Noble：AI是史上最大资本错配，市场处于后真相时代

So my, uh, mentor, Peter Lynch had insatiable curiosity. And he needed a foreign stock. Uh, jock. So they came to me, uh, in early 84, and they said there had been abroad. I wanted to you want to be in control, you know? So they sent me out here and they said, get your glove. Because end of the year of 80, 84, we're going to start our first foreign stock fund. I was it so, you know, but as with most things with Ned Johnson, they gave you opportunity.

Three into the fire and look let's see what you got. The fire right now is I you are scathing our listeners and viewers that own this stuff in their retirement plans and fidelity everywhere else as well. What should be their action into the autumn? Why am I not surprised by the question that we spoke about a couple of months ago, when I was one of was last time. Things have gone from bad to worse. Um, and let's just step back for a second, because there's so much day to day volatility, this announcement, that release, etc., etc. most recently all this stuff over the weekend.

I mean, Tom Paul, think about this. You have a commodity that's deflating at like record speed with debt that's being built up at record speed. Like what could possibly go wrong? Okay. So every day, you know, every week is another mile that comes out. And then the Chinese could do it for 95% off. And now there's noises about, you know, Trump maybe he's going to ban Chinese AI or whatever. Um, as we said last time, uh, I think this is, uh, going to be the biggest misallocation of capital in history.

Wow. And when people say, is it worse than.com? Not as bad as.com. History rhymes. It doesn't repeat. I read something interesting the other day. Not original thought, but I thought this fellow put up brilliantly. He said, you know this. I think it's kind of reminds him. It's kind of like if you if you took.com and merged it with the great financial crisis, ie all the Ponzi finance schemes of housing, it's kind of what you got.

Oh, boy. So what aren't you buying here? I guess in terms of the concept of I won. I mean, I think we're all kind of in the same boat. We're trying to every day learn a little bit more what this means, what it actually is. To me, it just feels like what we're talking about five years ago, which is big data and it's just another term. But I'm being told, no, no, no, this is a new way of computing. This is a new way of processing information.

And it requires a tremendous amount of computing power, which requires a tremendous amount of capital. And that's kind of what you got to get your head around. You're not buying it? No. Um, we all use AI. I use AI. Yeah. People savagely attacked me on Substack and X because. Oh, you used it all right. Yeah, I like it. Okay. Does that mean it's a good investment? It's like, you know, people always just talk about, you know, difference between a product and the stock, right?

The question is, is I if you if you do reverse engineer the math and you and you look at the trillions of spending on CapEx and just reverse engineer and say, okay, how much of gross profits they need to make to justify that. And in turn, what are the implied revenues that you need to justify that liars figure? The figures don't lie. And so the question is, is there going to be an acceptable return on capital? All these trillions of dollars are being spent?

Or is this just going to be, you know, $100 billion Tam and you're going to answer commodity business and there's going to be no margins. That's the issue. One last point I want to say on this, Peter Bear is a bank credit analyst, made a really good observation a couple of months ago. Like any 2.com. He said, you know, the folks in 99 who were all bullish on the internet, there were, right, internet traffic went up like 43% compared to next 25 years.

It went up by 25,000,000%. Didn't stop Nortel from going bankrupt and Global Crossing and going bankrupt. These are two different things. A George Noble where this focus, uh, hugely visible. And so you can't say enough about his careful writings on Twitter, on LinkedIn as well, of course. Definitive forever and Fidelity International. I love how Justin Bieber treated you in the book. I mean, I read the book cover to cover.

Just enjoyed it. They kept like overs out of it, You know, I went through I did an index search for lock overs just to see how many people were in it. Thank God they kept that there in the Boston Racquet Club. They kept they kept out of it. What's different now in the racket is is it easier not to lose money now because of the cacophony we're living in terms of the nation? Is it is it easier not to lose money? Um, I actually think it's easier to lose money.

And the reason is in, um, breaking this here. Breaking? Um, we've heard, you know, the term fiscal dominance has made the rounds the last couple of years. If I hear that term one more time, I'm going to put my fist through the wall. I'm coming out with a new phrase. It's called narrative dominance. Narrative dominance. In other words, I love that. Okay. It's it's do you remember the book Alan Keyes wrote a couple years ago, four years ago, the post-truth society.

We're in a post-truth stock market. It doesn't matter what reality is, right? They're trying to tell you this is what you should believe. And we're going to put enough liquidity. Spiked the drinks enough. So what are you complaining about? Time. You're looking at these numbers and everything. Can you parse between Meg seven or you treat them all the same? There are a little bit different, but. So, for instance, uh, no surprise, we've talked about this before.

The electric car company shall Not be named uniquely stands out for being extraordinarily unattractive. All right. Um, I've never seen a short at such scale 1,000,000,000,005. And then with its cousin space, which we spoke about last time as well. Um, space X is not Mach seven, but those are just unbelievable company. They're just atrocious. And then at the other extreme, you have, you know, Google. Fine. Uh, and then everything in between.

So again, it's a market of stocks. Know what you own Peter Lynch, please call your office. So how concerned are you about the overall economy if because so much of economic growth underlying economic growth is I related you pull that out. Uh, what does that mean? Again, the economy is not the market, the markets, not the economy. I am concerned. My call has not been for recession or has been for rotation, not recession.

However, um, as we've been discussing, you know, this, this, this Ponzi finance circular financing with, with with uh, it's underwriting. I, uh, when the market says no mas and you start looking at the CDs on Oracle or, you know, whatever, uh, in the markets is game over. To your point, you're asking the right question. And I think we're looking at, you know, I'm focusing the market not on the economy so much, but when you're spending trillions of dollars and running a deficit of 7% of GDP, like, how are you going to get a recession?

All right. Problem is, you're looking at a global increasing cost of capital and a nominal GDP or character of it. Maybe we've never seen before. So you mentioned CDs, credit default swap. And you know, there's a debate folks, about its efficacy in that the blunt instrument is I'm looking on the screen at the yield space. Is price down. Yield up. How does that play out. Is it play out. We're like in August of 1998. It just breaks or because of leverage or whatever?

Or do you see it as just sort of ebbing into something? Well, what's what's really interesting here? Much has been said about the passive bit in indexation, and much has been said about the huge deficit spending. And so if you think about past cycles, Tom, what will bring on the contraction is if stocks go down. Corporate managers cut back. And that gives you the economic impulse to have a slowdown if not recession with stock prices though continuing to stay up there