What Goes Up…

We’ve been warning for over a year that the stock market is overly concentrated in AI stocks.

And with those stocks soaring, market valuations aren’t just high – they rest on a sliver of companies that need to execute their operations perfectly.

A new survey shows that over 90% of money managers also believe that markets are overvalued.

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A full 91% of fund managers believe stocks are overvalued, the most on record (Source: BofA Global Research)

Why is this remarkable? It’s the highest ever recorded.

Only during the ‘08 financial crisis and its aftermath have the majority of money managers seen stocks as undervalued.

This data point is another in a list of historic highs – stock indexes, gold, silver, bitcoin, retail investment, retail margin borrowing – we’re seeing in the market right now.

Markets are out of whack to the upside.

History’s cautionary tale? When markets are out of whack… it takes an unsettling event (crisis) to get them back into whack.

~ Addison

P.S. Yesterday’s Grey Swan Live! with George Gilder was more important than we expected.

Yes, George covered most of what he believes are eight exponential technologies — AI, quantum computing, robotics, self-driving cars, blockchain, chips, advanced biotech, and even space.

But Mr. Gilder also took us on a deep dive into a new technology that could make traditional computer chips obsolete.

Why is it important? Because it will likely render the “Nvidia Model” – the business model pouring trillions into the stock market and massive data server farms around the globe – obsolete.

If you’re invested in the broader index in a significant way, including through a retirement account like an IRA or 401(k), you are going to want to hear George’s forecast for what disruptive technology is going to replace the microchip as we know it.

The pace of disruption will be staggering, according to Gilder. He and our colleague Ian King have released a new report forecasting these vital trends at the forefront of technology. You can see George and Ian’s work here.

And our own research with Ian, which we filmed on Tuesday, will be released on October 16. It details the next leg of stablecoin development and which three companies we expect will dominate the new regulatory environment for the monetary system as digital assets go mainstream.

You’ll have a chance to get on an exclusive email list for the release of my report with Ian on Sunday. Watch your inbox over the weekend. And stay tuned!

For paying members of the Grey Swan Investment Fraternity, the replay of our conversation with George Gilder can be found here:

If you have any questions for us about the market, send them our way now to: feedback@greyswanfraternity.com.

We’ve been warning for over a year that the stock market is overly concentrated in AI stocks.

And with those stocks soaring, market valuations aren’t just high – they rest on a sliver of companies that need to execute their operations perfectly.

A new survey shows that over 90% of money managers also believe that markets are overvalued.

Turn Your Images On

A full 91% of fund managers believe stocks are overvalued, the most on record (Source: BofA Global Research)

Why is this remarkable? It’s the highest ever recorded.

Only during the ‘08 financial crisis and its aftermath have the majority of money managers seen stocks as undervalued.

This data point is another in a list of historic highs – stock indexes, gold, silver, bitcoin, retail investment, retail margin borrowing – we’re seeing in the market right now.

Markets are out of whack to the upside.

History’s cautionary tale? When markets are out of whack… it takes an unsettling event (crisis) to get them back into whack.

~ Addison

P.S. Yesterday’s Grey Swan Live! with George Gilder was more important than we expected.

Yes, George covered most of what he believes are eight exponential technologies — AI, quantum computing, robotics, self-driving cars, blockchain, chips, advanced biotech, and even space.

But Mr. Gilder also took us on a deep dive into a new technology that could make traditional computer chips obsolete.

Why is it important? Because it will likely render the “Nvidia Model” – the business model pouring trillions into the stock market and massive data server farms around the globe – obsolete.

You’ll have a chance to get on an exclusive email list for the release of my report with Ian on Sunday. Watch your inbox over the weekend. And stay tuned!

For paying members of the Grey Swan Investment Fraternity, the replay of our conversation with George Gilder can be found here:

If you have any questions for us about the market, send them our way now to: feedback@greyswanfraternity.com.

Just a couple of days ago, everyone was celebrating gold’s move above the critical $4,000 psychological resistance level. But with today’s pullback, it slipped back below that level in both COMEX futures and spot, which makes me pause and think, as it indicates a rejection of that key level.

This increases the likelihood of a modest pullback or a period of sideways consolidation, as gold may have temporarily run out of momentum to push higher in the short term. That is perfectly normal, healthy, and not at all surprising. It is much like a sprinter who has just run hard and needs a moment to catch their breath.

Gold. Stocks. Bitcoin. Prediction markets. Each a different surface on the same wave — money searching for a story it can still believe in.

The Schelling Point of this moment isn’t one price or policy; it’s the shared intuition that something historic is shifting… even though we haven’t named it.

It’s Friday. It’s a good time to “remobilize our axioms,” as my favorite William F. Buckley quote goes.

We need to stick to our guns and remember that the goal of understanding Grey Swan events as they unfold is to plan, preserve our capital, and earn a good return for the long run. Let’s not get distracted by the market highs or headlines of a terrifying bull!

As AI clusters demand more light at every layer — from rack to package — Coherent’s share of that energy pathway increases. The startups illustrate what’s possible; Coherent ensures it happens.

As light enters the data center — step by step, layer by layer — Coherent is the most experienced and scaled name in the field. It carries the light forward.

For decades, Moore’s Law — that the number of transistors on a chip doubles every two years — was the quiet metronome of progress. It defined an era. AI just smashed that clock.

Global data center spending will hit $900 billion by 2028, Kobeissi notes. AI servers are growing at a compound rate of +41%, with the overall market expanding +23%.

Just building the facilities, not including chips or servers, now costs $43 billion a year — up 322% in just four years. There are $40 billion worth of U.S. data centers under construction right now, up 400% since 2022.

For the first time in history, the total value of U.S. data centers under construction will soon exceed office buildings.

More than a metaphor, we’re living through a civilizational shift. The upside Grey Swan event, in our opinion, is that the narrative unfolds without any political interruptions or blowouts in the currency and credit markets.