AI is Tanking the Stock Market. Why?

What's happening in the market sham? Is this the go forward reality that AI is going to compress these kind of stocks in a normal functioning market? What we are always debating is when a set of cash flows go from becoming highly confident to less highly confident. It's a when conversation. So when will Coca-Cola's cash flows be impacted? When will Eli Lilly's cash flows be impacted? And the answer to the when gets translated by the public markets into three things. Your price to earnings multiple. The second is a revenue multiple. And the third is what's called your weighted average cost of capital. And the basic math of this

is that when you have a high whack, it's called you're massively discounting these cash flows. When you have a low whack, you're assuming that these things are very durable. Okay. So what is happening? We used to debate when this is no longer a when moment. the market is very much in an if mode. Are these cash flows durable at all? >> Could they fall off a cliff in year three? Is there some AI model that's going to come around the corner and obliterate this business without me knowing it? And because they've shifted into this if mindset, your risk becomes totally different. You have this event risk that you don't know how to price. And whenever the market shifts into that

mode, what you see are that the holders of those equities want a massive margin of safety. What does that mean? They have to take pees way down. If you used to trade at 40, you should trade at 20. If you used to trade at 20, you should trade at 10. They take revenue multiples down. You used to trade at 10 times revenue. Now you're going to trade at three times. You take the whack way up. Used to be a 6% discounted weighted average cost of capital. You know what? I'm taking you to 12 or 13. That's the market's way of saying, I'm now debating if these things will even exist, and so I need to give myself a huge buffer to own this stuff. That's what's happening right