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.

The narrative for BTC and other cryptocurrencies is that every government around the world has high debt-to-GDP ratios. It means they are going to print more currency. It means there is a need for alternative currency. In the past, this alternative currency was gold.

Gold is not very portable. It’s a good store of value. It’s not as great of a store of value as BTC in terms of actually storing it. BTC, you can store it on a hard drive or at Coinbase. Gold, if you have bars you have to keep them in a bank or you have to dig a hole in your backyard. And you can’t send gold around the world as easily as you can send BTC.

I still think this rally has legs. If you go back to where the breakout happened, we were really in November of 2024 that was the beginning of this bull market in my mind because that was the first time we hit an all-time high in a couple years. Then we rallied. We pulled back. We tested that level again.

The uptrend, in my mind and with what I’m seeing, is still intact. We’re just in an oversold condition right now.

Nvidia’s $900 billion round-trip this week wasn’t about some revelation in Jensen Huang’s chip factory. The business is firing on all cylinders – and may yet be one more reason for the market to soar higher into 2026.

The culprit was the macro — one gust of wind from the labor market and trillions in valuation shifted like sand dunes.

Nvidia’s earnings lifted the market at the open, but the jobs report’s undertow snapped sentiment like a dry twig. As we pointed out this morning, the S&P notched its biggest intraday reversal since April.

The first half of the move was classic Wall Street choreography: blowout earnings, analysts breathless with adjectives, and every fund manager terrified of underweighting the patron saint of AI.

In April, following the “Liberation Day” low, the indexes took off in the morning only to crash later in the day. The first and only other time in history we have seen a strong bullish opening followed by a sharp bearish close was during the 2020 recovery from the Covid shock.

In both cases, the markets were rebounding from exogenous shocks.

That’s not where we are today. The index-level charts may look composed, but underneath plenty of individual stocks are trading as if they’ve already slipped into a private bear market of their own.

We’ll see how the day unfolds. It’s options-expiration Friday — the monthly opex ritual when traders roll positions forward, unwind old bets, and generally yank prices around like terriers with a chew toy.

Every major tech shift has followed a similar pattern. As information moves faster, the money follows.

The telegraph made news global and opened up a world of investment opportunities. Radio, and then television, ignited a new wave of prosperity for investors. And the internet made communication instant, creating fortunes for those who saw what was coming.

Now standards like x402 are doing the same for AI and digital payments, potentially putting Jamie Dimon’s empire in jeopardy.

If you have Coinbase building the payment rails, Circle handling settlement and projects like Worldcoin and Particle Network solving for identity and wallets — do you really need a bank to validate transactions and keep track of who owns what?

All of these companies are helping to build a new layer of fintech infrastructure. And they’re all working toward an economy that runs continuously, without the need for corporate scaffolding.