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Thar' She Blows The AI Trade October 10 2026

Thar' She Blows

The AI trade

Wait for it..

(Bloomberg) – “Billionaire Ray Dalio warned that artificial intelligence (AI) is a "classic bubble" that is nearing a bursting point thanks to rising interest rates and the need to turn wealth into cash”.

And welcome to Wayne’s world.
Well, actually my world. And Ray Dalios’.

I have, on more than a few occasions, have said to beware of AI stock prices, only to be right for a few days, then see AI stocks hit more all-time highs.

Seriously now, cautious investing is warranted when stock prices are anywhere near the multiples resembling the early days of the Dot.com bubble. Back then, stocks like Pets.com went ballistic only to crash and burn as early “investors” bailed out to massive profits.

AI stocks have been on a tear for close to two years. Not straight up mind you. There have been scary price vortexes from time to time, sucking back billions of profits.

Sell-offs shake out what they call the “weak hands”.

But those weak hands are usually not mom and pop investors. Mom and Pop don’t have the good sense to take profits when things start to wither.

The weak hands they speak of are nervous traders that see any downtick as the beginning for a massive sell-off. Usually not the case, but selling at the first sign of trouble can save the proverbial bacon at times.

More often than not, mom and pop just sit there and think things will return to normal. The normal of straight up that is, which is anything but normal.

In any case, I always tell investors the markets can stay illogical longer than you can stay liquid. The saying applies to professional option traders. Options are high powered investing (gambling) tools that magnify up and down moves by 100 times or more.

As a result, it’s rare that an option trader will ride a security to zero. Heck, they seldom ride an option position down more than a few percentages before ejecting the position. That’s because the 100-1 (or more) leverage can wipe out an option trader’s entire net worth in minutes if moves are violent enough. Leverage works wonders on the upside but also can bring the wrecking ball when things go south.

No such discipline exists in most retail (mom and pop) investors nor their advisors. They go by, and often repeat, the mantra, “stocks always go up in the long run”.

Professional traders who use their own money don’t listen to such nonsense. Option traders especially don’t live long enough using that strategy to even say the phrase.

For mom-and-pop investors, many have had success using that belief, but it can be stressful in severe market sell-offs.

That said, the current AI trade has all the classic signs of a bubble.

Keep in mind, however, those in early on such manias and who have the guts to stay a while can make buco bucks. Keeping those profits is the trick and many amateurs give it all back and then some as the greed DNA takes over the commonsense sector of the brain.

I don’t know, nor does anyone else, when the AI trade will hit the skids. When super-hot sectors deflate, they can do so surprisingly fast.

I also liken it to an “everybody in, everybody out” moment. When vast profits are made quickly, and by a large number of investors, many are of the “tag-along” variety that just bought because everybody else was buying. Fundamentals go out the window early and it’s a pile on moment.

When the air comes out, just imagine somebody yelling shark on a crowded beach. It’s everybody out, all at once, and many get trampled underfoot in the resulting melee.

In conclusion, when I avoid such hot sectors, as I often do, I might end up losing out on all the fast money being made. But there is something in me that just won’t bite on prices that seem to go straight up forever and a day.

I would love the high, true. But it’s the hangover I won’t miss. And often, the hangover is much worse than the party that preceded it.

“Watching the markets so you don’t have to”

This article expresses the opinion of Marc Cuniberti and is not meant as investment advice, or a recommendation to buy or sell any securities, nor represents the opinion of any bank, investment firm or RIA, nor this media outlet, its staff, members or underwriters. Mr. Cuniberti holds a B.A in economics with honors from SDSU in 1979. His website is moneymanagementradio.com.

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A Check in the Hand Those Refund Checks Oct 2 2026

Money for Votes

A bad idea

I received more than a few calls and emails regarding my opinion on the recently proposed “tariff refund” checks from Washington. These checks are not a done deal but the amount of $5,000.00 is healthy enough to garner plenty of attention as well as debate.

The proposed amount pales in comparison to the free money given out during the CoVid bailouts. Those monies totaled into the many trillions.

But $5,000.00 is almost ten times the amount of the $600.00 checks mailed out during the 2008/2009 financial crisis.

Although the exact details of the disbursement have not been announced, estimates for the total cost of the checks would be well over a trillion dollars.

I can’t help but wince. No one in government on either side of the political aisle seemingly knows anything about economics. Nor politics for that matter.

Much like the implementation of tariffs, mailing out $5,000.00 checks to every citizen in the U.S. would be extremely inflationary.

As if we haven’t had enough free money given out already. Have we learned nothing from the inflation we are now witnessing? And another round of free money would add even more fuel to the inflationary fires.

And what about the political bribery of promising funds if the election goes one way or the other. Does anyone else see a problem with this?

Once we go down that road, there will be no end to the tit for tat money giveaways from future candidates.

Not that it hasn’t already occurred, mind you. Money for votes is nothing new. There just seems to be something especially egregious about this latest political offering.

The amounts of money given out during the CoVid fiasco was beyond unprecedented. And so is the inflation from it.

Add to that the oil price spikes, the ongoing tariffs, the deficit spending spree that occurs every year since Lyndon Johnson was president, and the many other government programs tossing tax dollars everywhere. Then there is the fraud no one hardly talks about.

This whole check thing scares the heck out of me. I cannot imagine what would follow after millions of people get a whopping five grand in their mailbox.

The stock market would obviously benefit and probably run like hell for months. Then, as companies reap profits from their inventory flying off the shelves, the earnings reports from this buying spree would further boost stocks well into the future.

Theme parks, cruise lines, airlines, hotels, restaurants and other sector stocks would likely jump as people splurge on the experience dividend. Companies that cater to these sectors would also rise. No doubt some people would buy those overpriced sneakers, running outfits and the like and car companies would certainly sell some shiny new toys.

The imagination wanders as to who would do what with their newfound wealth.

To some, it would be a nice bump in lifestyle. To others, it would be a life saver.

For the most part, convincing a nation (where more than half its people can’t afford a $500.00 emergency bill), that handing out $5,000.00 checks is a bad idea, is a nonstarter. Few people would object.

Much like hiring Erin Brokovich to go speak and convince the people of Paradise, California to sign with a particular class action law firm (yes that really did happen), the move by Washington had brilliance in it.

Whereas the party not currently in the White House arguably errs on the side of free giveaways, the $5,000.00 check proposal takes the ‘money for votes” page right out of their playbook.

It will be interesting to see and unpredictable in its effect of what a $5,000.00 windfall to every wallet in America, all at the same time, would look like.

It would be like injecting a racehorse with ten times the amount of steroids, or something like that.

There is no telling what all that money hitting all at once will do to demand, supply and the eventual hangover.

These are vast amounts of capital we are playing with, and like the CoVid money tsunami that caused the massive inflation we have today, this check idea is very bad medicine for an economy already reeling from similar medicine handed out just a few short years ago.

And now they want to do it again?

Insanity is defined as doing the same thing over and over again yet expecting a different result.

It won’t be. Inflation will shift into overdrive.

This $5,000.00 check idea may be a brilliant political move, but in my opinion, a very, very bad idea.

“Watching the markets so you don’t have to”

This article expresses the opinion of Marc Cuniberti and is not meant as investment advice, or a recommendation to buy or sell any securities, nor represents the opinion of any bank, investment firm or RIA, nor this media outlet, its staff, members or underwriters. Mr. Cuniberti holds a B.A. in Economics with honors, 1979, and California Insurance License #0L34249 His insurance agency is BAP INC. insurance.

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Inflation Will Continue UPDATE September 14 2026

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The middle east crisis continues and oil spiked north of $100/bbl. last week. A client of mine showed me a report on the gasoline supplies in various areas of the United States and it was not encouraging.

Petroleum Reserve crude inventories fell to 311.45 million gallons in the week ending July 17, which is the lowest level since 1983.

With inflation’s relentless climb since the Covid shutdowns, doing the math on the money created to finance the massive bailouts, I am of the opinion that the price of oil will not come down significantly any time soon.

I would say “if at all” as it relates to oil’s future price, but knowing the resilience of the oil industry, if not constrained, it can ramp up enough production to at least get the price back under $100/bbl. and perhaps even in the $80/bbl. range.

Any lower than that I think is out of the question as the inflation we have been experiencing since Covid is baked into the cake and therefore prices of everything will stay elevated for years to come.

Barring an economic collapse that is, which could happen, given the ongoing erosion of the consumer’s pocketbook due to the same inflation.

Not to be too negative mind you, but prices have always risen over time since about the 1900’s due to the policies of modern governments, and the latest round of inflation in the past few years has been particularly egregious.

Tariffs are estimated to have added 235 billion to retail costs. The increase in oil prices has done further damage to consumer pocketbooks. Covid bailouts dwarf the latter costs at an estimated 5 trillion. The Federal Reserve also increased its balance sheet by an estimated 4.5 trillion. That’s a fancy way to say it financed a good portion of that bailout money by creating dollars out of thin air. More monies went into financial `system` to address liquidity concerns that also occurred because of the shutdowns.

Can you say bank bailout?

Right or wrong, experts will certainly debate the whys and how’s of the whole mess for years to come.

Subsidies to both consumers and businesses alike have pretty much run the gamut since the 1960s’ and show no signs of stopping.

Whether one agrees with subsidies to either group is highly debated but the effects are clear. Government spending that exceeds government income is known as deficit spending. Most, if not all governments of the world, practice deficit spending on a grand scale.

And the scale gets grander seemingly every year.

As such, inflation is accelerating and this analyst sees no relief to that acceleration.

On many of my past radio shows, I often ended many economic discussions with “You ain’t seen nuthin’ yet.”

And sadly, once again, I am afraid you still haven’t.

“Watching the markets so you don’t have to”

This article expresses the opinion of Marc Cuniberti and is not meant as investment advice, or a recommendation to buy or sell any securities, nor represents the opinion of any bank, investment firm or RIA, nor this media outlet, its staff, members or underwriters. Mr. Cuniberti holds a B.A. in Economics with honors, 1979, and California Insurance License #0L34249 His insurance agency is BAP INC. insurance.

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Inflation and those high priced yoga mats Update September 5 2026

Why not?
Because they COST TOO MUCH

Last week I was watching my usual business channel, and they were discussing the recent hammering of the clothing manufacturer Lululemon’s stock. The analysts were blaming the drop in their stock by anemic marketing, unexciting products and better execution by their competitors like Nike and others in the sports clothing space. The discussion centered around which of their competitor’s stock would they buy instead of the foundering stock of Lululemon.

Sorry kids. I couldn’t disagree more. The problem is not with Lululemon per se and the investing solution is not in the buying of some other upper tier clothing company’s stock.

Let’s just back up a bit shall we and open up our ECON 101 books once again.

It’s surprising that many of the commentators featured on business channels keep missing the basics when it comes to macro-economic analysis.

Lululemon, Nike and some of the other sports clothing lines exist in what I would call the highly discretionary apparel space. This means the price is higher than some of the other retailers that supply athletic clothing.

Puma, Nike, Under Armour and Adidas have all had their stocks drop in price in the last year or so and it isn’t because one company or another has been doing a better job of it.

The fact of the matter is that all these companies sell high-end apparel, and people just can’t afford to spend $80 on a yoga mat or $160 on a pair of sneakers when there are cheaper options available.

As the TV analysts argued over which high end clothing stock they would buy instead of Lululemon, I sat screaming at the screen saying, “None of them!”

Sure, Lululemon might be making some mistakes as compared to its competitors, but that’s not the issue. The whole high end clothing space, indeed, many of the high-end retailers, no matter what they’re selling are finding fewer and fewer customers that can afford higher priced items when cheaper alternatives are plentiful.

It doesn’t take a rocket scientist to know why these companies are struggling. It’s because of the persistent and aggressive inflation that has been ongoing since the end of the CoVid shutdowns.

I am sure most of you reading this knew that answer already, right?

Massive amounts of CoVid bailout money combined with the end of the shutdown demand met with the constricted supply lines of the very same shutdowns which has spawned the worst inflation since the 1980’s. Add to that the ongoing tariffs and the spike in oil prices and it makes for an inflationary fire that continues to rage on seemingly without let up.

Adding insult to inflationary injury, I read a new wrinkle in the prognostication of inflation centering around Artificial Intelligence (AI). There have been several articles by Reuters, CNBC and even the Federal Reserve citing that the cost in AI will force up overall prices even further.

The basic premise came about by observing the humongous run up in AI stock prices. The investment by many companies to incorporate AI in their services has been huge, close to a trillion dollars this year alone. Estimates on future spending reaches into the multitrillions.

Since this massive spending adds to the cost of production of almost all goods and services, those costs will be passed onto the consumer in the way of higher prices.

I keep saying inflation will not be going away anytime soon, or anytime later either.

I also keep saying, “You ain’t seen nuthin’ yet”.

And you ain’t.

“Watching the markets so you don’t have to”

This article expresses the opinion of Marc Cuniberti and is not meant as investment advice, or a recommendation to buy or sell any securities, nor represents the opinion of any bank, investment firm or RIA, nor this media outlet, its staff, members or underwriters. Mr. Cuniberti holds a B.A. in Economics with honors, 1979, and California Insurance License

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When to Buy or Sell Stock Update Aug 17 2026

My father was an unusual investor with unusual tactics. He would read some investing book somewhere and fall hook, line and sinker into the story. His big one was buying silver in the late 1970’s. Silver had sat around four bucks an ounce for seemingly forever and the book he was reading blew the usual horns that hot investor books blow.

Silver was in short supply. The mega-banks were reportedly heavily “shorting” it (selling silver to bring and keep the price suppressed). It was about to explode in price touted the book and would go up by many multiples.

Dad bought thousands of dollars’ worth and even though it languished, he kept buying more. When the price finally did move, he bought more and more and his profits doubled, then tripled, then quadrupled. He amassed many millions from a few hundred thousand and still kept buying.

However much me made, his eyes kept getting bigger and used the silver he owned as leverage to buy even more.
I don’t recall how many ounces he amassed or how many millions he had made, but he never sold nary an ounce.

To make a long story short, the folks at the big banks who were on the losing side of the trade convinced the FED that the rise was something akin to an unnatural act and the exchanges that traded the stuff were instructed to act.

Or so the story goes.

In any case, through more than a handful of questionable and rumored to be illegal acts by the “big boys”, silver came crashing down and my father’s money vaporized right along with it.

The moral of the story here is no investment is without risk, and not selling at least some of one’s investing winners is often a recipe for disaster.

In my experience, investors may frequently err on the side of buying their way out of good times as well bad times.

What I mean by this is I often see investors buying more of their losing stocks, averaging the price of their shares by buying more at lower prices.

Interestingly enough, they will use the same strategy on their winning stocks. As their stocks go up and they see more profits, they will also buy more shares in this direction as well.

Think about that one for a minute. The same strategy used for losing stocks is also used for winning stocks.

Sounds counterintuitive, doesn’t it?

And in my opinion, with few exceptions, makes little sense.

The two most descriptive and, in my opinion, dangerous words in the investing mind is fear and greed.

Although fear generates the selling act, the buying of both losing and winning stocks is based almost exclusively on greed.

My dad’s downfall was greed. Whatever he made, it was never enough. When he reached a million, he imagined two million. When he reached two million, he imagined five. And so on and so forth.

He probably could have got to 100 million and still would have set his sights on many millions more.

On the flip side, buying more of a losing stock is also driven by the same emotion. Belief in a stock is not negated by a falling price. Instead, the belief remains even more so. The allure of buying more stock at an even cheaper price activates the calculator of the mind and the profit possibilities becomes even more grandeur.

Many investors know of whence I speak and may, even now, resist the lesson that many a pro trader knows all too well.

Don’t chase your losers and take some profits on your winners.

Doing the flip side of that is often an expensive and painful lesson.

“Watching the markets so you don’t have to”

(end)

(As mentioned, please use the below disclaimer exactly) THANKS (Regulations) This article expresses the opinion of Marc Cuniberti and is not meant as investment advice, or a recommendation to buy or sell any securities, nor represents the opinion of any bank, investment firm or RIA, nor this media outlet, its staff, members or underwriters. Mr. Cuniberti holds a B.A. in Economics with honors, 1979, and California Insurance License #0L34249 His insurance agency is BAP INC. insurance services. Email: news@moneymanagementradio.com.

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