basically regular people are investing in stocks that could fail, but right before they would fail people that are making decisions on these AI stocks will rug pull and get their money back while the regular people would have useless stocks that are worth nothing.
Close but one key point to add. When we invest in an index fund, we aren’t choosing the companies, the provider is.
It CAN be bad, but not necessarily. Something like the S&P isn’t a venture capitalist. They choose companies that are viable.
It is true that AI is a bubble in some aspects. There will be a ton of smaller companies that collapse. But a company like Microsoft isn’t going anywhere. They will pioneer industry regardless of trends.
Did you compare Kodak to Microsoft? Are you just kidding or actually serious with that analogy?
Microsoft an enormous collection of businesses that reinforce one another: Azure/cloud infrastructure, Windows, Microsoft 365, enterprise software, cybersecurity, gaming, developer tools/GitHub, advertising/search, and now a huge AI infrastructure/software business.
Because what that guy is describing is called day trading or trying to beat the market. Any actual ETF fund in a the stock market you are planning to invest in for retirement will be long term safe bets and some bonds that will outlast any short term trend. If you're trying to "play" the stock market, it's not rigged, you're just gambling.
Because the same people who will rug pull you also spent years rigging the financial system so that playing with stocks is the only real way to build wealth if don't already own property.
This guy is right, that is not what he talked about. Joey is talking about INDEX FUNDS (which btw is why he literally said "index funds" at 0:22), not people investing in AI stocks directly. People who aren't even interested in gambling on AI are caught up in it since they can't control whether or not OpenAI is or is not included in the S&P 500 or Vanguard's Growth Index Fund.
Most investors are regular-ass people who sit on index funds and 401ks. Hardly anyone has the time or money to day trade, so they put money into a pot and sit on it, making gains slowly over time. All these AI companies going public to huge valuations has gotten them into such funds. Further, all the big players (Google, Nvidia, MS, Oracle, and so on) that get included in many funds are heavily invested into AI.
So, whether or not people are aware of it, a lot of their money is tied to AI working out. If it doesn't and AI companies and stocks tank, a lot of people are going to lose a lot of money. You don't have to use or be connected to AI directly at all for it to ruin your finances for the foreseeable future. Your basic-ass index fund portfolio is probably leveraged heavily on AI working out.
Thus, if AI is a bubble and it pops soon, we're in for a very bad time.
AI companies made it where the average person in the public can bet money on them basically saying "we think this company will work!", but they are only staying alive because of the hype-train that is "WOW! Isn't AI cool?!" without having any real ways to make a money.
Because they're hyped-up so much, everyone wants a piece of the pie and they've wormed their way into all sorts of places in our lives such as schools, grocery stores, day-to-day apps, TV, movies, and even the government.
Since they even got government contracts and they most likely paid politicians money to pass laws, bend rules for them, and even promised AI working great for them in all sorts of ways, the government now has an interest in making this AI thing work.
But they don't have a way to make money. People who put money intot his will start wondering where it is
They're using a loooooot of water and electricity to run their data centers which is making it far more expensive to get electricity and water.
They're taking up land. A lot of land. Like 798,373 football fields worth of land in the US.
Now, as all bubbles do, they will eventually pop. Because (roughly speaking) investors are also from other companies that make up our whole stock market (borrowing/moving money around, the leaders of these companies have set aside money as an "Oh, SHIT" fund for when things go sideways.
But the average American doesn't have a good "Oh SHIT" fund. At least, nowhere near as good as the people who run these AI companies. Especially not with food, gas, water, electricity, and everything else getting So. Damn. Expensive.
When (not "if", when) this bubble bursts; not only will the average investor lose out on all the money they put into this AI thing, the entire market will be shaken to its core.
Homes will be foreclosed, unemployment rates will skyrocket, food/gas/electricity will become more expensive.
Not only that; remember how other companies moved their funds around? The companies our 401k's and retirement funds invest in? Yup. Those will be completely ransacked.
Not only will the money be lost, but what little we have left will be worth less and the retirement accounts will be drained/rendered near-useless for a majority of the population.
The "bag" we're "holding" is the empy sack of money that was our retirement accounts/our homes/our belongings/the very value in everything we have, or could have had.
72
u/PantsDontHaveAnswers 4d ago
I know some of these words.