This time is different...
And, it really is... because of AI...
But, that is unlikely to mean what most might expect...
I think what it means... to have this hyper-speed transition occurring... is that those who adopt it successfully are far more likely to survive the near term market cycle... while those who don't... probably won't.
And, then... as innovation happens in the thousands of start-ups already funded... most will fail... but there will be herds of velociraptors coming after the large market dinosaurs... who are unlikely to win the resulting contest.
In the short term that means we should see what we are... the few big companies leading in AI now... are firing employees as fast as they can... but not because they're struggling... instead of making more money as profit margins rise.
But, of course... if you fire everyone... that's a tad deflationary... as shown during the recent "trail run" in Covid.
And, when you send them their stimmies... that's a tad inflationary...
So, we live in interesting times... and they're likely to become more interesting.
But, handicapping a market decline gets harder when the bubble stock ETFs include AI driven winners... NVDA and MSFT clear leaders... for now. Others... if the earnings aren't up... are not making it.
I looked at NVDA's competition... and it is not the others, like AMD... There are a couple HUNDRED new competitors trying to enter the space... as AI chip designers or fabs. I've not begun trying to sort them, much less handicap them. All of those companies I found are PRIVATE... so, this is not going to be a repeat of the dot.com bubble... at least, not yet. And, then... AI is not "a chip"... but an engine, data, software... and an idea of what to do with them that's not re-tasking them with doing what we were already doing...
Unlike prior "booms" in tech... this one will have... is already having... near term impact... its happening now.
It is not going to prevent a market correction... rather than amplify it...
It will be massively deflationary... but will be concentrating the benefits for a few winners... while making many losers... in EVERY business that can be transformed by it...
And then... it will be ubiquitous... and "the advantage" will evaporate as fast as it wipes out the dinosaurs.
The economic slowdown... will be like watching the dinosaurs or mammoths getting mired in the tar pits... right before they go extinct... while you watch...
Massive opportunities coming...
Keep some powder dry... |
