Below are some of the most interesting things I came across this week. Click here to subscribe to our free weekly newsletter and get this post delivered to your inbox each Saturday morning.
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Fred Hickey tells Edward Chancellor, “GenAI is probably the most over-hyped technology I’ve ever witnessed in my 45 years of following tech stocks.”
STAT
Even outside of the AI craze, though, valuations of the megacaps have been inflated to the extreme in large part by the shift to passive investing. “Fair value for Apple is around $50/share, with the remaining $220 attributable to ‘passive,'” writes Mike Green.
STAT
Stock market breadth has also been waning to a historic degree. As Investech points out, “The Nasdaq has only hit a new all-time high with declining issues outnumbering advances by more than 2 to 1 twice in its 54-year history.”
CHART
Meanwhile, by some measures, investor sentiment has never been more “greedy.” Goldman Sachs notes (via Mike Zaccardi), “In the last month, equity call volume in excess of puts reached the highest value on record.”
STAT
This may partly explain why Warren Buffett’s Berkshire Hathaway has never been more “fearful” in its approach to the stock market than it is today. As The Financial Times notes, cash at the company keeps hitting new records (both nominally and relative to the overall balance sheet).
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