Animal Spirits Podcast All-Time Highs Should Feel Better Than This
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Dec 17, 2025 The stock market rally is broadening, with small caps showing strength despite concerns over AI. Howard Marks delivers sage advice on cautious investing amidst uncertainty. They debate the potential impact of rising unemployment on earnings and explore inflation's hidden pains in housing and transportation. The feasibility of space data centers sparks an intriguing discussion, while retail investors learn tough lessons from concentrated AI bets. Plus, they dive into movie recommendations and the shifting landscape of streaming services.
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From Tech Concentration To Gold
- Brian Hahn once held 80% of his savings in tech and later moved to gold after becoming worried about concentration risk.
- Michael Batnick notes many retail investors got rich from concentrated mega-cap bets over the last decade.
Product Leadership ≠ Clear Business Model
- OpenAI's current cash burn and stock-based compensation are large relative to revenue, making near-term business economics unclear.
- First-mover product strength doesn't guarantee an established, profitable business model today.
Paid AI Tiers Reveal A Different Product
- Higher-tier paid AI offerings feel qualitatively much better than free tiers and change perceptions of capability.
- Rapid model improvements suggest today's capabilities will advance further in months, shifting product economics.
