Capital Economics called the AI rally slowdown. Now it tells you where to hide when the bubble pops.
Notice the hedge. "Whether or not" it's a bubble. That's the financial equivalent of a weatherman saying it will either rain or not, and here's where to buy an umbrella.
The firm is a London research shop. Economists. People who get paid to be right once and quoted forever.
Their advice: defensive stocks. Boring things. Utilities, health care, consumer staples. Companies that sell toothpaste and electricity. Products no chatbot has ever made a person stop needing.
You bought Nvidia at the top because a man on a podcast said "inference" with his eyes closed. Now you're being told to buy a company that makes soup.
Soup. After you told your brother-in-law you were "early on the future."
Here is the plan. The AI trade holds up, and you miss it while sitting in a utility fund yielding three percent. Or the AI trade collapses, and your utility fund falls slightly less than everything else. You will call this a win. Your spouse will not.
Calling one slowdown correctly does not make a prophet. A stopped clock is right twice a day. A bearish economist is right whenever the market pauses long enough to look like a prediction.
I have a chart. It shows a line. The line goes up, then down, then up. Nobody has ever hidden from it successfully, including firms with offices and a logo.
Hide in defensive stocks if you must. Just know the bubble doesn't care where you're standing, and neither does the soup.
Photo by Kayla Velasquez on Unsplash
Leave a Comment