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☆ The AI boom reminds this expert of the dot-com bubble — with one dangerous difference
▼ + stars: | 2024-05-05 | by ( Theron Mohamed | ) www.businessinsider.com time to read: +3 min

Read previewThe AI boom resembles the dot-com bubble — but there's one big difference that makes this craze far more dangerous, says one expert. "Many dot-com companies that drove the internet change went broke doing it. Many AI companies driving as big a change will go broke or lose half their value." "The giant AI pioneers won't go broke, but if AI losses drive their stock prices down, lots of investors will suffer," Gordon said. He's previously drawn a line between the dot-com bubble and the tech-stock boom.

Persons: —, Erik Gordon, Gordon, He's Organizations: Service, Business, University of Michigan's Ross School of Business, Nvidia, Microsoft, Big Tech

☆ 'We are still in a market bubble': A famed economist who called the 2008 recession warns the S&P 500 is as vulnerable as it was before its 25% fall in 2022 — and shares 3 signs of hidden weakness
▼ + stars: | 2024-03-16 | by ( William Edwards | ) www.businessinsider.com time to read: +6 min

Just because the current valuation backdrop isn't as extreme as 1999-2000, we are still in a market bubble, and valuations are even more stretched today than they were at the market peaks in 2007, 1990, and 1980." Rosenberg ResearchSecond, the S&P 500 is outperforming the HYG/TLT Ratio. AdvertisementRosenberg ResearchAnd third, even tech stocks, which have been overwhelmingly supporting the S&P 500, appear to be running out of gas, Rosenberg said. The same goes for Paul Dietrich, the chief strategist at B. Riley Wealth, who says the S&P 500 could fall 49% when the current bubble pops. The bull market has thrown egg onto their faces again and again: since the October 2022 lows, the S&P 500 is up a whopping 42%.

Persons: —, David Rosenberg isn't, Merrill Lynch, Rosenberg, he's, manias, HYG, Michael Hartnett, Jeremy Grantham, Paul Dietrich, Riley Wealth, Dietrich, Grantham, Carol Schleif Organizations: Service, Rosenberg Research, Business, Equity Model, Dow Jones, Dow Transports Index, Bank of America's, Bank, America, BMO Family Office

☆ An agency created an AI model who earns up to $11,000 a month because it was tired of influencers 'who have egos'
▼ + stars: | 2023-11-24 | by ( Sawdah Bhaimiya | ) www.businessinsider.com time to read: +3 min

A modeling agency created AI-generated Aitana López after encountering issues booking real models. AdvertisementA Spanish modeling agency said it's created the country's first AI influencer, who can earn up to €10,000, or $11,000, a month as a model. Euronews reported the news, based on an interview with Rubeñ Cruz, founder of the Barcelona-based modeling agency The Clueless, which created the influencer. The AI-generated woman, Aitana López, is a pink-haired 25-year-old. The agency created the images using Photoshop.

Persons: —, it's, influencer, Euronews, Rubeñ Cruz, Aitana, Cruz, Marta Biino, Emily Pellegrini, Fanvue, Will Monange, Biino Organizations: Service Locations: Barcelona, Instagram

☆ 'Manias die in vicious ways': A pair of fund managers who have beaten 99% of their peers over the last 5 years warn the S&P 500 will shed at least 30% of its value when the current bubble pops
▼ + stars: | 2023-08-26 | by ( William Edwards | ) www.businessinsider.com time to read: +5 min

They likened the current environment to the dot-com bubble around 2000. Cole told Insider he thinks the S&P 500 will lose at least 30% of its value in the years ahead. "This financial euphoria episode has gone to a sustained high that makes the dot-com bubble look like small change," he wrote in the August 22 letter. Smead is the founder of Smead Capital Management and comanages the Smead Value Fund (SMVLX) with his son, Cole. Don't take that to mean the S&P 500 will deliver low returns every year until 2033.

Persons: Cole Smead, Cole, Bill Smead, Smead, Russell, Akin Oyedele, It's, Manias, Bill, Dubravko Lakos, Lakos Organizations: Smead Capital Management, Yahoo Finance, it's, Netflix, Visa, Mastercard, Paypal, Smead, Federal, JPMorgan, CNBC, Conference

☆ Stories Like Norman Rockwell Paintings, if Rockwell Painted Guillotines
▼ + stars: | 2023-07-24 | by ( Dwight Garner | More About Dwight Garner | ) www.nytimes.com time to read: +2 min

In one of the new stories, people become obsessed with climbing ladders until one fellow disappears into the sky. “Green” is about a town that gets rid of its lawns and trees, only to long for them back. From hints in his diary, it appears that he liked to lie on her stomach and make love to her navel. In another scene, a naked little woman slides down a large man’s ear, to apparently profound effect. Little things become fashionable.

Persons: Millhauser, “, Rod Serling, ”, Gulliver, Nicholson Baker, shuddering Organizations: “, People Locations: strolls

☆ A fund manager who's beaten 99% of his peers over the last 5 years warns stocks face 'destruction' as hype around AI stocks lifts valuations to dot-com-bubble levels
▼ + stars: | 2023-07-01 | by ( William Edwards | ) www.businessinsider.com time to read: +5 min

The S&P 500 is back within an earshot of its January 2021 all-time high as it rides what is now a 24% upward charge back into bull-market territory. And the founder of Smead Capital Management is betting his strategy work for him again when the hype around artificial-intelligence stocks sputters out. Smead Capital ManagementThat means bad news for the broader index when the episode is over, he said. Smead Capital ManagementSecond, the top seven stocks in the S&P 500 have a collective price-to-free cash-flow ratio near 70. Smead Capital ManagementAnd third, the tech sector of the S&P 500 is hitting valuation levels last seen during the dot-com bubble.

Persons: Bill Smead, you've, Smead, Mike Wilson, Morgan Stanley, José Torres Organizations: Morningstar, Smead Capital Management, Apple, Microsoft, Meta, Nvidia, RCA, Smead, Management, Interactive Brokers, Reserve

☆ Ron Insana says an AI bubble may be forming, but we're not there yet
▼ + stars: | 2023-06-09 | by ( Ron Insana | ) www.cnbc.com time to read: +4 min

How to trade it Let's remember the elements of a bubble, as defined by many market historians who have written about such financial market phenomena (myself included). The public increasingly has been buying related tech stocks and associated ETFs, but we have yet to see the single-minded focus of the entire stock buying world come to bear on AI stocks. In 1999 alone, some 456 stocks went public at the height of the internet mania. If there is to be a bubble in AI, it's the early days. Also, "easy money" from the Federal Reserve, a key component of financial frenzies, is not fueling speculation in publicly traded AI shares, or any other asset class for that matter.

Persons: Jaap Arriens, Charles MacKay, John Kenneth Galbraith, Edward Chancellor, Charles Kindleberger, David Faber Organizations: Nurphoto, Nvidia, Microsoft, Google, Oracle, Adobe, Fund, Nasdaq, CNBC, Federal Reserve Locations: Sea, Mississippi, England, France

☆ AI stock picks: A portfolio manager overseeing more than $1 billion shares 6 firms he's betting on — and how to spot opportunities without getting caught up in the hype
▼ + stars: | 2023-03-24 | by ( William Edwards | ) www.businessinsider.com time to read: +5 min

Artificial intelligence is here to stay, says Gregg Fisher, the founder and portfolio manager of $1 billion Quent Capital. "I don't even think I can name a business that's not using AI in some capacity. Fisher shared six small-to-mid-cap stocks he invests in that he's put through this analysis and that have exposure to AI. 6 AI stocks to watchThe first firm Fisher named is RanPak (PACK), a $419 million firm that uses AI for packing solutions to reduce cardboard waste. He said they're using AI to predict when customers are set to have problems, and alerts business owners so they can preemptively reach out.

☆ Nasdaq closes out its first four-quarter slump since dot-com crash
▼ + stars: | 2022-12-30 | by ( Ari Levy | ) www.cnbc.com time to read: +7 min

The only other negative four-quarter stretch in the Nasdaq's five-decade history was in 1983-84, when the video game market crashed. watch nowOther than 2008, the only other year worse for the Nasdaq was 2000, when the dot-com bubble burst and the index sank 39%. Numerous companies went bankrupt, most notably crypto exchange FTX, which collapsed after reaching a $32 billion valuation earlier in the year. In total, Nasdaq companies have shed close to $9 trillion in value this year, according to FactSet. At its peak in 2000, Nasdaq companies were worth about $6.6 trillion in total, and proceeded to lose about $5 trillion of that by the time the market bottomed in October 2002.

☆ Billionaire investor Charlie Munger defends the Fed's inflation fight - even if it causes a recession
▼ + stars: | 2022-11-16 | by ( Theron Mohamed | ) www.businessinsider.com time to read: +3 min

Charlie Munger defended the Fed, saying it needs to curb inflation even if the cost is a recession. Warren Buffett's right-hand man compared the US central bank to the sober person at a party. "That's what they're supposed to do," Munger continued. "They're supposed to be the one guy at the party that doesn't hang around the punch bowl getting drunk." "If you look at Japan today, you would find that the central bank has made our central bank look like a little mouse that hardly tries to do anything," he said.

☆ The FTX Crypto Fiasco
▼ + stars: | 2022-11-11 | by ( The Editorial Board | ) www.wsj.com time to read: 1 min

This week’s investor run on the FTX crypto-currency exchange marks round two of the great crypto crackup, and so far the victims are consenting adults. Barring an unexpected spread to the banking system, this is another in the long line of easy-money manias turned to panic. FTX CEO Sam Bankman -Fried has been the crypto industry’s leading champion. This year he engineered bailouts of several troubled crypto firms, including lenders Voyager Digital and BlockFi Inc., as plunging digital asset values exposed bad bets and computer coding. Recall the May collapse of stablecoin TerraUSD, whose stable value was based on an algorithm.

☆ Insana: The manic speculation behind the fall of FTX is as old as the markets themselves
▼ + stars: | 2022-11-10 | by ( Ron Insana | ) www.cnbc.com time to read: +2 min

Sam Bankman-Fried, co-founder and chief executive officer of FTX, in Hong Kong, China, on Tuesday, May 11, 2021. Lam Yik | Bloomberg | Getty ImagesWith a nod to Gertrude Stein, "there's no there there," in the world of cryptocurrencies. Whether it's manias in Sumerian grain markets, Dutch tulip bulbs, railroad bonds and everything from internet service providers to digital currencies, leveraged speculation is as old as markets themselves. Digital assets that don't exist in reality have been used as collateral to buy and sell other non-existent assets with a heavy dose of borrowed money. This creates a daisy chain of interlocked digital tokens that have no inherent value except what people are willing to ascribe.

☆ Chamath Palihapitiya blames the Fed for 'perverted' market conditions that benefitted him
▼ + stars: | 2022-10-26 | by ( Lauren Feiner | ) www.cnbc.com time to read: +3 min

Billionaire investor and so-called SPAC King Chamath Palihapitiya said the zero interest rates the Federal Reserve allowed to persist for years created the "perverted" market conditions he benefited from at the height of the pandemic. "We are learning what went wrong, which is that we had a decade-plus of zero interest rates," Palihapitiya said of the market. Low interest rates mean lower returns on savings accounts, which can encourage more spending in the economy, which can be a boon for high-growth assets. So on the same way that I sort of blame Jay Powell for zero interest rates, I think I massively benefitted from Powell, and Bernanke and Janet Yellen before," he said, referencing past Fed chairs. WATCH: Chamath Palihapitiya unwinds two SPACs, cites high valuations and market volatility

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