Transcription
Because in the end, when the downturn comes, it is a bubble burst. At that time, it was about 75,000 million, which exited tech stocks. The moment Apple announced the price increase, sir, after that, the market immediately sold off. Those who dream big, when it falls, it falls hard.
Another day, a storm of selling hit tech stocks. Now the market seems to be concerned again with the cost or the cost of AI after a lot of investment has been made, and there is a high demand for upstream products like semiconductor chips, which has caused chip prices to soar.
You don't have to fear an AI Bubble. In this world, bubbles have occurred many times, and stocks have fallen by 20% many times. That's why I'm telling you, I'm telling you not to panic. 107 times in 100 years, the average is more than once a year, meaning more than 100 times.
Yes, sir, but coincidentally, in the past, we haven't often seen a minus 20%.
The ups and downs of these markets are caused by what? Overall, there are 3-4 issues, which ultimately come down to liquidity. Liquidity means the money to drive this and that, etc. Sir, if there's no money, stocks won't go up.
But that is the scary thing about why people are selling to take profits today and citing inflation as the reason for this. Ah, but that is one side of the truth, the demand side. It is believed that this round of AI globally, it might be real, but mostly it is due to bottlenecks stacked up in many AI supply chains. Therefore, what is interesting is to keep an eye on about 5 major issues, sir. We need to follow what happens, that whenever growth slows and stock prices start to fall, we might need to adjust portfolios and reduce AI stocks.
The point of concern this time comes from Apple's product price increases, ma'am, which raises the question of whether the price of chips for electronic devices, which has increased, will accelerate inflation. Ultimately, it will lead to interest rate hikes by the Fed and increased costs across the entire system.
I have also counted the statistics, sir, that 107 times, ah, what kind of recovery it was, sir, but every time there was a full recovery, Guitar.
Yes.
Ah, this is good news, sir. 107 crises recovered, making customers and investors profit every time, sir.
What's important? SpaceX is entering phase 2. In this second phase, 15 days from its market entry, sir. If it enters, sir, and is included in the Nasdaq 100 index, what does that mean, sir? It means that funds related to N100 will be very numerous and very large later on, sir. Portfolios must be rebalanced. I think today, this is the reason for rebalancing portfolios.
If you are a short-term investor, I think this kind of market might be difficult to trade. Sometimes we buy, thinking it will go up, right? Then after 1 hour, something is announced, and it falls by itself. So, short-term investing during this period will be quite difficult.
Whenever the bottleneck doesn't occur, the sales volume will decrease, and the selling price will also decrease, sir. Because when there is a bottleneck, no matter how much you produce, you can't sell enough, right? People are scrambling to buy, and whatever price per unit you charge, they will buy. But when it reverses, that's the point where you need to reduce your stock portfolio. Apple's current CEO, Tim Cook, said it's an unavoidable right due to a crisis in the production of chip-related products, ma'am, which have very high demand, and prices have risen sharply. Apple can no longer bear this cost on behalf of consumers. Our goal is to take this channel to 1 million subscribers. Please subscribe, ma'am. We now have YouTube Membership, ma'am. By becoming a member, you will receive exclusive content and seminars from PRP and Team Business Tomorrow.
Asking if AI will bubble, I need to say a little first, sir. This picture here is an attempt to clearly show that you don't have to fear an AI Bubble. In this world, it has happened many times, and stocks have fallen by 20% many times. So, I went to study the stock market, sir, from 1929 until 2025 for 5 countries, sir: the United States, England, Japan, Germany, and France, counting only those that fell by more than 20%, sir. Guitar, do you know, sir, that in the past 100 years, from 1929 until 2025, which was last year, all crises where the stock market fell by more than 20% occurred? Sir, the US market, the S&P 500, sir, England, the FTSE, sir, this is the Nikkei, sir, ah, Germany, the DAX, sir, ah, all of these fell by 20% in the past 100 years, do you believe, sir, there were a total of 107 times?
Yes.
Where stocks fell more than 20%.
Yes.
Therefore, that's why I'm telling you, I'm telling you not to panic. 107 times in 100 years, the average is more than once a year, meaning more than 100 times.
Yes, sir, but coincidentally, in the past, we haven't often seen a minus 20%. Therefore, seeing a minus 20% this year is not a big deal, sir. We saw it once in 2022, sir, so 3 years have passed. And I'd like to share a little, sir, about the patterns of recovery in each crisis, sir. I have counted the statistics, sir, that in all 107 times, ah, what kind of recovery it was, sir, but every time there was a full recovery, Guitar.
Yes.
Ah, this is good news, sir. 107 crises recovered, making customers and investors profit every time, sir. So, don't be afraid. So, anyone who invested in S&P yesterday and said, "Oh, I'm stuck on the peak," don't worry, sir, you will definitely get out. Let's see what time it will get out, sir, what time it will get out. Ah, the recovery patterns, sir, in the past 107 times, V-shape was 18%, sir. V-shape recovers quickly. U-shape takes about no more than 18 months, which is a year and a half, sir. But this is 54% that happens often, W-shape. This is our Tom Yum Kung crisis, sir. W-shape, sir, ah, occurred 21%, and then no recovery at all, sir, which is Japan, sir, only 7%, sir, only 7%. Ah, someone asked when Thai real estate will recover, sir. Thai real estate will probably be in an L-shape, sir. Meaning no recovery at all, sir. It will go sideways, sir. For us, we focus on valuation, financial dividends for now, sir. Now let's look at, ah, observe carefully, sir, more than 60%, Guitar, you see, right? The recovery will take no more than 18 months.
So, that means we expect the stock market to recover. If we're stuck at the peak, and it will return to a new high, this means returning to a new high, sir. A new high from before it fell takes about a year and a half. So, don't be afraid, sir. Uh, simply put, we will buy when the market falls. From the past 100 crises, global stocks have fallen by an average of about 20-35%, sir. But the Thai stock market will fall by an average of about 30-50%. We will be more than them because our Thai stock market is not very stable, sir. Tom Yum Kung fell 87%, the US financial crisis we fell 51%, Subprime fell 55%, Covid fell 35%. This time, before you bounce back, Guitar, we talked about how when it fell to 1,200 points, we had to buy because it fell below 30%, remember? To buy the first tranche. This crisis fell for 3 years, down 36%, sir, and then bounced, which means at least one tranche was bought, sir, and then it bounced up to 1,600 points, sir. Ah, so if I summarize it here, sir, we will find that we don't have to fear immediate adjustments, and this time, I have to say, hey, we will encounter all sorts of crises, sir. You can cut me off, sir, I won't give any more information. This program has covered everything. Ah, stocks, please, P' Vee.
Ah-huh, but this is complete, sir. Really, the rest would be strategies for buying stocks, which would be too long. So, even if we think, uh, AI is a market bubble, I really can't definitively say, sir, whether this round is an AI Bubble or not. And this is count 1, right, for the correction. I can't say, because in every crisis, no one can predict. No one could predict Covid. But if we only count technology crises, I want to remind you that there has never been a technology crisis that couldn't be overcome, and no technology crisis that completely wiped out the old technology. Okay? So, rest assured, just hold strong stocks in businesses you think are correct in AI, sir, and you will survive, sir. If anyone wants to buy SpaceX, that's fine, but just know that we need to diversify our portfolio well, sir, so that if SpaceX goes to 0, we won't die. Because they dream big, those who dream big, when they fall, they fall hard. Like those who expect a lot, when they fall or get hurt or things don't go as expected, sir, it will hurt badly. The pain isn't about whether you got it or not, the pain is about how much you expected. Ah, so diversify your risks well, sir. But, uh, uh, we say that no technology has ever been completely wiped out. If we go back to, uh, 1835 AD, is that far, sir? 200 years, right? 200 years, uh, Guitar, do you know what technology caused the stock market to explode, because the American stock market was already open then, sir? What caused the stock market to explode? Was it trains or something?
Correct, sir, trains.
Yes.
The trains that go "choo-choo" every day, sir, the rail trains, sir, not electric trains, not Shinkansen, sir, it's, uh, not even BTS. Uh, trains, at that time, they opened the first track when the city was still a desert, sir. It was the cowboy era, sir, riding horses and shooting each other, right? You probably remember when they first pioneered the United States, sir. The 200-year history of the United States of America has this, sir, building railway tracks. As soon as the first railway track was built, it required investment. Everyone, wow, opened contracting companies to build, ah, railway tracks, and, ah, where the railway tracks passed, they built cities, right, sir? Ah, opened up land for parties, if you look at the past, cities, uh, there was investment in buying horses, doing this and that, building barns, raising animals. This was investment in the old days, sir. That was technology, ma'am, that was technology.
Ah, which is probably not a prominent technology in this era, sir. If you want to see technology from 200 years ago, go look at the State Railway of Thailand, and you will see what trains from 200 years ago were like, they are there, sir, they are there, sir. Ah, meaning the trains that are in the museum, not the ones running. The trains in the museum are still good, sir. Ah, they used steam power in the old days. Energy still used steam and coal, sir. That, and then there were many steel mills that emerged because enormous amounts of steel were needed to make both trains and railway tracks. It turned out that these stocks rose until they went bankrupt, sir, until they went bankrupt, and that era was an era where, uh...
But what was the change, P' Bee, when there was so much investment and business expansion, ma'am, that you said, uh, it rose and then one day went bankrupt? What was the trigger point or turning point?
On that day, no one knew, sir, because everyone was rushing to invest, wow. But the turning point might be when everyone announced massive investments, and, well, I don't want to say, 1. The country's debt was high, which America already had. Ah, 2. There was "the bag" every round, there were "the bag" stocks every round, sir. Even if there were, there would be one stock that I don't know if I should count as technology, which is the Nifty 50, 50 US stocks. Ah, many people can try searching on Google, sir, NY50, not Indian stocks. The Nifty 50 are 50 stocks that, in that bubble burst era, and with "the bag," would be stocks like McDonald's, Coca-Cola, sir. Ah, no Apple, no Nvidia, sir. McDonald's, Coca-Cola, Walmart, sir, Johnson & Johnson, something like that, sir. These were stocks that are now "old technology" in the present era, but they were "new technology" in that bubble burst era, sir. Uh, at that time, Coca-Cola was "new technology," Guitar, just think, wow, it was a drink that had never existed before in this world, why did it appear? Something like bubble tea, maybe. I'm not sure either, but it was a super modern drink, very fashionable in the past, and it bubbled up, and then fast food like McDonald's, think about it, also adjusted upwards. And then the next technology, after the railroad, it would be things like radio transistors. Ah, there was accelerated investment in radio waves, and then it burst again with color television, sir. And then it hit again with personal computers. Ah, personal computers, don't forget all the technologies I mentioned, sir, McDonald's, Coca-Cola too, sir. Ah, personal computers, and then it became...
This is all technology related to technology. Do you notice, sir, that everything I've talked about, every technology, has bubbled, and every technology has bubbled? So, I don't dare to say that AI won't bubble, but every bubble occurs from over-investment. At a certain point, everyone will stop investing, and then there will be companies that can't survive, sir. That's all, sir. But if you ask, are trains still around? Are color televisions still around?
Yes.
Are personal computers still around? Are McDonald's, Coca-Cola still around? Are businesses like IBM, Verizon, AT&T, which exploded during the dot-com bubble, still around today? Is Oracle still around today? Yes, they are. And today, even if AI bubbles, do you think AI will disappear? No, it won't disappear. The winners in AI will continue to exist, and AI will be developed continuously, and in another 10-20 years, we might encounter a new technology that will bubble again, which we don't know what it will be. It might be...
AI directly in the human brain, or perhaps technology for making robots that can replace us, something like that. We don't know what the future will be like, or we might not even reach the next technology, or actually, SpaceX might be "The Bag" stock in another 10 years, because ultimately, they can go to Mars. But with current technology, sir, going to Mars takes over a year. We would have to be in a weightless state for over a year. That means we would break the record of astronauts who have been to other planets and returned. They said the first thing an astronaut who flew, uh, who was in space for a year, and then returned to Earth, the first thing they encountered, do you know what it was? They said their eyes would burst because our eyes already have pressure, and this pressure is suitable for Earth's gravity. When they come back down, the eyes adjust quickly, but not fast enough, and it turns out that the pressure in the eyes will push the eyes out, sir. If you stay in a weightless state for too long, your eyes will burst, just think. Therefore, ordinary humans like us are not as strong as astronauts. We go there for a year, land on Mars, and return to Earth. So, ultimately, we need to build a mass transport machine. Uh, this might be a new technology, uh, mass transport might be a new technology in another 20 years, or according to the chain, I think it's good, Doraemon's gadgets, sir, they are starting to become real in many aspects.
There will be many more innovations in the future, right, P' Wi, because our world never stops developing, no matter how many crises occur?
Yes, sir, so, for example, today SNT is... but this time, about AI, if it really has to explode or bubble, P', but I still believe it won't explode yet. I still think there's time, meaning it can still go up.
I'm excited, Professor. Actually, you already said that a sale-off event or a stock market downturn would occur, ma'am. Professor, please remind us again why you saw the global stock market collapse happening when we talked about 2 weeks ago, Professor.
It started with stocks falling for the first time, probably on Friday the 2nd, right? And on the 5th, we came and said that, sir, liquidity was not enough, sir.
Yes.
At that time, it was about 75,000 million, sir, it exited tech stocks, sir, and it went to reserve, to reserve SpaceX shares. But the reservation was 4 times, do you understand, sir? 4 times. So, that 75,000 million became 300,000 million that was sold off from profitable tech stocks to reserve shares in the same group, which is SpaceX, do you understand, sir? After that, on the 12th, we saw that as soon as the reservation was complete, right, sir, on the 11th, sir, that event happened from the 2nd to the 5th, 6th, 7th. On the 11th, boom, the market ran up again, sir, because the 3 parts of the money that were returned ran back into speculation in the same old stocks, like hoes and spades, you see, sir, it ran up. So people said there was nothing, sir, but when we talked that day, we said, sir, there would be events like this for about 4-6 weeks, sir. Therefore, the stocks that went up after SpaceX entered the market, that was the money that couldn't reserve shares, it ran back in again.
Sir, and what else happened today? There will be more. The reason it fell, it wasn't just about SpaceX. There are a total of, I'll share it with you, sir, to review it, sir, so we don't have to wonder often, sir, what causes the ups and downs of these markets. Overall, there are 3-4 issues, which ultimately come down to liquidity, sir. Meaning the money to drive this and that, etc., sir, if there's no money, stocks won't go up, sir. Even if I talk about it today, it won't go up.
Professor, are you sharing your screen?
I'm about to share, but I'm monitoring and doing many things. I have until 6 PM, but I'll talk slowly, talk slowly because this person...
Talked a lot, sir, and then, I'll go on, I'll go on, I'll share it with you, sir, that this slide is from this, sir. Here, sir, June 5th, it started with the Fed first, Strong Job. Now, 17 more, the Fed came in strong again, sir, Hbit, right, sir? Sir, that means people interpreted that the Fed might have the right to raise interest rates towards the end of the year, sir. Uh, they interpreted it themselves, sir. I said that when the Fed met, oil prices hadn't fallen yet, but now oil prices have fallen to 73 dollars, right, sir? Oil from 120 dollars has fallen to 73 dollars, as the Professor said, sir. And then, asking why the Fed has a chance not to raise interest rates this year is because the inflation that rose, sir, in May and June, it's compared to last year, which didn't yet include the, ah, inflation caused by the cost-push of oil, sir. But now it's included, and it's temporary, sir. So, ah, I'll, I'll summarize why they cited this and sold, and why the selling today is a rebalance. This rebalance is a bigger issue, bigger than the 300,000 million that was reserved, that was reserved.
Sir, that was all about liquidity, sir. Ah, so the first issue now leads to the second one. So people will, some people understand it this way, sir, that the Fed will... Therefore, the stock market that has risen a lot, they will sell, sir, because the arrival of the "Watch" is like a hawk, sir. But if you ask the Professor, it won't rise, in terms of actual monetary policy management, sir. No one harms their own country. Raising interest rates is not good for America, sir, not good for America at all. Therefore, if America, if it were to raise interest rates, sir, ah, Guitar, just watch, sir, in another 3 months, inflation will fall. Inflation will fall, sir. If we look closely, the Fed's inflation forecast has already fallen, sir. Ah, can I bring up another one, sir, to show you? It's that listening requires understanding, sir. Let me ask first, what inflation are you looking at, sir? This, this, sir, this is inflation, sir, the Fed's forecast, sir. Did it go up, sir? Look at the far left, sir. Did it fall, sir? See, inflation has fallen, and the one that says the Fed's inflation has fallen, right?
Yes.
Sir, the Fed's average inflation has fallen, sir. And what about bond yields, sir? Bond yields have also fallen, sir. And what else has fallen? Here, real yield, sir. Why do we see real yield rising, sir? It's by subtracting bond yields from inflation, subtracting inflation, sir. So you'll see it has fallen a little, sir. If you look at numbers like these, there's no reason, sir. Don't make assumptions that the Fed will raise interest rates, there's no reason, sir. The main point is that the Fed will focus on inflation, but the Fed is not the one who forces inflation to rise or fall, sir, but the one who can force it is Trump, right, sir? Trump will do everything possible to end things with Iran, sir. That is Trump's benefit, that Trump must do whatever it takes to prevent inflation from rising, sir. And Trump also said that he likes inflation, so they probably understand each other, sir, that, uh, if you can't end the war, then there's no chance of lowering interest rates, sir. The chance of a soft landing for America, as they say, won't happen, sir. Trump will do whatever it takes to make stocks go up because his election is near, sir. Do you see, sir, that in his MOU with Iran, they have 3 months to talk, sir? 3 months, so if this month is August, September, right, sir? October, November is the election, right, sir? So they might not finish talking and postpone it for another 2 months, sir. But once it's over, ask Guitar again, once the election results are out, whether he wins or loses, can he go after Iran again? Before that, you went after them without any rules, who could stop you, right? And what about if a peace treaty is signed and finished, can he tear up the agreement, sir? Can Trump tear it up, sir? Yes, he can tear it up. Let's think long-term, sir, that, ah, what Trump wants is not to lower interest rates. Trump understands that lowering interest rates makes stocks go up, sir. Stocks can go up without lowering interest rates, do you understand, sir? Yes.
Sir, understand this first, sir, that if you look at geopolitics and America's distorted strategies, it can be interpreted this way. The second thing is SpaceX, sir. Anthropic and OpenAI might be years away or next year, so the impact during this period is specifically on SpaceX itself. Why is SpaceX important? SpaceX is entering phase 2, sir. This second phase is 15 days from its market entry, sir. If it enters, sir, and is included in the Nasdaq 100 index, what does that mean, sir? It means that funds related to N100 will be very numerous and very large later on, sir. Portfolios must be rebalanced. I think today, this is the reason for rebalancing portfolios. It's a portfolio rebalance, sir. And when they sell, sir, they, they will have to sell stocks, and the stocks that will be hit are the ones that push the Nasdaq down a lot, which are the Big Tech stocks, sir. Because SpaceX is big, right, sir? That price of 150 is about, uh, 1.99 trillion dollars, sir. This will have to go into the funds, sir. And Guitar, think about it, sir, this will not have locked-up shares for sale either, only IPO shares, that 4.5%, 5%, sir. Sir, we will see that as soon as SpaceX enters the market, it goes straight up and then gets dumped. If it keeps going up, no one will sell, but as soon as it gets dumped, the subscribers will sell, right, sir? Therefore, these various funds already know, sir, that SpaceX is expensive, they can't buy it expensively, they have to bring it down first. So tonight, or from now on, you will see that SpaceX might also fall, according to the sentiment, just like Thai stocks fall with one big stock, and others sell off too, it's the same. So if you bring down the 7 big stocks, sir, the big ones, then tonight, we might see Nasdaq fall by 1,000 points, sir, and Spain itself also fall. But what happens is the opposite, it's a rebalance, sir, selling large-cap stocks and buying SpaceX. Guitar, do you understand this game, sir, that what they have to do, they will do it this way? So the fall today, uh, it also has a part, the third part, which is the buy cycle. It's that stocks have been rising for a long time, they are in a bullish cycle, sir, until they are entering a period where they need a recession, a correction first, sir, returning to a period where they are still in an uptrend. That means this downturn is not a collapse, sir. Ah, if you understand this, sir, let's look at the results that will happen, sir. We will see that for the United States, sir, we recommend reducing weight, sir, in tech stocks, sir. And Hong Kong, this Hong Kong, money is flowing out, you see, sir, flow is out. Stocks are cheap, but flow is out, so Hong Kong stocks are not rising. Thailand, sir, Thailand has been rising all along, sir, and is still green, sir. As for Korea, it's given, sir, sir, waiting for a cycle memory rebound, sir, sir, this means, sir, it has rebounded, sir. This was released on the 5th, sir. This is the 23rd. From the 5th, Korean and Taiwanese stocks have risen a lot, sir. Sir, that means you should gradually sell and then gradually buy back, do you understand, sir?
Yes.
But in this one case, sir, Japan, buy export stocks. Why not buy stocks? Now, you see, sir, the dollar is strong, the yen is weak, you see, sir. This came out on the 5th, sir. So when the yen is weak, you have to buy Japanese export stocks and Japanese financial stocks, not tech stocks, you see, sir, in the details, each market is different. What about gold, sir? Yellow, sir, don't chase buying, you see, sir, last week I said gold went up to 4380 and it will come down again, sir, and look at 4070, it shouldn't break that and it will bounce up, sir. And today, many of us have tried it, sir, but I didn't say it won't break, you have to keep following the break, sir. As for Bitcoin, sir, from the 5th, sir, Bitcoin also started to fall, sir, ah, because Bitcoin, if there's no liquidity, Bitcoin won't go up, sir. Bitcoin will start to fall, sir. Oil, sir, traded in a range, as I said, oil is over, sir. So oil has fallen from 120 dollars to 70-73 dollars. This is the core factor causing inflation. So inflation will fall, sir. And if we evaluate all of this, Guitar, can we say, sir, that interest rates will rise? It's not related. So what reasons are left? People who sell according to the cycle have the right to sell, right, sir? People who sell because they have the right to sell, why? Because it has risen so high, and then it happened once, never seen before, sir. What kind of stock made a profit of 100 dollars, then went up to 2,000 dollars, something like that? There are some strange ones, Sandi is strange. The big company sold it off, and after selling it for 86 dollars, it ran up to 2,000 dollars. Ah, why didn't you hold it yourself? Why did your company sell it off? Right, sir? There are strange things, sir. It's like they used the situation to create everything, and we need to be careful of those who exploit it. Shall we continue? Let's continue, sir. This is about, finding about the AI Ecosystem, sir.
Yes, Professor. So, I'll, I'll, I'll go look at the AI Ecosystem next. So, Professor, you see this market downturn as not a permanent fall, right, Professor? Professor, you see an opportunity for it to adjust upwards again.
Yes, yes, but not going in to buy a lot of money, because it's, it's a period where we need to be careful, because it will also say in here.
Ah, now it will say that AI, this is that from today, people will start saying that an AI bubble will occur. This is what we are talking about, an AI bubble, will it occur, and if so, where?
Sir, so let's first understand what you mean by AI when you talk about AI. Do you understand the entire AI system, sir? AI consists of Energy, Data Center, Chip, Network, Cloud, Model Apps, sir, various applications, and industries that use AI.
Sir, where will the AI bubble occur, sir? AI will have a total of 3 waves, sir. The first wave is creation. Right now, we are in wave 1, which is creation, build-out. What are we building, sir? Data Centers, sir. The second is the deployment phase, which is when various software will come into use, sir. Ah, the third phase is when various industries use AI and create productivity. There will be 3 phases. The phases to watch out for are 2027-2029 and 2031-2033, sir. That is, AI will not have a bubble, but there will be corrections in the AI supply chain, sir. If we understand today, we will understand everything, sir. AI, sir, has Chip, Data Center, sir, which is power to acquire knowledge, sir, which is transmission lines to many people and users. Agent Work for is machines producing productivity, sir. These Agents will become automation that produces unlimited productivity for the world, sir. So, what is build-out? GPU, HBM, Power. Right now, we are here. AI is here, sir, if we say an AI bubble will occur. Yes.
Ah, what else is a bubble? We will see that these GPUs, their P/E is not high anymore, so it can't happen, sir. If there is, it's HBM, right? There's a chance it will happen, right, sir? Because what is it, sir? Because it's a commodity, sir. And then there will be Power. Power, there's no way that Power will cause a bubble for power plants in England, there's no way, right, sir? Ah, next will be, sir, ah, used in organizations, sir. What's wrong with this? Just a moment. It will be cloud software. These will be in phase 2, sir. Phase 3 is those who use AI, sir, whether it's Industrial Adopters or Robotics, sir. Let's understand first that there are 3 phases. Right now, we are in phase 1, not yet in phase 2, sir. So those who bought software and other things, you bought too early.
Sir, later in phase 2, the software that we see falling, it will come, sir. Service Now and other things, sir, they will come by themselves, sir. And finally, those who use AI and create benefits for themselves, it's 3 parts. Do you understand AI yet, sir, that it has 3 segments? And you say an AI bubble will occur, it will occur at...
Sir, this is the 7-step AI Ecosystem Map that must grow together, that must grow simultaneously, sir. What does that mean, sir? It means if AI collapses, everything collapses, sir.
We meet again on a morning with a global sell-off, ma'am, from a tech sell-off once more, ma'am. Looking beyond the headlines, ma'am, what does Piroj think triggered the selling pressure this time?
Actually, if we look at stocks last night, right, from before the US market opened, sir, pre-market was good, or during the initial period of market opening, the stock market was actually brightly positive, right? It would choose Micron's earnings report that came out, showing revenue and profit growing beyond expectations, and the guidance still indicated a demand for memory chips, which would then be tied to further investment in infrastructure, right? And in the early part of the market itself, the market responded positively, saying, "Okay, the investment cycle probably isn't over." So, the semiconductor group itself or other related industries should be able to continue, right? But the moment Apple announced price increases, sir, yes, iPad prices went up, ah, MacBook prices went up by 100-300 dollars. After that, the market immediately sold off, right? Because now, some parts of the market are starting to worry, "Hmm, in the past, everyone enjoyed, right, from the investment cycle and the huge benefits, it went to semiconductor manufacturers, especially those with severe shortages recently, which would be memory chips, right?" And there are 3 major producers: Samsung, SK Hynix, and Micron, sir. These are the three main players. The earnings reports reflect that there is indeed a shortage. And in the notes to the financial statements or the executives' explanations themselves, they also spoke looking long-term into the future, saying that in the future, there will still be shortages, right? In another one or two years, there will likely still be shortages, and the contracts made have already locked in prices in advance. Ah, so the meaning is that from now on, the price of memory chips that these manufacturers will sell to buyers is locked, both the volume to be purchased and the price, saying they will take that price because the contracts are "take-or-pay," right? So, that means the price of memory, at least in the foreseeable future during the contract period, which is 3-5 years, will not fall, right? So, while it might be good for manufacturers, in terms of those who use it further, because memory is one part, right? After that, it has to be assembled into semiconductors, into chips, into products we use, like mobile phones, laptops, iPads, game consoles, etc. These all use these costs as their input costs. So when one supply chain item goes up, it will eventually pass on the price to consumers, right? And today, Apple itself said that it has gone up so much that they can no longer bear it, and they have to pass it on to consumers. After Apple, there's, uh, Microsoft, right, sir, who also said their Xbox will also have to go up. Ah, and before this, actually, Nintendo already announced increases, right? All those Switches. I think these things will gradually show that, uh, the shortages caused by data centers competing for chips are starting to spread, and it will gradually enter, ah, other businesses not related to AI data centers. For example, today we see consumer products, and soon we might talk about cars, right? Because automotive is another sector where they also locked in long-term contracts. I think today is about adjusting expectations, that what has happened is we have to accept that in the past, we used various electronic devices at cheap prices for a long time, right? We see new mobile phones coming out, their prices keep falling, if it's not Apple, other brands, there's China competing, there's other competition. Laptop prices haven't gone up for many years. I understand that for 20,000 baht, you could buy a lot for a long time. But today, it will be an adjustment that occurs due to the existing shortages. It makes some people start to worry, "Hmm, inflation, P', we saw the numbers last night, right? Core PCE was, uh, 3.4%, right, sir? Before that, CPI numbers came out at only 4.3%. This was a peak that people were already worried about, and it looked high, ah. May's numbers also looked high, something like that. And then, when we saw good employment numbers, when we saw good GDP numbers last night, right, sir? And then, when we saw Apple's product price increases, it made the concern tied to inflation as well, right? And it also linked to interest rate hikes, right? It also linked to the strong dollar, ah, it also linked to gold prices correcting, and it also linked to selling off highly profitable stocks, like those in the technology group in the past. But I think all these things are interconnected, all interconnected. When one person benefits, the rest are the payers. Ultimately, someone has to pay for those who benefited. And today, the payers are those who sell products along the way, but it's about to become the end-users, which is us, who will have to pay more, sir.
Yes, but if we delve into inflation coming from AI, ma'am, AI chip inflation, how scary is it, Piroj? Will it just be a temporary price increase this time, or will it become something that makes costs across the entire system rise?
Actually, I have to say this, sir: memory is used in every industry, right? It's not just AI data centers, right? Mobile phones, uh, various automotive robots also use memory, and in the future, it will be used even more. When we enter the era of humanoids or the era of, uh, agentic AIs, we have to admit that it's a "scarce chip," meaning that memory, which we used to think of as cyclical—good sales this year, bad sales next year—is no longer that way. It has become something long-term, and it's reflected in the "take-or-pay" contracts they've signed. So, when this situation occurs, it means every industry related to electronics is affected by memory prices. GPUs might not be used in every industry, sir; they are specific to AI or high-level processing. But memory is something that is very consumer-oriented. That's the scary thing about why people are selling to take profits today and citing inflation as the reason. Ah, but that's one side of the truth, the demand side, which is definitely high because there's new demand arising from AI, from robotics, from agentic AIs, etc. But on the other hand, we must not forget that memory is not a monopolized technology. Ah, among the major manufacturers, Samsung, SK Hynix, Micron are the three major producers that produce 90%. But the term "major producers" and "market sellers" refers specifically to the High Bandwidth Memory market used for data centers. But memory also has two other types that we don't often talk about: DRAM, which we use in general devices, and NAND, which is storage space like hard drives. These two products, DRAM and NAND, are produced in very large quantities. China produces a lot of them. And in reality, the capacity that will increase in the future, sir, everyone is increasing it. Samsung, SK, and Micron are also increasing it in the next 2-3 years. We will see this capacity coming in, including a very large increase from China, right? CMTX, CFMT, etc., they have announced a 4-fold increase in capacity from today in the next 2-3 years. So, this situation of shortage and expensive chips, I think it won't last forever, especially for products that are not high-tech, like DRAM or NAND, which affect us. Ultimately, new supply will emerge because the innovation for making these is not monopolized; there are many players who can do it. But for High Bandwidth Memory, which requires advanced techniques for packaging, etc., that might be another story. So, I think the various consumer products we see today, sir, if their prices are going to adjust upwards, it will likely be in the next 1-2 years. But after the increased capacity from China, as well as from from countries like South Korea and Taiwan, I think ultimately, it will find a balance of 2,000. So, if we are worried about inflation caused by, uh, memory or chips, it should happen in the short term, meaning one or two years. But in the long term, I believe everything can adjust because it's not a technology that only a few people can make; it's a technology that previously had ample supply, everyone could make it. Today, it just happened very quickly, and people weren't prepared, so there's a shortage, that's all.
Yes, but 1-2 years is a long enough period to make costs in the system rise, ma'am. The market is even more afraid of rising interest rates. The Fed will have to deal with inflation, ma'am. Piroj, do you think this will be another accelerator that makes them raise interest rates? When looking at inflation, right, we have to look at all sides, right? Meaning all aspects, right? Okay, we have inflation that might come from consumer products improving, coming from various chips whose prices have risen. But on the other hand, we also need to understand that in the past, sir, the goods and services whose prices rose a lot before were food and various energy sources that rose due to concerns about oil, concerns about various Hormuz issues that drove prices up to 120-110 dollars per barrel, and that made inflation in May become 4.33% because that was when oil prices were 100 dollars, right? But as of today, we see that oil prices, after Hormuz started to clear up, have been falling steadily, right, from...
110 dollars, today, if currently, it's only 75 dollars left, and the direction, it has come down very quickly, right? In the past 1 month, it has come down 30%. And if you ask about the future, the trend will likely continue to fall. I think the price of oil itself should definitely go below 70, perhaps settling at the low 60s or even lower, because, in reality, the supply of oil after the war ended, sir, it increased enormously. Before the war started, oil was already in surplus by about 3 million barrels per day, right? After the war ended, we will see that various countries that previously did not produce at full capacity, such as America, such as, uh, Latin America, such as Africa, during the war that occurred, they pumped out and produced at full capacity during the past 2-3 months. That's one part of the increased supply, but there is still supply within the OPEC group where today many countries are starting to not really want to follow the OPEC agreement, and the one that has already left is UAE, right? They had an agreement of 3 million barrels, today they have left and are producing at full 4,000 barrels and are about to increase it. There is Venezuela, which America seized since the beginning of the year. Its original capacity was 800,000 barrels per day. In 1-2 years, they will expand to 2,500,000 barrels, that's number 2. There is Iran, which is about to get a good deal, right, with America, not banning oil anymore. Iran is in OPEC, right? Iran produces 3 million per day, its actual capacity is 4 million. Previously, they could only sell to China because they were sanctioned. Going forward, they can sell to everyone at market price without discount. This is another part of the increased supply. Ah, recently, Iraq started to complain that no, I want to produce at full capacity, I want to sell oil to compensate for what happened during the war. So, they threatened OPEC that if they don't increase Iraq's capacity specifically, they will leave OPEC too, Khun Guitar. Iraq is OPEC's number 2, UAE is OPEC's number 3, Iran is OPEC's number 4, Venezuela is OPEC's number 9. If these 4 people leave OPEC, will the remaining OPEC still exist? Sometimes I think OPEC's unity might end this year. So, when OPEC's unity ends or its enforceability is no longer real, what happens is that oil will become a commodity with a competitive price. That means everyone will bring it to sell repeatedly at a price where they can still sell and make a profit, as much and as quickly as possible. The cost for Shell Oil, for example, is around 50-60 dollars, right? So, the price of oil itself can go down to that, or it might even be lower. I think we used to live in a world where, before this, you can look at historical statistics, oil was 20 dollars per barrel back then, right? I think the picture itself probably won't go down that much, but it will help reduce concerns about inflation in the non-electronic sector, right? Consumer goods, tourism, transportation, ah, various real estate properties, they all have embedded oil costs at every point. So, I don't want to look at it from only one side, right? On one side, consumer electronics themselves might see prices adjust up periodically, ah, according to actual rising costs and passed on. On the other side, there are also reduced costs from various energy products, which might balance each other out. For my part, I think in the end, we will have to look at the long-term impact. A one-sided interpretation today might make us feel like we are seeing a distorted picture. If we look at inflation expectations, really, for the United States, right, it's delineated from the yield of government bonds plus the treasury adjusted spread, right? It's coming down. Exited inflation today, from the beginning of last year, 10 years, no, from last month, 10 years, May, it was about 3.5%, 40 years ahead. Now it's down to around 2.5%. I think, in reality, these things need to be monitored continuously, but coincidentally, this period, Khun Guitar, coincides with mid-year, right? Here in our country, it's June. This year, it's a year where the stock market, especially technology, has risen a lot. This has made various funds, such as, uh, social security, government pension funds, they have made a lot of profit from their stock portfolios. And the weight of these stocks has exceeded the set limits. Many people imagine setting a limit at 20%, holding 20. When stocks rise, oh, technology like AI rises a lot, 50%, it exceeds from 20 to 25 to 30. When it's time for the review cycle, to review performance, review portfolios, there will likely be some profit-taking. JP Morgan has made figures, right, as research, that there might be money from rebalancing portfolios, where they will have to sell down their proportion, perhaps 160,000 million US dollars during the second quarter. It just so happens to coincide with various events that have occurred. Okay, inflation is becoming more concerning, the dollar is strengthening, right? People are talking about tech stock valuations, and there's also portfolio adjustment. So, we've seen quite a lot of selling pressure recently, and the stock market itself, which has been rising all along, we've started to see a sideways consolidation phase in the past 2-3 weeks, but it's not a downtrend, right? It's still sideways. Even today, it's not lower than the previous low that occurred in the 15th week. I think it's a period of base adjustment and watching for future events.
>> Yes, but on the side of interest rate hikes, or the chance that interest rates will be tight or at least difficult to come down, right? Uh, it cannot be denied, can it, that it affects the market, especially tech stocks, growth stocks, and stocks in the AI ecosystem. >> The expectation regarding interest rate hikes, it's the Fed itself, right, that made the Dot Plot, right? That they will raise rates 1 time, 2 times this year, and so on. People are pricing in that if the Fed raises interest rates, uh, the dollar will strengthen. In terms of valuation itself, when interest rates rise, it will be adjusted down, right? This is the reason for the current selling. But I think when the Fed predicts, right, about interest rate hikes, they don't say it will be next time, they look until the end of the year, see? So, there's still quite a bit of time. This is June, right? Ah, I think once time passes, next month, July, August, September, we will see that with falling oil prices and possibly rising commodity prices due to various factors, what will the balance of inflation be in the end? And I think it might not be as bad as we, as we are worried about. But during this period, since everyone has made a lot of profit and leveraged a lot during the past period, there will be adjustments. So, the stock market during this period will be quite volatile, but I still think that in the end, they will react based on forecasts, as Kevin Warsh said. They will look at real-time data. So, I think if the inflation data for June adjusts down, which it definitely will because May was the peak of oil prices, right? Now, in June, it should see some adjustment down. As time passes, the inflation figures released in subsequent months might gradually ease concerns about what has happened, unless the increase in consumer products related to electronics is not enough to offset the overall inflation picture that would otherwise come down from oil prices. In that case, I think the market might be overly concerned at this time, and the Fed itself can change its stance at any time. So, if we stand by today's situation, we will see people talking about interest rate hikes for sure, and people will talk about a strong dollar, and people will say gold is not interesting because the dollar will be strong, right? These are the related issues, and they will be sold because they say valuation will have to be adjusted down from a higher multiple.
>> Yes, and how do you see this situation, P'Roj, regarding how long it will take to balance out what inflation will truly be like and what interest rates will ultimately clearly be? How long do we have to face this kind of situation where we see such extreme fragility in tech stocks? Especially recently, there have been frequent sell-off days, like what happened today. >> I think we have to get used to it, right? We have to understand that this fragility or market volatility happens every year. Every year there will be problems, right? This year we've already faced the Iran-America-Israel war. Last year we had the trade war, right? The year before that, we had the Fed's interest rate hikes. The year before that, there was Covid, and so on. I think these things happen every year, and whether the volatility is great or small depends on people's positions on that day. Like today, we have to admit that most people are in profit, right? And a large number of people used leverage, whether through leveraged ETFs or using futures and options. This period is a time when there will be adjustments to each person's cost basis and a rebalancing. So, we will see that the swings during this period will be quite strong, right? We've seen daily swings of 1, 2-3% in the index very often recently. So, if you are a short-term investor, I think this kind of market might be difficult to trade. Sometimes we buy thinking it will go up, right? Then an hour passes, something is announced, and it comes down. So, short-term investing during this period will be quite difficult. Ah, but if it's long-term, I think a correction is a good thing because if everyone is in profit, even if everyone sells at the same time, it will fall very sharply. But what is happening today is that the market is trying to adjust each person's cost. Right? Those who bought very low, with low costs and high profits, will start to take profits, right? While those with high costs might be adjusting their portfolios or experiencing some losses, but it doesn't mean that every market correction has to be a downtrend. Ultimately, if what we are talking about is still real, if growth can still continue, then these things that are happening – the correction, technical issues, selling adjustments, or short-term inflation – these will just be short-term stories. I think if it's long-term, it might still be able to continue to go down, because we think various innovations will continue, and their use will increase. In the end, if we have to use them more, even if they are expensive, we still have to pay. We will just save on other things, right? I think the picture will turn out like that. The world has never been in a market situation that is rosy all the time. There will always be something like this, a bump.
>> Yes, but as P'Roj mentioned, what might multiply the volatility is leverage. Recently, we've seen leverage figures grow significantly. In the US, they say the leveraged ETFs of NASDAQ 100 have figures around 40,000 million, and then there are groups in the Asian market, especially in South Korea. Is leverage a problem for the market, and will it be a factor that causes severe crashes in the future? >> Leverage is already a problem, right? When problems occur, leverage is always the villain. Everyone will blame leverage, right? But in reality, you have to understand that the market has grown, its market size has increased. So, if you only look at the absolute amount of leverage, you can't really say, right? Suppose I had leverage here, and when the market went up, I didn't do anything, it just went up on its own, right? So, that's one thing, but I think the leverage used recently has been extensive because it rose sharply in a short period. The corrections happening now will gradually squeeze out leverage. Those with high leverage and low capital will be squeezed out of the market. We see this often in the crypto market, and we are starting to see it in the stock market now. So, for investors who might be heavily leveraged, they need to be careful during this period because market swings of 5-10%, and if we leverage 5x or 10x, it can go to 0 in reality. But if we are long-term investors, the moment of a squeeze-out is an opportunity to buy. We will see that on many days, some stocks fall in a confusing way, like falling 10% after a squeeze-out and then bouncing back +5, and so on, right? We will see opportunities arise during these periods, but during a highly leveraged market where everyone is talking more about various uncertainties, we will see a lot of market swings. I think it's just how the market is, and we have to understand it. If you ask if it's a problem, many countries are aware of this, regarding limiting leverage. Thailand is an expert in limiting leverage, but other developed markets might be less strict, so we will see quite a lot of volatility. Anyone who thinks developed markets will have less volatility, that's not true, right? This is an incorrect belief.
>> Is it too strong? Is it too expensive yet? Will the bubble burst? Especially when it coincides with the possibility of interest rate hikes, people will focus more on this. If we scan the symptoms of AI tech stocks during the second half of the year, how do you see it, P'An? Can the rally continue? Can the bull run continue? >> Yes, let me divide it into 2-3 topics, right, so investors might see the concept more clearly. First, is it expensive? The answer is yes, it's expensive, but not extremely expensive yet, because earnings are adjusting up. Right now, when considering, uh, the global stock market, if divided into two dimensions: the dimension of optimists, right, the positive ones, they will see that global stocks are not yet expensive if viewed from a PE perspective, because earnings are still being adjusted up, right? So, the PE either decreases or stays the same, which is true. Right? So, if you look overall, you will see that in terms of PE, currently, the country that is significantly more expensive than the average in terms of PE is only Taiwan, Khun Guitar. The red graphs on everyone's screen are plus 2 standard deviations over 10 years. >> Yes. >> Right, uh, but if you look at other countries, S&P 500, NASDAQ, they are only slightly up, not even 1 standard deviation yet, see? This is in the PE dimension. But in the Price Per Book dimension, I believe investors must consider both angles. Right? PE is adjusted up, earnings are continuously adjusted up, so PE is adjusted down. But everyone must first understand the picture that currently, global tech is a matter of bottlenecks, do you understand? The bottleneck extends from, uh, AI chips to memory chips, to CPU, GPU. Now it's moving to photonics. So, anything that arises from a bottleneck, because demand is overflowing and supply cannot keep up, you believe it's a cycle. It's not growing sustainably, gradually, like growth from economic expansion, growth from increasing population, growth from, uh, gradually increasing demand for goods in a lasting, sustainable way, right? But anything that grows from a bottleneck, when it enters an upcycle, it will have a very strong momentum in earnings because it can both sell a lot and the selling price per unit is unusually high, right? Because it primarily comes from a bottleneck. So, now it has gone through all the bottlenecks, even for AI. Therefore, if you look at it from a PE perspective, it's not expensive, but if you look at it from a PBV perspective, I must say it's very expensive. Every country has it, but whether it's very expensive or less expensive, right? And what investors need to follow is, I won't come to predict whether it's a bubble or not a bubble, because I think predicting it will never be right, and it creates more panic for the public and investors. But I believe what's more important is when it enters a downcycle, how will you act to survive the downturn? Because ultimately, when the downturn comes, it's a bubble bursting, right? So, in the initial stage of evaluating this, it's clear that PE is not expensive, but PBV is very expensive, see? It's extremely red. Only, uh, from, right, Indonesia is low because its stock market has crashed, right? So, investors must first differentiate that Facebook is not cheap from its PE, which is cheap, which is not expensive, uh, I can't use the word cheap, which is not expensive, is it a cycle? Personally, I think it's a cycle, because if you look, Khun Guitar, every company related to AI right now is increasing production capacity. So, you just wait and see when the production capacity will successfully increase, because it takes a considerable amount of time to build. So, whenever the production capacity is completed, the downside risk here will increase. What does that mean? It means that earnings, earning growth, will not keep up with the high PE. This, from being slightly red, will immediately turn bright red when that time comes, right? Therefore, this is what you need to be careful about. You must not just look at PE alone, you must also look at P/Book. Right? But if you ask about the more important point that I mentioned, how should we invest? Right? No one can sell at the highest point, Khun Guitar, but the important thing is that when the turning point arrives, we must sell in time when it starts to fall. So, I have 5 variables, let's say, to tell investors who invest in the AI group what they should look at besides PE and PBV. I believe that this round of AI globally, while it might be real demand, mostly I think it's due to bottlenecks stacked upon each other in many AI supply chains. So, what's interesting is to follow these 5 major things that I've given you. We need to follow what, that whenever growth slows and stock prices start to fall, we might need to adjust our portfolio and reduce AI stocks. The first thing is you must follow South Korea's export figures, right? Which are reported every 10 days, Khun Guitar. Whenever South Korea's exports start to slow down, you must be careful because they are the origin of exporting chips, memory chips, right? The second is reports on various delivery figures. If you've seen before, for example, news saying Nvidia will deliver this chip, it takes 30 weeks, 40 weeks. If it changes to 10 weeks, 12 weeks, that means the bottleneck is starting to be resolved, right? Lead time is starting to shorten. The third point is you must follow TSMC's revenue, which is reported monthly. Right? Whenever TSMC's revenue starts to slow down, because TSMC is an AI chip manufacturer, right? It has the highest market share. So, naturally, if South Korea's export figures start to slow, the lead time for Nvidia's product deliveries starts to shorten, TSMC's revenue starts to slow down, which we can follow in, uh, what they report to the Taiwan market every month, right? And also, look at the capital expenditure of each company. ByteDance, for example, whenever its capex starts to decrease, decrease, decrease, this means that the end-user is starting to respond by buying fewer products, right? And finally, follow the prices of memory units, various chips, which can be seen on websites like Gartner or Trend Force. That is, if you keep track of these 5 things and follow them every week, every month, whenever you start to see signals that they are coming together, for example, 3 out of these 5 reflect that growth is starting to be less, momentum is starting to slow down, you should be careful that the bottleneck cycle, whenever the bottleneck doesn't occur, it will turn into reduced sales volume and reduced selling prices, right? Because when it was a bottleneck, you could, uh, no matter how much you produced, it wasn't enough to sell, right? People were scrambling to buy, whatever price per unit you charged, they would buy. But when it reverses, that's the point where you need to reduce your tech stock portfolio. We don't need to waste time predicting whether it will bubble or not bubble, because if you keep thinking like this every day, you won't be happy investing. But in today's world, we can clearly follow factors or variables, these 5 things. If you make a dashboard to follow them, if it sends a warning signal for 3 out of 5, I'm out.
>> Who knows if it's a bubble or not, but I've seen that the numbers don't lie. I'll say goodbye, I'll run first. I'll run and then buy regular stocks, buy dividend stocks, that will be safer, right? So, I think this is more important for investing in the AI era. Right? Uh, besides that, another interesting thing is IPOs, Khun Guitar, which I see as important for tech stocks this year, because this year, besides Space X which already IPO'd, its size was 75,000 million dollars, right? IPO size. Right? There will also be Open AI and Anthropic Law, right? Two more, each worth 40,000 million dollars. So, if, uh, the IPO size is around this for the whole year, this year the value of IPO fundraising in America will be the highest in about 6 years, right? Compared to 2021, but 2021, I must say, was unusually high because it came from the recovery period after the AI crisis, oh sorry, the Covid crisis, the Covid crisis that, uh, recovered and came back up. So, if you ask how we should, uh, time our investments, keep an eye on the news that whenever Open AI and Anthropic open for subscriptions, during that subscription period, money has to be paid, Khun Guitar. If we look at Space X as an example, during the payment period, tech stocks fell, right? Uh, and then after the payment period, Space X started trading, stocks eased up. So, every time there's news about big tech stocks going public, you have to be careful, right? Be light-handed, right, during the period when money has to be paid because money will be sucked out to subscribe to these IPOs, right? And this year, the size is quite large too, Khun Guitar. That means for the second half of the year, I think it will be bumpy, right? But it's still a market where you can invest because, uh, the bottleneck, I think if it's going to ease, it will likely be next year rather than this year. So, we can probably enjoy it for a while longer.
>> Yes, on the other hand, the bullish people, right, they will say it's a super cycle now, right? It might be a cycle that will be longer than usual, right? The bottleneck that was supposed to be short won't be short, right? It might extend longer than usual. Right? Uh, besides keeping an eye on the numbers P'An mentioned, what's your view, P'An, on whether it's a super cycle, a big round of high growth in the AI industry, uh, is it true? Or will it just use the same old cycle as its mechanism, nothing has changed, uh, what some people say, 'this time is different,' right, P'An? >> I think this question, no. It's not different. I don't think it will be different at all, because everything is the same, right? The same old playbook, Khun Guitar. >> Right? Whether it's about, uh, the period when goods are in short supply. >> It has to be. >> It has to be sold at an expensive price, right? Uh, no matter how much you produce, people will buy it all up, right? Every country around the world is scrambling to invest, scrambling to buy things. We will see that large companies are all announcing capex. So, if you ask how it's different, it's not different at all, Khun Guitar. And finally, what needs to be careful about is. >> Finally, it doesn't mean that every AI brand will succeed. >> Yes. >> Is it currently an investment based on, uh, over-demand? >> Yes. >> Right? Because ultimately, let's say we have 4-5 AI companies, in the end, only about 3 will succeed. That means for the 2 companies that don't succeed, were the orders placed for them over-realistic? But right now, everyone is competing to be a winner, so they are all scrambling to order. But ultimately, the global population is only this much. You can try to think mathematically. Suppose 1 person. >> Needs to use 2 AI services, right? Because no one will use 5. In the end, the total number of users is only this much. And if you have 5 AI companies, in the end, 2-3 of them will not succeed. But the initial investment to compete to be a winner will be over-realistic. And ultimately, when demand only goes to some companies, those who invested over-realistically will have a risk of problems later on, right? So, I think it's the same old cycle, it's just that this time it might be hyped up a bit more because the word AI is mixed in, right? Uh, I think that's all it is, really. Ultimately, one day it will have to. >> Experience a situation called earning contraction, overvalued valuation, which will then be followed by a bubble, right? So, I still think it won't be different from before, it's just that this time it might be, uh, hyped up more, that's all.
>> Yes, P'An, and we've discussed in the past that for these businesses, when they invest a lot, the forms of investment include fundraising, or using private credit, or cross-investments, which is circular finance, right? And, uh, they are all intertwined. Right? Even though we won't predict the occurrence of a bubble, uh, P'An, do you assess that there will be a risk that it could lead to, uh, systemic risk? When the bubble bursts, right, it will become a widespread effect on the overall market due to the nature of fundraising. >> I think there might be a risk, as a part of it. >> Yes. >> But it won't affect the entire system, right? Why? Because, firstly, currently, large big tech companies, I must say, have a lot of cash, right? Their debt-to-equity ratio is low. Right? There will only be a few companies that we feel are overspending, right? And companies that are overspending, most of them will, uh, borrow money in the form of private credit, Khun Guitar, because commercial banks, they have learned their lessons. >> A lot, since the Hamburger Crisis, right? During the Covid outbreak. So, you will see that commercial banks are not lending excessively. >> To these high-risk companies. So, if there is, uh, a stumble, let's say, I believe that companies with weak financial status will be affected by private credit or specific banks that dare to lend, but overall, large banks should be quite cautious about this already, right? Because everyone sees that ultimately, as I just mentioned, the number of users who will use AI is the world's population multiplied by about 2 or 3, right? But when you have 5 AI companies, ultimately, not everyone will use all of them. Banks see this, so they don't lend indiscriminately. Therefore, if there is, uh, a real impact, if you look at past crises, the impact would be widespread, meaning a major bank would have to collapse, right? But this time, I think if there is an impact, it will only be on private credit or medium-sized banks that are more risky, or, uh, investors who bought, uh, bonds of those companies, rather, right? But it won't be a widespread impact like, uh, a tsunami wiping everything out, something like that, Khun Guitar.
Another day the selling storm hit tech and AI stocks again, right, as we are broadcasting live right now. Right? Stocks in Asia, the Japanese market, fell very heavily, close to 4%. The Nikkei was down by over 2,000 points. As for the stock that fell very heavily in the Japanese stock market, which pressured the sell-off this morning, it was SoftBank stock, whose price has fallen 11%. Now the market seems to be concerned again about the cost or the cost of AI after a lot of investment and high demand for upstream products like chips and semiconductors, right? This has caused chip prices to surge. We seem to have seen that these surging chip prices are the cost for companies that produce electronic-related products. Going back to yesterday, we saw the NASDAQ board fall sharply, right? Even though there was good news early on when Micron announced very beautiful and splendid financial results, right? But as soon as news was reported from Apple that they announced price increases for products in the Mac group and important Apple products, Apple's stock price fell by about 6%, right? After that, it sparked selling pressure in giant stocks in America. Right? We have interesting data that we have compiled, right, regarding the phenomenon of the plunge in US stocks yesterday, because at the beginning of market open, right, NASDAQ was up about 1% plus, but immediately, right, when a sensitive issue emerged, it caused the market to flip down to minus about 3%. Right? And before it flipped down, there was macro data released first, which was the US inflation figure, the PCE figure, right? The personal consumption expenditure index, which is the figure the Fed uses to decide on interest rates. It turned out that the figure was the highest since April 2023, and this figure was higher than analysts' forecasts and exceeded the Fed's inflation target of about 2%. Right? But after the inflation figure, then came the news that Apple announced price increases for products, which the current CEO of Apple, Tim Cook, said was unavoidable due to a crisis in the production of chip-related products, right? With very high demand, prices have risen sharply. Apple can no longer bear this cost for consumers. Price increases have been announced for MacBook Air, MacBook Pro, MacBook Neo, iPad Air, some iPad Pro models, with some increasing by up to 25%. Right? Tim Cook said that surging chip and memory costs made this price increase unavoidable, and some analysts say that the cost Apple has to bear is very high, even more than 200 dollars per item, right? This led to the interpretation that the cost of electronic products is going to rise and adds to the concerns about inflation coming from AI, or what is called AI-flation. Right? There is interesting data, right, from Casey Letter, who said this is the first sign of AI-flation, or inflation from the cost side of AI. That is, technology is starting to be passed on to costs, right? Expensive chips, expensive memory, various AI infrastructure are being passed on to manufacturers and are about to reach consumers, right? Therefore, this is a turning point for the NASDAQ market, right? It turned out that after about half an hour of trading, stocks fell by about 3.5-5%. Right? Big tech stocks all fell: Apple, Nvidia, Micron, Bitcoin, right? And NASDAQ Futures, right, also adjusted down at that time. Right? Before Micron's stock price surged due to strong earnings and performance, but the rest adjusted down. Right? The trigger for this round of concern came from Apple's product price increases, right? Which raised the question of whether the price of chips, the price of electronic devices that have increased, right, will accelerate inflation? Ultimately, it will lead to Fed interest rate hikes and increased costs across the entire system. Right? This is what the market fears. Right? The most important heart of it is inflation and interest rates that are affecting tech worldwide right now, and it's exacerbated by very high leverage in both the US market and the Korean market, which is currently falling heavily. Right? But P'Roj's perspective sees through the concerns about the news of product price increases. Right? He admits that it is indeed a rising cost, and after this, it will continue to rise beyond brands like Apple, right? For electronic devices, prices will rise, making this part of inflation increase, right? But P'Roj believes it will balance or offset with the consumer goods side, which comes from falling oil prices and transportation costs, right? After the Iran war ends, the Strait of Hormuz opens, and the OPEC group might have problems, right, to the point of scrambling to sell oil. Therefore, the falling oil cost side will balance or compensate for the rising costs on the AI tech side. And the tech side, even though it's a not-insignificant cost increase, right, it will be for non-essential goods, right? Not consumer staples. It might not even be used, right? Or it might give large buyers more bargaining power with upstream product groups, right? Therefore, he is not afraid that it will embed itself into the system to become deep-seated inflation and that interest rates will have to rise, right? Because the overall picture of a slowing economy, right, makes it difficult for the Fed to decide on future interest rate hikes. Right? The market might be overly concerned right now, right? P'Roj still views investing in technology stocks positively, but risk diversification is the most important thing, right? Stocks that are opportunity stocks right now, right, their prices have already risen significantly, right? We need to study in depth what the new opportunities are going forward, right? Bottlenecks that arise regarding electricity, regarding data centers, right? This part is still in short supply, right? Therefore, these are still stocks with good opportunities. Electricity might be the best, right? Because whether it's AI or not AI, electricity is still in demand, right? We have to try to do in-depth homework on those groups. But if you cannot do in-depth homework on every layer of AI, right, buying diversified as an index or an ETF is the safest, right? Or the largest indices like S&P, like NASDAQ, right, are good choices because they already help diversify the weight. Right? That's the side of AI investment. As for gold, right, the main pressure during this period is the dollar. Right? Gold remains a good risk diversifier in P'Roj's view as a fund manager. Right? But having more than 5-10% in a portfolio might not be balanced, and if you hope it will make you very rich or generate high returns in your portfolio, gold will not be like that, right? We need to re-understand gold as a safe haven asset and a portfolio diversifier. Right? As for non-tech, right, value economy stocks, these are already helping to balance portfolio risk, right? Because too much tech can lead to high volatility, right? Therefore, these are also selective options that can be diversified in a portfolio as well. Right? The bottom line is that risk diversification remains essential for investing in a potentially more volatile market and with fragility regarding interest rates and financial costs that the market fears will rise in the future. Right? Thank you everyone for following us all along. Our goal is to take this channel to 1 million subscribers to create a wider society of learning in economics, business, and investment, and if you don't want to miss good content, please subscribe. For anyone who wants to upgrade their knowledge in depth, we now have YouTube Membership, right? By becoming a member, you will receive exclusive content and seminars from PRP and Team Business Tomorrow. Come join us in supporting the creation of good content to increase knowledge and enhance the financial lives of Thais together.