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by nemo161816 hours ago |
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upvoteby nine_k16 hours ago|
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I think this is reality-distortion field rivaling that of Jobs', and a crisis of faith. Nobody apparently believes that capital is worth investing into anything but AI.
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upvoteby randomNumber715 hours ago|
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> Nobody apparently believes that capital is worth investing into anything but AI.

This is the main reason we see this insane investment into AI imo. If you imagine having lots of money, where should you invest that currently?

Housing market: Seems very overvalued (at least in germany). Also with the current uncertainty and inflation its hard to make an investment that pays back over 20-30 years. So building is also difficult.

Stocks are very volatile currently. Not only since Iran. To me it seems since the financial crisis 2008 investors don't enjoy stocks as before.

Gold: Only if you are paranoid about collapse of society. It doesn't make sense to invest into s.th. without interest rates.

Crypto: Same as gold, but better if you like gamling. I would assume most people who are very rich don't gamble with most of their fortune.

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upvoteby nine_k15 hours ago|
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Looking around, and especially forward, it would be military tech, e.g. [1], and its supply chain, e.g. [2] :-\ Valuations are not as crazy, but I bet there'll going to be a lot of demand in the coming decade, unfortunately.

Chip production, too, of course, but it's overflowing with money already, apparently. It's growing though, because there are real actual shortages of stuff like RAM and SSDs, there's money to be made immediately if you can. Chinese RAM manufacturers are building out like crazy.

[1]: https://www.ultimamarkets.com/academy/anduril-stock-price-ho...

[2]: https://www.marketscreener.com/quote/stock/RHEINMETALL-AG-43...

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upvoteby teeray14 hours ago|
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> Looking around, and especially forward, it would be military tech, e.g. [1], and its supply chain, e.g. [2]

Only viable if you’re okay with the ethical implications of funding war.

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upvoteby nine_k14 hours ago|
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Would you be fine with the ethical implications of funding the industry to fight WWII? Would you consider funding Ukrainian military unethical? Or Taiwanese?

This is, sadly, not theoretical, and I'm afraid we'll soon see more of such choices, not fewer.

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upvoteby zer00eyz13 hours ago|
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> it would be military tech

Anduril is the only company in this sector in the US that has any promise and they aren't even public. Most of us are not going to get our hands on this.

Traditional defense sector looks more like Jeep, or Kodak...

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upvoteby class3shock11 hours ago|
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Anduril has yet to deliver anything of consequence. I hope they shake up the industry but to say they are the next hot thing and write off the primes at this stage is premature.
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upvoteby nine_k9 hours ago|
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Invest in the Ukrainian drone producers which proved themselves on the literal battlefield! Some of the Gulf states already did.
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upvoteby nine_k13 hours ago|
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The demand for more Patriot missiles is large, now that much of the stockpiles have suddenly been spent. Raytheon should do fine just based on that.
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upvoteby iririririr2 hours ago|
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this admin will probably source patriots made in china
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upvoteby lotsofpulp14 hours ago|
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> Stocks are very volatile currently. Not only since Iran. To me it seems since the financial crisis 2008 investors don't enjoy stocks as before.

These returns do not qualify as “enjoying stocks”?

https://investor.vanguard.com/investment-products/etfs/profi...

The returns are higher than before 2008, the previous 15 years are unprecedented.

https://www.macrotrends.net/2526/sp-500-historical-annual-re...

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upvoteby triceratops14 hours ago|
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> To me it seems since the financial crisis 2008 investors don't enjoy stocks as before

Maybe in Europe. The US stock market has nearly tripled since then. Literally the best period of stock growth in history.

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upvoteby jacquesm13 hours ago|
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"The Roaring Twenties roared loudest and longest on the New York Stock Exchange. Share prices rose to unprecedented heights. The Dow Jones Industrial Average increased six-fold from sixty-three in August 1921 to 381 in September 1929. After prices peaked, economist Irving Fisher proclaimed, "stock prices have reached 'what looks like a permanently high plateau.'"

https://www.federalreservehistory.org/essays/stock-market-cr...

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upvoteby timr9 hours ago|
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You can argue that current market multiples are higher than 1929 [1] - and they're certainly high - but this also ignores the mechanism that drove that crash, focusing only on the symptoms. We simply aren't doing the kind of consumer margin buying that drove the '29 crash. It isn't even close. Average schlubs were leveraged to the stratosphere to buy shares of boring industrial stocks.

[1] https://www.multpl.com/shiller-pe

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upvoteby jacquesm9 hours ago|
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> The US stock market has nearly tripled since then. Literally the best period of stock growth in history.

The only thing I meant to point out was that a very high stock price by itself is no guarantee that there isn't a crisis around the corner. We plugged a lot of holes after 2008 and then reversed a lot of those fixes, I hear retail investors talking about their stocks at birthday parties again. Deja vu... of course this time it will be different. Or not. Let's just say that with the proverbial bull in the earthenware goods store on the loose if we only end up with another financial crisis that might actually not be so bad.

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upvoteby triceratops13 hours ago|
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Ok second best :-) I wasn't alive in the 1920s though
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upvoteby jacquesm13 hours ago|
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True, but it is close enough in time that we should heed the lessons learned lest we repeat the experience.
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upvoteby hunterpayne9 hours ago|
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Do you know the actual lessons of that crash? Because we don't allow retail investors to go 10:1 on leverage anymore. There are a lot more lessons and none of them apply to this situation (even Glass-Steagall). This is much closer to the dot com crash in 2001 in how it looks, just a lot more concentrated and probably a bit bigger. If all you got is "number go up too much" then you probably shouldn't be investing your own money.

The good news is that its almost all rich folks money on the line here and a small amount of dumb money. That's very different than, 2008 where it was mostly the indexes that got hit and that's more middle class/upper middle class concentrated.

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upvoteby heathrow8382910 hours ago|
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you gotta have some of all the above actually.
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upvoteby woah9 hours ago|
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OpenAI is making $24b a year. It's a 32x revenue multiple. High, but not insane. Spinning this as a story of overinvestment doesn't make sense.
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upvoteby duchef2 hours ago|
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Are you conflicting price to earnings to price to revenue?
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upvoteby dlev_pika14 hours ago|
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I wonder what is not getting invested in bc AI has been crowding out everything else since 22.

It has to be brutal out there for everybody else, if all the money is going to AI.

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upvoteby bandrami14 hours ago|
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But they're really cagey about actually handing money over to them today
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upvoteby roncesvalles15 hours ago|
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It's the result of too much echo chambered bullshit floating around daily about how capable LLMs really are. It's literally crypto/blockchain all over again. It's one big lie that a lot of people have bought into which causes it to self-perpetuate, like religion.
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upvoteby burnt-resistor11 hours ago|
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That's the tao of hyper-financialization. It must keep growing irrational exuberance big and up forever like stonks or it bursts like DotCom and tulip mania. It's funny money that cannot be liquidated for real value for more than a tiny fraction of the imaginary trillions being thrown around. Similarly, Nvidia $4T mkt cap makes absolutely no sense when it has but a few incestuous customers-parters-investors throwing around tens of billions each per year devoid of fundamentals like essential service offerings that turn a profit. Those handful of whale customers will make their own chips or cease buying large qtys at any time.
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upvoteby gavinray16 hours ago|
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  > At least they're throwing consumers a bone via the ARK deal.
I had to look this up. There's a venture fund you can invest in with as little as $500 as a consumer -- though it's limited to quarterly withdrawals.

https://www.ark-funds.com/funds/arkvx

The fund is invested in most of the hot tech companies.

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upvoteby squirrellous12 hours ago|
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ARK was all the rage around early pandemic time when wallstreetbets was in the news a lot. Most people probably know it from then.
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upvoteby frankfrank1313 hours ago|
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An ARK ETF is a smell to me. Besides, based on their holdings, i would never invest. 18% of the fund is SpaceX
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upvoteby torginus11 hours ago|
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Even a billion dollars is crazy money. If you have a company with a subscription service that costs $100 yearly, you have ~2m customers, with a 50% profit margin. Your company makes ~100m every year in profit. Imo that's what is actually worth a billion dollars, maybe even a bit less.
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upvoteby hunterpayne9 hours ago|
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That company is probably worth about $8b, FYI. Obviously that's an estimated average but a P/E ratio of 80 give you that valuation.
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upvoteby chilipepperhott14 hours ago|
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I would not call an effective 2.9% expense ratio "throwing a bone".
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upvoteby munk-a14 hours ago|
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Also, the valuation for such a debt laden company should be viewed with great skepticism. I'm afraid a lot of mutual funds will end up holding the bags.
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upvoteby mizzao13 hours ago|
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It's not that far off from the standard 2% mgmt fee and 20% of excess performance?
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upvoteby a13n14 hours ago|
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VCX (Fundrise) has way more exposure than ARKVX
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upvoteby xlbuttplug27 hours ago|
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It's also trading at a huge premium. Probably worth a read if you're considering it: https://www.morningstar.com/funds/fundrise-innovation-is-not...
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upvoteby carlosjobim14 hours ago|
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The money is worth much much less than it was before, we live in times of global hyper inflation.
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upvoteby rvz16 hours ago|
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> At least they're throwing consumers a bone via the ARK deal. It's crazy how little AI exposure is available to anyone who isn't already wealthy and/or connected.

It is deliberate. Period.

It's always been known that you make money in the private markets and pre-IPO companies and retail is the final exit for insiders and early investors.

Retail is not allowed to be early into these companies (Because that would ruin the point of being an insider) and this "exposure" has to be at the near top.

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upvoteby 7 hours ago|
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upvoteby monkeydust15 hours ago|
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There are ways now for retail to get in to these companies including, check out hiive or equityzen...just beware of massive dilution.
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upvoteby lotsofpulp14 hours ago|
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Who are "these" companies? Did retail get into Google, Facebook, Amazon, Tesla, etc before the top?

Also, aren't AI businesses losing a lot of money each year? Pretty sure there is some risk involved that is not good for retail.

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