File: 7a005a58e49181b82d071c680(...).jpg (141 KB, 693x1248)

141 KB JPG

The M7 now accounts for more than a third of the entire S&P 500 and Nvidia has a share price to earnings ratio of 54; investors would normally begin to twitch at a ratio of 25. Microsoft and Apple both passed $4tn valuation on Tuesday, joining Nvidia as the only companies to pass that threshold, though Apple later eased back just below.

Earlier this month, Carson Block, founder of the short seller Muddy Waters, told the Financial Times: “Cycles have become so long and the corrections so short, that the demand for traditional short selling is just not there.”

Block said investors were confident, and ballsy, rallying around battle cries such as BTFD, or “buy the fucking dip”.

On 3 April, while the S&P 500 dived by almost 5% the day after Trump announced his “liberation day” tariffs, retail investors pushed more than $3bn into US stocks, according to Vanda Research – the largest daily injection of cash since the market analyst began keeping a tally in 2014.

The phenomenon is leading to more interest in the “inelastic markets hypothesis”, proposed in 2021 by the economists Xavier Gabaix and Ralph Koijen, of the US thinktank the National Bureau of Economic Research, which argues that share prices can be pushed up by an increase in the amount of money available to invest.

The theory goes that prices are rising not because of the prospects and profitability of the M7 and other popular assets, but because of the wall of money being pushed into the markets by amateur speculators. The trend has been compounded by an increase in low-cost passive investments by pension schemes and fund managers, which channel savings into an ever-smaller group of the fastest growing stocks.

https://www.theguardian.com/business/2025/oct/28/amateur-investors-riding-out-dips-ai-bubble-stomach-steel