I like to post contrarian data points. Not advice! See important disclosures here: https://xitter.cf/t.co/MA7VJvMMjU
Dallas, TX
Joined March 2020
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Loic LeMener CFA, CFP® retweeted
PSA on this: stop googling price returns. They’re always wrong. So is Yahoo Finance (unless you look at historical data and the adjusted price column).
Use testfolio, stockcharts.com, koyfin free, Morningstar, portfolio visualizer free, totalrealreturns.com, etc. Your toilet paper is more accurate than Yahoo or Google! Use that if you must.
THANK YOU FOR YOUR ATTENTION TO THIS MATTER!
I don’t know if there’s anything in finance that drives me crazier than price charts. The major news sites report them and so do brokerage firms.
The brokerage firms at least have an excuse - tax reporting between distributed income and capital change. But everyone else using a price chart should be put immediately in jail.
When the firms with big M&A departments start sounding the warning bells it’s because the end is near and they want to save face
Loic LeMener CFA, CFP® retweeted
You’re not gonna believe this.
5,000 stocks are down 20%+ from their 52-week highs.
And it gets crazier…
Nearly 4,000 are down 40%+.
Think about what that actually means.
While the major indices have held together, underneath the surface thousands of stocks have already been living through their own bear markets.
The index looking fine while individual stocks are getting absolutely destroyed underneath it.
Some seriously messed up shit when you actually look under the hood.
Loic LeMener CFA, CFP® retweeted
I get it, there are nuances for tech-bros who are deep in the weeds. Everyone has an anecdote about why I’m wrong.
Take a step back and be a commodity-bro who’s seen enough supply/demand cycles. Tokens are a commodity. Currently, the token factories are out-stripping token demand. Pricing is the adjustment factor. Except token factories are mostly fixed-price businesses. They have take-or-pay. They have commitments. They will produce tokens at a loss rather than turn off.
I’m not saying that token demand is slowing. It’s still growing at astronomical rates. I’m saying that token production is now out-pacing demand. The cycle will turn when demand accelerates or token production slows. There’s like half a trillion $ of GPUs waiting to be installed. I don’t think token production slows anytime soon.
Yeah, I get it. Jevon’s and all. It’s great for AI consumers and innovators. But the guys owning token factories are gonna all go bust in the process, and that’s like $2T of capex to date. You cannot even restructure these things and crush the debt. They’re just stranded by new, and more efficient chips. They’re always going to be stranded by new chips. More efficient Models will strand the more expensive ones. It’s a race to the bottom against fixed costs. It’s the most godawful business misallocation I’ve seen in a while. Makes the Chinese look like prudent capital allocators🤣🤣
It’s like having iron rails when the new railroads run on steel. This bankruptcy cycle will be epic…
In a normal functioning ecosystem, when the price of tokens drops below the cost of production, the quantity of tokens declines to normalize with pricing. In this case, nothing in AI has any unit economics and you don’t see normalization because everyone is still going full-speed ahead with external funding. (Sort of like shale oil in 2016-2019). Meanwhile, compute prices are based on LT contracts that were signed at above market prices, and are now capital destructive. They’ll eventually catch down to token prices in free-fall.
What we’re seeing here is spot price negatively diverging from term pricing. Usually, when this happens in a cyclical industry, it’s INCREDIBLY BEARISH. Especially when there are take-or-pay contracts that make it difficult to ration supply at prices below cost. What we’re witnessing is a world where losses will accelerate, just as more supply comes online….
Loic LeMener CFA, CFP® retweeted
Absolutely incredible.
Just 10 stocks have driven 70% of the S&P 500’s gain since March 30th.
These stocks have added +16 percentage points to the index’s +23% gain over this period.
Nvidia, $NVDA, has contributed the most, accounting for 13% of the S&P 500's gain, or +3 percentage points.
This is followed by Micron, $MU, Apple, $AAPL, and Microsoft, $MSFT, each accounting for 9% of the S&P 500’s advance, adding +2 percentage points.
Return contributions of AMD, $AMD, and Alphabet, $GOOGL, have been 8% and 7%, respectively.
Meanwhile, the remaining 490 stocks have accounted for just 30% of the S&P 500's gain since March 30th, adding +7 percentage points.
Diversification is dead.
Worth a read! If the AI bubble doesn’t end like past CAPEX crazes, it would be the exception.
THE AI REVOLUTION IS REAL.
But so is the Bubble!
Read this article and tell me you disagree.
Read the FREE article:
henrikzeberg.substack.com/p/…
Loic LeMener CFA, CFP® retweeted
Paul Tudor Jones says markets are “literally exactly like 1999,” split between AI adopters and everyone else, and warns the path may be great short term but not long term
“It still feels like 1999: a two-speed market. You’ve got it completely, perfectly bifurcated in the sense that you have everything that’s adopting AI and everything that’s not, and they’re going in opposite directions. That was pretty much the case in 1999.
“I did this conference about a week ago, and we were going through what period this reminded us of. We were talking about 1999. I asked everyone at the conference, ‘How many of you were trading in 1999?’ There were probably 200 people there. It was about 20%.
“I thought, ‘Oh my gosh,’ because for me it’s just so clear that we’re on this path that could be great short term but may not be so great long term. I forget that so many people haven’t lived this.
“We are literally exactly like 1999 in the sense that we have a two-speed economy.”
Jim Chanos explains why this AI boom carries more financial risk than almost any boom in history
“So, my friend Paul Kedrosky, I don’t know if you heard him recently, he had a wonderful point."
"I teach the history of financial-market fraud, but as part of it, we teach financial cycles because the fraud cycle follows the financial cycle, usually with a lag."
"And Paul made a wonderful point. I think he made it on your podcast, that major booms are either credit-related, government-related, technology-related, or real-estate-related."
"He said this is the first one in a long, long time, if not ever. I forget. I think railroads might have been the other one where all four boxes are checked."
"It’s government policy. It’s certainly technology. It’s certainly credit-driven now. And it’s real-estate-related with the buildout of data centers."
"And so you’ve got four giant drivers for this cycle that all need to be harnessed and going in the right direction, and that increases the financial risk that we’ve been talking about.”
Loic LeMener CFA, CFP® retweeted
This is one of the WEAKEST US equity markets in history:
Only ~29% of the S&P 500's companies have outperformed the index over the last 3 years.
This is near the lowest reading since the 2000 Dot-Com Bubble peak, when this figure fell to ~25%.
The market has almost never been this concentrated.
Loic LeMener CFA, CFP® retweeted
BARCLAYS DESK:
“.. I’ve yet been presented with a credible framework as to where this money is going to come from ..”
Loic LeMener CFA, CFP® retweeted
Nvidia earns a big profit whenever it sells a GPU. Whoever buys that chip, however, does not incur an immediate cost because the purchase is treated as capital spending. Thus, while aggregate cash flows do not change, reported earnings still rise. This has pushed up profits margins in the tech sector.
This is a joke of a market. When people start pricing things off fundamentals again, the losses will be incredible.
Loic LeMener CFA, CFP® retweeted
42 AI stocks have taken 81% of all the capex and R&D growth in the S&P since january 2024, but only 58% of the earnings growth. so they're spending about 1.4x faster than they're earning relative to everyone else, and the gap between those two numbers is being borrowed.
hyperscaler debt issuance is one of the reasons the 10-year is up. so the AI names sell bonds to fund the part of the build their earnings don't cover yet, that supply pushes long yields higher, and the higher yields land hardest on the companies that aren't in the AI basket.
60% of S&P stocks are already 20% or more below their highs and only 30% are beating the index, the fewest since 1991. those are the ones refinancing at 5.25% with no AI earnings growth to show for it.
so the AI build raises the funding cost for everyone outside it, and the index looks fine because the 42 carry it.
if AI earnings start catching up to the capex, this closes on its own. if they don't, the AI names keep borrowing and the other 458 keep paying more for money while they wait.
ALT S&P 500 performance, showing 42 AI stocks dominate capex growth at 81%, earnings growth at 58%, and price return at 67%.
.@gnoble79, @JG_Nuke & Danny Frank cut through the noise with brutal clarity on the AI bubble’s fragility. Paper trillions still mask the cash starvation, but the disguise is slipping. Every AI player is running the same racket of circular financing, affiliated deals & reinsurance style leverage. Past bank & S&L busts will look tame in the rearview mirror by comparison. The scale is nuclear, consumers are levered to the hilt & private mark-to-myth pricing is killing all market discovery. There will be no gradual warning, just a sudden, violent detonation when the fiction collapses. A desert mirage fades as you approach. The AI fantasy is a mirage of mirages that amazingly continues to hold until it detonates & it will.
Loic LeMener CFA, CFP® retweeted
Companies that are doing well just before an IPO don't:
- Refuse to disclose their actual revenue
- "Leak" overstated numbers to the press
- Repeatedly push back the listing date
- Raise huge "bridge" financing rounds
- Claim existential risk to get gov monopoly protection
Loic LeMener CFA, CFP® retweeted
The AI bubble is so ridiculous.
Anthropic is a cash incinerator: it lost $42 billion in 2025, with just $4.6 billion in revenue.
But Anthropic is going full steam ahead with its IPO, and wants a ridiculous $2 TRILLION valuation. Insiders hope to cash out before the bubble pops.
Meanwhile, analysts say Anthropic should really only be worth $150 billion, calling this the "most ridiculous IPO of 2026" and an "unprecedented test of investor gullibility".
The AI bubble is so bonkers that the IPOs of Anthropic, OpenAI, and SpaceX are estimated to be worth $5.2 trillion, which is more than 45 years of past tech IPOs COMBINED, including the IPOs of Google, Microsoft, Amazon, Facebook, etc.
