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    Bear Thesis

    Alright lemme get my existential anxiety out in the form of a bear thesis:

    Currently it seems like we’re headed for something bad. The concerns are threefold:

    1.) Oil shock causing resurgent inflation

    2.) Overvaluation of AI companies

    3.) Concerns that many private credit loans are overestimated in value, and may in fact be worthless.

    The oil shock is self explanatory enough, but it adds a layer of deeper concern to points 2 & 3.

    Let’s look at the big boys in the AI space. OpenAI, Anthropic, Google, MSFT, Meta. These are your folks pushing “frontier models”. Thing is the frontier model race isn’t looking like so much of a race at this point. Anthropic and OpenAI are pulling ahead of competitors (Google only slightly behind). Llama is declining in adoption as the other models continue to surpass it.

    That’s not a huge concern though. If a bunch of companies are trying something new, you’ll have a handful of them actually succeed at scale. Normal stuff. Still, the eventual losers might be currently overvalued.

    We have exciting tech coming out, OpenClaw is very cool, but it doesn’t add value to any company. It cuts costs, sure, but again, it’s essentially just a pre-built AI agent using a big boy’s LLM. No company will gain a unique advantage over any other by adopting this type of workflow, everyone will adopt it. It’s not a monetizable thing.

    The greater concern are the thousands of AI “companies” that are little more than a GUI or wrapper for one of the big boys LLMs. I brought up AI receptionists in a previous comment. Dozens of companies. There are thousands of these bullshit companies in different niches, all one product update away from being obsolete.

    Then you have Private Credit, and this is concerning on both ends, Big Boys and bullshit. First off, the jitters in private equity are serious. Consecutive quarters of loans going from 100 cents on the dollar to zero. That’s not a result of a material change in these businesses. The loans should never have been given in the first place.

    Then you have OpenAI offering a guaranteed 17.5% return to private equity, when they’re not remotely profitable.

    And this is all within the context of potentially resurgent inflation that may make the Fed unable to cut rates, and a massively increased debt to gdp ratio compared to 2020 or 2008 that makes massive stimulus far more difficult to perform.

    It’s all very concerning.

    Closed QQQ 585p 6/27 +250% today. Waiting to see tomorrow’s action. Likely reopening QQQ and SPY puts Monday, QQQ 560p sometime in April, not sure about SPY yet.

    TL;DR (Courtesy of u/WakaWear):

    TL;DR:  

    AI valuations look frothy, private credit looks mispriced, and an oil‑driven inflation rebound could trap the Fed.  

    Most AI startups have no moat and could get wiped out by model updates.  

    Macro + credit + AI hype together create a setup for a broader market pullback.  

    Bear Thesis
    byu/ihopethisworksfornow inwallstreetbets



    Posted by ihopethisworksfornow

    30 Comments

    7. SelenaMeyers2024 on

      Honestly I would appreciate deeper evidence of systemic risk in private credit. As of yet, I see none.

      You’ll probably point to stories of “rushing for the exits” but those were retail investors…. Frankly never should have been involved with non liquid commitments…

      Non accruals for the major bdcs like arcc and obdc are 1.5 ish percent.. no one loan is greater than a 2 percent position. Typically servicing companies with 100m ebitda plus.

      Where’s the evidence? And don’t reply with some 30b number, that’s couch money in a systemic sense.

      My take is that most bdcs crashed for the same reason Adobe did… Vibes. I’m buying both.

    9. poorat8686 on

      My conspiracy is that there are a whole fucking lot of loans for commercial properties that are on the brink of defaulting. Condos, rentals, new builds, apartments etc.

      It makes too much sense, rents doubled out of the blue when COVID landed, which caused a mass influx of renters into started homes, later we learned about Real page and their price fixing which only made minor headlines. There never has been an explanation for this price increase aside from price fixing.

      So rent goes sky high because of price fixing and people say “whoa we need to build units!!!” And they do, and banks approve loans hand over fist because the prices keep going up but the prices keep going up because the landlords (using real page) are adjusting them higher to make up for higher vacancies until this year I think we have hit an absolute ceiling where they can no longer increase prices. I think it tips this year. It has to. My area alone has doubled the housing availability and units and it’s all fucking empty. They’re offering 4 months free. There’s no way the population increased enough to build new housing all over everywhere to the extent they have.

      If someone smarter than me could figure out what banks gonna be left holding the bag I’d be happy.

    10. FastCar_5 on

      As you just seen rn the market runs of tweets. The world could literally be burning, but each time orange tweets about delaying his shit, then each time it rips a big one. And your thesis in mud.

    11. Careful_Response4694 on

      Anthropics best coding models are far ahead of anything else in both terms of usefulness and profitability. The rest are kind of slop that isn’t much more useful than cheap open source models.

    12. Brickell_Investor on

      Closing puts +250% and then posting a bear thesis is the most bullish signal in this whole thread.

    13. Sidney_Godsby on

      This is the DD thirteen years in the making you mentioned in the daily thread?

    14. Tay_Tay86 on

      You’re missing a key point #4 Speculation Bubble — decrease in asset prices, when retail is heavily involved leads to a negative wealth effect. Lots of normies are involved in the AI trade. All of this is a meat ball of doom

    17. Otherwise_Wave9374 on

      The wrapper risk is real. A lot of so-called agent startups are just thin UX on top of the same frontier APIs, and the moat disappears the minute the base model vendor ships the feature.

      Where I think agents do add durable value is when theyre embedded into a real workflow with data, integrations, and reliability (evals, monitoring, permissions). Thats harder to copy than a chat UI.

      If youre modeling AI valuations, Id separate infra + distribution + workflow-native agent companies from pure wrappers. Some notes on agent patterns and what tends to be defensible: https://www.agentixlabs.com/blog/

    18. DeepFriedAnoos on

      yeah yeah yeah the economy is fucked. We know. But stonks only go up, so your thesis is invalid

    21. Sir_speeds_alot on

      Point #3 really stocks for me because private credit ran out of credit worthy applicants long before they ran out of money to lend

    23. wakaWear on

      TL;DR:  

      AI valuations look frothy, private credit looks mispriced, and an oil‑driven inflation rebound could trap the Fed.  

      Most AI startups have no moat and could get wiped out by model updates.  

      Macro + credit + AI hype together create a setup for a broader market pullback.
       

    30. Promptfolio on

      Yeah the AI wrapper thesis is spot on. half the startups I’m seeing lately are literally just a basic GUI wrapped around OpenAI.

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