So much investment has gone into AI that anything less than spectacular results will look like failure. One estimate is that the Mag 7 would have to make $600 billion in revenue to make sense.
I believe Bill was refering to an Israeli company not Israel itself. Which, one could argue the government of Israel does not imply the people of Israel. Different things.
"Which, one could argue the government of Israel does not imply the people of Israel. Different things."
Quiet, you. Our government and "media" has tried for DECADES to make us believe the people and the government of Israel are the same thing. They are totally WRONG, but have been very successful in getting that lie to stick.
When you view current events in the light of Jews and the government of Israel being separate entities, your conditioning is at risk of being changed. Modern Israel is a secular state - but good luck trying to get any of the haters to consider that....
You make a very good point. Here in Australia any criticism of Israel's handling of the "war" in Gaza marks you by the Murdoch media as a Jew hating anti- semite while Hamas is branded as terrorist, rapist, baby killers getting their just desserts..
Ding! Ding! Ding! "And there you have it, folks! Murray's laugh of the day! Mr. Announcer, please tell our contestant what he has won!" Best always. PM
LOLOLOL, always for the good of the sheeple....Like the Dept of Edu screeming "but it's for the good of our children" as grades decline to historic lows, and teacher saleries rise to historic, severly undeserving highs....it's always about money, and power, and never about the people, and even less, our children:) and it was never about the news being twisted and distorted, it's about the twisted and distorted minds behind the fake news...in all time:)
Its all insane and its no different when we talk about the "economy" - BEA, BLS, GDP you name it and its all worshipped as if it was written by the hand of god himself.
I would add the physical construction of these mega data centers costing in upwards of $1-2 billion dollars each to build is nice fir the construction industry and suppliers of the data computers it houses. We have a $1.0 billion dollar data center under construction in my down of Fayetteville Georgia suburb of Atlanta. The investment in the data center is only part of the picture, Georgia Power Company is constructing hugh towers, substations, snd having to scramble to contruct billion dollar gas fired generation in a big hurry to supply the 100 plus megawatt power demand for this behemoth. No telling how much water is going to be consumed and infrastructure is going on to supply water to cool these computers.. I say all this because others like Georgia Power are spending billions on investment too keep up with the demand. What happens to the Non AI company investments if AI is a flop and the data centers go off line? Companies like Georgia Power will be stuck with a stranded investment. But I guess AI will be telling us all of that is not a problem not to worry.
Ah yes... Reminds of the old industrial Midwest USA, with all those power plants built in the 1930s-60s to supply electricity to American mills & factories... And then came the 1970s-80s, and the decline of American industry into the Rust Belt. Yet there remained all that "stranded" power, which led to bargain rates for residential, commercial and what was left of the industrial users.
“Some food for thought: The Intel ASCI Red Supercomputer was released in 1996. It could execute 1.3 trillion math operations per second and cost $55 million. The iPhone 15 Pro, released in 2023, can execute 35 trillion math operations per second and costs $1,000.
While the cost of other necessities — like housing, education, and healthcare — has skyrocketed, the average person today carries more computing power in their pocket than an entire Fortune 500 company of 30 years ago. If the cost of intelligence follows a similar downward curve, the average person could soon have access to more labor (in the form of AI agents that work for you) than the typical billion-dollar company today.“🤔
Compute power is a poor indicator of value. I can fit a massive HP engine to my car or boat but unless the rest of the machine can cope it's going to crash. The sad reality is that most humans have nobidea what to do with the access to data/information.
There are some great AI use cases for allowing natural language search and analytics on BIG datasets, butvi can't help feel it'll be like Excel, mostvpeople will be able to do create something simple with it, but only a few will be able to do really interesting things with it.
It's not what you read about AI that should scare you, it's what you don't see. It has been going on for years. Data interpretation, censoring, monitoring, control. Power is more important than money. With power, you can manipulate and take money.
Great article, Bill… re the classic issue of price versus value.
As for AI…. Recent leaks inform us that as former President Joe Biden went into sharp mental decline, his speechwriters used AI to compose his talks. They culled old speeches from better days and ran them through the AI “speechwriting” algo. And this is how we wound up with an angry old man, raving from the podium, repeating point after point about his days riding on Amtrak.
With that in mind, I might not have the guts to go short on AI plays, but it sure tends toward owning more gold and gold miners.
Byron, I got out of the market just prior to the high of the dot.com mania. I did not own any true tech stocks at the time (having started in the market in 1966 at the tender age of 14). I had mostly old stand-by companies in my meager portfolio. I still paid hefty capital-gains taxes, as the market had risen inexorably and unjustifiably in the overall run-up. Inflation (a nice, yet sneaky, word for government deficits) ruins value, regardless, so it's pointless to talk about value anymore, anyway. I run all this by you to let you know that the ultimate short is leaving the market, as I did. Like all the people that hang around the gaming tables and dice tubs in Las Vegas merely observing, there is no cost in observing, but there is no payoff, either. When value cannot be discerned at all, the choice becomes would I rather take a likely loss than not be in the game? No matter what AI achieves, at these prices, it's physically impossible for it to pay off. It will be a struggle to break even. It's similar to what I tell myself when I, wager-less (unwagered?) watch the Kentucky Derby: as the winner crosses under the wire, "Oh, well, I would not have bet that nag, anyway." Wishing you every success in everything. Best always. PM
Excellent support of my point, thank you! There are those who value being in the game more than they fear the likely loss. It's strictly a tolerance-level determination. Per Bill's example, why not bet directly on Japan and India? They have to produce or die. AI only has to sucker. I will rejoice at your success, and feel sorry when you have to pay your profits in the form of capital gains. Don't you just love "free" market opportunity? I know I've always wanted to try it. Best always. PM
By the way, I once threw three 7s in a row at Bally's in Las Vegas. That same trip, I made the horn and a hard-way 10 in the now-gone Stardust. I was a hero to the crowd at both venues. Knowing the game as I do, I haven't played craps since. PM
O.M. Goodness! THAT'S priceless! That's true winning! Screw the "market"! Give me that every time. For those who have never played the best game in the casino (only a 2% house edge, folks... as close as you'll ever to get to a fair fight), you'll never know what an achievement this was. And craps is the simplest game in the world; don't let anyone tell you otherwise. It's a binary proposition: the basic premise is it's either going to be "7" or it's not. You bet accordingly. Icebergs, I doff my cap, sir... Best always. PM
I don’t believe Bill hates Jews, just those who push their NWO agenda behind their unpracticed religion…he knows that we don’t want them to herd the sheep 🐑 Like the many RINOs, there are just as many JINOs…..if not more 🤔
A mixed movie reference..." Choose wisely." "The red pill or the blue pill ?" To PMs point what if either took the third option? Another cheese reference...War Games... "The only way to win is not to play."
Excellent analysis from Bill. His good (best?) friend, Addison Wiggin, has also been very skeptical of the practical benefits of A.I., but I don’t believe he has analyzed this as deeply as Bill has here.
Maybe the two of them will someday put out a book analyzing A.I. once they have watched it for awhile to get a better feel for where it will go.
I don’t know Mr Westmoreland, but considering mankind is losing intelligence at an alarming pace(intelligently planned), and the people behind this loss of intelligence are planning to take more than your mind. They want all of your money and possessions also. The coming AI revolution will consist of Smart Money, which will tell you how it is to be spent. No variations allowed. In their perfect world of stupid people, their agenda will succeed. I know it’s hard to believe, but look at almost every democrat controlled city 🤔. It’s already working…
This post has nothing to do with AI but I thought Bonner Private Research subscribers would both enjoy and benefit from this video. Richard Werner Exposes the Evils of the Fed & the Link Between Banking, War, and the CIA. It's long but incredibly informing. I thought i was pretty well educated in this area but some of the insights are very eye opening. https://www.youtube.com/watch?v=StTKHskg5Tg
Tom, off topic. I recall you publishing a series on whole life insurance, how can I access this? Is this still an approach you advocate for? I Have been a paid subscriber to Palm Beach until it’s demise..Thanks
Excellent piece, Bill. Especially your point about AI being more of an input story than an output-driven revolution (so far). The numbers just don’t justify the euphoria. And if the returns don’t show up soon, all that leverage underneath is going to matter. A lot.
What got me started down this path was Dan Denning’s piece in Bonner Private Research, where he posted the chart showing margin debt hitting $1 trillion. An all-time high. That visual was a gut punch. It reminded me how much of today’s market “confidence” is floating on borrowed money and hoped-for miracles.
I ended up writing a piece of my own, connecting the dots between that $1T in margin and the fragility baked into the current market structure — especially for retail investors:
Hey Tom, your chart in the August Strategy Report really stuck with me. I spun it into a piece of my own, using that same stat (50% of household wealth now in equities) to explore what it means for the average person trying to stay afloat.
Nice article. BUT, there are other companies not related to Israel that can manipulate the news. Why just mention Israel??. It does not look good for you. As far as the stock market, DIVERSIFY. Keep a certain percentage in stocks, real estate, gold and silver, and maybe crypto. Hopefully, this will keep your assets without losing your shirt. Ride the stock market with a small percentage of your assets until you sell it when it turns sour. AP
Like best always I bought my first stock@14 in 1966. Montgomery Ward because I liked the Carnaby Street like shirts it sold. Mobil later bought Ward and I profited handsomely. I remember my dad’s broker saying I should buy Sears, but they didn’t sell pop culture cool shirts so I refused.
Anyway I’ve been in the market ever since in some capacity. Right now I’m as short as I have ever been only 100 deltas long (sic). After all the market does have an upward bias.
I use the charts. Friday S&P outside day. Today filled the downside gap. I think the market has turned sour right now.
Alas I acknowledge I’m like Sgt Schultz in this den of Bonners heroes and villains and know nothing.
Good luck to those who can make money using their wits trading these markets.
The 50% of Household asset value invested in Equities sounds like Home Equity Loans invested in the Stock Market (or they have almost no assets). Future real estate prices are uncertain and the stock market is even less certain. When younger, most of my friends were cash poor with some budding real estate investments. Hope I’m wrong here and the 50% Equity investments ARE NOT with borrowed money.
“And an Israeli company just announced that it can twist and turn (distort) the news in real time.” Hasn’t our media been doing that for decades 🤔
Well, Bill had to take a shot at Israel.
I believe Bill was refering to an Israeli company not Israel itself. Which, one could argue the government of Israel does not imply the people of Israel. Different things.
"Which, one could argue the government of Israel does not imply the people of Israel. Different things."
Quiet, you. Our government and "media" has tried for DECADES to make us believe the people and the government of Israel are the same thing. They are totally WRONG, but have been very successful in getting that lie to stick.
When you view current events in the light of Jews and the government of Israel being separate entities, your conditioning is at risk of being changed. Modern Israel is a secular state - but good luck trying to get any of the haters to consider that....
I agree, its a mess.
Pete-
There are many countries where companies distort, twist and turn the news. Only mentioning an Israeli company does not look good,.
I cant argue with that and your right.
You make a very good point. Here in Australia any criticism of Israel's handling of the "war" in Gaza marks you by the Murdoch media as a Jew hating anti- semite while Hamas is branded as terrorist, rapist, baby killers getting their just desserts..
Yes, of course Pete. I support Judaism. I do not support the current regime in Israel.
Ding! Ding! Ding! "And there you have it, folks! Murray's laugh of the day! Mr. Announcer, please tell our contestant what he has won!" Best always. PM
Yes, but it was for our own good, don't you know? Best always. PM
LOLOLOL, always for the good of the sheeple....Like the Dept of Edu screeming "but it's for the good of our children" as grades decline to historic lows, and teacher saleries rise to historic, severly undeserving highs....it's always about money, and power, and never about the people, and even less, our children:) and it was never about the news being twisted and distorted, it's about the twisted and distorted minds behind the fake news...in all time:)
Its all insane and its no different when we talk about the "economy" - BEA, BLS, GDP you name it and its all worshipped as if it was written by the hand of god himself.
But the government tells us so…”In God we Trust” our governments God is Gold, Oil and Diamonds. Our God is not material. 🤔
I would add the physical construction of these mega data centers costing in upwards of $1-2 billion dollars each to build is nice fir the construction industry and suppliers of the data computers it houses. We have a $1.0 billion dollar data center under construction in my down of Fayetteville Georgia suburb of Atlanta. The investment in the data center is only part of the picture, Georgia Power Company is constructing hugh towers, substations, snd having to scramble to contruct billion dollar gas fired generation in a big hurry to supply the 100 plus megawatt power demand for this behemoth. No telling how much water is going to be consumed and infrastructure is going on to supply water to cool these computers.. I say all this because others like Georgia Power are spending billions on investment too keep up with the demand. What happens to the Non AI company investments if AI is a flop and the data centers go off line? Companies like Georgia Power will be stuck with a stranded investment. But I guess AI will be telling us all of that is not a problem not to worry.
Ah yes... Reminds of the old industrial Midwest USA, with all those power plants built in the 1930s-60s to supply electricity to American mills & factories... And then came the 1970s-80s, and the decline of American industry into the Rust Belt. Yet there remained all that "stranded" power, which led to bargain rates for residential, commercial and what was left of the industrial users.
“Some food for thought: The Intel ASCI Red Supercomputer was released in 1996. It could execute 1.3 trillion math operations per second and cost $55 million. The iPhone 15 Pro, released in 2023, can execute 35 trillion math operations per second and costs $1,000.
While the cost of other necessities — like housing, education, and healthcare — has skyrocketed, the average person today carries more computing power in their pocket than an entire Fortune 500 company of 30 years ago. If the cost of intelligence follows a similar downward curve, the average person could soon have access to more labor (in the form of AI agents that work for you) than the typical billion-dollar company today.“🤔
Second hand iPhone 15 Pro goes for $159.30 on ebay..
Compute power is a poor indicator of value. I can fit a massive HP engine to my car or boat but unless the rest of the machine can cope it's going to crash. The sad reality is that most humans have nobidea what to do with the access to data/information.
There are some great AI use cases for allowing natural language search and analytics on BIG datasets, butvi can't help feel it'll be like Excel, mostvpeople will be able to do create something simple with it, but only a few will be able to do really interesting things with it.
And I used the mighty power of AI today to make a sketch of 2 pigeons (which looked like 1 pigeon). The Emperors new clothes are indeed fine....
It's not what you read about AI that should scare you, it's what you don't see. It has been going on for years. Data interpretation, censoring, monitoring, control. Power is more important than money. With power, you can manipulate and take money.
My thought too... those that invest now will likely come out on top.
AI is not a singular entity like the internet, it's tenacles will reach into most every crevasse of society.
Great article, Bill… re the classic issue of price versus value.
As for AI…. Recent leaks inform us that as former President Joe Biden went into sharp mental decline, his speechwriters used AI to compose his talks. They culled old speeches from better days and ran them through the AI “speechwriting” algo. And this is how we wound up with an angry old man, raving from the podium, repeating point after point about his days riding on Amtrak.
With that in mind, I might not have the guts to go short on AI plays, but it sure tends toward owning more gold and gold miners.
Byron, I got out of the market just prior to the high of the dot.com mania. I did not own any true tech stocks at the time (having started in the market in 1966 at the tender age of 14). I had mostly old stand-by companies in my meager portfolio. I still paid hefty capital-gains taxes, as the market had risen inexorably and unjustifiably in the overall run-up. Inflation (a nice, yet sneaky, word for government deficits) ruins value, regardless, so it's pointless to talk about value anymore, anyway. I run all this by you to let you know that the ultimate short is leaving the market, as I did. Like all the people that hang around the gaming tables and dice tubs in Las Vegas merely observing, there is no cost in observing, but there is no payoff, either. When value cannot be discerned at all, the choice becomes would I rather take a likely loss than not be in the game? No matter what AI achieves, at these prices, it's physically impossible for it to pay off. It will be a struggle to break even. It's similar to what I tell myself when I, wager-less (unwagered?) watch the Kentucky Derby: as the winner crosses under the wire, "Oh, well, I would not have bet that nag, anyway." Wishing you every success in everything. Best always. PM
.... Mr. Murray, you don't have to worry about the company's profitability, only your own.
Yes, the investment into AI is ridiculous.
But not investing may be even more so...
At this moment the table is loose, and the dice are hot... now is the time to make money.
Walk away when the table gets cold...
Excellent support of my point, thank you! There are those who value being in the game more than they fear the likely loss. It's strictly a tolerance-level determination. Per Bill's example, why not bet directly on Japan and India? They have to produce or die. AI only has to sucker. I will rejoice at your success, and feel sorry when you have to pay your profits in the form of capital gains. Don't you just love "free" market opportunity? I know I've always wanted to try it. Best always. PM
By the way, I once threw three 7s in a row at Bally's in Las Vegas. That same trip, I made the horn and a hard-way 10 in the now-gone Stardust. I was a hero to the crowd at both venues. Knowing the game as I do, I haven't played craps since. PM
...funny Paul, I too used to play a lot of craps.
The stock market replaced the free drinks and smoky tables.
Yet I still can't walk away...
-
I parlayed 3 horns in a row once (downtown at the Golden Gate) the stickmen had no idea how to pay, consequently they overpaid me!
By the time the pit-boss put it together I had already distributed most of it.
They ended giving me and my wife a free dinner...
O.M. Goodness! THAT'S priceless! That's true winning! Screw the "market"! Give me that every time. For those who have never played the best game in the casino (only a 2% house edge, folks... as close as you'll ever to get to a fair fight), you'll never know what an achievement this was. And craps is the simplest game in the world; don't let anyone tell you otherwise. It's a binary proposition: the basic premise is it's either going to be "7" or it's not. You bet accordingly. Icebergs, I doff my cap, sir... Best always. PM
...I've always likened craps to the market, there are so many ways to play.
Each combination can win.
Best odds are betting the dark side, with the house.
Investing in AI might be likely more like gambling.
Mr. Bonner warns us, avoid the "big loss".
But Mr. Bonner, the only sure way to avoid a loss is not to play...
And I enjoy playing, particularly winning.
Let's hope we get some rolls out of this AI before the 7 out...
Rare earths are going to become King. 90% of the rare earth mines are in BRICS countries and with the U.S. not making friends anywhere..........
Plenty in Australia, I think we're still friends haha
Aussies are magnificent. And, they live in their own world. Absolutely wonderfrul!
Agree brother! I bought METC a few weeks ago around $10 and sold half today. Will let the other half run😊
Agree. Just bought a platinum Comex for October. Going to get crazier and crazier. All we peons can do is "Hang On Tight!"
Thoughtful column today, Bill. See what you can do when you don't write about Trump!
(but he still couldn't resist taking a shot at Israel...a leopard doesn't change its spots)
I don’t believe Bill hates Jews, just those who push their NWO agenda behind their unpracticed religion…he knows that we don’t want them to herd the sheep 🐑 Like the many RINOs, there are just as many JINOs…..if not more 🤔
JINOs...SECOND laugh of the day. I may not be able to take any more of this... Best always. PM
One World Government is a terrible long term investment.
Similar to investing in Dodo bird sanctuaries.
Artificial intelligence, artificial gains.
...not so sure your statement is true.
Just how did they get that rocket to land upright on the launch pad?
The only question might be what is the ROI on reusable rockets?
RKLB knows...
A mixed movie reference..." Choose wisely." "The red pill or the blue pill ?" To PMs point what if either took the third option? Another cheese reference...War Games... "The only way to win is not to play."
... Mr.Bonner, is that you?
Excellent analysis from Bill. His good (best?) friend, Addison Wiggin, has also been very skeptical of the practical benefits of A.I., but I don’t believe he has analyzed this as deeply as Bill has here.
Maybe the two of them will someday put out a book analyzing A.I. once they have watched it for awhile to get a better feel for where it will go.
I don’t know Mr Westmoreland, but considering mankind is losing intelligence at an alarming pace(intelligently planned), and the people behind this loss of intelligence are planning to take more than your mind. They want all of your money and possessions also. The coming AI revolution will consist of Smart Money, which will tell you how it is to be spent. No variations allowed. In their perfect world of stupid people, their agenda will succeed. I know it’s hard to believe, but look at almost every democrat controlled city 🤔. It’s already working…
This post has nothing to do with AI but I thought Bonner Private Research subscribers would both enjoy and benefit from this video. Richard Werner Exposes the Evils of the Fed & the Link Between Banking, War, and the CIA. It's long but incredibly informing. I thought i was pretty well educated in this area but some of the insights are very eye opening. https://www.youtube.com/watch?v=StTKHskg5Tg
Tom, off topic. I recall you publishing a series on whole life insurance, how can I access this? Is this still an approach you advocate for? I Have been a paid subscriber to Palm Beach until it’s demise..Thanks
Excellent piece, Bill. Especially your point about AI being more of an input story than an output-driven revolution (so far). The numbers just don’t justify the euphoria. And if the returns don’t show up soon, all that leverage underneath is going to matter. A lot.
What got me started down this path was Dan Denning’s piece in Bonner Private Research, where he posted the chart showing margin debt hitting $1 trillion. An all-time high. That visual was a gut punch. It reminded me how much of today’s market “confidence” is floating on borrowed money and hoped-for miracles.
I ended up writing a piece of my own, connecting the dots between that $1T in margin and the fragility baked into the current market structure — especially for retail investors:
https://lucaskandia.substack.com/p/following-the-margin-money
Hey Tom, your chart in the August Strategy Report really stuck with me. I spun it into a piece of my own, using that same stat (50% of household wealth now in equities) to explore what it means for the average person trying to stay afloat.
https://lucaskandia.substack.com/p/while-the-rich-sail-yachts-most-are
Thanks for the inspiration!
;)
Bill:
Nice article. BUT, there are other companies not related to Israel that can manipulate the news. Why just mention Israel??. It does not look good for you. As far as the stock market, DIVERSIFY. Keep a certain percentage in stocks, real estate, gold and silver, and maybe crypto. Hopefully, this will keep your assets without losing your shirt. Ride the stock market with a small percentage of your assets until you sell it when it turns sour. AP
Like best always I bought my first stock@14 in 1966. Montgomery Ward because I liked the Carnaby Street like shirts it sold. Mobil later bought Ward and I profited handsomely. I remember my dad’s broker saying I should buy Sears, but they didn’t sell pop culture cool shirts so I refused.
Anyway I’ve been in the market ever since in some capacity. Right now I’m as short as I have ever been only 100 deltas long (sic). After all the market does have an upward bias.
I use the charts. Friday S&P outside day. Today filled the downside gap. I think the market has turned sour right now.
Alas I acknowledge I’m like Sgt Schultz in this den of Bonners heroes and villains and know nothing.
Good luck to those who can make money using their wits trading these markets.
The 50% of Household asset value invested in Equities sounds like Home Equity Loans invested in the Stock Market (or they have almost no assets). Future real estate prices are uncertain and the stock market is even less certain. When younger, most of my friends were cash poor with some budding real estate investments. Hope I’m wrong here and the 50% Equity investments ARE NOT with borrowed money.