Key insights
- The author posits that the ongoing war is artificially propping up the market due to the perceived upside risk of its potential end. They argue that the actual end of the war could trigger a market crash, exposing underlying economic vulnerabilities like inflation and rising interest rates. The author expresses concern about overvaluation, particularly in AI-related stocks, and the dependence of companies like META on consumer spending.
Anyone else get the feeling that Trump ironically needs the war to continue indefinitely to prop the market up? He can announce the war has ended weekly for that little pump, and no one wants to sell or short the market because of the upside risk of a big move up the day the war actually ends.
Ironically, I can imagine the war ending as the catalyst for the market to crash back to reality when the upside risk is removed and we are left with inflation, an oil shock, rising interest rates, and circular financing.
Edit: Most of these responses are "companies making lots of money stocks go up straight line forever." Just shows we are at peak euphoria when a lot of us are up 100%+ in a month and still so delusional that we think another 100% is coming. I am not even bearish on AI but to think think the fastest and largest short term run in stock market history is not overdone... that is a wild take.
Where does META get its money? Almost entirely from ads to the consumer. You can scream the economy is K-shaped all you want, but if the consumer is struggling the ads stop coming and the revenue stops increasing. This goes for every company down the line. Passing billions between companies in "investment" is not real revenue.