DegenerateGambler

I shorted CAR from 669 and bought puts on it. Exited early like I always does at 487 - I wish i held onto them all the way down to sub-200. My take-profit target was 280 but i paper-handed it. So i kinda fumbled this trade.

Hi guys, I was thinking back to the dot com bubble and how some traders took both long and short on some names to profit from both directions. How would you guys measure that the AI mania is near a top? And flip from long to short to do 2x the profit on it? Right now I have net long SNDK positions which I expect it to hit 2k, but from strictly valuation criteria, that wouldn't really be a maniacal top - which looks more like the chart of VCX (Fundrise Innovation Fund) which had stakes in Anthropic and SpaceX and jumped to 30 times NET ASSET VALUE. Then it blew up. https://investorplace.com/hypergrowthinvesting/2026/04/the-vcx-frenzy-is-a-warning-for-ai-ipo-investors/ I wanted to short VCX at 25 times net asset value but the shares were restricted for shorting - so i lost that opportunity. But if you look at some AI names like NVDA, SNDK - they are not expensive on a forward PE basis given their growth trojectories over the next 2-3 years. As businesses I wouldn't want to hold them over 10-20 years, but I do believe the AI supercycle will produce a chart similar to VCX. So the question is, how do we profit from both direction given the velocity of the moves? For example - Allbirds (BIRD) converted from a shoe-making company to buying chips to rent to AI companies and its shares went up 600% and crashed, I tried to short that one too but couldn't find any shares available. But those are individual cases with BIRD and VCX. I was thinking of the actual entire trend, if riding it up then ride it on the way down, could produce generational wealth. But currently am not yet skilled enough to know when the mania will end and do the "flip". Would greatly appreciate any insight into this.

https://finance.yahoo.com/news/openai-forecasts-revenue-top-280-230738108.html OpenAI says its revenue will top 280 billion by 2030, do you guys believe it?

I took profit on PLTU, which fell from 90 to 38ish. I didn't want to wait for Palantir to hit fair value (which i believe is 60-80ish) because i think "buy the dip" crowd considers any kind of dip a generational opportunity and it may take a long while for PLTR to hit fair value. The stock still is trading at 200+ PE right now and the "buy the dip" crowd will likely buy it back up so I am getting out before that happens.

am actually short PLTU - the daily 2x palantir shares which mathematically moves in our favor as a short candidate over the long run

I am short Palantir since 188, but fed is lowering rates soon and QT ended and this bull-mania might continue for a while. Shorting has the problem of requiring good timing, unlike the long side of the trade.

The problem with his NVDA short is simply that there are so much better shorts out there (Oracle and Coreweave etc) and he would need a bear market to trigger some kind of big waterfall for puts to print. I get shorting Palantir, not NVDA. Also Oracle was a much safer short because how the heck is OpenAI with 20 billion dollars of revenue going to pay Oracle 350 billion in the next 5-10 years? and Oracle was projecting their datacenter revenue to grow to 144 billion in 5 years, yeah right. Then Oracle has to spend all the money building all this infrastructure HOPING some company will use their service for all their capital investment. NVDA on the other hand, is a pants-and-shovels company. They are the guys selling the pants-and-shovels during this gold rush. Why would he pick that one? I get the Cisco analogy tho, NVDA will for sure fall the way of Cisco some day, but using puts, he put a time limit on it. Also if NVDA sells off 30%, the rest of the AI stuff will absolutely get crushed, just short those. I feel like he wants to be Cassandra more than he wants to make money.

Bloom Energy (BE) went from 8 to 147 on the AI power supply narrative. It's crazy. NRG a traditional power company literally tripled already in the last year on the AI power supply theme. So you are correct that power is the bottleneck since Microsoft literally have GPUs collecting dust in their inventory since they cannot find enough power, but the market has front-ran this thesis already.

I hope he does not make a move on Taiwan. I don't think China really benefits that much from getting Taiwan anyways, it's just a historical thing for them. The new generation of Chinese youth prolly just wants jobs etc. tho they are somewhat brainwashed. China should really just learn from Charlie Munger's wisdom and copy Singapore in every way and then get their GDP per capita the same as Singapore's (144k adjusted for purchasing power), and then they'd be like - what use is Taiwan? Xi is not a very good leader - he cracked down on Chinese tech companies a while back and I am sure he wished he didn't so they could have more money to devote to AI development now. It's unfortunate that Deng started China's internal change by copying Singapore and Xi left that all in the dust. Why wouldn't they just keep copying Singapore until it becomes a giant Singapore?

Just more money printing to dilute the debt, but that is actually good for the USA and bad for the average USA citizen who has to face inflation. Since the reserve currency status isn't going away any time soon, USA assets (stocks, houses etc) should go up in price (faster than debt) and the net worth of the nation will actually increase. The USA has a net worth well over 150 trillion dollars and 38 trillion dollars of debt is nothing compared to the assets the USA holds. Just keep printing - make assets go up, and USA net worth keep going up while the middle and lower classes becomes relatively worse off standard-of-living wise. The nation itself will be fine while average citizen might be a bit worse off, and of course live like 7-8 years shorter than Europe and Japan on average since healthcare and healthy living is a mess here. I don't think the USA is made for the average citizen, it's really just made for the ultra-talented and rich classes. So their aggregate assets will still make the nation super rich on a net-worth basis even as we print to oblivion.

Why would he short NVDA when it's like 50 PE growing 30%+ per year? He has to make sure this is the very top of the bubble to make money. Costco is like 50 PE growing less than 15% per year, he should be shorting that one instead if he wants to short 50 PE megacaps. I know growth rate and PE is not the end all be all but just back of the napkin calculations tells you NVDA is not extremely expensive and the AI boom better be at the very top for him to make money on it. Unlike 2008, the companies he picked to short are not crap companies - just highly valued, especially Palantir. I think Palantir is more likely to work out for him than NVDA, but picking on NVDA is kind of ridiculous as a short thesis. Worst case growth slows to 20% and NVDA falls to 150 and his puts still are underwater due to time premium burn.

The path to universal happiness with AI is such a bold claim i think it's people annoiting themselves Gods.

That's an interesting observation. With regard to AGI - if we start from the base layer - atoms - would we definitely say that using semiconductors is the better way to create intelligence than using neurons? I mean some of these semiconductors are getting close to 1-atom thin and that is the physical limit without resorting to quantum computing. And who is to say there are no quantum phenomenon going on inside our brains? I'd say it's still early to say semiconductors is the better way to create intelligence from the basic building blocks of matter. It may never surpass meat brains.

The problem with calling bubbles is timing and the surety of eventual collapse. The problem with calling bubbles on these cashflow-positive big tech is that they can weather any kind of "collapse" scenario whereas in 2008 the banks and financial institutions had no way to survive. Sure the big tech companies can overspend for a few years but that doesn't create the kind of bubble we saw in 2008 where literally everything was built on a pile of sand. Meanwhile what can happen is his short position can get obliterated as people pile into the "AI trade" and then it "crashes" to a point still higher than where he started shorting them. Also remember if the stock market really crashes the fed will come to the rescue giving you very little opportunity to exit your positions. The Fed put is a real thing now, nothing is really allowed to fail, not even asset prices. The "AI trade" can go on for quite a few years and then maybe the frothy, no-revenue companies will start failing but the big tech can just cut back spending an their operating cash flow will sky-rocket again. I feel Burry bet too big on what is eventually an "adjustment" vs "crash" scenario. The fed has incentive to keep printing money because US debt is so high - gotta inflate that debt away. So where is the money gonna go? Right now the only obvious answer is the "AI Trade".

Karp seems to think 700 PE or even more is supportable by his company's mission which he seems to think is special above all other since he thinks his company is doing a noble cause. He compared his company to michael jordan and michael phelps. So that tells you where his beliefs are. Retail drove up the price of Palantir and may burn Burry. Tho I have to say i did short Palantir with about 4% of my portfolio after careful analysis and we will see how that works out. It prolly will go to 1000 PE just cuz i shorted it lol.

Google is a really admirable company - although am not an expert to gauge the feasibility of this, but it sounds awesome!

Value investors tend to be early in things, so i guess Burry isn't the best indicator out there. I wish I knew how the Soros/Druckenmiller methods worked since they sometimes long and short the exact same securities - playing both sides. That would make shorting Palantir and the AI bubble much easier. I think Burry will get burned on NVDA since it's like growing 50% with a 50 PE, not exactly expensive even tho there is circular accounting like he mentioned. It's probably hard to gauge something like buyer exhaustion without a Bloomberg terminal or some proprietary methods.

Interestingly, Michael Burry of Big Short legend, has opened bearish positions against Palantir. I think he is a bit early but might not be wrong. I feel his bearish bet against NVDA is wrong tho. https://www.quiverquant.com/news/Michael+Burry’s+Scion+Asset+Management+Bets+Against+Nvidia+and+Palantir

Thanks for the inputs guys. I guess it's pretty hard to gauge how many years we are away before rationality returns to the markets.

I was not an active investor in 1998-2000, do you feel now we are more akin to 1998-2000 than 2000-2001?

I am looking to short some insanely overvalued stocks like Palantir, trading at 600+ PE and 140 times sales, but it's tricky to get the timing right as people just "buy anything AI". Stanley Druckenmiller talked about using some indicators to gauge buyer exhaustion, but I don't know how to do this at all. Any of you have any experience with shorting stocks can shed some light on how do you gauge things like buyer exhaustion and improve timing?