The Discounting Mechanism At Work
The newsletter argues that equity markets act as a discounting mechanism, pricing the probability of outcomes before they materialize, as seen in the early rally during the Iran‑U.S. conflict and muted reaction to Fed leadership chatter. It highlights that cloud giants Amazon, Microsoft and Google hold roughly $1.5 trillion in enforceable performance‑obligation contracts, with $701 b added in six months, providing concrete fundamentals for the rally. Growth rates for AWS, Azure and Google Cloud are accelerating, while Asian industrial capex—driven by AI, energy and defense—is projected to reach $16 trillion by 2030. The piece warns that concentration risks, such as Microsoft’s OpenAI exposure, could trigger rapid repricing despite the current upside.
Neither Skynet Nor Snake Oil
The newsletter contrasts two dominant AI narratives – existential doom versus a speculative bubble – and argues the reality lies between them. Recent data show AI is delivering measurable margin and headcount efficiencies, yet large language models still suffer from...
Strait Talk: Bull and Bear Scenarios
Guild Investment Management outlines a dual‑track outlook as the Iran‑Israel war spikes oil to $110 per barrel and tightens global liquidity. The bearish case hinges on pre‑existing liquidity contraction, rising inflation expectations, and potential 15‑20% equity corrections tied to oil...