AI is the go BUT it is probably a short term play and I wouldn't touch our perceived AI related stocks on ASX (they're BS!), the real play is the mega techs but as good as they are, their valuation is now overstretched, which is why it is just a short term play.
The same love is not felt in our resource driven market. We know why, so we should not confuse with what happens in Wall St compared to our local market.
But as I said and what the below suggest, this speculative AI mania is putting global markets at risk...maybe not tomorrow, next week or next month but soon.
This below is an excerpt from Porter Stansberry research about this AI market rally.
Consider this:
Artificial intelligence ETFs are exploding in popularity.
There are now 36 AI ETFs available and billions of dollars have poured into these funds as investors hope to strike it rich on AI stocks. And while you may think this is bullish… it’s the opposite.
Between 1999 and 2000, money managers launched 136 new tech funds and ETFs to capitalize on the dot-com craze. Billions flooded in… and within a year the NASDAQ was down 77%.
Same story with U.S. housing in 2007.
In the lead up to the Great Financial Crisis, 37 new real estate funds were launched. Just a few months later, investors were sitting on more than $2 trillion in losses.
Or take the The Magazine Cover Indicator.
One of the surest signs a market trend is about to reverse.
Simply put, whenever major magazines like Time or The Economist jump on a trend, it signals the end and it could be time to do the opposite.
Case in point, two Citibank analysts studied 50 Economist covers that reported on an investing idea or trend in either a bullish or bearish light.
They found 68% of the covers were wrong within one year of publication and that doing the opposite of what was recommended would have delivered returns that beat the average hedge fund.
This year, The Economist released an issue called AI’s New Frontier.
It’s another sign that artificial intelligence is fast approaching –an imminent event could send artificial intelligence and tech stocks crashing by 50% or more.
