The stock market on Monday was disappointed, and NVIDIA, a giant of artificial intelligence, lost nearly $ 600 billion, the largest daily loss for the public company. Why is one fate of our major companies suddenly fall? Some people ask for an answer to promising AI’s emerging companies and trade policy variables from China, but these movements are strangely strangely reviewed by reconsidering ancient myths. We talk to our financial market deeper changes that can be explained.
The image of Ouroboros, a snake that eats its own tail, is a very durable and extensive motif. The civilization of ancient Chinese, Egypt, Europe, and Latin America appears to be fascinated by images and things, and symbolizes the periodic nature of life, the whole of the universe or fertility. 。 Today, more resonance lessons come from Uroboros’s self -crabism.
Like Uroboros, I believe that Big Technology is the most likely component company to throw more cash with more investments and create more returns. Monday revision indicates that our financial markets, and probably your retirement portfolio may have begun to reflect the understanding of this dynamics.
Even after the dip on Monday, the remaining part of the stock market, even after the Microsoft, Apple, Amazon, NVIDIA, Tesla, Meta, Alphabet, the separation of Big Tech 7 is astonishing. The magnificent 7 consists of 30 % or more of the market capitalization of S & P 500 (from less than 10 % of 10 years ago). Compared to the profit or sales, our high -tech golia tess, a conventional method for measuring the evaluation of shares, is traded two to three times that of an unstable 493.
Market watchers argue that large -scale high -tech shares are better than everyone else, or whether other companies’ shares can catch up to enhance productivity using artificial intelligence. But the myth of Uroboros suggests another possible result.
The first step to understand this kind of thing is to return to the basics of funds. The stock price does not always rise due to the improvement of corporate prospects. Also, if investors judge that a specific company is a safer bet than other companies, they will not be punished for more time to generate money.
Watchers in many industries argue that artificial intelligence will fly a magnificent property, but another dynamics acts. Investors have regarded these companies as safe bets, thus stopping to require considerable immediate profits. Therefore, the forecast of the stock analysts does not support the stock price of these companies.
Why don’t investors expect more investment dollars?
I think the world investors have come to consider these seven shares as the best safety assets. In the world of infress pikes, political instability, grid rock, and financial uncertainty, investment in companies with a balance sheet of fortress, repeated revenue, stable cashflow, commanding market position, and respected management team Would you like to do it? New generation investors seem to be implicitly viewed by these companies like the government. Indeed, it is clear that the founder Eron Musk stimulated his loyalty, as proven by Tesla’s extraordinary evaluation. In the world of algorithm transactions and passive investment, these beliefs take a very high rate of major high -tech shares seen today.
How did the manager of these companies respond to the inflow of this large amount of money? Perhaps, as they should have, without worrying about returning and expecting many things, investing more and more capital into investment. From a practical point of view, what they think was doing is to release the surprising sudden stream of spending each other. In other words, they live and eat themselves.
NVIDIA, a creator who was very loved by the next -generation AI chips with the shares crushed on Monday, gained almost half of the revenue from the magnificent seven brothers. According to unsuitable court documents, Safari’s search engines are very likely to account for about 20 % of Apple’s profits. META has adopted the Amazon Web service for cloud services and is increasingly adopted in the AI push, and all high -tech jings have released a huge amount of expenditures on the infrastructure.
And when the high -tech giants are not spending money on each other, they often buy different shapes, that is, their own stock. In the past three fiscal year, Apple, Alphabet, Meta, Microsoft, and NVIDIA have purchased a total of more than $ 600 billion.
We are not particularly bothered by each other about seven spectacular purchases and services. Also, there is no mistake in spending a lot of money on capital expenditures and stock repurchases. However, if all of these operations and capital distribution are led to very low investors, they may eventually have a low return. And it can be a glimpse of the remaining unstable 493 speculative bubbles and rally, but the magnificent 7 and AI. Expenditures on the future of innovative or non -approaching technologies as promised.
Even more dangerous, these companies, like all companies, are disappointed with those who someday they are safe assets. It reveals that self -crabs are not only mediocre investments, but also unstable bets on the illusions propagated by technology and the mythical and Messianic beliefs for these companies.
Similar dynamics form another era in American history. The remarkable expansion of the 19th century railway created magic thinking as well. By the early 1900s, after several decades of enthusiastic investment, the railway industry accounted for more than 60 % of the market capitalization, and the bonds were considered a safe bet. Their low yield promoted expenditures on steel, eventually creating a huge Konglomarit US Steel in 1901.
What lasted in the first 20 years of the 20th century? Significant low and ordinary profits from these companies return from the entire stock market. The natural restrictions of steel players, which have established a railway, were immediately revealed, as the problem of such a scale was so.
Of course, the physical boundary of nature that restricts the growth of American railways may not exist in today’s magnificent 7. Nevertheless, information technology has promised such productivity growth for the past 20 years.
You do not need to see the ancient folklore to find the depiction of Oboros. Economist Joseph Schnopeter once explained capitalism as a almost mysterious update process. He writes a brilliant writing cycle of industrial mutation that “constantly revolutionizing the economic structure, continues to destroy old things, and constantly creates new things.” The creative destruction process sounds like Uroboros, but it is easy to praise and thank it if you are not your own tail.
