(BLOK), (MSTR), (LEGR), (JD), (BIDU), (BABA), (AMD)
There's an old Wall Street saying that the market has a way of turning exuberance into experience. After decades of trading, I've watched this play out more times than I can count, and these days that wisdom is ringing in my ears like a persistent trading reminder.
Just last week, I watched the S&P 500 touch $5,994.89 (up another 0.3%) while the Nasdaq Composite flirted with $20,000, sitting pretty at $19,886.60 (up 0.6%). Feels a bit like déjà vu, doesn't it?
Let's rewind the tape to November 30, 2022. While most folks were arguing about whether to serve turkey or ham for the holidays, OpenAI quietly dropped ChatGPT into our laps. Talk about a stealth bomber.
Since then, the S&P 500 has rocketed up 49%, while the tech-heavy Nasdaq has left Earth's orbit entirely with a 75% gain. And that's not a typo, folks - I triple-checked those numbers.
Full disclosure: I've been around this rodeo circuit long enough to see a few "next big things" come and go. Remember blockchain? (If you're wincing right now, you probably bought some crypto at the top). Let me share a little story about that particular circus.
Take the Amplify Transformational Data Sharing ETF (BLOK) - a name that probably took longer to create than some blockchain projects lasted.
This fund has actually kept pace with the Nasdaq and outperformed the S&P 500 since 2018. Impressive, right? Well, hold onto your hardware wallets, because here's where it gets interesting.
Peek under the hood, and you'll find MicroStrategy (MSTR), a company that's up nearly 3,000% since January 2018. But here's the kicker - they didn't get there by revolutionizing blockchain.
They basically turned themselves into a publicly traded Bitcoin piggy bank. It's like entering a marathon and winning by taking an Uber to the finish line. Technically effective, but not exactly what the prospectus advertised.
And don't get me started on the First Trust Indxx Innovative Transaction & Process ETF (LEGR). Despite having tech heavyweights like JD.com (JD), Baidu (BIDU), and Alibaba (BABA) in its portfolio, most of these stocks have been underwater since 2018.
The fund's saving grace? AMD's (AMD) 1,200% moonshot, powered by - plot twist - artificial intelligence, not blockchain.
So what does this tell us about AI stocks heading into 2025? Well, the Nasdaq's got an interesting story to tell.
Since 1971 (yes, I've been watching it that long), it's only had back-to-back losing years twice. The last time was over two decades ago. It's like that friend who keeps failing upward - somehow, it just works.
But here's my two cents after decades in the trenches: investing in megatrends is like trying to pick the next Beatles at a high school talent show. Sure, somebody in that auditorium might be the next Paul McCartney, but good luck figuring out who.
Want my advice? If you're itching to play the AI game, stick to the established players or passive index funds. You know, the ones that actually have revenue and aren't just PowerPoint presentations with "AI" slapped on them.
It's like I always tell newer traders - sometimes the safest way to join a gold rush isn't by prospecting, but by selling picks and shovels to the miners.
After all, history and my battle-scarred portfolio suggest that while markets should keep climbing in 2025, not every AI company is going to be sending champagne to their shareholders.
Sometimes the smartest play isn't trying to outsmart the market - it's just making sure you've got a seat at the table when the feast begins.
And speaking of feasts, did I mention I owned MicroStrategy back when they were actually a software company? But that's a story for another day...
