longshot prediction: the AI bubble gets popped this month by the SpaceX IPO, so get out NOW

[paulkienitz]

When SpaceX asks for $1.75 trillion and doesn't get it, that might be the moment that the AI stock market bubble stops inflating and starts tipping into a crash. I'm leaving this here just on the off chance that I get to say "called it" later.

But seriously, it's time get out of the stock market. Especially index funds and anything large-cap. My hunch is that this danger has gone from looming to urgent. Start the process of getting out TODAY, if you haven't acted yet.

[multigraincracker]

1. Sold my last 3 stocks. Moved money to a

Money market account based on gov bonds to protect against inflation. If market crashes, cash will be king. Impossible to pick highs and lows, but there are some things you can do to be ready.

[edhopper]

2. You may be right

But Wall Street has shown itself to be fools when it comes to AI.

[yardwork]

4. If the Democrats win back Congress this fall I predict a stock market correction.

They call it a correction. I call it deliberately crashing the market when they can blame Democrats.

[edhopper]

22. Trump will still be President

And get the blame

[GreatGazoo]

3. There are no crashes anymore. Market is rigged and irrational

Looks like only the QQQ will have to buy the SpaceX IPO with a time constraint but even then only in proportion to the float which is low. Morningstar thinks SpaceX will make up less than 1% of the SPY so even if SpaceX became worthless in August the "crash" for those holding passive indexed funds would be less than -1%.

It is a ponzi scheme but so is the whole economy. That's why we have $39 trillion debt. The crypto bubble got Ponzi'd into the AI bubble, eg lots of crypto mining infrastructure got rebranded as "data centers". Crypto is crashing right now but the market isn't.

Losing the Iran war and struggling in Ukraine is driving investment in new weapons systems. "Space" mostly means military systems like satellites, hypersonic missiles and directed energy weapons (DEW). Airplanes and tanks are getting replaced. No expense will be spared.

My prediction: SpaceX is not profitable as is so it will use some of the IPO money to buy related companies that are closer to profit or already in the black: RDW, RKLB, LUNR, RCAT, etc. Many of these have doubled in the last month.

I would not sell SPY and would hold off on buying more QQQ until the dust settles a bit but crashes are now impossible. The stock market is socialism (ironic) for Boomers and the investor class. Investors and banks are the only ones that get bailed out in a downturn (see 2008 and March 2020). They will print enough $$$ to backstop the markets no matter what. I like GLD or GLDM right now. Easy call -- it will continue to rise as oil reroutes and output increases. Shiny rocks.

GLDM will be over $120 by year end, up 30% from right now. Has good support at $85-87 so danged little risk now.

https://www.marketwatch.com/investing/fund/gldm

[paulkienitz]

11. That kind of rigging can't hold forever

in the face of continued overinvestment in stuff that won't pay for itself.

[GreatGazoo]

15. and yet here we are

Lost a war with Iran = market goes up 20%

[Melon]

5. The issue is how many times have we been told to leave the market?

My portfolio is up 20% this year. Slightly more last year. It’s literally changing my retirement horizon.
The message was to leave last year on trump election. The message was to get out end of 2025. I absolutely know individuals who did and are now really far behind.
I used to get in and out for these reasons, and at the end of the day never came out ahead.
Market timing is a bad bet usually. Take some profits sure, but on a multi year crime horizon no. I would even say it’s at your own risk of returns to not be invested in AI and yes…space X. There are bubbles but the US through 401k accounts has a continuous influx of investment cash going into the market. AI is the foreseeable future and the most successful entrepreneur in the world is Musk. It’s just as risky to bet against those things.

[ITAL]

8. Yeah, that's where I am

Maybe if I were older I'd take everything out...but even if there's a big crash on the order of '08, the market recovered within a few short years.

[edhopper]

23. It took six years to recover

And ONLY because Obama and the Dems were in power in 09.
This time you have Trump.

[ITAL]

24. Six years isn't that long for me

I'm in my late 40s. I'll probably see at least one more crash before retirement.

[edhopper]

28. Or get out now and

Buy in after the crash, You won't recover in 6 to 10 years, you will quadruple your investment.

[Melon]

32. Preferably you are cost averaging.

In December, everyone who cashed out due to doom are down 20% to the markets in only 6 months. That’s multi years of returns for the average investor. They can’t buy in now because of more doom.
The market would have to lose 20% if you’ve taken no gains just to get you back to that time.
It’s crazy to try and time and a huge losing strategy.
You are better off cost averaging with your purchases or just investing more conservatively.

Cashing out also means your down another 3% to inflation. Crazy.

[edhopper]

33. There are other investments

Besides equities

[paulkienitz]

9. No it's not "just as risky".

The only "risk" of being out is that you might miss a share of an ill-gotten ponzi windfall.

[Melon]

21. Ill gotten ponzy...huh? You mean investment returns.

I’m sure people have said that for 100 years.
You would be yelling at cars from your wagon in 1908. Yelling at the clouds today.

You can invest in others success and get a return on it or become that success and start your own business. Then sell shares but I guess then you are the head of the ponzi scheme.

You are losing money sitting in cash. You can invest and at some point make more in interest than you need to live. Then you retire.

Or work until you’re dead. Whatever.

[paulkienitz]

25. "others success"? There is no success to profit from in AI.

AI is popular only because it's been massively subsidized by suckers. The data centers they're building will never pay for themselves. That's the key difference between true investment and a ponzi bubble.

[Melon]

31. Go read what Sam Altman is saying. Uber and

Others. Companies are burning through massive AI budgets in months. The layoffs and 401k cuts posted here due to AI because AI is taking their budgets.

That’s where you’re wrong. I see it at my company. We are now allocating huge budgets to stay ahead in AI. They are building massive data centers because massive amounts of money are being spent on AI. It’s all not speculation. This is where spending is going. The stocks are through the roof because they are taking spending today’s times projected growth multiplied by exactly that…time.

[GreatGazoo]

16. WSJ and Gallup did a story looking at how Democrat voters are losing money

because they are more inclined than others to predict, or even want, financial collapse.

https://www.wsj.com/finance/investing/investment-portfolios-politics-6d186f91

[ColoringFool]

17. "Democratic." The adjective form is "Democratic."

[GreatGazoo]

20. I could have put a hyphen in there but noun

one who votes for Democrats.

I identify as a Democrat, not a "Democratic". In theory, all voting is democratic (adj)

[Johnny2X2X]

6. No

Market is going to do well, it's completely divorced from the economy now. Do not let politics affect your money. Stay in, but of course hedged in your mix.

[paulkienitz]

10. I've heard that song before.

Every bubble, just before it pops, gets heralded as a new era where economic fundamentals are no longer a relevant limit.

This bubble is going to collapse as soon as it sinks in that all the new AI models and datacenters are unable to recoup their costs from paying users.

[Johnny2X2X]

12. We've been waiting decades for a bubble

Been like 18 years now. Kept going up under Obama, under Trump, under Biden, and now under Trump again. At each stage there were people who sold for political reasons and missed out on record gains. If you sold under Trump's first term, your portfolio missed out on fantastic gains. If you sold because things looked dire during Covid, you missed out on incredible gains. If you sold when Trump took back over you missed out on very broad and significant gains.

Some people have been predicting a crash for decades now, there are more signs that we are about to see incredible growth than a significant pull back, and that's even if an AI bubble falters.

[paulkienitz]

14. Index funds are like 50% AI bubble now.

[Johonny]

7. People are predicting the market is holding on

To pop one more time for the SpaceX IPO.

In reality, the 1970s oil embargo saw a recession stock market crash that took 6 to 9 months to realize. The market is likely to see a significant oil endured pull back by late summer...

[CanonRay]

13. I turned some investments into a newer and larger house

in a location impossible to duplicate. Those funds are now pretty crash proof, although not very liquid.

[ColoringFool]

18. I'll just keep my NVIDIA,TYVM.

[paulkienitz]

19. Jensen Huang is pulling sooo many circular-financing fast ones...

[Ziggy Beans]

26. Heard the same shit from Thom Hartmann a few years back

The stock market doesn't crash anymore

[paulkienitz]

29. That same lie was told before the last two crashes.

[bucolic_frolic]

27. imho Fat gains should be pruned. Rotation is underway.

The overall market is weaker than is apparent. Time to hoard cash and prepare for the next opportunity. That's been the gist of many professionals interviewed on financial YouTube channels. A lot of people who worked professionally in Big Bank trading operations are now retired with nothing to do but become analysts. Some of them know a lot, and most are not political. But as always, do your own due diligence.

[multigraincracker]

30. Simple....

Buy low, sell high..

Most do the opposite.