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Stock market might dip 20%+, because OpenAI is a large buyer of GPUs, RAMs, servers and disks, every chip company will be impacted from removing huge customer f

Stock market might dip 20%+, because OpenAI is a large buyer of GPUs, RAMs, servers and disks, every chip company will be impacted from removing huge customer from their revenue. then flywheel effect might kick off and impact carriers and construction companies building data centers and delivering things there. which impacts investor trust and they might start pulling their money from AI companies, which in turn, they either need to increase prices or downsize their efforts

mikewarot 2mo ago
I find it hard to justify any conclusion other than we're about to repeat the crash of 1929 in terms of stock prices. Back then, stocks dropped 90% over 3 years. We'll be lucky if 10% actual value remains after the bonfire that's about to happen.
- soupfordummies 2mo ago
  So, what, should I withdraw my 401k and buy physical gold?
  - overtone1000 2mo ago
    Uh oh, this is the comment chain where somebody is gonna say "fiat"
    - mikewarot 2mo ago
      Fiat money sure came in handy when 10% or more of the trees in my entire county were blow over toward the east. Long term, you're getting eaten by inflation, but when the power grid, and most cell sites are down, cash is still king. The real lesson I've learned is that a small generator consumes about 10 gallons of gasoline per day. There's no way to store enough of it to last through a total collapse, even if you could keep it from being stolen.
  - dgellow 2mo ago
    That's up to you, but if there is a crash it's very unlikely to be before a major hyperscaler decides to reduce or stop their infra expenditures (which isn't happening, like, quite the opposite). That's what I would personally see as the top signal, but it's pretty dumb to exit the whole market because of a possible crash at some point in the future, without anything you see as a catalyst. Also, gold is completely overrated, it's not at all a safe place where to put your money and you have no idea how it would correlate with an AI bubble burst
  - mikewarot 2mo ago
    Gold has dropped every time the US does something stupid with Iran, the opposite of conventional wisdom. I think that countries are having to sell their most liquid asset, their gold, in order to buy oil from sources outside the gulf. I'm not a financial planner, and my gut instincts have been wrong far too many times for me to give advice. I'm just noting the odd thing going on right now.
  - SaucyWrong 2mo ago
    This isn’t financial advice, but Defense contractors seem to be a solid hold in a winter economy with this insane and hawkish “war department”. This administration’s primary means of distraction from issues at home appears to be “start a conflict somewhere”. We’ve dropped so much ordinance in the Middle East at this point, buy whoever has the multi year contracts to replenish the stockpile. This is a sarcastic answer, but I’m only half joking.
  - runarberg 2mo ago
    No. You most definitely should not. Do not under any circumstances try to beat capitalists at their own game. The rules are always against you, and you will loose. The only winning move is not to play. Go to your local instrument library and grab your self a guitar. If your 401k vanishes, at least you know how to play the guitar and can entertain your self through the collapse of the system.
ivan_gammel 2mo ago
Chip makers may be fully booked now and have extra revenue because of AI, but that also creates deferred demand elsewhere. The prices will not fall immediately because of the crash of a single company. The scarcity has probably negative impact on the economy in general, so stock market should recover after that quickly or at least stay near a healthy valuation level.
- throwaw12 2mo ago
  when market sees huge storm of un-bought devices, prices will drop, companies waiting on the line will also drop their contracts because they don't want to buy chips with pre-crash prices and renegotiate their prices
  - ivan_gammel 2mo ago
    Yes. Those on the demand side will benefit from it. And that‘s the whole point. It is much healthier situation economically than current, very distorted market.

mikewarot 2mo ago

I find it hard to justify any conclusion other than we're about to repeat the crash of 1929 in terms of stock prices. Back then, stocks dropped 90% over 3 years. We'll be lucky if 10% actual value remains after the bonfire that's about to happen.

soupfordummies 2mo ago
So, what, should I withdraw my 401k and buy physical gold?
- overtone1000 2mo ago
  Uh oh, this is the comment chain where somebody is gonna say "fiat"
  - mikewarot 2mo ago
    Fiat money sure came in handy when 10% or more of the trees in my entire county were blow over toward the east. Long term, you're getting eaten by inflation, but when the power grid, and most cell sites are down, cash is still king. The real lesson I've learned is that a small generator consumes about 10 gallons of gasoline per day. There's no way to store enough of it to last through a total collapse, even if you could keep it from being stolen.
- dgellow 2mo ago
  That's up to you, but if there is a crash it's very unlikely to be before a major hyperscaler decides to reduce or stop their infra expenditures (which isn't happening, like, quite the opposite). That's what I would personally see as the top signal, but it's pretty dumb to exit the whole market because of a possible crash at some point in the future, without anything you see as a catalyst. Also, gold is completely overrated, it's not at all a safe place where to put your money and you have no idea how it would correlate with an AI bubble burst
- mikewarot 2mo ago
  Gold has dropped every time the US does something stupid with Iran, the opposite of conventional wisdom. I think that countries are having to sell their most liquid asset, their gold, in order to buy oil from sources outside the gulf. I'm not a financial planner, and my gut instincts have been wrong far too many times for me to give advice. I'm just noting the odd thing going on right now.
- SaucyWrong 2mo ago
  This isn’t financial advice, but Defense contractors seem to be a solid hold in a winter economy with this insane and hawkish “war department”. This administration’s primary means of distraction from issues at home appears to be “start a conflict somewhere”. We’ve dropped so much ordinance in the Middle East at this point, buy whoever has the multi year contracts to replenish the stockpile. This is a sarcastic answer, but I’m only half joking.
- runarberg 2mo ago
  No. You most definitely should not. Do not under any circumstances try to beat capitalists at their own game. The rules are always against you, and you will loose. The only winning move is not to play. Go to your local instrument library and grab your self a guitar. If your 401k vanishes, at least you know how to play the guitar and can entertain your self through the collapse of the system.

ivan_gammel 2mo ago

Chip makers may be fully booked now and have extra revenue because of AI, but that also creates deferred demand elsewhere. The prices will not fall immediately because of the crash of a single company. The scarcity has probably negative impact on the economy in general, so stock market should recover after that quickly or at least stay near a healthy valuation level.

throwaw12 2mo ago
when market sees huge storm of un-bought devices, prices will drop, companies waiting on the line will also drop their contracts because they don't want to buy chips with pre-crash prices and renegotiate their prices
- ivan_gammel 2mo ago
  Yes. Those on the demand side will benefit from it. And that‘s the whole point. It is much healthier situation economically than current, very distorted market.