The bond market just started calling the AI trade's bluff

Tom Keene (0:00)

Louise Yamada will be with you. George, you are rocketed. Explain the majesty of Louise Yamada.

George Noble (0:07)

Thanks so much.

Louise belongs in the Hall of Fame for technical analysis, along with Ralph Acompore and the whole bunch. And Louise is still, she's still pitching. And we're so delighted that she'll be joining us next week, Tuesday and Wednesday.

20 of the leading technicians' names you would know. This is the varsity team. Over two days, ten to four, and we're really trying to democratize finance. Thanks for letting me mention it. It's only $199, and it will all be available on replay.

Tom Keene (0:38)

$199 is what a used Wells Wilder book costs, if you're lucky to find it. I can't say enough about the quad of this, including John Rook will be there. It's okay, let's get down. I need you to explain this. You said it out on Twitter where you get a lot of hate mail.

You're making it both ways. Your longs are going up, and your shorts are going down. How rare is that, that you're making money both ways?

George Noble (1:04)

Well, I guarantee you our results next year will not be as good as they've been this year. I mean, it's obscene. I don't want to mention it, but just go on our Twitter feed or on our sub stack. As Peter Lynch always taught us, it's a market of stocks.

The lazy, easy, seductive thing to do is sit around and try to call the market. It's a market of stocks. Some companies are doing well, others are not doing so well. And so, look, these are challenging times.

I've refrained from making a big market call. I am leading more bearishly with each passing day. But I have much higher conviction in what's working, what will work, and what won't work. And last time around, we talked a lot about the AI trade, and it just goes from bad to worse. You know, Tom, it's kind of funny. I come in this morning, I was thinking on the train on the way in. What are we going to talk about today? It's sort of, it's like you get up to bat, and Pedro Martinez is pitching, and it's like you know he's going to bring you his cutter, or whatever it is. But I got Kane on the mound, and he's got such an awesome, I don't know if he's going to hit me with energy, AI, French elections. It's like the stories write themselves. There's just so much going on. And so, you know, we've talked a lot, the last couple of times you have me on about the AI trade. Who knew that today was going to be the day I show up again? But that's going from bad to worse. You know, energy, just your colleague just mentioned it, the lead in oil price is up again, despite the fact we've had, what, our 77th truce or whatever it is.

There's a lot going on. And so, if you're a hedge fund guy, if you're a stock picker, just remember, the economy is not the market, the market is not the economy, right? And this is nirvana because there's a lot to do on both sides of the ledger.

Paul Sweeney (2:37)

All right, folks, just if you want to get the 30-second call on AI, here it is. This is according to our guest here. AI is the biggest misallocation of capital in history, complete disaster, no ROI, stay short. What do you think of AI?

What do we do here?

George Noble (2:56)

Why am I not surprised? I thought you would never ask. You know, as we all like to study history and we stand on the shoulders of giants, I was reminded of this quote, I pulled it out, and coming in here today, widely attributed to Mark Twain, although it's not clear he ever said it. It's easier to fool people than to convince them that they have been fooled, all right? Or that's another version of what Soros once said, the real way to make big money in the market is, try to figure out what is it the market believes is not true, but more importantly, identify when you think they're going to realize they've been had. And I think we're in the throes of that right now. And if you don't believe me, just look at the CDS on Oracle and CoreWeave and everything else. And so, you know, Paul, it doesn't matter what you think or what Tom thinks or what I thinks, it's what Mr. Market thinks, right? The market is starting to go our way.

The force is with us. We've been short. CoreWeave, it's our biggest position. And we doubled down on it, actually, two weeks ago.