Insider Newsletter: Issue #317

AI hype, oil power plays, real estate traps, overlooked Hong Kong bargains, wind’s math, graphene’s gamble, Greece’s climb...and 5 contrarian shots. Where’s the asymmetry?

Greetings, friends!

Client Josh actually sent me through three amazing sunrise pics while salmon fishing in Haida Gwaii, off the Northern coast of British Columbia. I had to pick one.

A sunrise in Northern Maine from John Walb.

To start, we recorded a brief video for you with an overview of some of the topics covered in this Newsletter issue. To watch it, click here.

Everyone wants to live at the expense of the state. They forget that the state lives at the expense of everyone.

Frederic Bastiat

In This Week’s Issue

• Delusions of AI

• Operation “Let’s Grab the Oil”

• Thoughts on Real Estate

• Musings on AI

• Is There Anyone Out There for Hong Kong Small Caps?

• Wind: Trumped by Economics

• What About Graphene

• Remembering the Greeks

• The Big Five:

Delusions of AI

History is replete with mankind deluding itself into believing the most unbelievable things. Delusions, hysteria. and groupthink are all part of the same social package. We, humans, are social creatures… or put another way, herd animals.

Today, right here and now, we are living through the latest iteration of groupthink. We are seeing it everywhere. Even Steve in sales is telling Brenda from HR to buy AI stocks.

It’s all getting a bit ridiculous.

In fact, I was reading an update on Transocean… you know, the company that provides offshore drilling services.

Imagine what I find in the last paragraph:

While we acknowledge the potential of RIG as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk.

If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

Granted this was from Yahoo Finance, which shills garbage to retail investors… which itself is indicative of the hype surrounding AI.

Also, since it’s being pushed by Yahoo Finance (which is entirely retail), we can surmise that we’re closer to the top than the bottom of this cycle.

Don’t get me wrong, AI will probably change the world, possibly in the same way the internet did. Some think even more so. Maybe they’re correct. But none of this changes the fact that the current AI stocks will be HIGHLY unlikely to be the beneficiaries of all of this.

This bad boy is currently 8% of the S&P 500 and 5% of the MSCI index. So the question is, what happens when earnings fail to catch up to valuation? A quick reminder: as of this writing it trades at a PE ratio of FIFTY EIGHT!

Or as Mike Green suggests, what happens when the passive capital flows slow or even reverse? I suspect we will find out. When? No idea, but we know where the fire is so we know where not to step into.

Meanwhile the AI boom driven by Nvidia carries the US markets higher. With that we now proudly present to you… the US stock market. The most overvalued market in history… and by any metric.

And broader than just Nvidia, the mania in the venture capital market is itself astonishing.

This is not going to end well for investors throwing money at this.

There is another element to all of this which I find… ahem, uniquely useful for the implementation of an authoritarian control structure — a digital gulag if you will.

We are still living in a world where there are individuals that can be associated with the abuses that are inflicted on people.

Whether it be politicians or corporate thugs, we’re still dealing with humans. Now, imagine when it’s not just some faceless bureaucracy, but literally a chat bot or an automatic deletion/cancellation/denial of service that renders whatever you’re trying to do void.

We will know that it is just some black box called “AI,” and we won’t even know who to be angry at or where to direct that anger.

I believe we are being set up for just that. All totalitarian systems have required jack-booted thugs. They’re easy enough to find.

Just remember CONVID and your average idiot neighbor was ready to call you in to the police because you decided to have a barbecue with friends.

But imagine there isn’t even any need to rely on such coercive tactics and psychological manipulation. AI can be programmed by the programmers to carry out anything, and we won’t have any recourse.

Consider that we’re being told from multiple angles. That we humans really are just not good enough. We simply can’t compete with AI. We’re useless. This is nonsense.

AI is a tool. It will never be “sentient.” What it does is takes the information from you and I, scrapes it from the interwebpipes, and packages it up for us based on how we instruct it.

It does it faster than any human can just as a spreadsheet can calculate multiple variables faster than a human.

Will it disrupt many workers? Sure.

Will it produce productivity gains? It already is. But don’t be distracted and buy into the ”all humans will be replaced” codswallop.

What is worrisome is the reliance on AI. Those who control the AI get to “impart wisdom.”

AI gets to rewrite history, decide science, you name it. Granted, much of the history we think we know is borderline criminally wrong or at the least manipulated for the benefit of the writers.

Operation “Let’s Grab the Oil”

It’s back on track.

I don’t know if you remember it, but last year I hypothesized that the Trump administration would focus their attention on a North/South axis of power… and less on an East/West.