The Wall Street Journal wrote about the recent struggles of CoreWeave's stock price. After a hot IPO, the stock price has fallen from a high of $187 to the current $68.46.
The company is part of the AI and data center ecosystem. The troubles are at least in part attributed to heavy rains in Texas causing serious delays on a build site in Denton, TX. There's more to the story including its business relationship with Nvidia that appears to be circular, causing people to think of it as being similar to the Cisco Systems (CSCO) situation from 25 years ago.
I don't have any great insight on CRWV but this part of the market is ground zero if there turns out to be a consequence for the obvious excesses in this segment. It's not obvious that there will be a bubble popping, I'm not attempting to predict anything but we can observe there is an obvious excess and then make a decision about whether to be over/under/equal weight the risk embedded in an obvious excess.
I've been intentionally underweight and prefer to use a sector ETF that still includes stocks that are now considered part of the communications sector like Google and Meta. The ETF will capture the upside of the segment and the downside but not face the worst of the fallout if something awful is coming.
Jeffrey Rosenberg was on ETF IQ on Monday talking about the new iShares Systematic Alternatives Active ETF (IALT). He made a couple of interesting comments that I think might be useful for anyone interested in understanding alternatives and possibly using them. Rosenberg went out of his way to say IALT is a multi-strategy fund which allows the opportunity to avoid a strategy that might be in a period of underperforming. Opportunity is my word here because IALT needs to prove it can do that. The other interesting thing to me was that the holdings are not alternative, IALT builds alternative strategies with simple assets; equities, fixed income and currencies. I don't know, maybe that's a very geeky thing to find interesting.
Last week we wrote about the proliferation of "moderate millionaires" as covered in the WSJ. This week we're back to Gen-X is doomed thanks to Yahoo. The comments are more interesting than the article, always read the comments. One of them was very funny. The reader paraphrased his accountant who said he's shocked by how many people are relying on inheriting money from their parents to fund their retirement and that he's even more shocked by how frequently that works out for people.
The article cited some survey that Gen-X expects to have an average $771,000 in retirement versus the $1.2 million they think they will need. The way the word average was used rendered it meaningless and quite a few commenters noted how small the typical 401k balance is for Gen-X, one reader cited $110,000.
Reading the comments is always fun and interesting but very little attention is given to the conversation we have here about what to do. If someone is old enough to be Gen-X then I think it is reasonable to have at least an elementary understanding of what you might need and where you are now in relation to what you might need when you retire so you can begin to figure out how to address any shortfall. Using AI can help with figuring out where you might be in 15 years or whenever. Tell it how much you have, how much you're saving and then have it run scenarios with different return assumptions.
I'm always going to chip in with figuring out how to add an additional income stream or two by creating a job somewhere that would be enjoyable whether its full or part time which can include a monetized hobby or something you wish you would have done earlier or whatever. A 50 year old who might feel a little undersaved has a very long time to catch up on their savings and a very long time to figure out how to plug in some sort of income stream as mentioned above.
The information, analysis and opinions expressed herein reflect our judgment and opinions as of the date of writing and are subject to change at any time without notice. They are not intended to constitute legal, tax, securities or investment advice or a recommended course of action in any given situation.
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