Nassim Taleb Calls Stocks a ‘Trap,’ Sees ‘Naive’ AI Investors

Where do you stand in terms of the rally? Uh, it's always wrong to think in first order terms or second order terms. The stock market is sort of like what we call a trap, because you have, you know, you think, oh, let me short the stock market because what because this event, they're not linked. The stock market attracts money. Uh that's sticky. So it's going to keep rising and but eventually it, you know, it's going to fall from there because it builds up a lot of risks, but in a very counterintuitive way. I had an aphorism years ago that the market follow the past, that first, the maximum number of measures. So visibly the stock market and gold have of our claim that things like you think logically that gold rally stock market go down and sort of the opposite happened. So it's false to think. I mean, we're not a first order of think. We're a world of volatility fun. So we're not their fault. So in other words we don't think in terms of, uh, uh, the market will go down. We think in terms of risks increases. And typically when this increases, things going in the opposite direction for a while just to hurt people. So that's the story of the stock market. So where do you stand now with the stock market. I'm the naive. There's a class of naive investors who say, okay, I is going to change the world, and let's invest in firms that are linked to AI. And that probably be the most naive thinking you can. Because if you look backwards, the things that the change the world in retrospect, uh, we can see that the company that benefited were not the pioneers. I mean, take the personal computer. Apple started the personal computer, then almost went out of business, and then I took the market and then, of course, almost went out of business. And and the one who started the the personal computer, Sir Clive Osborne, went bankrupt. Okay, so and then. But the personal computer would have been a great investment idea. But you don't know who. What happened is that technology companies are threatened by other technology companies. And technology is fundamentally unpredictable in the sense that we don't know what will, uh, what will cause AI to become more efficient and, and, and and it will be a trap to go invest in companies that benefit from it. So this is why we have to worry about, uh, the valuation of some companies, uh, because they may not be the ultimate winners, but we know that story. The story, you know, as old as investments. You know, what happened to airline companies? Uh, automakers, uh, and of course, uh, you know, you remember the Nasdaq, uh, bubble. And what happened is that those companies that were at the origin of the boom in the web, um, the browser, the first browser, they all went bankrupt. I mean, not all of them were the few survived, but but but the majority didn't survive.