$10 Billion Bets on a Tech Bottom. I’m Not Buying It.

George Noble (0:01)

Given the volatility of markets recently, I thought it would be kind of me to have yet another update. Just a few random thoughts, trying to get away from the Captain Obvious stuff, which is, you find it all over X and in the mainstream media. A couple things. One, if you noticed the last week or so, there's been net buying of technology and semiconductor ETFs. I've made this point before. This is not what you want to see if you're a bull. This is incredibly bearish. It doesn't prove the mark is going to tank, the tech is going to see any of the tank, but you do not want to see this. All things being, which they never are, it's a hugely negative sign. Number two, remind folks about positioning and where we are in the calendar year. I warned about this previously, given how late it is in the year, I find it very unlikely that anyone is going to stand up and want to really take risk. Instead, they're going to run up to the hills and sell. Weakness is going to get more weakness. We warned about this a couple of weeks ago. So I think positioning is all wrong.

Retail has been net buying into this downturn in tech. So you have the necessary but not sufficient conditions for a total collapse in technology stocks, particularly those that are AI related.

I don't think valuation is going to help you on the way down. I mean, after all, valuation was never a thing on the way up. They ignored it. So why should it be anything on the way down? We're still so far above levels for so many stocks. People just don't understand or fail to recognize that reflexive nature of what's going on. In a very real sense, the share prices of these AI-related companies, those are the fundamentals. The share prices represent the cost of capital. Cost of capital is going up just the time that these companies need more capital. Who knows what's going to happen with Anthropic? As I said in prior videos, easier to justify a price of zero than it is two trillion. I understand they're talking about a trillion, trillion two or something like that.

I'd avoid that like a plague.

You know, it's a reflexive nature of all this, that people just don't pay enough attention to. And in a bear market, and technology stocks are in a bear market, you either can be short or flat, short or flat. This isn't a bull market, long or flat, long or flat. And I want to differentiate between the tech stocks, the AI plays, and the rest of the market. They're just a story of two markets, they're completely in their own different orbits. We've had a fantastic year this year. We grew up 60-61% in our long short spread in The Noble Update. We got roughed up a little bit the last week or so. We killed it on the tech stocks, on the shorts. Our gold stocks and our energy stocks hurt us, but I think gold is shaping up to be a huge buy right here. Put it another way, gold doesn't rally. You can forget everything else. As gold is a brammer of liquidity of the system.

Yeah, I just look at the psychology of what's going on. Everyone's trying to call the bomb. They're trying to call the bomb. They've been trying to call the bomb the whole way down, and you know who I'm talking about. Equally, do not pay any attention to the fools who go on about the passive bid, the yield curve, the Fed, R-star, the neutral rate. None of them are doing any analysis of companies. It's a market of stocks at the end of the day. Yeah, on the way up, maybe something did well. It's all luck. Now they're getting rinsed. They're going out of business.

Eric Jackson, just to be an example, Anthony Pompliano, all the tech fools, like Shade Malor, and there are others who I'm not going to name, but you know what I'm talking about. It's a market of stocks. So, you know, stay out of harm's way. Who knows what the market's going to do? There will be volatility. Again, it's now time to be a hero, especially given we're on the calendar year.

And I'd invite all of you to subscribe to Noble Update. We've been absolutely killing it. Our performance is unrivaled. Sometimes you're hot, sometimes you're not. And we've been very hot. And seen the ball incredibly well. This too shall pass, but right here, right now, we're the guys with the hot hand. Give us the ball.

We're going to have significant news coming out about the Noble Update in the next couple of days. So, I urge you to subscribe sooner, rather than later. All right, guys, hope this helps. Take care. Bye.