Summary
- AI-driven profits and S&P 500 growth fuel bullish sentiment, but I see signs of irrational exuberance and extreme market concentration.
- Semiconductor valuations and Japanese/Korean indices appear stretched, with parabolic rises disconnected from real economic risks and cyclicality.
- Margin debt levels echo past bubbles, raising the risk of aggressive drawdowns if sentiment reverses or inflation surges.
- I prioritize stable, high-margin dividend companies like McDonald’s to reduce portfolio volatility and avoid FOMO-driven, overvalued assets.
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Irrational Exuberance or Not?
When the stock market experiences one of the most violent bullish rallies ever, it is really hard to complain about it. When you see your net worth increasing day by day, you can only be happy; however, I believe that a
Analyst’s Disclosure: I/we have a beneficial long position in the shares of MCD, GOOG, META either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
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