Unai CS

MARKETS: A secular bear market is highly likely to follow the peak of the AI capex bubble. Key drivers: 1. A historical pattern of capital misallocation (e.g., building too aggressively to meet pollyannish ROIC expectations and accelerating depreciation schedules) amid waves of post-IPO-lock-up selling; 2. The deteriorating geopolitical world order demands US reindustrialization and global remilitarization, which implies the $28 trillion US net international investment deficit will likely narrow over time from a starting point of foreign investors currently owning 31% of the US stock market; and 3. The deteriorating domestic political order dramatically increases the probability of nationwide wealth taxes, states nullifying federal pro-jobs legislation (e.g., TX & FL), states nullifying federal pro-AI legislation (e.g., CA & NY), and/or outright secession amid rising anxiety regarding employment. Both sides learned the hardest way imaginable in the Civil War that, “The enemy gets a vote.” Do NOT try to time it. Leave such sorcery for cocksure newsletter writers and their gullible victims. You don’t have to sell the exact tops of market cycles to protect your nest egg—insofar as you don’t have to buy the exact bottoms of market cycles to grow it. You’ll be far better off respecting the wisdom of the crowd and responding to capital flow dynamics than trying to pick tops and bottoms. NO INVESTOR IN HISTORY has demonstrated consistent success with the foolish “strategy” that picking tops and bottoms represents. Don’t confuse luck with skill. Don’t confuse an n of 1 with a repeatable process. And, most importantly, stop trying to pick tops and bottoms if you want to retire on time and comfortably. 💜