Podcast – Episode 200 – PROOF The AI Bubble Is About To Burst

Should You Let AI Do Your Trading? Navigating the AI Bubble

Everywhere you look today, the financial world is buzzing with two letters: AI. It promises to revolutionize our workflows, replace entire company departments, and, according to the hype, make us all incredibly wealthy.

Recently, a member of the Option Genius community, David, asked a fantastic and timely question: “Should we have AI do our trading for us?”

It is tempting to think we can hand our brokerage accounts over to a supercomputer and head to the beach. But as conservative options sellers who prioritize risk management and capital preservation, we have to look past the hype. To answer David’s question, we first need to look at the macroeconomic environment surrounding artificial intelligence right now—because history is starting to rhyme, loudly.

The AI Boom vs. The 1999 .com Bubble

If you traded through the late 1990s, the current market environment should give you a distinct sense of déjà vu. Back in 1999, the mantra was “this time is different.” Companies that weren’t making a dime were going public, slapping a “.com” onto their name, and watching their stock prices soar 1,000%.

Today, we are seeing the exact same euphoria with AI. The major tech companies (the hyperscalers) are projected to spend over a trillion dollars in capital expenditures on data centers, chips, and power. Yet, outside of a few ad platforms like Facebook utilizing AI for better ad targeting, very few companies are actually converting this massive AI spend into bottom-line profits.

We are also seeing failing companies pivot to AI just to survive. Take the eco-friendly shoe company Allbirds, or the social media platform MyMuse. Both companies recently announced they were pivoting entirely to AI—without a clear product in mind—and their stock prices skyrocketed by hundreds of percentages.

When shoe companies pivot to AI for stock bumps, conservative investors need to be on high alert.

The Mirage of the AI-Powered “One-Man Business”

The media loves to peddle the narrative that AI will allow a single person to run a billion-dollar company. Recently, major financial publications highlighted a company selling GLP-1 weight loss drugs, run by just a few people using AI for operations and marketing.

However, a closer look revealed a darker side of this technology. The Federal Trade Commission (FTC) quickly cracked down on the company because its glowing customer testimonials and before-and-after pictures were entirely AI-generated. Furthermore, the massive ad campaigns featuring doctors recommending their products? Those doctors were deepfakes.

AI has made it incredibly cheap and easy to create fake User Generated Content (UGC). This “AI slop” is flooding social media, tricking consumers, and artificially inflating ad revenues for big tech companies. Eventually, regulators will bring the hammer down, and the companies relying on this deceptive marketing will collapse.

Removed Guardrails: A Late-Stage Warning Sign

Another glaring warning sign for the stock market is the recent rollback of the Pattern Day Trader rule.

Established by FINRA and the SEC in February 2001, just after the .com crash, this rule required retail traders to hold at least $25,000 in their accounts to actively day trade. It was designed specifically to protect small investors from excessive risk. Now, at the height of this AI-driven market euphoria, regulators have decided to drop that requirement, allowing virtually anyone with a small account to day trade without restriction.

Inviting inexperienced traders to gamble their savings at the top of a historic bull run is a recipe for disaster.

“That’s the one thing I’ve learned over the last 20 years in the stock market, is that it never, you don’t just wake up and have it be going down. There is always a sign before the major drop.”

Answering the Question: Should AI Trade For You?

So, back to David’s question: Should you let AI take the wheel of your trading account?

The short answer is: No. Right now, true AI (systems that learn, adapt, and make autonomous decisions) is not ready to be trusted with your hard-earned capital. The data access—especially for historical options chains—is incredibly limited for these language models.

However, we must differentiate between AI and Automated Trading.

Using AI as a research assistant is highly recommended. You can use tools like ChatGPT to help you code strategies, backtest ideas, or verify market data. You can take that code and plug it into charting software like TradingView, and connect it to your brokerage’s API to execute trades automatically.

But in this scenario, the computer isn’t “thinking” for you. It is simply executing a conservative, well-thought-out trading plan that you designed. You remain the master of your risk management.

In a market filled with deepfakes, irrational stock surges, and reckless retail gambling, the best strategy remains what market makers and hedge funds do: sell premium, manage risk relentlessly, and keep a steady hand on the wheel.

Podcast Transcript

Today’s topic is AI and the AI bubble and the AI bubble going to burst, and what the heck am I talking about? Well, so I have three pieces of proof that they might support my argument. Now, when we’re talking about a bubble, right, the most prominent bubble, tech bubble that I don’t know is the.com bubble. And so if you remember what happened in the.com bubble, I don’t know. I don’t know, Matt, if you were paying attention to the stock market back then, this was like 1999 2000 where everybody was aware of it. Everybody was like, Oh man, everything’s going up. The stocks are going up, going up, going up every day. And the big mantra at the time was, this time, it’s different. You know, it’s eyeballs. You don’t need to make money. It’s all about eyeballs. How many people are coming to your website, if you have a website, and there were companies that were changing their names, they were like, Oh, we are this company, and we’re changing our name to this.com and stock would just go up like 1,000% it was like crazy.

One that sticks out to me. There’s a Worldcom and the pets.com

and, yep, companies that were not making any money, the stocks are going crazy. And everybody thought, oh, no, this time is different. And people like Warren Buffett were like, why is it different?

Tell word, what you just said. You know that phrase, oh, this time is different. It’s like, oh, okay, we’ll see.

Yep. It’s like, oh, boring. You’re an old fogy. You don’t understand this new stuff. And so AI seems to be a similar concept the, you know, there’s a lot of money that was being thrown at that time onto these companies, through venture venture capitalists. A lot of money being thrown at them right now. There’s a lot of money being thrown at AI. These hyperscalers, the six, seven big ones, they’re in one year, they’re going to spend maybe over a trillion dollars in just capital expenditure. And that money is going to data centers, going to energy, it’s going to chips, it’s going to power, it’s going to the people who they hire for this stuff. I mean, some of these guys are getting paid $100 million contracts like, that’s more than ball players. Is that? Is anybody worth $100 million I don’t know. And it’s, it seems to be, it’s like a race, right? It’s like, oh, who has to whoever gets there first is going to win everything. I don’t know if that’s the case, but that’s the mentality right now. And so I’m, I’m drawing parallels between there and here, and saying, Okay, how did that end up before? So, you know, for a while it was just going higher and higher. The stocks were just going up, new all time highs, like we have today, right NASDAQ up, oh, 10 days in a row, just like we have right now. And everybody’s excited. And at that time, people didn’t really understand websites. Most people didn’t have one, but people were getting on board with email that was like, the first, you know, you first step into it, yeah. Everybody had an AOL address. Everybody had the CDs coming in the mail. Every day they got more CDs, you know, people were putting them all on the wallpaper, CD wallpaper. And so people were putting their foot in the door and kind of like, right now, people are like, you know, hey, I got chat GPT for free, and I’m testing it. And, you know, we’re using for recipes, and we’re talking to it and stuff like that. But people really don’t understand how it works and whatnot. So we’re still in the infancy, kind of like we were in the infancy of websites and internet and stuff. Back then, where it was early adopters were really taking charge and really hyping it up, something very similar to what we have here. But back then, the reason for the downturn was that it didn’t really take off. The more eyeballs did not turn into dollars. And so when the economy kind of shrugged and said, Hey, I’m going the wrong way, everything fell apart. The money dried up. Companies started going out of business because they couldn’t raise any more capital, and the stock market, like the NASDAQ, did not recover for. I think at least 10 to 20 years. I don’t know the exact number, but it did not recover for a long, long, long time, well over a decade. And so I don’t want to get caught in that again, if it happens something similar, like, I mean, you’ve always said it, right? What is it? The history rhymes. Yeah.

It doesn’t. May not repeat exactly the same way, but it does rhyme.

Yeah, so we’re seeing a lot of parallels from that, and it’s not, I think it’s like It’s rhyming using the same words, pretty much. So I’ll show you what I’m talking about here. You look like you got a question.

No, I just, in my mind, I’m thinking, okay, like there’s this, you know, your euphoria gets wrapped into this, right? Where people don’t even think about the way we’re talking about it. We’re thinking it all the way through, right? So it’s like you get caught up in the moment. And I think investors and anybody out there who is, you know, it’s all exciting and it’s not known. So you can get Rhey positive about it and euphoric, and also the market realizes, hey, this is a kind of pie in the sky, right? And starts realizing what is really at hand. And then you start having a downfall. So, yeah.

So, you know, at that time, there were very few companies that were making money. There were Cisco, Oracle, the companies that were making the hardware were making money because there was so much money coming and everybody wanted that stuff right kind of like right now you have Nvidia and the chips and all the chip makers making money hand over fist, because there’s so much demand. There’s so much demand for the ram and the RAM chips and stuff like that. So yes, there are companies making money here, but the companies that are actually spending the money are not making the money. So we look at the biggest players, right? We look at Google, Amazon, Facebook, Microsoft, all the others that are, you know, the six or seven big hyperscalers. Are they actually being able to use AI to make money. And I think the answer across the board is no, they’re spending way more than they’re actually getting out of it with the idea that, you know, down the line, we might be able to get this money back. It’s a big bet. Yeah. And so there’s only one company which has so far been able to show that, yes, you know, if we put the money invest in AI, it will help us make more money. And that company is Facebook, and they have been using the AI to make their ads platform better, so that the targeting of their ads appeals to people better, and so the more people click on it that gives the advertisers, you know, happy thoughts, and so they spend more money with Facebook. So Facebook’s the only one been able to be like, really? Oh yeah, hey, let’s use it for this, so that we just make more money overall. And for right now, Facebook, I believe, is the number two ad platform in the world. It’s about to overtake Google as the number one ad platform in the world in size, and so it’s been working for them, even though their stock price is being hammered right now because of their spend. But so it’s getting better, but it’s not getting as better as as much to their spending. So we’ll see how that works in the past. But that piece of information I want you to just take and just like, understand that, and just like, put it on the side for right now. Okay, so, yeah, so they’re like, the only ones, and you know it’s coming from ad revenue. Okay, so now you know, the big thing about the the AI is it’s going to make people more productive one person can do the job of 10 or 20 or 100 now you got these AI agents that are supposed to do everything for you. They’re supposed to cook your breakfast and make you coffee and, you know, make the bed when you get up in the morning, stuff like that. And so the big, the big test, or something, that has been put out there is the one man company like, oh man, you know, all these AI agents they’re allowed to have, you know, they’re going to allow people to make tons of money and just have their own companies and and it’ll just be one person show. And so this week, the New York Times came out with, actually, not this week. It’s a couple a week ago, a week or two ago, but they came out with a article on the first billion dollar one man company. Yeah. So it’s this guy. He started a company last year. It’s basically him, his brother and a couple of VAs virtual assistants. So it’s not exactly one man, but close enough, right? Two and some part timers or something I don’t know, and they sold about $400 million worth of stuff last year. This year, they’re on track to do over a billion dollars in sales. So. So it’s incredible, like, holy cow, you know, so and so they, they did a so this is the fellow right here. You know, pretty cocky looking guy that’s pretty like him, nice guy, yeah, might be, I mean, definitely very smart, right? He’s been able to use these tools. So if one guy can do it, man, everybody can do it, why isn’t everybody can do it. Why isn’t everybody making billion dollar companies? Well, the New York Times ran the story and got picked up by the Wall Street Journal got picked up by all the internet company. I mean, they got a lot of publicity for this. Even the guy, Sam Altman of open AI in chat GPT, he was, you know, he’s doing podcasts and interviews, and he’s talking about this guy, and, oh, the power of AI, the power of AI. Well, it’s not all it cracked up to be, at least this one, this particular story. So what they do? They have a company called Med V

M, E, D, V i, right? And he used AI for probably everything. I don’t know, I didn’t dive into it. But, you know, website, customer service, tracking all kinds of stuff. And they sell GP one drugs to people. So the the ones that are, you know, weight loss, the injections, the like the wegovis and the mongiornos, but these are compounded so basically, you go to their website, you talk to, I guess, I don’t know if it’s an AI doctor, or you talk to a real doctor, you get a prescription, and then they have partners who are compounding pharmacies that will actually make the drug for you and then ship it to you, and then they bill you every month. So once they get a customer, it’s like, you know, you’re going to stay customer for a long time, right? So great model, great thing. He doesn’t have any products. He doesn’t have any overhead or anything like that. So it’s very easy for him to be the middleman and really focus on what he’s doing, which is mainly marketing, right? His job is to get new customers, and so he’s obviously doing it very well, and he’s doing a lot of ads. And so the the thing that happened was the what the New York Times, or who was, yeah, it was the New York Times who ran the story, and all the other journalists who actually ran with the story and hyped him up failed to notice that a month before the story, their company was hit by the FTC, the Federal Trade Commission. And so what these guys were doing was on their website, they had lots of testimonials, before and after, pictures of people that were showing how much weight they lost and how good they felt in their comments and whatnot. Unfortunately, they were all AI generated. So no no good testimonials, no real testimonials, which is actually fake marketing, right? Deceptive marketing. So the FTC came down and told them, hey, you need to change this. You can’t do this anymore. We’re going to investigate you. So what they did was, and the website since been changed, so I’m not showing it to you. Otherwise I would have but what they did after that was they changed all the pictures of the people. So they put new pictures. So you think, oh, okay, they got pictures from real customers, except the AI, or maybe this guy or somebody. They got a little sloppy, or they missed it. They left the names of the people the same. They had fake names, and they left them the same, and the names are still there when they change the pictures, yeah, and you could tell even the new pictures were all fake. So that’s one strike. Now, okay, maybe they, you know, they got out overzealous, and that’s just on their website, right? But they also they ran a lot of ads, like I said, and so anybody can go into Facebook now and you can look at the ads that any company runs. And so what they should have done, these reporters is gone, and take a look at the ads that these guys were running. Because what he what this, what this guy did was he contacted, or he had about over 500 different doctors that were that were vouching for his company. They were talking about the GLP ones and how they help people lose weight, and how they’re safe, and, you know, how this company is really great and how, and so those were the ads that they were running. Basically, you know, doctors talking about this, right? And it’s like, Oh, hey, if you want to lose weight, this doctor saying how to do it, click this button and go buy the thing. So that’s great. You know, you got 500 doctors recommending you. I mean, how does this one guy run a company and have time to go out and talk to 500 different doctors and and they’ll do all that stuff? Well, he didn’t. They are all fake. All the doctors are fake. All the ads are fake. Everything is completely AI generated. So not only is the website full of fake stuff, the ads, all the ads, and I mean, if you’re doing, you know, 400 $500 million of ads, you’re spending at least maybe 10 to 20% of that on ads or in revenue. If you’re doing, like, 400 in revenue, you’re spending millions in ads, and so they’re all fake. And the thing is, he’s not the only one.

If this is happening, it’s happening everywhere.

No, he’s not the only one that’s doing this. You can actually do a search, you can go to Google, you can do a search, and you can look for AI generated UGC, which is, what is you? I forgot what it stands for, user generated content. Okay, so normally, what you what you know, if you have a cosmetic company or you have a company, you tell your customer, hey, can you make a video talking about our product, you know, like, Oh, hey, I got this water bottle. It’s the greatest water bottle. I love it, drinking it, okay? And I send that to the company, and the company uses it as an ad that is a user generated content. Well, now you can have ai do the same thing. So if I have a water bottle for sale, I go to this website that makes this stuff, I give it a picture of my water bottle, and I can have 1000 different fake

AI people. How many they can do? I mean, they’re holding

my bottle, they’re playing with it, they’re tossing it, they’re talking about how great it is. And I can have them say anything I want, and this kind of AI slope or fake ads are all over the place. So when you have Facebook, the only company who’s making money off of AI, and how are they making money off of AI? Not because there’s more people advertising, but because they’re advertising with this AI fake ad slop, and so if they actually did go and take a look at their ad revenue, which hopefully the FTC will go after them and be like, You guys need to shut this stuff down, because you’re tricking people. Right? Then they’re going to lose a lot of revenue, and so they might not even be an AI company that’s actually making money with AI be in real danger, yep. So you know it’s it’s very simple now to make AI user generate contact, and it’s all over the internet. It’s all over Facebook.

Are learning this technique, right? It’s only going to grow and become, yep, we’ll get more educated with AI. I mean, what it can do?

I watched a YouTube video of this guy. He’s some teenager. He’s he goes online and he finds companies that are advertising, and they have a Shopify checkout. So basically it’s an ad, and it might be a person or might be something, and the ads doing well, and he can look at all the ads that this company is running. He finds the product, and then he goes and finds their website, and the product is sold on AliExpress. So you got aliexpress.com the product is over there, so he can get the same product for drop shipped, meaning that somebody places an order, the guy in China will actually send the product directly to the customer. And this guy doesn’t have to do anything except make the sale. So he showed a AI tool that could make a copy or a duplicate of that Shopify website. So basically, what you’re doing is you got the same exact product, or very similar, right? You can now copy their website exactly the way it is, and you have all their ads. So what he does is he uses AI and chat GPT to find all of their images, you know, the customer images, and replace them with fake ones. Oh, God, the testimonials are changed and written, rewritten and put fake testimonials. And then he goes to the ads, and he makes duplicate ads, fake ads with AI, and he starts running those ads to his now copied website. And he’s selling something. It might be 30 bucks, 40 bucks, 50 bucks, he can get it on Ali Ali experience, he’s paying like, $2 or $5 for it, and he’s making tons of money by copying somebody who already figured it out did all the hard work. Yep. So, I mean, there are people making money on AI, but

that’s the wild west right now.

It really is insane. Mean, okay, so that’s number one. That was, that was proof target number one, that eventually, you know, the hammer is going to come down on all these fake ads. We don’t know when, but it’s going to come down. It has to happen. Everybody knows this out there, yeah. Okay, so that’s number one. Number two, this week, we had a couple news stories come on. Actually, more than one of companies that decided to go all in on AI. So the first one is all birds. I don’t know if you ever heard of them. Oh, is that that grocery store? No, all birds. Okay, all birds. Well, there’s all D, which is the grocery store, and Albert sons, which is the grocery store. This one is all birds. So a, l, b, r, d, r, d, s, and they sell sneakers, of all things. They came out as they eco friendly sneaker company, right? And they’ve been in the business. They went public, but they’re not doing that well, so they decided that they’re going to go into AI. They sold everything sneaker related to somebody, and now the whole team is focusing on making an AI product. No idea. Okay, no idea what the product is going to be, no idea what they’re going to do, but the stock went up 600% Wow.

Talk about a pivot, right there. Okay, exactly.

It went up 400% and then it went up another couple 100% since then, it’s been up 600% just because they changed what they were going to do to AI.

People just heard AI. So they just,

people heard AI. That was the first one. Then there was another one that people really didn’t, most people didn’t hear about is my Zoom. Oh, he wants me to subscribe. Anyway, it’s my zoom, m, y, $1 per week. It’s my zoom, m, y, s, e, u, M. So this is a social media company. They have apps and they have other things for social media. And they said, Oh, you know what we are going to they weren’t making money. We’re gonna go AI. We’re gonna go 100% in AI. And so their stock rally incredibly high just because of that press release that went out. And they got picked up by Reuters. They got picked up and, I mean, that’s, you can’t see it, but that’s yeah, let me see if I can refresh it. There we go. So my Zoom takes flight after all birds and fresh ai, reband rebrand wave. So that was the headline on Reuters. So their stock just went crazy because they did the same thing that all birds did, and they’re just going all into AI,

you’re making the case for 1999

I’m trying to that’s the point. And there were other ones as well. There was

CRM, which is Salesforce. They came out and said, hey, you know, we’re going to make our we’re going to change all of our products so that they’re usable by agents. So they’re not, we’re not going to make we’re going to switch all of our, all of our software, so it’s used by agents, not by people. So that’s like, all 100% almost AI. So they’re, they’re switching to other companies have done similar stuff, and so that is proof number, or point number two of what I’m saying. You know, it’s like, Hey,

what’s going on? I would say that, you know, there’s no doubt that the AI revolution is real and it’s going to change a lot, right? But there’s going to be a settling of that process, right? There’s going to be real winners and real losers. And in all that, this has to happen in a way right for the process to work right as we evolve. So there’s going to be some, you know, I think this is part of the process unfortunately, right? There’s going to be people that it’s all new. People are learning this, and they’re going to take advantage of it. And, you know, everything has to come up with it with great regulation and figuring out what works, what doesn’t, who’s hurt by this, who’s you know, how you’re protected all the above. So, yeah, it’s important to be really aware of these type of things, right? And just not take it at face value and be like, Oh yeah, it’s gonna solve everything, because it will not

Well, I mean, whether it does or does not, that’s we can debate that question, right? Yeah. But right now we are trying to, we’re trying to trade and make our way and figure out the right investments. So, you know is the allbird stock, is that something I want to invest in just because they’re going to do AI stuff? I don’t know, right? I don’t know who’s buying this thing that’s making it go up 600%

well, you remember back in the 90s with what? Yeah. Who, right? It was like, just, I think the percent was crazy, right? Like, why would anybody looking at their numbers invest in Yahoo, and it just was a disaster, right? Yep, my mind is the same type of things.

And do you remember back in 1999 every party you went to, everybody you talk to what were they all talking about?

I was all about.com Yeah, it was all about social roommate, a roommate. I was living in Atlanta at the time. I had a roommate who was in tech, so I was very aware about he would come back, you know, every day after work, and he would just be like, Oh yeah, everything’s, it’s awesome. And all you had to do is this and this and this, and then, you know, it crashed, and, you know, just to see him lose his job, and it was very tough, right? And then it was all. I saw it all firsthand, so I have a lot of memories of exactly how that played out.

But was he also trading?

No, he wasn’t right, but I could parallel that whole situation.

So, I mean, for what I remember, and I was, I was little at the time, but I had also gotten into it. I had, you know, Dad, dad, we got to open an account. We got to open account. And I was trying to, you know, buy stuff and sell stuff, and even everybody I knew was in it. Like, we would go to any party and you’d be like, Oh, hey, yeah, you know, I bought this and I bought this, and that was the whole talk. Everybody was talking about the same thing.

Even the kids were talking about, yeah, if you, if you don’t do it, you’re an idiot.

Why would you, you know, yeah, right. And so a lot of individuals and small people, where we’re all in the market, right? And they were all got the headlines. They’re like, Oh, markets at all time highs. Market keeps going up, and it’s on the news every night. And you know, this thing is going to change the world. And the stock goes up 5% every day, and 3% and 2% and this is just going up, up, up, up. And so people are buying and buying and buying. Well, that leads us to section number or proof number three. So last a few months ago, FINRA came out and said, Hey, we would like to get rid of the rule for day trading, which is three trades in a week, or something like that. I mean, where you had to have 25,000

rolling days, like five, five

day period, yeah, something right, where you had to have at least $25,000 in your account to be trading, day trading. Otherwise you only had a couple trades to whatever, and then if you went over that you get you couldn’t do it anymore. Now, do you know when they implemented this rule?

No, I’m glad you brought this up, because we were talking about this in the coaching calls, and I did not know. Well, I can see it right here. We were not, I was not sure of when it did pass.

Yeah, this was established in February 2001 following the.com crash to protect small investors from excessive risk, protect Yes. And two days ago, the SEC approved new rules to eliminate this requirement.

Now, why would they do this?

So it was put in place after the last bubble burst, and now we’re in another bubble burst, and they’re like, Oh, hey, it’s a good time to get rid of this. So they got rid of it. Now they do have, you know, they didn’t just completely get rid of it. They made a small tweak to it, and they say that each broker will be available able to change the margin requirements on people. So basically, they’ll take a look at what stocks you own, and based on that, your margin will change up and down. Schwab, decided that they are going to do it during the day. So for example, let’s say you have a $2,000 account or $5,000 account, and you just make a trade, and you’re getting in and out the whole thing multiple times. They’re going to take a look at you, and if you’re using too much margin, they’ll shut you down. Other brokers will want to wait till the end of the day, and they’ll they’ll take a look at your margin, and then they’ll give you a margin call if you need it or not, for smaller for smaller people, for smaller accounts.

So the case by

case by case, but it’s still allowing people with smaller accounts to massively day trade.

Yeah, this is gonna, I mean, do you think there’s a little bit of pressure, you know, from all the poly market, like, how to, I mean, why now, right. I mean, what’s your view on that?

You. I don’t know, you know, they’ve been, they’ve been talking about it. There is, you know, money, money likes to make more money and worth. There’s this, been this huge push away from

where, like, where the companies take care of their employees. To, hey, you need to do it on your own. To, now, after covid, it’s like, Hey, give me all the rules, and I want to do it on my own. Like, even now, you know, for example, you cannot invest in a hedge fund unless you are a most likely a qualified creditor, not even accredited. But you have to be qualified. So in a real estate fund, you can be accredited and have a 1 million net worth, and you can invest, if you want to be in a hedge fund, where they’re actually charging you fees, you have to be worth $2.2 million so it’s even a higher bar to be in a hedge fund. That rule is now, they’re trying to get rid of that rule, they’re trying to say, you know, why? Why should somebody have to be accredited, you know, make them take a test, and if they’re smart enough to pass the test, then they should be able to invest in whatever they want. That makes sense. But the rule was there to protect people, right? And nowadays, a million dollars not the same as it was before. So, you know, a lot of people, a lot more people qualify, but now they’re trying to get the money from the even people that don’t even have a million dollars, right? So you have an investment, and you’re like, yeah, yeah. I want, you know, people with less money to come in. I want to take their $50,000 well, that’s their whole life savings, right? So it’s, it’s definitely going in that way.

This, to my mind, is pretty it’s, it’s pretty dangerous in my mind, in a way, right? Because, I mean, especially in an upward market, right, where we’re talking about the potential for it to be right, just this explosion to the upside. People are obviously going to see this rule, and they’re going to be, they’re going to be getting a lot of different new, new traders, right, with very little experience, and it’s going to be tough, I imagine. I mean, it’s almost like the period in covid, right? So it’s like, all sudden, everyone’s a stock trader. Yep. It’s like, covid 2.0 in my mind.

I mean, to me, they’re going after the kids, you know, the youngster. It’s like, Hey, I can’t pay my student loans, but I got $3,000 in my Robin Hood account, and I’m gonna go day trade. They’re like, it’s on you, yeah, so that you know that that day trading was a big piece of the.com bubble. I mean, I remember doing it myself, you know, jumping in and out and in and out of stocks during the day,

just because we could, I made this much, you know, like,

Yep, and doesn’t mean you made money every time. Like, it’s still not easy. It wasn’t easy, and now they’re getting strategy. You got

to have a plan. Obviously, some things never

change, yep. So this was, this was my, my third piece of evidence that the bubble is bursting soon. Again, we don’t know exactly when, but the more of this you see, you know, the more headlines you get, the higher the stock market goes, the more these companies are, the you know, the the big seven, the mag seven, their stocks haven’t really been going up that much. A lot of other companies are going up and taking over, so that’s kind of a good thing. But still, you know, you see a stock like SanDisk, right? This thing has gone up, what, 2,000% in in a couple of months. It’s, you know? So those kind of moves are not normal.

Isn’t the telltale sign that you’re in a you know, you’re taking a taxi. Well, these days it’ll be your probably your Waymo will tell you, like, Hey, I got this great stuff. I gotta get out of the market.

I gotta get out now. Yep, yep. So when everybody’s talking about how they’re invested in the party. That’s when, you know, Okay, it’s time to it’s getting it’s getting big. But you know, there are some other signs that they have. They’re like, Oh, hey, when the local news talks about the stock market as the as the main story, that’s when, you know, and that’s what’s been happening the last couple days. You know, they’re not talking about the war as much. They’re talking about, oh, the market, all time highs.

My marker was, there was a video that came out, I think was about a month ago, where it had like, Trump and Pam Bondi, and they’re like, they’re they were testifying, and they’re like, the Dow, the Dow is 7000 it’s all time highs. And this is like, it’s like, oh, okay, here we go. And. And soon after that video was let out, you came right down, but back

up again. I mean, right back up, just like a big, big, little V, you know, just drum up. And now we’re just, we’re still going. So, you know, I don’t like, how do you how do you protect yourself

from this? Like anything, you have to be aware that’s the first thing, right? You need to look back, like we’re talking about back in history, and see that these things may not repeat exactly, right, but they will rhyme. And this is the rhyming right here. So you have to be things you know in the real world, things will not continue to go up forever, right? Yeah, so.

And then, you know the other thing, like, I know when we had the the bubble in real estate in 2007 2000 8008. Yeah, one of the signs there were all of the pundits coming out and saying, how wonderful real estate is. It never goes down. It’s a great time to buy. You know, prices keep going up. Where we’re anticipating prices to continue to go up. Blah, blah, blah, because this reason, that reason, and they had all these economists and pundits and everybody’s talking about the same stuff. Last night on Fast Money, the CNBC show, there was a fellow on he is the head of strategy for equities. I forgot which bank he’s at, but it’s at a major bank. This guy was even mentioned as a potential for the next Fed chair. So this guy is very well known, and he’s on TV all the time. He’s got a ponytail. I forgot his name. Eventually, after a while, all these guys, they like. There’s so many of them, you forget all their names. But he was on the show, and he has been a major bull the whole time, like the last several years, and he does seem to be very conservative Republican based so he’s a big Trump supporter, and he’s, you know, hasn’t said anything negative about the administration that I’ve ever seen. And so they asked him, like, Oh, hey, so now we’re at all time highs, aren’t you kind of scared, like there’s still a war going on. There’s, you know, we’re barely had a cease fire. What’s, you know? What’s going on? And he said that, he goes, you know, Wall Street is. Everybody on Wall Street, they think they’re good at geopolitics, but they’re really not. They really suck at geopolitics. They really can’t understand what’s happening in geopolitics. And so they’re, you know, the stocks went down because of all this geopolitical stuff, but that’s just Wall Street trying to pretend that they know stuff that they don’t, and you shouldn’t really pay attention to it. And people are, you know, they’re selling stuff, and it’s silly to be hedging in this environment, in this situation. And he, he’s like, you know, everything is great. Everything is wonderful. Just keep you know, the markets are going to keep

rolling, keep driving ahead, yeah.

And when he said that it was silly to be hedging, that was like, danger, danger, danger, danger, danger. Why? I mean, you should I mean, if there’s something going on, you should be hedged. If there’s a freaking war happening, yes, you should be hedged. What do you mean? It’s silly to be hedged. Now, this guy is the top strategist at a major bank, like, I don’t know if he’s Bank of America or Merrill Lynch or one of those, but he’s, like, one of the top, top banks in the world, in the US, at least in and he’s, this is what he’s coming out of his mouth. So that’s unbelievable. That. I mean, yeah, that would happen on the on the 16th, so April 16, if you want to look up the show and you can watch, I’m sure they have their his interview on on CNBC. So, yeah, so this is, like, you know, there’s, there’s more and more signs coming. You know, I want to make as much money from this as as I as I can, while it’s going up. And so, yes, I am invested, but I am keeping my finger on the trigger, so to speak. You know, it’s okay if it starts turning around, I’m going to start lowering, not get out completely right away, but I’m going to start, you know, taking chunks off the table, yeah, because we don’t know what what’s happening with the war. We don’t know what’s happening with this AI thing eventually. I mean, you know, in June, we’re having the SpaceX IPO, supposedly, chat. GPT is going to go IPO. Claude anthropic is going to go IPO. So that’s, I guess, another piece of proof, right? Because in the.com bubble, what did you have all the time? You had IPO after IPO that would double triple, right? And everybody wanted to get in the IPOs right away. So we’re kind of going in that direction,

access to easy money. I see them, you know, the plan is the cut

going forward, yeah, so if they do cut the rates, yep, it’s going to be easier to borrow money, and the guardrails are being taken off.

Yep, I agree with you. I mean, you just have to be there’s always like, tremors before the earthquake, right? So it’s like, recognize those tremors, and that’s when you start taking a little bit taking a little bit off being cautious, you know, as you go down, and rather than just riding it down and getting hammered, right? So it’s, you know, you gotta be aware.

That’s, that’s the one thing I’ve learned over the last 20 years in the stock market, is that it never, you don’t just wake up and have it be going down, right? It doesn’t just drop. No, there is always all

along the way. There’s

always a sign before the major drop. There’s always a smaller drop, and then it stabilizes for a while, and then you’ll see the bigger drop. So people know ahead of time that there’s danger.

Well, it’s like, you’re going down a river in a canoe, right? And you’re like, oh, yeah, everything’s good. And all sudden, it’s like you’re getting near possible falls. There’s signs along the way that you’re coming to a cliff, right? So it’s in the same kind of idea, yep, yep.

So we don’t know when this is going to happen, but there’s a good chance that it’s going to burst eventually, you know, a trillion dollars in spend per year. It’s got to come from somewhere. So we’ll see what happens. But that’s right now. Those are my my three points of proof, and then maybe even the fourth one we throw in for free based on what the guy said yesterday. Now we got David asking the question, should we have, or should we be having ai do our trading for us?

So I’m split on that. I think at this point, right, that where we are you AI is supposed to be, in my mind, helpful to you, right? Like an aid, right? So you have, like, AI assistance. So I think you can use AI at this point to help you in the decision making process, but I don’t feel that I would just have it take over for your trading by any means.

It’s kind of, yeah, I haven’t, I haven’t seen any AI type system that has been working.

That means the proof itself, and maybe over time, we don’t know, right?

It might come one day, right now, it’s not ready. The AI is, for sure, and so,

but it can help you. I think you know, using it to aid in your process

trades, yeah, so it’s like research is really good for AI. You know, if you have an idea, they go, hey, I want to do I want, I want this to happen. Or I thought about this idea. Can you go and verify this? And can you do the research? It can help you?

Yeah, tell me where what I’m not saying. Maybe something’s wrong, or whatever,

automated trading can be done, and AI can help you with that. So, you know, there’s brokers that will allow you to use their API, which is their connected you know, have your account or have a third party software connect to them. I’m not saying this properly, but there’s a software like trading view, okay, this is a charting software that you can, you can get per month, and you can pay for. You can have aI create a strategy for you, and give you all the code, and then you take that code and you put it in trading view, you connect trading view to your broker, and then whenever the strategy says, you know, signals a trade, it can do it for you in your brokerage account. That is automated trading, not AI trading, because it doesn’t learn from itself. And it’s not doing it for you. It’s doing it based on what you programmed it, what you told it to do, based on the strategy. So AI can help you with a strategy, but whether it makes money or not, that’s on you, right? Because AI cannot tell, and especially with options, it’s more difficult because AI has trouble when it’s going and doing research. It has trouble finding options data. So like, if you want to know, hey, what was the price of the 500 Apple call back in 1999 okay? Like, it won’t tell you. It can’t. There’s no There’s no repository for. Have to go and search it and look for it right now, you if you want to, you know, pay for that data, then maybe you can get it. But that’s a whole different story. So for options, no for, you know, futures trading, that it makes it easier. But even that, even with AI, even with these automated strategies, most people are still losing they’re losing their shirts, so just be careful in there. This stuff is not there yet.

Yeah, it’s gonna be rocky for a while, for sure. Yeah,

yeah, for sure. Interesting times, but yeah. So that’s that was. That’s our show for today. How are the markets right now? I have no idea my, I don’t have my, my,

it’s still up. The SPX is up about 80 at this point. Okay, see. Oh no, yeah, no. Oh, okay. So I got out of my double dip.

Your double dip got out with a winner. Cha Ching, nice

winner. All

right, so we had a

next winner. We had a I wish I held a little bit longer on that one, because that would have been a major lotto. We’ve had nice adjustment, winner, slight winner. And we had a double dip today, so it’s been quite active. Yep, and looks like we’ll be taking them on for

Monday. All right. It’s keeping us busy, sir. All right. And yeah, so

I haven’t mentioned this before, but we’re on the topic of automated trading. I’m actually working with a company that is interested in taking market power and automating it and offering it to people so that might be coming soon.

Really cool, yeah, where

it’s automated, and you do it, does it, it’s all done for you. So we’ll see how that goes. All right, but yeah, so that’s it for today. Folks. Have a great weekend. Enjoy your all time highs, and just you know, be careful of what news is coming out and how the market is going to behave if there are major hiccups in the economy, a lot of these names, these AI names, the tech names, are going to take a big hit. Hopefully it doesn’t go down as much as it [email protected] bubble, and it doesn’t take a decade to recover, but it caused a lot of pain for a lot of people. So this is us trying to warn you, to

be careful. Yeah, don’t. Don’t be like, scared. I don’t want anyone to be scared. It’s just be, you know, mindful what’s going on, right and then, so you can navigate this right? So there’s plenty, like you said, there’s plenty of time to navigate these situations. You just seem to be aware of the markers along the way.

Yeah, but something

is brewing Wall Street climbs the wall of worry is what they say?

All right, guys, have a great weekend. We’ll talk to you next week. Are you ready to get started with passive trading and be a consistent and confident and profitable trader generating cash flow consistently from the stock market? Well, I have some great news for you. For a limited time, we are offering my new book, passive trading for free. All you got to do is go to passive trading.com/free book, and we will send you the book in the mail for free, as long as you cover the post Asian handling. So if you can cover that, we’ll send you the book for free. We’ve already printed it. We got it for you. We’re gonna send it out to you. It’s free. All you got to do is just go to passive trading.com/free, book, and learn the basics of passive trading. Get the behind the scenes, get some examples, learn the strategies and put this stuff to work in your life right now. Remember, go to passive trading.com/free book and get yours now, while this offer is still available, you.