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Michael Lewis and Tom Lee held court at a podcast taping in New York City on Tuesday, talking to SoFi\u2019s head of investment strategy, Liz Thomas, for her show, The Important Part.<\/em> In a wide-ranging conversation that covered, among other things, Lee\u2019s thoughts on flash-frozen food technology and Michael Lewis\u2019s dinner with OpenAI CEO Sam Altman on the subject of Sam Bankman-Fried, the two towering figures in finance debated whether the current selloff in software stocks was turning into something more serious. They were grim, yet humorous.<\/p>\n The duo dissected a market defined by extreme volatility, in which software stocks are \u201cdown a ton\u201d and artificial intelligence threatens to wipe out entire industries. But the most arresting moment came when Lewis, author of The Big Short,<\/em> shared a morbid statistic about who actually makes money in these environments.<\/p>\n \u201cDid you know Fidelity published a report about the best-performing retail accounts of Fidelity?\u201d Lewis asked the audience. \u201cAnd it was all customers who died.\u201d (Lewis was referring to a famous 2014 study that found, in fact, the best-returning portfolios were left alone, whether owing to death or absent-mindedness.)<\/p>\n A few moments later, Lee cited research about how 40,000 stocks have either gone public or been spun off since 1974, of which 90% fell by more than 50%, the vast majority going to zero: \u201cSo in other words, the majority of stocks basically went to zero.\u201d<\/p>\n The anecdote underscored a central theme of the evening: In a market whipped into a frenzy by a fear of missing out (FOMO) and algorithmic trading, doing nothing is often the superior strategy.<\/p>\n \u201cThe message is not: die,\u201d Lewis clarified dryly. \u201cDon\u2019t over trade.\u201d<\/p>\n Lee, head of research at Fundstrat, supported this view with data from his own firm. He noted that while institutional investors have shrunk their time horizons to mere days\u2014or in some cases hold stocks for \u201clike 40 seconds\u201d\u2014retail investors are actually \u201cgetting it right\u201d because they are working with \u201cpermanent capital.\u201d Or being literally dead, they are unable to withdraw their capital from the market. Unlike hedge funds that churn positions based on daily P&L, retail investors sit on their assets. <\/p>\n \u201cAs you know,\u201d Lee told the crowd, appearing to refer to high-frequency trading patterns, as covered by Lewis\u2019s book Flash Boys<\/em>, \u201cthe average stock is held for like 40 seconds. So most [of] these large hedge funds \u2026 one second or five seconds is considered a long holding period. So a lot of funds are literally just churning through stocks.\u201d (Asset management executive Barry Ritholtz has taken issue with estimates of this nature, arguing they apply only to high-frequency traders and are not representative of most stock market activity.)<\/p>\n Lee noted Thomas made a good point in her prompt, however. <\/p>\n \u201cThere is something that\u2019s different this year. All of a sudden, a lot of stocks and industries are starting to have shrinkage,\u201d Lee said. \u201cSo the software industry, for instance, is seeing shrinking demand and a repricing of their service, and there\u2019s now many research reports pointing out that agentic AI products or AI products are starting to replace traditional software.\u201d<\/p>\n It\u2019s a lot of shrinkage, too. Bloomberg calculated an iShares ETF tracking software stocks has bled roughly $1 trillion over the past seven trading days.<\/p>\n Lee said he viewed this as proof of AI\u2019s productivity and a long-term positive, reasoning that less is being spent on software because AI is fulfilling this function instead; there are also fewer tech employees now than in 2022, when ChatGPT was released.<\/p>\n Lewis, though, said he saw echoes of the dotcom bubble. He warned investors are once again \u201cconflating the technology with corporate profits,\u201d assuming that just because AI is transformative, it will inevitably lead to stock market windfalls.<\/p>\n \u201cIt may, in fact, be a machine for reducing corporate profits,\u201d Lewis argued, suggesting many of the current high-fliers could eventually come \u201ccrashing down.\u201d<\/p>\n The conversation veered into existential risks for other asset classes as well, painting a picture in which even \u201csafe\u201d assets could theoretically go to zero. Lee suggested Bitcoin could be rendered obsolete by quantum computing or even by AI itself\u2014if AI decides to run its own \u201clanguage of validation\u201d and bypass human crypto chains entirely. Even gold, a $35 trillion asset class by Lee\u2019s calculation, isn\u2019t safe from devaluation.<\/p>\n \u201cThere\u2019s a million times more gold underground than above ground today,\u201d Lee said, reasoning that if it gets too expensive, the Magnificent Seven will just get into the gold mining business, \u201cbecause you might as well just dig for gold.\u201d<\/p>\n Given the talk of bubbles and potential asset collapse, Lewis revealed he has moved into a defensive crouch\u2014specifically, the \u201cArmageddon trade.\u201d<\/p>\n \u201cWhen I own [gold], I think I\u2019m long fear,\u201d Lewis admitted, revealing he has a position in the metal, which he didn\u2019t advise any listeners to follow him in acquiring. \u201cI don\u2019t see any reason not to be scared. And I think fear is not a bad thing to be long right now.\u201d<\/p>\n For the living investors in the room, the takeaway was a paradox: The market is dangerous; technology is cannibalizing profits; and the best way to survive might be to emulate the dead\u2014the only reliable capital is permanent capital.<\/p>\n<\/div>\n #Michael #Lewis #Tom #Lee #hold #court #trillion #softwarestock #carnage<\/p>\n","protected":false},"excerpt":{"rendered":" Michael Lewis and Tom Lee held… <\/p>\n","protected":false},"author":1,"featured_media":19239,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[2],"tags":[97,11986,504,162,11947,7992,166,2143,11880,5657,11985,4748,1628],"_links":{"self":[{"href":"https:\/\/microvibenews.com\/index.php?rest_route=\/wp\/v2\/posts\/19238"}],"collection":[{"href":"https:\/\/microvibenews.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/microvibenews.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/microvibenews.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/microvibenews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=19238"}],"version-history":[{"count":0,"href":"https:\/\/microvibenews.com\/index.php?rest_route=\/wp\/v2\/posts\/19238\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/microvibenews.com\/index.php?rest_route=\/wp\/v2\/media\/19239"}],"wp:attachment":[{"href":"https:\/\/microvibenews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=19238"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/microvibenews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=19238"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/microvibenews.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=19238"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}\nFOMO or death?<\/h2>\n