David GerardFeb 23

Bet against the bubble: Goldman Sachs’ non-AI stock index

https://awful.systems/post/7387786

Bet against the bubble: Goldman Sachs’ non-AI stock index - awful.systems

‘eliminate the noise introduced by the AI hype’ https://www.youtube.com/watch?v=k0grq0yp9Ic&list=UU9rJrMVgcXTfa8xuMnbhAEA [https://www.youtube.com/watch?v=k0grq0yp9Ic&list=UU9rJrMVgcXTfa8xuMnbhAEA] - video https://pivottoai.libsyn.com/20260223-bet-against-the-bubble-goldman-sachs-non-ai-stock-index [https://pivottoai.libsyn.com/20260223-bet-against-the-bubble-goldman-sachs-non-ai-stock-index] - podcast time: 4 min 11 sec

Show threadV0ldek
Do we think that a pop of an AI bubble will not result in a massive wipe all across the board, not just with “AI enablers”? These companies are also going to lose value in a recession.
Feb 24 at 2:42pmWeb
Show threadCinnasVersesFeb 24
Investing is all about relative performance. If you think ‘AI’ stocks are a bubble. you think that some other stocks will do better than them over the next five years, and you can allocate your assets accordingly.
Show threadV0ldekFeb 25
But if both are going to get obliterated in the next five years then the hedge is to buy like, govt bonds. It doesn’t matter if your fund goes down -20% when the entire market went -40%, you’re still losing to the guy who kept his cash under his mattress.
Show threadCinnasVersesFeb 25

That depends, remember that you are losing five years of growth and if you are are a wise investor every year or so you sell some of what is doing best and buy some of what has been doing worse to lock in your gains. Also remember that you have to buy back in to gain anything from that crash, and its really hard to buy stocks when the market has just lost half its value. Most people who ‘successfully predict a recession’ sell too early and buy back too late so are not very far ahead.

But if you really believe that the US economy will crash by say the end of 2027, you think other assets will do better, and there are ways to buy them.

The USA is about 60% of the global stock market by market capitalization. Right now its much less than 60% of my stock holdings.

Show threado7___o7Feb 24
Like David said, it’s a hedge against the bubble being real. GS certainly isn’t pulling back from the void yet.
Show threadDavid GerardFeb 25
I also didn’t say it’s a good hedge. It’ll stay uncorrelated right up to the moment you need it to, when it’ll crash in lockstep.