The entire US economy is currently being propped up by growth in the AI/tech sector. And I am convinced that LLMs are fundamentally incapable of delivering on the promises being made by the AI CEOs. That means there is a massive bubble that will eventually burst, probably taking the whole US economy with it.
Let’s say, for sake of argument, that I am a typical American. I work a job for a wage, but I’m mostly living paycheck to paycheck. I have maybe a little savings, and a retirement account with a little bit in it, but certainly not enough that I can retire anytime in the near future.
To what extent is it possible for someone like me, who doesn’t buy into the AI hype, to insulate themselves from the negative impact of the eventual collapse?
Real estate is a trouble prone investment normally, much less in this crazy market; I specifically wouldn’t want to touch that right now.
Can’t speak for metals, but also be careful there…
Thing about a bubble like this is you don’t know when it’s going to pop. I like the saying “the market can stay irrational longer than you can stay solvent.”
What I’m saying is to be careful about going all in on more pure hedges. If this lasts another 4 years and one’s into stuff like XMAG and metals, and they drop in a crash anyway, you may end up in a worse position than if you had held the S&P 500. I think a better perspective is to avoid “buying a hedge” and instead invest in companies (or other assets) one thinks will be productive and grow with the bubble or not. They’ll grow however long the bubble goes, and keep growing after.