The Semis Are in a Bubble That Is Going to Pop and Destroy Everything

I’d first like to preface this screed with the fact that I own $NVDA from years ago in the trusts for my children and have some presently in my quant. But let’s get serious about this fucking semiconductor index, shall we?

Returns for $SMH by month
Nov (23) +15.3%
Dec (23) +8.9%
Jan +6.3%
Feb +14%
March +6.1%
April down 4.8%
May +12.3%
June +8.4%
July +7.1%

Are you fucking kidding me?

Now let’s look at this silly thing called ‘valuation’. Some of you younger piece of shits have never heard of this word before because your fucking Reddit and Discord chats only buy stuff based upon astrological patterns or the whimsies of your gurus. But let’s take a look anyhow.

Below are the price to sales values of one of the major semi industries. If you peer in you can see the median p/s is about 6.8x now, the HIGHEST on RECOURD. More than that, if you look at the juxtaposition of it against the overall market by that stat on the far right you will now learn it is trading at a +448% premium to it. Now we can compare apples to apples across the decades and see if we ever traded like this before and the answer is NO. That’s about 3.6 standard deviations above normal. Again, NO BIG DEAL.

Now I know what you’re thinking because plebians always thinks this way: “but Fly what about AI and Bitcoin? How about that pal?”

SHUT THE FUCK UP. Remember back in 2021 when $ZM and all of those COVID plays traded at absurd valuations and you thought it would last forever? Well it didn’t and as much as I like $NVDA and all of the other supporting actors in this bubble; it’s going to fucking crash through the floorboards one day and suck the entire god damned market with it.

But don’t worry. It isn’t happening now, so you can go back your Discord server and figure out where the next play is, as I chew on my sour grapes.