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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Morgan Stanley notes that, “OpenAI projected revenue of $145 billion in 2029. The data reveal that no public company has grown this fast for five years in the last three-quarters of a century. The forecast implies a roughly 9.5 standard deviation outcome which is extraordinarily unlikely.”
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“The industry contribution to price momentum currently stands at an all-time high. The practical implication is that investors with significant price momentum exposure may be inadvertently running a concentrated industry bet on a scale they have not seen before,” reports Man Group.
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Michael Santoli points out, “The erratic, divergent action underneath range-bound indexes has been the story of this market for months, and there are plenty of ways to portray it. Here’s the High-Low index from Ned Davis Research that shows the market vastly ‘out of gear,’ meaning a high number of stocks making highs AND lows.”
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“By March 2000, dotcom companies were hitting the skids. Still, the companies building telecom networks (Corning, Cisco, JDSU, Sun Microsystems…) kept on soaring, and most made new all-time highs over the summer months,” writes Louis-Vincent Gave.
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Finally, as Ray Dalio writes, “When there is a lot of financial wealth relative to real wealth it reverses and real returns of financial wealth are bad… During periods of the devaluation of money, hard money and hard assets rise in value relative to cash.”
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