Bear Thesis

Alright lemme get my existential anxiety out in the form of a bear thesis: Currently it seems like we’re headed for something bad. The concerns are threefold: 1.) Oil shock causing resurgent inflation 2.) Overvaluation of AI companies 3.) Concerns that many private credit loans are overestimated in value, and may in fact be worthless. The oil shock is self explanatory enough, but it adds a layer of deeper concern to points 2 & 3. Let’s look at the big boys in the AI space. OpenAI, Anthropic, Google, MSFT, Meta. These are your folks pushing “frontier models”. Thing is the frontier model race isn’t looking like so much of a race at this point. Anthropic and OpenAI are pulling ahead of competitors (Google only slightly behind). Llama is declining in adoption as the other models continue to surpass it. That’s not a huge concern though. If a bunch of companies are trying something new, you’ll have a handful of them actually succeed at scale. Normal stuff. Still, the eventual losers might be currently overvalued. We have exciting tech coming out, OpenClaw is very cool, but it doesn’t add value to any company. It cuts costs, sure, but again, it’s essentially just a pre-built AI agent using a big boy’s LLM. No company will gain a unique advantage over any other by adopting this type of workflow, everyone will adopt it. It’s not a monetizable thing. The greater concern are the thousands of AI “companies” that are little more than a GUI or wrapper for one of the big boys LLMs. I brought up AI receptionists in a previous comment. Dozens of companies. There are thousands of these bullshit companies in different niches, all one product update away from being obsolete. Then you have Private Credit, and this is concerning on both ends, Big Boys and bullshit. First off, the jitters in private equity are serious. Consecutive quarters of loans going from 100 cents on the dollar to zero. That’s not a result of a material change in these businesses. The loans should never have been given in the first place. Then you have OpenAI offering a guaranteed 17.5% return to private equity, when they’re not remotely profitable. And this is all within the context of potentially resurgent inflation that may make the Fed unable to cut rates, and a massively increased debt to gdp ratio compared to 2020 or 2008 that makes massive stimulus far more difficult to perform. It’s all very concerning. Closed QQQ 585p 6/27 +250% today. Waiting to see tomorrow’s action. Likely reopening QQQ and SPY puts Monday, QQQ 560p sometime in April, not sure about SPY yet. TL;DR (Courtesy of u/WakaWear): TL;DR:   AI valuations look frothy, private credit looks mispriced, and an oil‑driven inflation rebound could trap the Fed.   Most AI startups have no moat and could get wiped out by model updates.   Macro + credit + AI hype together create a setup for a broader market pullback.