AI is the new railroads - and the hype may cost investors dearly

This video is an excerpt of Bob Desmond's Shocking Prediction at Livewire Live 2024, held on Tuesday 17 September 2024. 

Momentum investing works best when the crowd is well and truly convinced that the darlings can do no wrong. Think about it. 

In the 1800s, railroads were the technology that would change the world. It would make us far more connected, so much so that one writer described it as the thing that would "forever change the pace of human existence." Eventually, railroad shares fell 85% from their peak as revenues per mile crashed. Now, just a handful of major railroad stocks remain listed in the US.

In the 1990s, the internet was the flavour of the month's investment. The poster child of this story, Cisco (NASDAQ: CSCO), saw its shares surge over 2500% in less than five years - until it didn't. It lost 80% of its value shortly thereafter. 

Closer to home, the lithium trade worked when Pilbara Minerals (ASX: PLS) soared 1500%+ in under two years - until it didn't. It's now back well below $3/share. 

All this is a long way of saying that every megatrend has its trigger, its peak hype moment, before a long fall and a trough of disillusionment. And artificial intelligence may be reaching that second stage now, according to Claremont Global's Bob Desmond. 

To watch Desmond's full Shocking Prediction, click the wire:

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