Key insights
- The author expresses skepticism about the sustainability of the AI-driven market rally due to high oil prices, weak consumer stock guidance, rising bond yields, and potential rate hikes. They highlight concerns that the rally is fueled by debt and capex, drawing parallels to the 1999 tech bubble, suggesting a potential correction in the next year. The author sold their Micron (MU) position due to these concerns.
I bought mu I think at 385, bought more on the way up, and sold recently. If the strait of Hormuz isn’t gonna open, oil keeps going up, and other consumer stocks are crashing due to bad guidance, why should mu be 700 a share now when we had more hope about the future when it went down to 350 a share? What changed to where it got sold off 2 months ago post earnings but now it should be 900 a share?
the bond market yield is going up and some are calling for rate hikes. So holding here even if the market keeps going up just no longer makes sense, there’s no good way to justify it. Apparently in 1999 tech stocks grew 30 percent then had negative growth the following year, because capex ended. This rally is entirely debt and capex driven so I don’t see how it ends well in a year.