Even AI Mania Can't Rewrite History

Get ready to lose money on Nvidia (NVDA) twice as fast...

The GraniteShares 2x Long NVDA Daily Fund (NVDL) caught on like wildfire earlier this month. It's an exchange-traded fund ("ETF") that only invests in Nvidia. Its gimmick is that it doubles the stock's performance.

It does this by investing with leverage. It borrows money to double how much of the stock it can buy, giving investors twice the gains... and twice the losses.

As if there wasn't enough mania surrounding the chipmaker already.

In all fairness, NVDL has been around since late 2022. However, it has been making headlines lately... because in just one week, it took in more than $250 million in new investor funds.

That brought the entire fund above $1.4 billion.

Folks, this is a warning straight out of the dot-com bubble playbook. Don't let yourself get caught up in the hype...

The market got far too concentrated during the dot-com bubble...

At the peak, 25% of the S&P 500's market cap was in just 10 stocks. Everyone was betting the same way... which only works for so long.

Investors were buying into a "great minds think alike" narrative. Then the tech bubble popped. The S&P 500 dropped 49%. And the tech-heavy Nasdaq plunged 78% from its all-time high.

If you think that's bad... last year, we surpassed the dot-com era's level of concentration. The top 10 stocks in the S&P 500 comprised 32% of market cap by the fourth quarter. And that percentage has kept rising.

The Magnificent Seven tech stocks now account for 29% of this weight by themselves.

When you see this level of extreme concentration, you start to hear another narrative – the "winner-take-all market." You hear how Nvidia will power all AI. And Microsoft (MSFT), Alphabet (GOOGL), and Amazon (AMZN) will be the platforms that all AI is built upon.

Don't get us wrong... these are good companies. All of the Magnificent Seven are rich in cash and highly profitable.

However, good things don't last forever. Investors have gotten way ahead of themselves today.

So has GraniteShares, the maker of NVDL...

Following that fund's success, GraniteShares is building other leveraged tech ETFs as fast as it can.

You can now buy the GraniteShares 2x Long AAPL Daily Fund (AAPB)... the GraniteShares 2x Long META Daily Fund (FBL)... and the GraniteShares 1.25x Long TSLA Daily Fund (TSL).

If left alone, the S&P 500 could find itself even more lopsided than it already is.

It can be tempting to dive head-first into these big, established AI beneficiaries and ignore everything else. However, that would be a big mistake...

U.S. business is centered around creative destruction. Competition is destined to come in. Some of today's small players will dethrone the current giants.

That's exactly what I'm expecting from one misunderstood corner of the market... entirely outside of AI.

You see, I've been closely watching one historic anomaly. And I have to say, it's evolving much faster than I expected.

One company I'm tracking popped 194% in just five days. Another is up more than 205% year to date... and 40% of those gains came in the past few days alone.

Let me be clear – this is a rare setup. I haven't seen a situation like this in more than two decades. That's because it's almost a mathematical impossibility.

And yet, against the odds, it's playing out right now.

I'm not the only one who's fascinated by this phenomenon...

Porter Stansberry, founder of our corporate affiliate Stansberry Research, has been tracking it closely. He agrees that this situation shouldn't exist... and says it probably won't in a few more months.

Tomorrow at 10 a.m. Eastern time, I'll share the stage with Porter to explain exactly what's going on... and why, as he puts it, this story could be "the most valuable information you will ever get for free in your life."

Once the opportunity is gone, we might not see another one like it for decades. So even if you don't intend to act on it, I hope you'll at least tune in... and keep an open mind.

With the Magnificent Seven running out of steam by all appearances, this could be the best investing opportunity you'll see for the remainder of 2024.

You can learn more – and reserve your spot for free – by clicking here.

Until then, keep in mind... the market doesn't seem to think the music will stop for today's champions. Anyone who pays attention to history knows better.

Don't put all your eggs in one basket. And don't count out smaller companies in less-popular industries. When the AI hype dies down, those hidden gems could end up taking the cake.

Regards,

Joel Litman
March 25, 2024