This is why the media all-too-often are not just not doing the job they piously proclaim they are doing, but are adding to the ever-growing stock of bullshit in the world. Mind, like God’s love, the stock is infinite, so no need to worry if you are worrying.
And speaking of bullshit, Donny has assured all those still willing to listen – not many now – that ‘an Iran deal is imminent’ and, presumably will be announced at the same time he will reveal his new ‘health plan’.
‘Powering stocks’ (as in ‘powering the stock market’) gives many that warm ‘well, it’s not all bad then, is it?’ glow. This is followed by the – note, carefully worded – observation that the S&P500 is shooting ahead which ‘often means more good times ahead’.
The ‘more’ is dishonest: America is not in enjoying ‘good times’ and the outlook it looking ever bleaker: inflation is creeping up, groceries (especially fruit and vegetables largely imported from Mexico) are now almost 25% higher on average, energy prices have risen (gas up almost 35%), mortgages becoming dearer, no new jobs being created.
Crucially more Americans are using their credit card to pay for their weekly shopping and US consumer credit defaults are now as high as they were by the end of 2008. Remember 2008? Not a good year.
But the headline is worse: ‘The AI drive hits overdrive’ might also warm the cockles of many a cretin.
‘Powering stocks’ (as in ‘powering the stock market’) gives many that warm ‘well, it’s not all bad then, is it?’ glow. This is followed by the – note, carefully worded – observation that the S&P500 is shooting ahead which ‘often means more good times ahead’.
The ‘more’ is dishonest: America is not in enjoying ‘good times’ and the outlook it looking ever bleaker: inflation is creeping up, groceries (especially fruit and vegetables largely imported from Mexico) are now almost 25% higher on average, energy prices have risen (gas up almost 35%), mortgages becoming dearer, no new jobs being created.
Crucially more Americans are using their credit card to pay for their weekly shopping and US consumer credit defaults are now as high as they were by the end of 2008. Remember 2008? Not a good year.
But the headline is worse: ‘The AI drive hits overdrive’ might also warm the cockles of many a cretin.
But then the prices for tulips also ‘hit overdrive’ in The Netherlands in the 1630s, as did the South Sea Company stock price in the 1720s, the price of property in Japan in the 1980s and the stock price of innumerable Dot Com start-ups in the late 1990s.
Oh, and in the US in the mid-2000s buying up property to sell again soon was very attractive, especially as you and your goldfish could get a 100% mortgage just by asking, as prices just kept going up and up and up. That, if you recall, ended badly in 2008.
Similarly, buying and holding AI stock is very attractive because the price is continually rising – ‘hitting overdrive’. Traditionally, companies are seen as attractive, as in ‘profitable’, because they are earning money and passing much or some of it on to stockholders. To date, AI companies are not earning a sou, not a dime, penny, cent, fen or centavo – it’s all what they are expected to rake in.
Bollocks, say the cretins, we can wait! So they keep buying, pushing the price higher and so other cretins, worried they might lose out – so make that ‘other greedy cretins’ – also pile in and up goes the price even more.
‘You, matey,’ the cretins say (addressing me), ‘really don’t know what you are talking about! Just look at the stock market valuations of AI and tech companies! Look at them!’
Yes, dear hearts, look at them and try to understand what they are: NOT what you seem to think. A quoted companies ‘valuation’ is not the same as its ‘value’. It is simply the price of the company’s stock multiplied by the amount of the company’s stock. That’s it.
If 100 shares of ‘FillYourBoots.com’ are launched at 1p each, the stock valuation is £1. If a week later the price of each share shoots up to £10, FillYourBoots.com is now worth £10,000. Impressive, eh?
Oh, and in the US in the mid-2000s buying up property to sell again soon was very attractive, especially as you and your goldfish could get a 100% mortgage just by asking, as prices just kept going up and up and up. That, if you recall, ended badly in 2008.
Similarly, buying and holding AI stock is very attractive because the price is continually rising – ‘hitting overdrive’. Traditionally, companies are seen as attractive, as in ‘profitable’, because they are earning money and passing much or some of it on to stockholders. To date, AI companies are not earning a sou, not a dime, penny, cent, fen or centavo – it’s all what they are expected to rake in.
Bollocks, say the cretins, we can wait! So they keep buying, pushing the price higher and so other cretins, worried they might lose out – so make that ‘other greedy cretins’ – also pile in and up goes the price even more.
‘You, matey,’ the cretins say (addressing me), ‘really don’t know what you are talking about! Just look at the stock market valuations of AI and tech companies! Look at them!’
Yes, dear hearts, look at them and try to understand what they are: NOT what you seem to think. A quoted companies ‘valuation’ is not the same as its ‘value’. It is simply the price of the company’s stock multiplied by the amount of the company’s stock. That’s it.
If 100 shares of ‘FillYourBoots.com’ are launched at 1p each, the stock valuation is £1. If a week later the price of each share shoots up to £10, FillYourBoots.com is now worth £10,000. Impressive, eh?
What assets does FillYourBoots.com have and how much has FillYourBoots.com earned in that week? Well, it has no assets at all and has earned nothing but don't quibble, don't be such a naysayer, don’t keep looking on the downside! Chill! Good times are on the way!
Thus I, the CEO, COO and CFF of FillYourBoots.com have managed to convince suckers that ‘good times are on the way’.
Word gets out that FillYourBoots.com looks like a winner – the proof: stocks have shot up in price tenfold! Imagine! Must be a good thing! Get in there!
So over the next week the price shoots up higher, and though some canny investors think they smell a rat sell up and cash in and walk off with a profit, less canny investors pile in further. And as there are more potential buyers than sellers, the price rises even further. Soon, with the price hitting £100 for each share, the valuation – though, note, not value – has hit £100,000.
I needn’t go on an labour the point as you grasped that point minutes ago and those who did not and will not have already left for a less challenging pastime. Anyway, isn’t the WSJ from which this headline comes talking about the S&P500 not just AI stocks? Well, yes it seems to but . . .
Overall, around ten AI and tech companies are grouped together as those whose stock is ‘hitting overdrive’ and two or three, e.g. Microsoft and Apple, do make a profit. But pertinently the AI companies do not.
The financial news they do release is misleading: certainly, the AI and tech companies have turnover and buy and sell, but simple analysis had shown that almost exclusively they trade with one another. Thus no ‘new’ money his being made – it is the same millions doing the rounds which looks impressive on a their balance sheet but de facto means fuck-all.
What is far worse and far more misleading is when, as here, the Wall Street Journal trumpets a soaring stock market, it is almost wholly the trading in the AI stocks which thriging: by ‘valuation’ these ten or so companies make up almost 40% and so their success makes the overall S&P500 look good.
Strip out the ‘gains’ – make that the spurious gains – made by the AI stock trading, and the rest of the S&P500 is barely limping along. It is what has been described as the ‘irrational exuberance’ of those soaking up AI stock bumping their prices ever higher which is skewing the picture.
The description ‘irrational exuberance’ was coined almost 30 years ago by former Fed Chair Alan Greenspan for the behaviour of those piling into any dot-com stock going and we know how that ended.
This is where the ‘P/E’ ratio is useful and gives broad-brush view of just how well a company is performing and whether it might be worth investing in. To establish it you just divide the price of a share by how much that share is earning. The rule of thumb is that the higher the P/E as in each share is earning pretty much fuck-all as are the AI companies, the more such a share should be avoided.
Certainly, there are wise-acres who insist – as always – that ‘this time it is different’. And to sound even more convincing the don’t put it in language most cretins are suckers for: this, they assure us, is a ‘paradigm shift’. More letters, certainly, but adds up to the same old bollocks: This Time It Is Different!
Well, it is your money, pal. Me, I’ll stick to backing the gee-gees – Kev down the pub passed on a dead cert which will start at 33/1 and make me a tidy sum. OK, he’s been wrong these past six or seven times but a broken clock is right at least twice a day.
Overall, the WSJ should know better and probably do, but with newspapers to sell who’s going to be that picky? It reminds me of advice all young reporters starting out are eventually given here in Old Blighty, but no doubt in Australia, Canada, India, New Zealand, South Africa (thought the yanks are perhaps a little too precious to abide by it).
Word gets out that FillYourBoots.com looks like a winner – the proof: stocks have shot up in price tenfold! Imagine! Must be a good thing! Get in there!
So over the next week the price shoots up higher, and though some canny investors think they smell a rat sell up and cash in and walk off with a profit, less canny investors pile in further. And as there are more potential buyers than sellers, the price rises even further. Soon, with the price hitting £100 for each share, the valuation – though, note, not value – has hit £100,000.
I needn’t go on an labour the point as you grasped that point minutes ago and those who did not and will not have already left for a less challenging pastime. Anyway, isn’t the WSJ from which this headline comes talking about the S&P500 not just AI stocks? Well, yes it seems to but . . .
Overall, around ten AI and tech companies are grouped together as those whose stock is ‘hitting overdrive’ and two or three, e.g. Microsoft and Apple, do make a profit. But pertinently the AI companies do not.
The financial news they do release is misleading: certainly, the AI and tech companies have turnover and buy and sell, but simple analysis had shown that almost exclusively they trade with one another. Thus no ‘new’ money his being made – it is the same millions doing the rounds which looks impressive on a their balance sheet but de facto means fuck-all.
What is far worse and far more misleading is when, as here, the Wall Street Journal trumpets a soaring stock market, it is almost wholly the trading in the AI stocks which thriging: by ‘valuation’ these ten or so companies make up almost 40% and so their success makes the overall S&P500 look good.
Strip out the ‘gains’ – make that the spurious gains – made by the AI stock trading, and the rest of the S&P500 is barely limping along. It is what has been described as the ‘irrational exuberance’ of those soaking up AI stock bumping their prices ever higher which is skewing the picture.
The description ‘irrational exuberance’ was coined almost 30 years ago by former Fed Chair Alan Greenspan for the behaviour of those piling into any dot-com stock going and we know how that ended.
This is where the ‘P/E’ ratio is useful and gives broad-brush view of just how well a company is performing and whether it might be worth investing in. To establish it you just divide the price of a share by how much that share is earning. The rule of thumb is that the higher the P/E as in each share is earning pretty much fuck-all as are the AI companies, the more such a share should be avoided.
Certainly, there are wise-acres who insist – as always – that ‘this time it is different’. And to sound even more convincing the don’t put it in language most cretins are suckers for: this, they assure us, is a ‘paradigm shift’. More letters, certainly, but adds up to the same old bollocks: This Time It Is Different!
Well, it is your money, pal. Me, I’ll stick to backing the gee-gees – Kev down the pub passed on a dead cert which will start at 33/1 and make me a tidy sum. OK, he’s been wrong these past six or seven times but a broken clock is right at least twice a day.
Overall, the WSJ should know better and probably do, but with newspapers to sell who’s going to be that picky? It reminds me of advice all young reporters starting out are eventually given here in Old Blighty, but no doubt in Australia, Canada, India, New Zealand, South Africa (thought the yanks are perhaps a little too precious to abide by it).
Don’t let a couple of facts get in the way of a good story
It might not win you too many prizes for ethics and professional standards, but it sure does sell rather more copies of the rag you are working for (in the generic sense of ‘rag’ in that the winners have left ink and newsprint behind and are now all binary or digital or whatever the sodding word is. That’s it, ‘online’.
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