The Biggest Mistake AI Investors Are Making Right Now

So, one, I think we all have 2022, let's say, anyone's been investing for the last few years, we all have that 22 2022 bare market in the back of our heads, and we're so scared of that coming again. And I think the thing to remember there is one, you had inflation that was through the roof. We were at like 9% inflation, and that wasn't a and that happened because we we shut down the world, right? We had no factories working for many months. Uh and so there was this like very very like apparent supply constraint on basically everything and so prices went way higher. We also hit a recession, right? And so this was like a a a really bad time for the economy both from inflation and recession, unemployment, all the things, right? We are nowhere near that today. Like not even close. And I think that blip in inflation jump that we had two months ago was again what's kind of spooked the market in terms of them raising rates. But again, that happened because oil went up because we closed the straight of her moves, right? So that's been basically figured out at this point. It's not as much a concern. I know there's still it's not over yet over there, but like it really is not that big of a concern anymore. And that's why inflation came right back down uh two weeks ago, right? Or last week. So one and then we are nowhere near a recession. Unemployment is great. Inflation is coming down. Uh earnings are absolutely through the through the roof. Like the economy is humming. And so this is I think what what investors need to know is we are nowhere near a 2022 environment. Okay? I'm not saying that we can't have a bigger pullback here. I'm not saying that we've hit the bottom, but this is not 2022. And then the other thing that I think people have in their mind all the time is the.com bubble. Right? You see so many people talking about how this is the dotcom bubble and comparing it. Every time I make a tweet, there's multiple people showing me some sort of stat from the dot crash. And I think the thing to understand here is the the in 2000 when this happened, you had multiples of like just unbelievable multiples on these companies. They had no revenues and their multiples were, you know, hundreds of x above what it should be. Okay? And you had that while there was basically no users, right? You had like five people on the internet in 2000. Okay? Okay, it's not actually five obviously, but it was it was a small amount and it was growing very small. And that's because you had to go and literally buy a computer that no one didn't even know what they were and didn't really have in their homes. So like we had to wait until people were buying computers and then they had to like get someone to come in and connect the internet to their home, right? Like it was very hard. This is complete opposite. One, you got a bunch of stocks here that are not super o overvalued. Now some of them were in June, don't get me wrong. That's what triggered this, right? As soon as there was a little bit of fear, people were like, "Okay, these multiples are pretty high. Um, I've made a lot of profit in the last year and so like I'm starting to sell." So that started the the sell-off in June. But if you especially now after this pullback, we're nowhere near that, right? Like if you look at some of the memory stocks, the semi stocks, they're cheaper than they were before Chat GBT launched, which is crazy. And at the same time, you have insatable demand as we talked about, and you have user adoption growing like crazy. not just more and more users but also these users are using it more and more. So users and usage is accelerating in AI. It's a complete opposite of the.com bubble and the com crash. So I just think at some point we might get there. We we might get to a point where we have a dot crash, but it is way higher than it is today. I think investors need to understand that because you cannot compare what we're in today to what we had back in 2000. Just going to pause there for a second to point out that the market is showing signs of something kind of different happening and our analysts at Milkro Pro are all over it. They spent the last couple weeks making a lot of trades, getting out of some positions and then getting into a lot of new ones, getting ready for the next wave of robotics space or even kind of picking some different AI winners. If you want to see what they have in their portfolios, what position is their opening, it's just a dollar in Milkroad Pro at the link below. Kyle, what is what is retail going to do with all their cash? They sold each. >> What should they do? >> What are they going to do? What should they do? What are they going to do? Because now they're going to buy. They want to buy back today. They're buying back higher. >> So, exactly. This is why I think that we're going to go back up. Is because you've got a bunch of people that either sold out emotionally or got out early and took profits and did well, right? Uh or were were forced out, okay, and stopped out. And so, what do those people do? They buy back in and they chase. Why are we up? Why are some stocks up 30%. That means, you know, some of these went up 10%, 15% and others still came in like, I'm going to buy more, too. Right? And so, it's very likely that's going to happen. And that is why if you look at the market, let me share screen again here. >> We have these crazy V-shaped recoveries, right? Is because this is this is the market in their emotions, right? We we sold off like crazy because they ran more and then everyone goes, "You know what? Actually, it's not going to be that bad." and they just buy and we just straight line up and we go almost like look at how much higher we went right like we came down I think it's 15% 13% >> and we went up 30 5% in like a matter of days okay and this is is is basically because we sold off when earnings were still getting better in a recession it's not that big a problem it was fear and so people chase and come back in and I guarantee you whenever we decide to go back up, which I'm assuming is probably now, but maybe it takes a little bit. You're going to have a bunch of retail chase again. You're going to have the same thing happen. I think we're going to end up much higher once again. >> K, I want to I want to um this is a good theory and makes a lot of sense. I want to ask you about rate hikes because you did mention earlier going into a rate hike cycle, which has not been indicated yet at all. Um, everybody the last couple days was pointing to on the prediction markets that there was a 25% chance of a rate hike. didn't happen but in September it is currently on poly market like a 50% chance. So is that is that going to happen still in two months time? >> Uh so I don't believe so it is. So what is it? Do you have the poly market up? Can we can we pull that? >> It's at 53% right now. >> 53. Yeah it up. Yeah. Yesterday before they decided to pause hikes, it was a 20% chance that they would they would um keep it as is a 55% chance they would raise by 25 bips and then a like 25% chance that they would raise it by there would be 50 bips higher by September. That's cuz they thought there would be 25 yesterday, 25 in September. Now we're about 46 47% that it's it stays um uh paused and then 53% that it goes up 25. So there's no one in the camp. Maybe it was like half a percent that it's going to go up 50 bips. The So, we're still kind of leaning towards a potential raise. And if you listen to the um the meeting, everyone asking questions, all the media, all the analysts, all the journalists, they were berating WSH for not raising rates, right? They're like, "Why are you not doing it? The market's telling you you need to do it." Blah blah blah blah. >> And Worsh is like, "Look, I'm just going to let the market decide." Right? The And I think the thing for people to understand is the market has its own way of kind of providing an equilibrium. So if like the price of oil goes up like crazy and our gas prices go up like crazy, generally consumers will just like stop spending as much, right? Might not drive as much that week or those few weeks, right? And so that ends up bringing the demand down on its own. We don't need the Fed to move rates for us. We can do it ourselves. And the the the previous Fed, they wouldn't do that. They would just like, you know what, we're just going to move mate uh move rates even though the market had already done it for them. And so like they'd be late to the punch and worse doesn't want to do that. So, I can tell he doesn't necessarily want to raise the rates. Now, he said he will if he has to, right? He wants inflation at 2%. But the thing is is inflation has already been coming down. Now, we had this blip because of the Iran war and I think he knows it's a blip and his hope is as long as oil comes back down, let's see what oil's at today as we're talking, then he's not too worried. Okay, so it's still a little bit high, but look at this chart. I think I showed this before, maybe it was on the live up here. It was very much a problem, right? Then we broke down. This is why inflation came down right right here because oil was basically the reason why inflation spiked two months ago after it coming down like crazy. We saw that the June CPI came down a lot, way more than people expected. That's because of this. Now the problem is we came back up into the 90s. Now we're sitting in the low 80s. So long as this continues to come down, I think inflation will continue to come down CPI and in two months from now when he has to make his decision in September, I don't think he will need to raise rates. I don't think anyone will even want him to raise rates. So, it's going to depend on what happens at the war. I don't know the answer to that. I'm not a geopolitical expert. I don't know what Trump's what's going on Trump's mind, but that is going to matter. So, oil does still matter a little bit here. But ultimately, there's a lot of things that are moving uh inflation lower and forcing it lower. AI is one of them, right? AI is a very deflationary um uh trend. So, I just think um the market right now has time and I think that's the good part is we've got almost two months here where we can wait before we have to get another decision. But my guess is he probably doesn't raise. >> Everyone's tokenizing stocks these days, but almost nobody's doing it right. 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In this case, that rate hike in 2 months might be the thing that it's like, well, we'll know in 2 months, but there's plenty of time for the market to move upwards in that time. Also, time for it to move downwards, though. There's no guarantee. So, what what do we do from here for both both the retail people that are super liquid now suddenly uh and and they got out at the bottom and for for the rest of us, too. >> Yeah. So, look, the first thing is you should have been selling in fear. And I mean, everyone knows this, right? You've heard Warren Buffett say, be fearful when others are greedy. be greedy when others are fearful. It's just really freaking hard to do. Like our analysts were buying like crazy over the last two weeks, but I guarantee you ask them, I was one of them that was buying. It's hard. You're like, "Shit, my reputation's on the line. My money's on the line. Like everything seems to be falling apart, but I got to like I know that I need to buy." So, you do it, right? Um I know a bunch of our members did as well. So, like, congrats to anyone who did. But that's that's the first thing is anytime you see unlever or leverage unwinding or you see this like mechanical selling or just like mass capitulation, take note of this right now. Take note of how you felt yesterday. What did you do yesterday? Did you sell? If you did, you made a mistake and you need to learn from that and you need to get better because the best times to make money are when you're buying from for sellers. By far it's the best time to make money. Okay, so one, take note of that today. Go journal how you felt over this last week. Why did you sell? Why didn't you buy? Okay, get better next time. Now, the other good news is as much as these things are up like crazy, Micron we're looking at right now is up 15%. Uh Nibius is up like 26%. Bloom Energy is 26%. They're still way down from their all-time highs. Way down. >> And so, while I'm not saying you should buy today, I probably wouldn't buy uh you know when something is that green. maybe wait till tomorrow or the next day or Monday or whatever. You know, you don't have to rush into this. But I would say even if you did buy today, you're probably going to be fine. Uh because I think that most of these companies, again, good companies only, are going to go back to all-time highs or higher. Why? Because the earnings have been so damn good so far in the last 2 weeks that the fundamentals have gotten better since we were at the all-time highs back in June, right? So there's a really good chance that these companies will actually go higher than they were when we reached that high in June. And we're still down. Like Micron is still down. I don't know probably 20some percent here. [clears throat] >> Up 32%. It's still down. So you can buy it on a 16% up as long as you you can wait a month or two, right? Again, I'm not saying that we're going to V-shaped recovery and be up, you know, to alltime highs tomorrow or next week. Um, you know, this is why I say I probably wouldn't buy when it's up 16%. Maybe we just need a quick breather here. market needs to digest what just happened obviously but I think we're going to be much higher in the next one two three four months and so if you have a little bit of patience then I think you want to be buying anytime the market is red over the next little bit here if you didn't do that already uh in the last two weeks uh again in good companies you got to make sure you do your research and know the companies to buy >> Kyle will this will this event also perpetuate the rotation to the application layer that you've been talking about right because the thing is is that you've got you know just think about from somebody who was up a lot on the microns and the nebuses and the blooms and it's like well maybe they sold things are down it's an uncertain future but there's a rotation and you've been calling for the rotation to applications right to software companies that are using AI uh healthcare biotech that kind of stuff will retail then now be like I don't know if I can go back into a micron emotionally but I'm going to look for something else that's going to maybe do a micron I don't think Eli Liy is going to do micron it's already had a trillion dollars But you know what I mean? It's like I'm going to I I got to look for a new flavor this the rest of the year. [music] Want to stay ahead of the biggest technological shift in history? Subscribe now to get insight [music] straight from the sharpest minds in tech and finance. Quickly, you'll note this show is for educational purposes only. Nothing here is financial advice. Investing always carries risk. Never invest more than you can afford to lose. Thanks for tuning in. See you in the next one.