In Reply to: Thanks for the analysis posted by SagoBob on October 27, 2026 at 10:07:23
I think Prof. G made a good big-picture point: investors are often betting that even when major disruptions occur, the companies that survive ultimately generate substantial financial returns.
Consider the early internet boom. If you had invested broadly across the major internet companies, including those that eventually failed, you could still have made substantial profits. The winners more than compensated for the losers.
Amazon is another interesting example. During the Great Recession, its stock lost roughly 90% of its value from its peak. Yet Amazon emerged as a monopoly as weaker competitors struggled or disappeared. The shakeout helped Amazon consolidate its position and build the dominance it enjoys today.
Personally, even if we experience an AI apocalypse, I'm betting that the companies with strong cash flow and deep pockets will be the ones left standing. A massive shakeout could allow them to acquire struggling competitors, consolidate market share, and emerge with dominant positions.
That's why I'm betting on AI companies with substantial financial resources, including Meta, Google, Anthropic (through Amazon's investment), and Microsoft. I haven't bought NVIDIA because I'm already heavily exposed to it through the S&P 500 holdings in my wife's 403(b).
I'm also investing in Apple. It has been relatively restrained in its AI spending compared with some of its competitors, yet it has enormous financial resources. If an AI apocalypse triggers a fire sale of AI startups and technologies, Apple could be in an excellent position to acquire valuable assets at bargain prices. Personally, I wouldn't be surprised to see Elon buy ChatGPT eventually in a fire sale.
I'm young enough to wait out the profits of an AI massacre. I'm just trying to pick the winners of that massacre. I think it has less to do with who has the best model but who has the best cash flow. That's an easy metric to calculate.