I haven’t been in a hurry to put the truck into stock in recent months. No doubt many smart money managers (think some of the big hedge funds) have not knocked on the table, with many effectively acting as net sellers of stocks in recent quarters. Whether that is due to the perception of overvaluation of the market or something else remains a hot topic of debate.
Now that Warren Buffett is ready to “keep it quiet” as his storied conglomerate transitions to a new CEO with an absolute pile of money, it feels like there’s an aura of caution in the air. So should the recent wave of net selling activity at many hedge funds make investors less optimistic?
For now, it looks like the retail crowd is buying the dips and keeping the rally strong. And while hedge funds may be smart, not all of them beat the market. In fact, many of them fall far short, so blindly following their asset allocation moves may not lead to the best results in the world.
Personally, it seems wise to stay on board and focus on the long road ahead, even as investor fears grow over the rise in prices of several stocks that may have gotten a little ahead of their skies, so to speak. As always, caution and a backup plan (defensive stocks) seem like a good idea in any climate and regardless of what the investment professionals are doing (or not doing) at any given time.
Volatility and AI jitters are back. But don’t hit the panic button yet
Is the AI Rebellion the Real Thing or a Bubble? It will probably be something in between, but only time will tell how the markets will ultimately react. Either way, there’s no denying that AI has revolutionary potential. For the time being, only the timing of the benefits (productivity gains and automation in the labor market) is a big question mark.
Personally, I think there is no point in overpaying for AI exposure and would rather look at some of the names that could become the long-term beneficiaries of AI. I believe that AI will impact almost every industry in due time, especially once it becomes more adept at decision-making.
Whether we’re talking about supply chain decisions or investing in future growth, AI is a major issue that the average investor (via the S&P 500) has already invested heavily in. The big question is whether it makes sense to be overweight in this theme, or whether it’s okay to stick with a number of names that aren’t really flourishing in the here and now.
I wish I could buy Shopify at a lower price
At this point I’m just waiting Shopify (TSX:SHOP) stock coming in soon. The e-commerce and fintech titan has been firing on all cylinders with an AI growth strategy that may be underrated in the long term. Shopify is undoubtedly one of Canada’s best public AI plays, especially if ChatGPT, Claude or Perplexity AI becomes the way we all shop in the future. For the time being it is still uncharted territory and in my opinion the valuation does not yet indicate that a bargain can be made. That could change in a few weeks.
Even if chatbots are no longer the way to do digital commerce in the future, I see Shopify as a winner either way. But in the meantime, I’ll be keeping a close eye on this latest share price drop in case shares fall back to $180, an area I would personally be tempted to enter. For now, I’m not rushing to buy.
#wait #buy #stock #patient