The Roaring AI 2020's Dear Reader Just pause for a moment and take in the chart below that I have been iterating since June 2020, the message one should be receiving is that I expect this bull market to run for many more years, that I expected to target a return of X6 over some 7 years on where AI tech stocks stood June 2020, whilst my best guess 3.5 years ago was that we could see a major top during 2027, as long as run away valuations moderated from time to time delivering buying opps as they did during 2022 then I don't see why this should not still remain the big picture, thus the bull market that began March 2009 could continue to fulfill my original expectations for a 18 year bull market, where even the bear market that follows it will prove temporary as the bull market once more resumes during the 2030's. 12th June 2020 - Machine Intelligence Quantum AI Stocks Mega-Trend Forecast 2020 to 2035!
Therefore the following graph illustrates my road map forecast conclusion of how I expect the AI mega-trend to play out over the next 15 years and why I will continue the mantra of buy the dips and panics all the way towards liquidating holdings during the next mania peak when valuations go out the window and when I will likely heavily short these same stocks all the way down towards the buying opportunity of the 2030's. We are now near 4 full years into the roaring AI 2020's, whilst AI will lift all boats due to huge leaps in productivity, however obviously we want to be focused on core AI and it's primary derivatives. hence the Quantum AI tech stocks portfolio. The greatest danger to capitalising on huge AI gains yet to come is to get side tracked into sectors such as bonds, mining, commodities and so on, that's the real danger, to DIVERSIFY AND DILUTE, which is a mistake we are ALL guilty of, including me. We are just to fidgety to stay focused on the big picture and hence dabble in stuff we know little about. It's another one of those things that most take for granted which in reality is WRONG! i.e. TO DIVERSIFY IS WRONG! I continue to see War with China as being inevitable that could turn a Quantum AI stocks bubble mania crash into a true multi year bear market. Thus my primary strategy remains to buy the periodic deviations form the highs in good / fairly valued AI tech stocks as we experienced twice during 2023., in March and then again in late October, whilst several more opportunities arose randomly during the year such as AMD plunging towards $80 early May 2023, which is why you often hear me state that the S&P is a nothing burger / red herring in terms of investing in target stocks Whilst I expect AI to continue to deliver an exponential uplift to economic activity which will continue to surprise the econofools who think in linear terms, and thus completely fail to understand what is taking place hence are stuck on the default setting of a recession is always coming! Given that the models they are using are based on decades old theories, hence why we are in the Roaring AI 20's! That most will only see with the benefit of hindsight, look back in some years time and write reams and reams of worthless economic papers about it, as if they had clue of what was transpiring at the time! I mean this is FOUR YEARS into the ROARING AI 2020's! We have had the LLM's of 2023 that will continue to explode on an exponential curve during 2024, which will be followed by Tesla's Optimus Bot's during 2025 to be followed by several competitor bot's during 2026.... The future is rushing towards us at an ever faster pace all whilst linear minds cling onto decades old comfort blankets This decade is the WORST time in a century to be bearish on stocks! Especially AI tech stocks! Some fools on the cartoon network still call AI hype! The AI market can easily grow by 20% per annum driving earnings into AI tech stocks. Whilst 20% per year might not sound like much but through magic of compounding today's global AI market of roughly $600 billion becomes $1.5 trillion in 5 years time, and $3.7 trillion in 10 years time! And 20% is likely to turn out to be a a conservative growth rate given AI's explosive exponential nature! This illustrates the problem with looking at past data, the pre AI era, that ship has sailed, we are living in the AI age so one needs to skew interpretation of economic data in the light of the AI prism, such as the consensus econofools view that the end of a Fed tightening cycle tends to soon be followed by a recession, which I am sure is all you are going to hear for the whole of 2024, that a recession is coming, just as was the case for 2023 and 2022! Given what I see coming to pass in terms of AI, I would not be surprised if we don't see a recession for many years!. And say even if a recession happens, if it doesn't effect target stocks earnings growth then it won't result in a drop in the stock prices, where the advantage my patrons have are the metrics I track in my portfolio that instantly show which stocks are strong and which stocks are weak in terms of their fundamental metrics that I will return to towards the end of this analysis. Stock Market 2023 Trend Forecast Review Stock Market trend forecast mission accomplished, a rally to 4600 July 2023 to resolve in a correction to 4100 by late October 2023 followed by a rally into the end of the year. Full DJIA Analysis - Oct 2022 - Stock Market Analysis and Trend Forecast Oct 2022 to Dec 2023 S&P Chart - Dec 2022 - S&P500, Gold, Silver and Crypto's Trend Forecasts 2023 S&P targets a trend to 4600 by Mid Summer 2023 before correcting to below 4100 by late October.
And here's the updated S&P chart, baring in mind that the analysis and concluding trend forecast was posted at the bottom of the 2022 bear market when most were convinced of much lower prices ahead i.e. S&P 3200 and below.
So all one had to do for the whole of 2023 was to follow the yellow brick road map which was blind to all of the noise that MSM would focus on, nothing burgers every other day! My response to every 'crisis' was that it is just a nothing burger! Debt ceiling, banks going bankrupt, Ukraine war, oil price volatility, Zionist genocide of palestinians, all in terms of the stock market trend were nothing burgers. STOCK MARKET DISCOUNTING EVENTS BIG PICTURE The name of the game is to - a. STAY INVESTED b. Capitalise on discounting events. During 2023 we were lucky enough to experience two discounting events of near 10% each of the 3 expected as measured on the general stock market indices such as the S&P, with many individual target stocks experiencing far greater discounting events. The only one that failed to materialise was the dip into June, that confused ALL at the time, when's the correction? when's the correction? Operative word being CORRECTION! A Mike Tyson boxing lesson to all those who positioned themselves for a drop who forgot what the word CORRECTION MEANS! A correction is just that, a correction against the trend, and where I go one step further by stating that corrections such as 10% are getting LUCKY to prevent folks from getting carried away in thinking they can out box Mike Tyson!
One needs to learn to embrace discounting events by understanding what they are and what they mean, instead I get the impression that perhaps as a function of an emotional response on reaction to FALLING prices the exact opposite tends to happen i.e. it appears the more stock prices fall the less inclined investors become to buy as prices fall on BAD NEWS. So instead of buying I get comments on x,y,z, bad news, is the stock still good? Stock prices don't tend to fall on GOOD news! As for 2024, we should again expect to be in receipt of at least 2 discounting events of similar magnitude to 2023, though the greater the discount the greater the opportunity being presented. This article is an excerpt from my in-depth analysis and concluding S&P detailed trend forecast for 2024 - S&P Stock Market Analysis, Detailed Trend Forecast Jan to Dec 2024 has first been made available to patrons who support my So for immediate first access to ALL of my analysis and trend forecasts then do consider becoming a Patron by supporting my work for just $5 per month, this is your last chance to lock it in now at $5 before it soon rises to $7 for new sign-ups. https://www.patreon.com/Nadeem_Walayat. Analysis that seeks to replicate the accuracy of 2023:
S&P Stock Market Analysis, Detailed Trend Forecast Jan to Dec 2024 CONTENTS Latest analysis - Stock Market Election Year Five Nights at Freddy's My counter to the headless chickens following the failure of santa clause rally and the first five trading days indicator.
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Wednesday, 31 January 2024
The Roaring AI 2020's
