AIBS™️ - Part IV

My Portfolio is Changing...

AIBS™️ = “Artificial Intelligence-Backed Securities” (also a clever pun for “AI - BS”)

At this point, it’s a question of “WHEN” the AI Bubble will burst, rather than “IF”.

“Why such certainty, dear Shrub?” you might ask. Lets see:

• “Is it because Scam Altman sounded unhinged and defensive when confronted on how OpenAI can support $1.4 trillion of capex commitments?”

  • You can watch Altman going all “Skilling*-like” here at the BG2 Pod (If you don’t get the Skilling reference please refer to this post here).

  • “Poor” Brad Gerstner of Altimeter had to come out on CNBC to defend Altman, but he didn’t do such a great job, letting it slip that the latest correction was “healthy, we are letting SOME of the air out of the Bubble”. Ohhhh, so it’s a Bubble after all? You don’t say. You can watch Brad here, it’s a good one to watch as Brad is a good guy and he even makes it clear that Altimeter reduced their AI exposure…

• “Is it because Labubu Larry’s share price gave up all the gains from the earnings pump, then Oracle’s CDS spiked and Larry just took over the Finance Department of Oracle?”

  • “Ellison now manages finance … after picking up some teams that were previously managed by former CEO Safra Catz” (source: Bloomberg)

• “Is it because Michael Burry, of “Big Short” fame, returned on Twitter to highlight the accounting shenanigans of hyperscalers’ understating depreciation of their data center assets?”

  • Burry estimates that hyperscalers will understate depreciation by $176bn in 2026-28… in Labubu Larry’s case that’s 26.9% of his earnings lol!!!

    

  • <Shrub’s take: Since the Plebes will get 50-year mortgages, the AI Oligarchs should ask for 50-year depreciation schedules on GPUs, problem solved🤭>

  

• “Is it because Buffett just dropped a farewell message to shareholders, thus marking a “Meme Bottom” in “Value vs Growth”?”

  • You can read the letter here, full of wisdom.

All of the above are good answers, but here is the real culprit for the inevitability of the Bubble eventually bursting:

• MASAPONZI SON DIDN’T GIVE THANKS!

Here at Shrubstack we know all too well the importance of giving thanks and the consequences of not doing so…

We have offered mental models to preserve our Wealth and our Sanity:

• For example, “Round-Tripping is NOT Allowed” hence why we take profits along the way, make the trades “free” and give thanks

Round-Tripping Not Allowed

• Secondly, we have “The Two Wolves” mental model as guidance to size up the remaining “free” positions and avoid FOMO down the line

"Inside you there are Two Wolves"

So when I see Masaponzi Son not giving thanks, it’s as if he is mocking the Gods and tempting the Universe for retribution. But what exactly did he do?

You see, Softbank just released results and disclosed that they sold their NVDA stake for $5.8bn. At first read of the headline, I was actually impressed. “Wow, Masaponzi must have learned his lesson and took profits”, I thought.

But then it became apparent that Softbank was selling their NVDA stake, along with part of their TMUS stake, in order to double up and plough ANOTHER $22.5bn into OpenAI…

…which is weird, since the CFO can’t even tell if we are in an AI Bubble or not:

*SOFTBANK CFO SAYS CAN’T TELL IF WE’RE IN AN AI BUBBLE OR NOT

…which brings me to this Meme:

Softbank’s share price TRIPLED since the summer. Instead of giving thanks, and learning from past mistakes, Son just doubled up again… no wonder Mr Softy has a history of round-tripping his share price 🤭.

I guess Masaponzi Son also has “Two Wolves”… but they are both degens…

My Portfolio is Changing…