Medium Size Me
At $773.55, I moved to medium-sized short $SPY.
Position: Short SPY (M)
The Defeat of Value Investing
Position: None
My Comment of the Day
Dougie Kass
I couldn’t disagree more with Joe Terranova on Halftime now (I am not posting on Twitter!).
Though I am not high on large cap tech my disagreement is not that I don’t think AI related stocks will begin to outperform.
It is the degree of confidence/hubris that he is expressing in his view that the AI momentum trade will resume.
Position: None
Programming Note
I have a business luncheon — out from noon to about 1:30 PM
Position: None
Doug Kass: Move Over Warsh, Nvidia Might Be Lender of Last Resort
Let’s look at who is really the most powerful banker in the world right now.
Recommended Viewing
A great MRKT Call today with Dan and Carter.
Lets go to the tape.
MRKT Call – Wednesday, October 21st
Position: None
More on Circular AI Financing
I wanted to make one more point on the circularity, which continues to fly under the radar.
The revenue quality issue.
See tweet below:
The circular financing goes well beyond Nvidia ($NVDA) and others funding their customers. It is also the Venture Capital firms who are financing the consumers of the compute, in the hopes that another greater fool takes them out at a higher valuation.
These companies that the VCs are financing are consuming the bulk of compute, NOT corporate America, which actually has a balance sheet and sustainable businesses of their own volition. There is no shortage of data coming out that corporate America is finding little utility from AI. In fact the data shows the opposite and it is becoming more clear that AI is just a cost.
At the end of day, AI is really all sort of an inter-linked Ponzi scheme and money recycling operation, underpinned by public market valuations that I believe have been goosed by Nvidia. The demand for compute is coming from businesses that really should not, and do not need to exist, and are just being financed by VCs that effectively are funneling money to compute infrastructure, in the hopes that valuations remain high and a greater fool takes them out of their investment.
But most will go the way of Character AI – with $2.7 billion in market capitalization to near zero… in a heartbeat.
Position: None
Added to My SPY Short
I just added to my $SPY short at $771.48.
I am a scale seller on more strength.
Position: Short SPY (S)
Charting the Late Morning Market
Breadth
SOURCE: Barchart
S&P500 Indices
SOURCE: Barchart
% GAINERS, DECLINERS
SOURCE: TheStreet Pro
Nasdaq 100 and
S&P500 Heat Maps
SOURCE TheFly
