Bear Markets Are Where You Get Rich

Fear. Uncertainty. Doubt.

The market is stewing in all three.

Bitcoin’s been cut in half… Silver has plunged as much as 47%… Gold has dropped as far as 21%… And Big Tech names like Amazon and Microsoft have been hammered down as much as 23% and nearly 30%, from their respective highs.

Over $10 trillion worth of investment gains have been wiped out over the past few weeks.

Is this the end? Should we all go to cash and ride out the storm in our own personal bunkers? Heck no.

Let’s look at what is actually going on…

Big Tech is getting pounded on fears that artificial intelligence (AI) will make software-as-a-service (SaaS) companies obsolete.

The accumulated gains in these stocks have been so huge that we’ve seen a “sell first, ask questions later” mentality take hold.

Since the start of the year, software companies like Intuit, Oracle, and Salesforce have dropped as much as 33%, 26%, and 27%, respectively, on those fears.

Maybe AI will make them obsolete. But it ain’t happening overnight.

The internet killed a lot of businesses, too… but it took years. If the market follows its normal script, it’ll over-discount the AI fear, and we may have some incredible deals open up in the software space in the weeks ahead.

More troubling is the market is finally waking up to a stark reality: Companies once viewed as asset-light cash machines – Alphabet, Amazon, Meta, and their peers – have transformed into massive CAPEX money incinerators.

Big Tech has committed to spending $7 trillion on AI infrastructure by 2030, with no clear sign of a return on investment.

Again, these stocks are up hundreds of percent over the last five years.

So it makes sense folks are thinking it’s better to cash in now and pop back in later when there’s more earnings visibility on the massive AI investments. These stocks needed a little air taken out of them. They were (and many still are) insanely overvalued.

If the market does its job properly, it’ll create tremendous moneymaking opportunities for us as valuations finally come back to Earth.

Silver and gold are experiencing their first meaningful pullback in what was a highly crowded and overleveraged trade. And bitcoin is performing a volatility baptism on an entire new cohort of crypto investors.

I’ll chat more about precious metals in a moment. Let's dig into BTC a bit more first.

What’s Driving Bitcoin Lower