I hesitate to take a victory lap regarding my predictions for the Iran conflict, and my predictions for the harms produced by AI. This post is just to say: I stand by what I have been saying.
With a bit of commentary, here’s the posts I’m standing by:
- Things are amazingly more bad than markets seem to think The fact that a considerable amount of oil is now getting through might make this seem less worrisome, but I continue to stand by my analysis. Oil is getting through at great risk, and at huge cost. I don’t see any scenario where this gets better any time soon.
- Things are still amazingly bad Not much to add here. Nothing Trump is doing (or can do) will help in the slightest.
- The supposed dangers of AI As I say in the post, I think really there aren’t any.
- “Exit through the state” could fail The single exception is that the AI tech bros could convince the government to pay them billions in taxpayer dollars to prevent a stock market collapse after the AI bubble bursts. That would be very bad, but I’m slightly hopeful we can avoid that scenario.
- Prepare yourself for the pop of the AI bubble My argument that there is an AI bubble, and that it’s one of the bad sorts (where very little of enduring value gets built, and the whole thing is financed with a lot of leverage that’s hard to analyze).
One thing that’s a little difficult just now is structuring your investments so that when the AI bubble collapses your whole portfolio doesn’t collapse along with it. That’s harder than you might think, because AI, and AI-related stuff (power generation, data center construction, real estate under data centers, lending money to AI companies, etc.) add up to be most of the S&P 500 now.
I’ve been toying with various ideas—investing in foreign companies, investing in dividend-paying stocks, investing in government bonds. I just heard a podcaster claim that really the only sectors of the economy that aren’t mostly AI-related now are maybe consumer staples and health care, which aren’t really enough to add up to a diversified portfolio. He suggested just investing in short-term government securities, and waiting for the bubble to pop. So that aligns nicely with my preconceptions.
