Where is the evidence behind this? Yes the Nasdaq sold off, but who said this is because of AI jitters? Who says it because investors are questioning whether AI is worth the hype? Did Bloomberg interview all these big investors who sold tech stocks today?
… or are they just telling the narrative that will drive the most eyeballs? Because they can’t have a lame headline like “$1T wiped from Nasdaq because there were more sellers than buyers”???
I know its “bloomberg” but we can’t just blindly believe everything they tell us.
At the end of every trading day, news reporters confidently state the reason behind whatever stock rose or fell that day. They must be very wise as they don’t seem to interview anyone before making these proclamations.
News reporters don't write the narrative - it is traders, analysts and economists.
"I did everything perfectly, but stuff outside my control blew up my otherwise winning trades - it would have been even worse if not for my quick thinking" is the correct answer for when your boss asks "Why did you lost $50million today?".
It is what he told his boss back in the 00's when he was in your seat and it is what some junior will tell you in 20 years time when you are in the corner office.
Financial news headlines have been like that forever. They feel like they have to attribute the drop to something so they just come up with whatever sounds plausible. It doesn't even matter that they're often contradictory, like in a week I wouldn't be surprised if I saw the headline "Nasdaq 100 makes huge gains on AI's booming future."
They are in on it. They have to explain it somehow so it doesn't look like market is starting to deflate or head down... Even if some of these valuations are at point where that is not entirely unreasonable.
Worse than trying to attract eyeballs, they’re lying to put down an industry that threatens the existence of traditional media and especially media like them that relies on advertising
> - The selloff was triggered by a middle-of-the-road earnings report from Alphabet Inc. late Tuesday that featured a bloated capital expense.
Nobody knows what triggered the selloff, it's a global market with millions of actors doing actions based on numerous sources of information. More than that we come off a peak of hitting SPY500 ~$600 and NASDAQ100 at $20.5k which are all time highs and it's very normal to retrace a bit after - but even that doesn't mean much.
Whenever someone tells you the reason for a stock market move, all they're telling you is what they believe did it, but they have no clue, other than specific critical situations as like, after 9/11 attacks. For company specific "this is why" it's much easier, but even then many times it does the opposite of what the analysts' previous explanation was. They just tell you something because they know people want a "reason".
They could've easily written "after historic rise and new all time highs, some investors take profit" and it'd also be correct.
It's like a bunch of guys looking at a CPU metric in grafana without SSH access to the server or knowing what it's running trying to figure out the cause. Sometimes it pins at 100% and some guy shouts "it's paging to disk", and yeah, might be, might also not.
There was a massive sell off(consolidation) happening from Jun 20th until Jul 2 on the S&P. I know I made some profit off a buy position, but noticed that the trend continuation was taking incredibly long time to start, which is rare in a uptrend. This sell off was already in the works, not to mention sell structure that developed at the top. I wouldn't be so quick to say these things are random. Institutions with billions of dollars don't do things randomly. There was no black swan event this time. It was just time for the over bought market not only to correct but to actually reverse.
This is based on institutional theories or smart money of how price plays out in the chart. I have developing my theory for years using those principles(i.e Wycoff Methods[1]
> Nobody knows what triggered the selloff, it's a global market with millions of actors doing actions based on numerous sources of information.
Using this argument, you can basically discard any kind of inference on any large system. That’s not particularly convincing. It’s not because something is complex that you can’t a posteriori conjecture links between causes and consequences at a macro level.
What economic journalists and analysts mean when they say a move with triggered by something is that both events happened in a time frame which is conductive to saying a correlation exists. Turn out that Google published is earning Tuesday with larger than expected capital expenditure and little return to show for it and then the market tanked. That’s what they mean by reason and that’s how everyone understands it. We know the market is large and made by a lot of actors. We are not dumb.
You are free to think it’s all random happenstance. I’m free to think you have an axe to grind and prefer denial to rational thoughts.
It really was a matter of when. What real progress have we seen since people first experienced ChatGPT and the hype started? Investors have been very dumb throwing money on anything AI and they're starting to realize it.
It is pretty much impossible for the investment cycle to be perfectly aligned with the value creation cycle. The dotcom bubble laid the foundations for the cloud and the modern internet. But keep in mind the valuations right now are nowhere close to the valuations in the dotcom bubble. Compared to back then we are not in a bubble at all or at just the beginnings of one.
Except these might be long term duds.
The latest AI bandwagons hype cycle invites silliness.
One would be wise to look at the entity in questions overall health prior to announcing aome whole-hog AI effort.
Due dilligence, etc
The market can stay irrational longer than you can stay solvent, as they say. I have tried to make guesses that turned out to be right, with negative returns, because price was detached from value. I don't think that's how securities markets are meant to work or how they work optimally. I don't think the liquidity that pro-HFT people insist is so good means it's net positive. High frequency trading outfits, market manipulators, and trend chasers gain too much while more reasonable investors get sucked dry. A bunch of people have benefitted from predicting sentiment-based price and selling out of overinflated crap just in time. I believe the distortions that behavior creates are unhealthy for the overall economy and disincentivize smart investment, generally.
We have investment based on hype and lies, and the outcome is that the actual labor the market implores is misdirected and falls short of its purpose of raising the net quality of life through real creation of value.
Apple, Microsoft, and Nvidia may be long term duds? Certainly there are some, but the article talks about the Nasdaq100. The odds of all of them sucking and being down in a year are pretty slim.
I have some pets.com I am happy to offer to you at a 90% discount from its all time high. Act fast, you don't want to miss out on a once in a lifetime opportunity.
Readit News
… or are they just telling the narrative that will drive the most eyeballs? Because they can’t have a lame headline like “$1T wiped from Nasdaq because there were more sellers than buyers”???
I know its “bloomberg” but we can’t just blindly believe everything they tell us.
"I did everything perfectly, but stuff outside my control blew up my otherwise winning trades - it would have been even worse if not for my quick thinking" is the correct answer for when your boss asks "Why did you lost $50million today?".
It is what he told his boss back in the 00's when he was in your seat and it is what some junior will tell you in 20 years time when you are in the corner office.
- The selloff was triggered by a middle-of-the-road earnings report from Alphabet Inc. late Tuesday that featured a bloated capital expense.
- The declines mostly affect companies strongly linked to the AI push: Nvidia, Microsoft, Apple but also Broadcom, Tesla, etc.
- Some analysts lead by Goldman Sachs have been beating the AI bubble drum for a bit now while multiples remain very high.
Nobody knows what triggered the selloff, it's a global market with millions of actors doing actions based on numerous sources of information. More than that we come off a peak of hitting SPY500 ~$600 and NASDAQ100 at $20.5k which are all time highs and it's very normal to retrace a bit after - but even that doesn't mean much.
Whenever someone tells you the reason for a stock market move, all they're telling you is what they believe did it, but they have no clue, other than specific critical situations as like, after 9/11 attacks. For company specific "this is why" it's much easier, but even then many times it does the opposite of what the analysts' previous explanation was. They just tell you something because they know people want a "reason".
They could've easily written "after historic rise and new all time highs, some investors take profit" and it'd also be correct.
It's like a bunch of guys looking at a CPU metric in grafana without SSH access to the server or knowing what it's running trying to figure out the cause. Sometimes it pins at 100% and some guy shouts "it's paging to disk", and yeah, might be, might also not.
This is based on institutional theories or smart money of how price plays out in the chart. I have developing my theory for years using those principles(i.e Wycoff Methods[1]
[1] https://chartschool.stockcharts.com/table-of-contents/market...
Using this argument, you can basically discard any kind of inference on any large system. That’s not particularly convincing. It’s not because something is complex that you can’t a posteriori conjecture links between causes and consequences at a macro level.
What economic journalists and analysts mean when they say a move with triggered by something is that both events happened in a time frame which is conductive to saying a correlation exists. Turn out that Google published is earning Tuesday with larger than expected capital expenditure and little return to show for it and then the market tanked. That’s what they mean by reason and that’s how everyone understands it. We know the market is large and made by a lot of actors. We are not dumb.
You are free to think it’s all random happenstance. I’m free to think you have an axe to grind and prefer denial to rational thoughts.
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[0] https://link.cnbc.com/public/29081083#:~:text=%22If%20they%2....
We have investment based on hype and lies, and the outcome is that the actual labor the market implores is misdirected and falls short of its purpose of raising the net quality of life through real creation of value.
1) Cisco had good hardware, but nothing that commodity gear couldn’t also do. Nvidia have a substantial moat.
2) Cisco had a p/e of 700! Nvidia is at 60.
3) Cisco had a decent order book during the boom, but nothing to justify their price. Nvidia’s order book is… unholy.
I do think there’s a lot of hype around the various FOMO/ridealong stocks - but nvidia, I earnestly think remains undervalued.
> “The overarching concern is, where is the ROI on all the AI infrastructure spending?”
I have an opinion which they wouldn't listen to anyways.