In the 1970s, $SLB surged to become the second-largest oil and gas company in the world, trailing only Exxon at the time.
Consider this: its market cap was larger than all but one of its customers. It was the stock to own, offering full exposure to the fastest-growing oil and gas capital spending markets — particularly offshore in the North Sea which was at the time the fastest growing market for O&G spend.
$SLB's ascent unfolded in three stages, each interrupted by a brief pullback:
Initial Doubt — skepticism about the cycle’s existence, followed by a pullback.
Rising Optimism — growing confidence in the future, followed by another pullback.
Parabolic Euphoria — a final surge where everyone was fully invested, leaving no more "wall of worry" to climb.
Today, there are striking parallels with $NVDA’s rise — from relative obscurity to the epicenter of AI capex.
The decade following $SLB’s peak was not kind to the stock. Will $NVDA face a similar fate?
US firms' default risk hits 9.2% in March, a post-financial crisis high, 29% of energy firms are showing severe early default risk signals, per Moody’s Special Report for March https://x.com/MacroEdgeRes/status/1903498853086560302
...We are at Peak AI & NVIDIA + Peak US exceptionalism at the same time
...And the drop has begun from the parabolic heights, coinciding with a macro destroying event in just over a week
....We know these lofty parabolic moves never ends well,,...it was only a matter of time the mania ends and along with the capital inflows which helped sustained the exuberance.
....The time is nearing close, we may be at the point when we have the last flights out of harms way.
BIG KAHUNA AHEAD!
I don't see Gold underperforming stocks per Gary Savage after $3200.
If Gold could get to $3200, it could get there due to either
1) Gold rising in tandem with stocks as the Fed cuts rates OR
2) Gold rising in increased fear and volatility as trade war breaks sending stocks sharply lower
If (1), the equity market is still holding out a verdict on recession, i.e stays in denial but will resume a downtrend not long after
If (2), the equity market is entering bear territory, and Gold would most likely fall along with it
I think for Gold to hit $3200, (2) is most likely.
You guys may recall that when SVB faced a bank run along with other regional banks, Gold did not fall in tandem with stocks, it rose because it was deemed the safe haven. So we cannot discount that Gold may well diverge from stocks in a trade war scenario as UST is no longer the preferred unanimous safe haven to seek shelter. And that would work to Gold's advantage.
Another thing I want to say why This Time could be Different for Gold.
At this point, there remains very few who actually buy Gold. It has been pretty much the realm of the wealthy who seek diversification and gold bugs. The common reasons for not owning Gold are opportunity cost of holding (no interest/dividend), usually associated with bear (and people don't like investing in bear) and equities have traditionally provided better returns (well no longer true if one seeks to find out). Institutions do not want you to place faith in Gold, the entire capital market needs liquidity, liquidity helps people build stuff for the economy, while Gold $$ are 'dead' in that it does not contribute towards economic development. Hence the reasons for not championing the gold cause.
It is because Gold is still scarcely own by the masses which makes its potential a lot bigger.
If NVIDIA can rise >10x on growth optimism, it is not difficult too to imagine Gold could make 3x* rise (from $3k to $9k) over the course of next few years if the world turns to peak pessimism and investors including mum and dads flock to get a piece of the relic and then you have more Gold ETFs and pension funds buying into Gold just like BTC meteoric rise after BTC ETFs and Govt buying came into realisation.
*AUD Gold did rise 3x between Jan 2007 and Feb 2020 but since 2020, its trajectory has gone a lot steeper.
AUD Gold does best during periods of crisis:
From June 2007 ($765)- Feb 2009 ($1475) during and in the aftermath of GFC- AUD Gold rose 93%
From Jan 2020 ($2377)- July 2020 ($2766) during the short Covid market crash, AUD Gold rose 16% while all other asset classes, including gold stocks were in deep red
During the dot-com crash of 2000, gold prices in Australian dollars experienced notable dynamics. Gold is traditionally seen as a safe-haven asset during times of economic uncertainty, and the bursting of the dot-com bubble led investors to seek refuge in gold. In 2000, the average annual price of gold was approximately USD $279 per ounce. The crash heightened demand for gold, as investors moved away from volatile tech stocks In the years after the crash, gold prices experienced a significant rally, reflecting broader economic uncertainties and shifts in investor sentiment.
The years after the crash is when we see a significant rally. The aftermath of the crash. When there is disillusion with stocks, techs and paper assets in general, and money 'reluctantly' flows into Gold, except this time it is not reluctantly, it would be validation. Validation that fiat era is ending.
So we could see Gold rising to $3200, then fall by 10% to $2900 when stocks (and gold stocks) move into bear territory. The Fed starts easing in a notable way and introduces QE to pump up confidence, and then we see Gold and gold stocks flying together in a new major bull market (while economy and markets reel in recession).
