There's a growing concern about an AI bubble

Despite massive investments and hype, AI hasn't yet delivered on its promised transformative impact. Experts believe it will take much longer than expected to see significant changes in daily life and the economy.

Key issues:

Overhyped Expectations

• Massive investments: Tech giants and startups are pouring billions into AI research, development, and infrastructure. This includes acquiring AI startups, building specialized AI chips, and constructing massive data centers.

• Inflated valuations: The stock market has rewarded companies that integrate AI into their business plans, leading to inflated valuations and a fear of missing out (FOMO) among investors.

• Unrealistic timelines: There's a tendency to overestimate the speed at which AI will revolutionize industries and daily life, leading to unrealistic expectations about its near-term impact.

Limited Practical Applications

• Narrow intelligence: While AI excels at specific tasks like image recognition and language translation, it struggles with broader reasoning, understanding context, and general intelligence.

• Complex problem-solving: Many real-world problems require human judgment, creativity, and adaptability, which AI currently lacks.

• Data limitations: AI models heavily rely on vast amounts of high-quality data, which can be difficult and expensive to obtain, especially for niche or complex domains.

High Costs

• Expensive hardware: Developing and training advanced AI models requires specialized hardware like GPUs and TPUs, which are costly and in high demand.

• Energy consumption: AI data centers consume massive amounts of electricity, driving up operational costs and environmental concerns.

• Ongoing expenses: Maintaining and updating AI models is an ongoing expense, as new data, algorithms, and hardware are required to keep up with the competition.

Potential for Disappointment

• Investor backlash: If AI fails to deliver on its promised returns, investors may lose confidence in the technology and pull back funding.

• Economic slowdown: Overinvestment in AI could lead to a misallocation of resources and hinder economic growth if the technology doesn't pan out.

• Job displacement concerns: While AI has the potential to create new jobs, it could also lead to job losses in certain sectors, causing social and economic disruption.

It's important to note that these are potential challenges and not definitive predictions. AI is a rapidly evolving field, and there's a chance that these obstacles will be overcome. However, understanding the risks is crucial for making informed decisions about AI investments and development.

Why Bitcoin ETFs Flopped So Badly

For the past few months the much anticipated approval of Bitcoin spot ETFs has been the major driver of sentiment in the crypto markets. 

On January 11th the ETFs were indeed approved. But in the fist 2 weeks since launch the inflows have been paltry and the Bitcoin price has declined by ~15%. 

So why did the ETFs fail to live up to expectations?

Unraveling the Mystery: Bitcoin's Meteoric Rise and the Cryptocurrency Problem

Read my new article on Substack on the complex landscape of bitcoin's surge and the unresolved mysteries of cryptocurrency - is it an asset, gambling or a scam?

Free access HERE

 

How WeWork Went From $47B Startup to Bankrupt Penny Stock

WeWork, once a-venture-capital darling, has filed for Chapter 11 bankruptcy. Co-founded in 2010 by Adam Neumann, the filing marks a reversal for the company that specialized in leasing shared workspaces and was once valued at $47 billion. WSJ breaks down how the desk-rental company went from one of the world’s most valuable startups to a bankrupt penny stock.

Warren Buffett: Why You Should NEVER Invest In Bitcoin

Warren Buffett is the greatest investor of all time. In this video you will hear his opinion on Bitcoin, including the new 2021 comments! Very important to watch this regardless of your attitude to cryptocurrencies (and absolutely necessary if you own any of them!) As Charlie Munger says, “If you disagree with somebody, you want to be able to state their case better than they can.” And at that point you've earned the right to disagree with them.

Warren E. Buffett is an American long-term investor, philanthropist, business tycoon, and the chairman & CEO of Berkshire Hathaway. He is considered one of the most successful investors in the world and has a net worth over 100 billion dollars. Buffett was born in Omaha, Nebraska. He developed an interest in business and investing in his youth and made truly incredible stock market returns over his career.

The Inevitable Decline of WeWork

WeWork announced this week that it would not make two sets of interest payments totaling about $95 million, a move meant to jump-start negotiations with its lenders at the same time it tries to cut costs with its landlords. 

The missed interest payments will spur speculation of a bankruptcy filing. But WeWork says it has the cash on hand, and the company has a 30-day grace period to make the payments, which were due Monday. 

At the end of June, it had $205 million in cash and access to a credit line worth $475 million. Skipping an interest payment is not necessary to negotiate with lenders. But indebted companies sometimes use the move to put pressure on lenders to restrike deals under more favorable terms. 

From its inception in 2010 to its collapse in 2023, WeWork's journey has been a roller-coaster. Once valued at $47 billion dollars, the company today, is on the verge of bankruptcy. How did the Venture Capital backed co-working company, end up as the biggest financial bonfire in Venture Capital history?

FTX: the legend of Sam Bankman-Fried

FTX, Sam Bankman-Fried's cryptocurrency exchange, exploded onto the scene in just a few years. Endorsed by celebrities and accepted by the establishment, it attracted big-name investors and was valued at $32bn before it collapsed in a matter of days. Regulators fell for it, venture capitalists fell for it, celebrities fell for it - everyone fell for the legend of Sam

The ESG investment backlash is beginning to have an impact

Over the past couple of years, ESG investment has taken the financial and corporate world by storm, but now, an ESG backlash is gathering steam.

 The FT’s Gillian Tett explains that while much of this criticism has come from the American right, it’s not just conservative politicians criticizing the ESG agenda, and these complaints are having an impact.

Lehman Brothers - The Bank That Bust The World

In 2008, Lehman Brothers went bankrupt, causing the global financial crisis. 

In this video, we'll explore the history of Lehman Brothers and the 2008 financial crisis, from sub prime mortgages to the global recession. 

This video is for history buffs, financial experts, and anyone who wants to learn more about the 2008 financial crisis. 

Lehman Brothers is a key player in this epic story, and we'll tell you all about the bank that broke the world. 

$100 Million Pump & Dump Scheme!

Federal prosecutors and the SEC recently charged seven Influencers with using Twitter, Discord and YouTube to commit securities fraud that netted them more than $100 million. 

An eighth influencer was charged with aiding and abetting the alleged scheme in the SEC’s civil complaint and with conspiracy to commit securities fraud in the Department of Justice’s criminal case. 

Each of the defendants had well over 100,000 Twitter followers as of this month, they ran a podcast called "Pennies: Going In Raw" and a YouTube channel called "Goblin Gang".

Pump and dump (P&D) is a form of securities fraud that involves artificially inflating the price of an owned stock through false and misleading positive statements, in order to sell the cheaply purchased stock at a higher price.

"Pump and dump" schemes have two parts. In the first, promoters try to boost the price of a stock with false or misleading statements about the company. Once the stock price has been pumped up, fraudsters move on to the second part, where they seek to profit by selling their own holdings of the stock, dumping shares into the market.

These schemes often occur on the Internet where it is common to see messages urging readers to buy a stock quickly. Often, the promoters will claim to have "inside" information about a development that will be positive for the stock. After these fraudsters dump their shares and stop hyping the stock, the price typically falls, and investors lose their money.

Fractured markets: the big threats to the financial system - FT Film

Interest rates are rising; easy money is over; the cracks are showing. UK pensions were the first big explosion. FT experts and financial industry insiders examine where the next big threats to the global financial system lie and explain why when the tide goes out, we can see who is swimming naked.

Warren Buffett: Why You Should NEVER Invest In Bitcoin

Warren Buffett is the greatest investor of all time. In this video you will hear his opinion on Bitcoin, including the new 2021 comments! Very important to watch this regardless of your attitude to cryptocurrencies (and absolutely necessary if you own any of them!) As Charlie Munger says, “If you disagree with somebody, you want to be able to state their case better than they can.” And at that point you've earned the right to disagree with them.

Warren E. Buffett is an American long-term investor, philanthropist, business tycoon, and the chairman & CEO of Berkshire Hathaway. He is considered one of the most successful investors in the world and has a net worth over 100 billion dollars. Buffett was born in Omaha, Nebraska. He developed an interest in business and investing in his youth and made truly incredible stock market returns over his career.

Charles Ponzi - The Documentary

Charles Ponzi, was an Italian born con artist based out of the United States and Canada. Born and raised in Lugo Italy, he became internationally famous in the early 1920s as a con man for his money-making scheme. He promised clients a 50% profit within 45 days, or 100% profit within 90 days, by buying discounted postal reply coupons in Europe and redeeming them at face value in the United States as a form of financial arbitrage.

 
In reality, Ponzi was paying earlier investors using the investments of later investors. While this type of fraudulent investment scheme was not originally invented by Ponzi, it became so identified with him that it now is referred to as a "Ponzi scheme".

 
His scheme ran for just under a year before it collapsed, costing his "investors" $20 million.
This history channel style documentary tells the full story of Charles Ponzi, from his childhood in Italy, through to the heights of his fame in Boston Massachusetts, through to his prison sentence, deportation, and his life after the scheme collapsed. In this film the Ponzi scheme is explained along with how it differs from a pyramid scheme.

 
The film is written and narrated by Patrick Boyle, a fund manager and finance professor at King's College London.