“We think the markets, particularly in the U.S., are very overvalued.” – 00:02:56
Eric Biegeleisen, Partner, Deputy CIO at 3EDGE Asset Management, joins Remy Blaire at the New York Stock Exchange to discuss the highly anticipated earnings report from Nvidia, a company boasting a remarkable $4 trillion market cap. As the market awaits Nvidia’s earnings announcement, analysts predict an adjusted EPS of $1.01 and revenue of $46.2 billion. Remy and Eric delve into the potential impact of Nvidia’s performance, particularly considering the $8 billion hit the company is expected to report due to recent chip export restrictions to China.
Eric shares his insights on the current market dynamics, expressing concerns about the signs of a bubble forming around artificial intelligence and related technologies. He draws historical parallels to previous market bubbles, such as those associated with railroad stocks and the internet, highlighting the presence of excessive margin lending, momentum trading, and a pervasive “fear of missing out” mentality among investors. Remy emphasizes the importance of distinguishing between noise and signal in today’s social media-driven investment landscape, and Eric explains how his firm utilizes a quantitative investment process to focus on specific data points rather than getting swept up in daily headlines.
The conversation shifts to valuation concerns, with Eric articulating his apprehension about the overvaluation of U.S. markets. He notes that while earnings have increased fourfold since the lows of the global financial crisis, stock prices have surged eightfold, creating a significant disparity that raises questions about the sustainability of current valuations. Eric suggests that this could lead to a necessary adjustment in stock prices.