is this, a goddamn cartoon?
Magnificent Overhyped Seven? More Like the Delusional Six.
The Magnificent Seven: More Like the Overhyped Seven
John Pease at GMO is calling out the "Magnificent Six" (basically the Magnificent Seven minus Tesla). They're trading at 30 times earnings. Thirty times! What kind of fairytale future are these guys banking on?
He says these companies are shifting towards physical investment, "which is very different." Ya think? Building AI infrastructure ain't the same as writing software. It's capital-intensive, risky, and historically, it hasn't been a great deal for shareholders. Who benefits from all this? Certainly not us. Consumers maybe... but shareholders? I doubt it.
And this whole "AI will change everything" narrative? I’m not buying it. People said the same thing about the internet, and offcourse it changed things, but it also created a whole new set of problems. Income inequality, misinformation, social media addiction... the list goes on.
But wait, are we really supposed to believe that some lines of code will solve world hunger, cure cancer, and bring about world peace? Or is it more likely to automate jobs, spread propaganda, and make the rich even richer?
AI Bubble Bursts? Time to Short Japan?
So, Where Does That Leave Us?
GMO is suggesting international stocks and deep value stocks as alternatives. Developed market value stocks and non-US small-cap value stocks, particularly in Japan. I mean, sure, why not? It's not like anyone in the US is paying attention to value these days.
AI Is 'Classic Investment Bubble,' GMO Says. What to Buy Instead.
But here's the thing: even if AI *is* a bubble, it doesn't mean the whole market is going to crash. GMO is saying there are still opportunities out there. You just have to look beyond the hype.
Maybe I'm too cynical. Maybe AI really *is* different. Maybe this time it *really is* different. But history tells us otherwise. And I'm not betting my money on "maybe."
So, What's the Scam This Time?
