Where is The Bursting Bubble?

I have been writing about this impending doom and the markets continue to inch higher and higher.

What gives you ask?

I have no clue.

When markets reach a point of unexplainable, that is when I divest. We are there and I am divested. Maybe I am a little early, but I know I am not too late.

The point about the unexplainable is very simple to understand if you are me. Remember, I like simple. I like to know what I am investing in. I do not do crazy strategies. I buy funds, ETFs or stocks that have an explainable model. Sure, underneath some of the easy is the not so easy (to understand that is) but that is where my other mantra comes in to play.

Steady, intelligent and long serving management helps ease some of my trepidation about the underlying complexity of the company’s business model.

The perfect example of this is Jamie Dimon and J.P.Morgan Chase. I own the shares. A lot of them. I love Dimon and I love J.P.Morgan’s overall strategy and their execution of that strategy. Surely, they have some seriously complex business models underneath it all but I trust that after 2008, Jamie Dimon understands what they are and the risks taken. I trust Jamie Dimon.

Which runs counter to a lot of things I have said in the past. Mainly, I hate banks. I think they have completely abused every customer they have ever had and will continue to abuse every customer they will ever have in the future.

Like every good investor though, you have to release those feelings when you know there is a good thing and banks are a good thing, investment wise. They make money, lots of it, in good times and in bad times. The ones that struggle are the ones with shitty management. Period.

The US Government might go off on all this regulation bullshit and how banks are regulated, but the reality is, they may have certain bars they must meet but the US Government has allowed them to operate freely so they can meet those bars and that is why, while I hate banks with a passion, I will invest in them.

That is capitalism. Sometimes you have to leave your feelings in the other room and go invest in companies that will make you money. That will help provide you and your family with a good life and a safe and secure retirement.

If you invested like the Moral Morons, your returns would be in the negative column. Sure you invested in some company that only uses organic organs from dehydrated sustainable bee carcasses for it’s honey scented deodorant. Great. They burned through all their cash and now they are bankrupt and sitting on 400 lbs of dead bees. Nice going.

I know that is selfish and I know that we are slowly destroying our planet and I also know that there is no way to save the planet at this point. We have a population that is climbing to 9 billion people and you need to feed those people and you need to house those people and no matter what every eco terrorist on the planet says, you can’t do that without adversely effecting the planet. It is impossible.

So, selfishly, we protect what is ours and we do what we can to grow what is ours and while every liberal ,left leaning person ridicules that capitalism, they really have no answers how to change it. They believe that socialism is the answer but as we all know, it has failed in every attempt and if you were to pit one ideology against the other, capitalism would always win.

With that thought in mind I believe that we can still invest in companies or industries that we believe will have the most success in the coming years. That is capitalism at work.

These companies that we invest in employ millions of people around the World and that employment has given those people the ability to have a better life. That is capitalism .

One of the investments that the left and a lot of socially conscious people try to avoid is the military industrial complex in the US and Western Europe. I do get the position these people have and I can respect it but by that same token, this military industrial complex has kept us away from a World War III type scenario.

The ability to create and build strategic forces is paramount to peace and while these companies create articles of destruction, that ability has kept everyone in check and to top that off, they have been a great investment.

If the World stopped escalating, these companies would become superfluous and money would flow elsewhere, but that will never happen.

I know this is more like a poorly written OP-ED but it is about investing to make money, not to try and change the World with your 401K.

I do not apologize for being a true capitalist. I am happy to be one and while it may have some faults, it has worked for hundreds of millions Americans and will continue to work for those Americans.

Ok, back to our regularly schedule column.

So? What happened to this bubble bursting?

I still believe we are nearing an end to this mad dash to AI. That does not mean this will all come crumbling down. I think we are further along that path and that path will be sustainable because, as everyone has said ad naseum, this is the next industrial revolution. What is a more likely scenario is that the big investments don’t pay off quite as large as one would have hoped but they still work and they still make money.

The big brothers here will be ok. They might take a thump or some lumps but they will be just fine. The mid size players may get axed and the smaller ones will be gobbled up.

What will probably happen in the next decade or so, the Federal Government will get involved. Not as far as regulation, which is possible, but more about breaking up the mega companies that control the AI infrastructure. I think that is a pretty safe bet.