① Carson Block, founder of the well-known short-selling firm Muddy Waters Research, said that despite market concerns about artificial intelligence... Warnings of a bubble are increasing, but now is not a good time to bet on a decline in tech giants' stock prices. ① Opportunity; ② Block believes that in the current market environment, going long is more appropriate than going short, and points out Nvidia... The strong performance of leading stocks makes short selling risky.
Carson Block, founder of the well-known American short-selling firm Muddy Waters, said that despite increasing warnings in the market about a potential bubble in artificial intelligence , now is not a good time to bet on a decline in the stock prices of tech giants.
Founded in 2010, Muddy Waters Research was founded by its founder, Brock, who had worked in Shanghai for many years. The company name "Muddy Waters" comes from the idiom "fishing in troubled waters," which means to expose companies that commit fraud in the murky waters of capital and to profit by shorting capital.
In an interview, Block said, "In the current market, I would rather go long than short. If you try to short Nvidia or any other big tech company right now, you will be quickly eliminated by the market."
U.S. stocks experienced sharp fluctuations as investors worried about the previous overheated rally in tech stocks, with the S&P 500 falling more than 3% from its October high. Goldman Sachs... Group and JPMorgan Chase Executives also indicated that the market may have already prepared for further declines.
But these concerns eased somewhat after Wednesday's close. Nvidia reported stronger-than-expected revenue forecasts and countered "bubble" claims, boosting the tech-heavy Nasdaq. The S&P 100 futures rose 1.8% in pre-market trading on Thursday.
Block stated that he is focusing on some small and medium-sized companies related to artificial intelligence (AI) in order to find potential short-selling opportunities.
“There are many so-called ‘AI concept stocks’ or ‘AI fake stocks’ right now, and that’s where you should consider shorting. However, as long as leading stocks like Nvidia continue to rise, shorting will be very dangerous.”
He also pointed out that the boom in passive trading (ETFs) has largely "undermined the market's price discovery function."
"It doesn't matter how high Nvidia's stock price goes, all these funds that buy the S&P 500 index will not sell Nvidia until there is a net outflow of funds. As long as there is an inflow of funds, they will buy every day regardless of the price."
Block's remarks contrast with those of another well-known short-seller, Michael Burry. Burry has recently been on social media criticizing tech giants like Nvidia, arguing that the cyclical financing among these companies has created a bubble.
Regulatory filings released earlier this month showed that Burry spent $9.2 million to buy put options on Nvidia and software company Palantir Technologies. Meanwhile, SEC filings revealed that Burry's investment firm has terminated its registration.
Muddy Waters also posted about this, suggesting that Burry's decision to deregister the company might be to save on securities... Legal fees.
(Article source: CLS)
