[nemo1618]

I'm old enough to remember when companies worth $1 billion were called "unicorns." Now we have a company raising 122 times that? Valued at nearly 1000 times that...?

At least they're throwing consumers a bone via the ARK deal. It's crazy how little AI exposure is available to anyone who isn't already wealthy and/or connected.

[nine_k]

I think this is reality-distortion field rivaling that of Jobs', and a crisis of faith. Nobody apparently believes that capital is worth investing into anything but AI.

[randomNumber7]

> Nobody apparently believes that capital is worth investing into anything but AI.

This is the main reason we see this insane investment into AI imo. If you imagine having lots of money, where should you invest that currently?

Housing market: Seems very overvalued (at least in germany). Also with the current uncertainty and inflation its hard to make an investment that pays back over 20-30 years. So building is also difficult.

Stocks are very volatile currently. Not only since Iran. To me it seems since the financial crisis 2008 investors don't enjoy stocks as before.

Gold: Only if you are paranoid about collapse of society. It doesn't make sense to invest into s.th. without interest rates.

Crypto: Same as gold, but better if you like gamling. I would assume most people who are very rich don't gamble with most of their fortune.

[nine_k]

Looking around, and especially forward, it would be military tech, e.g. [1], and its supply chain, e.g. [2] :-\ Valuations are not as crazy, but I bet there'll going to be a lot of demand in the coming decade, unfortunately.

Chip production, too, of course, but it's overflowing with money already, apparently. It's growing though, because there are real actual shortages of stuff like RAM and SSDs, there's money to be made immediately if you can. Chinese RAM manufacturers are building out like crazy.

[1]: https://www.ultimamarkets.com/academy/anduril-stock-price-ho...

[2]: https://www.marketscreener.com/quote/stock/RHEINMETALL-AG-43...

[zer00eyz]

> it would be military tech

Anduril is the only company in this sector in the US that has any promise and they aren't even public. Most of us are not going to get our hands on this.

Traditional defense sector looks more like Jeep, or Kodak...

[class3shock]

Anduril has yet to deliver anything of consequence. I hope they shake up the industry but to say they are the next hot thing and write off the primes at this stage is premature.

[nine_k]

Invest in the Ukrainian drone producers which proved themselves on the literal battlefield! Some of the Gulf states already did.

[nine_k]

The demand for more Patriot missiles is large, now that much of the stockpiles have suddenly been spent. Raytheon should do fine just based on that.

[iririririr]

this admin will probably source patriots made in china

[teeray]

> Looking around, and especially forward, it would be military tech, e.g. [1], and its supply chain, e.g. [2]

Only viable if you’re okay with the ethical implications of funding war.

[nine_k]

Would you be fine with the ethical implications of funding the industry to fight WWII? Would you consider funding Ukrainian military unethical? Or Taiwanese?

This is, sadly, not theoretical, and I'm afraid we'll soon see more of such choices, not fewer.

[lotsofpulp]

> Stocks are very volatile currently. Not only since Iran. To me it seems since the financial crisis 2008 investors don't enjoy stocks as before.

These returns do not qualify as “enjoying stocks”?

https://investor.vanguard.com/investment-products/etfs/profi...

The returns are higher than before 2008, the previous 15 years are unprecedented.

https://www.macrotrends.net/2526/sp-500-historical-annual-re...

[triceratops]

> To me it seems since the financial crisis 2008 investors don't enjoy stocks as before

Maybe in Europe. The US stock market has nearly tripled since then. Literally the best period of stock growth in history.

[jacquesm]

"The Roaring Twenties roared loudest and longest on the New York Stock Exchange. Share prices rose to unprecedented heights. The Dow Jones Industrial Average increased six-fold from sixty-three in August 1921 to 381 in September 1929. After prices peaked, economist Irving Fisher proclaimed, "stock prices have reached 'what looks like a permanently high plateau.'"

https://www.federalreservehistory.org/essays/stock-market-cr...

[timr]

You can argue that current market multiples are higher than 1929 [1] - and they're certainly high - but this also ignores the mechanism that drove that crash, focusing only on the symptoms. We simply aren't doing the kind of consumer margin buying that drove the '29 crash. It isn't even close. Average schlubs were leveraged to the stratosphere to buy shares of boring industrial stocks.

[1] https://www.multpl.com/shiller-pe

[jacquesm]

> The US stock market has nearly tripled since then. Literally the best period of stock growth in history.

The only thing I meant to point out was that a very high stock price by itself is no guarantee that there isn't a crisis around the corner. We plugged a lot of holes after 2008 and then reversed a lot of those fixes, I hear retail investors talking about their stocks at birthday parties again. Deja vu... of course this time it will be different. Or not. Let's just say that with the proverbial bull in the earthenware goods store on the loose if we only end up with another financial crisis that might actually not be so bad.

[triceratops]

Ok second best :-) I wasn't alive in the 1920s though

[jacquesm]

True, but it is close enough in time that we should heed the lessons learned lest we repeat the experience.

[heathrow83829]

you gotta have some of all the above actually.

[woah]

OpenAI is making $24b a year. It's a 32x revenue multiple. High, but not insane. Spinning this as a story of overinvestment doesn't make sense.

[duchef]

Are you conflicting price to earnings to price to revenue?

[BadCookie]

32x earnings is high. 32x revenue is probably insane.

[burnt-resistor]

That's the tao of hyper-financialization. It must keep growing irrational exuberance big and up forever like stonks or it bursts like DotCom and tulip mania. It's funny money that cannot be liquidated for real value for more than a tiny fraction of the imaginary trillions being thrown around. Similarly, Nvidia $4T mkt cap makes absolutely no sense when it has but a few incestuous customers-parters-investors throwing around tens of billions each per year devoid of fundamentals like essential service offerings that turn a profit. Those handful of whale customers will make their own chips or cease buying large qtys at any time.

[dlev_pika]

I wonder what is not getting invested in bc AI has been crowding out everything else since 22.

It has to be brutal out there for everybody else, if all the money is going to AI.

[satvikpendem]

And not even actual capital either, as much of the investment amounts into AI have been through cloud and GPU credits so that AWS or Microsoft Azure don't actually have to hand over billions in straight cash.

[bandrami]

But they're really cagey about actually handing money over to them today

[roncesvalles]

It's the result of too much echo chambered bullshit floating around daily about how capable LLMs really are. It's literally crypto/blockchain all over again. It's one big lie that a lot of people have bought into which causes it to self-perpetuate, like religion.

[gavinray]

  > At least they're throwing consumers a bone via the ARK deal.

I had to look this up. There's a venture fund you can invest in with as little as $500 as a consumer -- though it's limited to quarterly withdrawals.

https://www.ark-funds.com/funds/arkvx

The fund is invested in most of the hot tech companies.

[squirrellous]

ARK was all the rage around early pandemic time when wallstreetbets was in the news a lot. Most people probably know it from then.

[bluecalm]

ARK funds has cult like following but then again they are a typical high beta player who outperforms in hot markets and heavily underperforms in cold ones. Fees are high. The CEO (CIO) is a women who looks for investment advice in the Bible and asks God for his thoughts (I am not joking).

If anything being associated with ARK in any form is a big negative signal.

[frankfrank13]

An ARK ETF is a smell to me. Besides, based on their holdings, i would never invest. 18% of the fund is SpaceX

[chilipepperhott]

I would not call an effective 2.9% expense ratio "throwing a bone".

[munk-a]

Also, the valuation for such a debt laden company should be viewed with great skepticism. I'm afraid a lot of mutual funds will end up holding the bags.

[mizzao]

It's not that far off from the standard 2% mgmt fee and 20% of excess performance?

[carlosjobim]

The money is worth much much less than it was before, we live in times of global hyper inflation.

[rvz]

> At least they're throwing consumers a bone via the ARK deal. It's crazy how little AI exposure is available to anyone who isn't already wealthy and/or connected.

It is deliberate. Period.

It's always been known that you make money in the private markets and pre-IPO companies and retail is the final exit for insiders and early investors.

Retail is not allowed to be early into these companies (Because that would ruin the point of being an insider) and this "exposure" has to be at the near top.

[lotsofpulp]

Who are "these" companies? Did retail get into Google, Facebook, Amazon, Tesla, etc before the top?

Also, aren't AI businesses losing a lot of money each year? Pretty sure there is some risk involved that is not good for retail.

[monkeydust]

There are ways now for retail to get in to these companies including, check out hiive or equityzen...just beware of massive dilution.

[a13n]

VCX (Fundrise) has way more exposure than ARKVX

[xlbuttplug2]

It's also trading at a huge premium. Probably worth a read if you're considering it: https://www.morningstar.com/funds/fundrise-innovation-is-not...

[torginus]

Even a billion dollars is crazy money. If you have a company with a subscription service that costs $100 yearly, you have ~2m customers, with a 50% profit margin. Your company makes ~100m every year in profit. Imo that's what is actually worth a billion dollars, maybe even a bit less.

[hunterpayne]

That company is probably worth about $8b, FYI. Obviously that's an estimated average but a P/E ratio of 80 give you that valuation.