Anonymous OP 21h

In the case of the current market, 35-40% of the weight of the entire S&P500 Index is concentrated in a tiny handful of mega-cap AI and AI adjacent stocks. Essentially, the entire stock market rests in the hands of AI, and once people realize in mass that AI is not as big as they think it is (similar to the dotcom crash), the entire market will nose dive over night.

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Anonymous OP 21h

Furthermore, the Shiller CAPE ratio has climbed quite steadily since approximately 2009, reaching almost record heights not seen since the 2008 financial crisis. Essentially, on average the current stock market is overvalued, and the market WILL correct itself eventually whether people want it to or not. It corrects itself by, you guessed it, crashing! This overvaluation is what lead to the Great Depression.

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Anonymous OP 21h

Finally, the breadth of the market has been noticeably sharpening since the early 2010s. Stocks like the Mag7 (GOOG, AMZN, AAPL, META, MSFT, NVDA, and TSLA) have continued to push headline indexes to all time highs and are, by most metrics, MASSIVELY overvalued (except maybe AAPL, but that’s due to their massive cash reserves). In the last 30 period only about 22% of S&P 500 stocks have outperformed the market. This means the value of the stock market is propped up by a few dozen or so stocks.

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Anonymous OP 21h

TL;DR. The market is broadly overvalued, but more specifically AI companies especially are overvalued doubly so. Once the market corrects itself (and it will correct itself) expect a dark day on Wall Street.

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Anonymous #2 20h

😀

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