🟪 Friday Hyped Charts
Equities have gravitated back to the all-time highs after a two-week spell of searching for something to worry about and coming up empty.
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"Never, ever invest in the present."
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Friday Hyped Charts
Equities have gravitated back to the all-time highs after a two week spell of searching for something to worry about and coming up empty.
We tried worrying about inflation again, and then gave stagflation a spin — but neither stuck.
That leaves us with just "less rate cuts than expected" for a bear case, which won't do much to dampen animal spirits.
Certainly not among Big Tech executives who only seem to be getting more bullish.
Meta, for example, has already spent nearly as much on GPUs as the US spent on the entire Manhattan Project (inflation adjusted) — and has plans to spend even more, even faster.
Not to be outdone, Microsoft is reportedly planning to build a $100 billion supercomputer that’s so powerful it will take several nuclear power plants to run it.
Fortunately, all this computing power will do much more than just serve us up ads we’re more likely to click on.
(Note: Please click on the ads above and below.)
On Wednesday, Alphabet announced its new AI model, AlphaFold 3, which they expect to "significantly accelerate scientific discovery."
The new model will be immediately helpful in drug discovery, but its impact should be felt far beyond that: What can scientists do with a model that can "predict the structure and interactions of all of life’s molecules"?
What can’t they do might be the better question.
Investors are excited, of course: Yesterday, Mistral AI announced that it’s raising money at a $6 billion valuation, up from a $2 billion valuation just six months ago.
(By contrast, the FTX estate seemed inexplicably pleased with the 78% return on this week’s sale of the Anthropic shares SBF bought three years ago.)
Mistral’s rapidly rising valuation could well be a sign that investors are getting a little overexcited, but the legendary investor Stan Druckenmiller said this week that, while AI may be overhyped now, it’s probably underhyped on a longer-term view.
For investors, the long-term is of course more important, as he’s previously advised us: "If you invest in the present, you’re going to get run over."
Druck, Meta, Microsoft, Alphabet, Mistral: They’re all investing — aggressively — in the future.
Maybe we should too then?
But to make it to the future, you have to first avoid being run over by the present.
So let’s look both ways before we cross Wall Street to invest — by checking the charts.
The scariest chart of the week:
The best we could do for something to worry about this week was initial jobless claims, which rose to an eight-month high of 231,000. Not very scary, is it?
Broke: switching jobs.
Woke: not switching jobs. People are increasingly happy where they are.
Home equity rising:
Mortgage rates back above 7% may make it impossible for anyone to move, but they can at least feel good about living in $16.9 trillion of equity. Two thirds of US households own their own home.
Aggressive investing:
The three biggest AI spenders are expected to spend nearly twice as much on capex this year than they did last. Whether that works out for their investors is an open question, but the capacity they’re building will benefit everyone, regardless.
Rational exuberance:
It’s easy to think we’re in an AI investing bubble comparable to the dotcom bubble that burst in 2000, but it’s different — this time, there’s earnings. Per this chart from BofA, tech stocks haven’t outperformed any more than tech earnings have done.
Magnificent forecasts:
As hyped as the Magnificent 7 has been, their earnings forecasts have been underhyped. Mag 7 forward estimates (right) have risen 20% in the same time period that estimates for the other 493 stocks in the S&P 500 (left) have fallen 15%.
The future may be even more hype than we think.
Have a great weekend, future-investing readers.
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How to Fix Crypto Lending
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In this episode, we sit down with Bill Barhydt, CEO and founder of Abra, to discuss the company's journey through the crypto lending crash and their groundbreaking SEC approval as a registered investment advisor. Bill shares insights on the benefits of separately managed accounts (SMAs) in the crypto space and how they differ from the pooled funds model that led to the downfall of many crypto lenders. He also dives into the future of banking, which he believes will be shaped by the tokenization of real-world assets, access to DeFi, and the use of SMAs to minimize risk. The conversation also touches on the current regulatory landscape in the U.S., the potential impact of the upcoming election on the crypto industry, and Abra's vision of empowering people to be their own bank.
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The yield curve has now been inverted for +500 days
The last 3 times this happened was:
1. 2008
2. 1974
3. 1929All ended with more than a 50% market crash
We expect a final rally before recessionary concerns takeover in H2 2024
— Game of Trades (@GameofTrades_)
2:01 PM • May 10, 2024
The Bitcoin holdings of the ETFs have been flat for a while.
Bitcoin’s price has been stuck around $60,000 for a while.
This is not a coincidence.
— ecoinometrics (@ecoinometrics)
11:37 AM • May 9, 2024
Here's an embedded version of the Broken Money video.
-An analysis of the past, present, and future of money, and how technology impacts it over time.
-How the current disequilibrium (transactions way faster than settlements) creates centralized and corrupted money clusters:
— Lyn Alden (@LynAldenContact)
4:26 PM • May 10, 2024
recent research
Research
MetaDAO offers a platform for DAOs to engage in futarchy, using conditional markets and profit incentives for improved decision-making. Conditional markets allow market participants to speculate on whether or not the passage of a proposal will increase a token’s market value. By crowdsourcing information from market actors, DAOs can utilize futarchy to identify decisions that will be most beneficial for their token’s market price. MetaDAO as an organization is explicitly engaged in decision-making on the criteria that market participants believe a decision will be accretive to the price of the META token.
by Luke Leasure
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