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S&P Global has lowered Oracle’s creditworthiness from BBB to BBB-

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Re: S&P Global has lowered Oracle’s creditworthiness from BBB to BBB-

#211

Post by kazinator »

fny wrote: post #162
someuser54541 wrote: post #146

Earlier quoted context omitted.

I suppose I'm just a little worried about a 10 year sideways market. The run-up has been absolutely insane the past year...some graphs are just a literal straight line up. I didn't get to participate in much of that and concerned the prevailing wisdom on these larger timescales may no longer hold true.

If you didn't participate in it, what are you hedging?

I would guess, longer positions held from before the past year to date period.

(As for me, I'm just hedging my rhetorical front lawn.)

Re: S&P Global has lowered Oracle’s creditworthiness from BBB to BBB-

#212

Post by fhdkweig »

pid-1 wrote: post #171
someuser54541 wrote: post #117

Earlier quoted context omitted.

What's the best way to hedge against this, considering many of us have significant savings in the market? A few puts on SPY dated a year or two out?

Hold short term debt (e.g money market funds or SOFR ETFs). Then you will have cash in hand if either stocks fall or yelds raise. Never buy derivatives as a non institutional investor.

I moved 80% of my money out of Vanguard's Target Date Retirement funds and into a money market on June 1st. In the 1.5 months since, the remaining Target Date Retirement fund has fluctuated up and down by about 0.1%. It has basically plateaued. I don't think I am losing out on potential short term gains. I like the idea that I have cash available to buy in on the day of the crash.

Re: S&P Global has lowered Oracle’s creditworthiness from BBB to BBB-

#213

Post by amlib »

moduspol wrote: post #152
amlib wrote: post #104

Earlier quoted context omitted.

Isn't specialized hardware also a big risk? GPUs are more amenable to any big changes that may happen in the next 5, 10 years of AI research. Maybe we won't even be talking about LLMs anymore. Maybe matrix multiplication won't even be the main primitive.

If matrix multiplication isn't the main primitive, I think we have a lot of pain coming our way.

Maybe that is far fetched, but I could see them specializing for some super high dimension multiplication and meanwhile 5 years later turns out "all you need" are 3x3 matrices and suddenly 90% of your specialized hardware is now dark silicon :)

Re: S&P Global has lowered Oracle’s creditworthiness from BBB to BBB-

#214

Post by sofixa »

echelon wrote: post #147
lelanthran wrote: post #88

Earlier quoted context omitted.

> Market signals on an impending AI bust are broader than just Oracle’s woes. It's worse than that - I believe that Oracle is one of the (many) companies right now that, if their AI experimentation fails, will stop the music, and everyone will be running for a chair. Oracle is one of a few foundational components in the circular-investing group of AI companies. If they fail to make their commitments they're the first…

Everyone in the tech and media world is dead set on this being a bubble. Yet, even now, Fable is able to do the work of 4-5 engineers when used by a single senior engineer. Teams can and will shrink. Look at all the production and advertising companies switching over to Seedance. I know ad firms bidding 1/4th their typical contract price (pharma, P&G, etc.) and winning contract after contract. This isn't dotcom "dark…

> Yet, even now, Fable is able to do the work of 4-5 engineers when used by a single senior engineer. Teams can and will shrink.

If that's true or not, it's a bit irrelevant. Maybe teams won't shrink because of Jevon's paradox, or maybe tech debt will catch up.

But it doesn't matter because the people calling this a bubble mostly believe that the companies burning money cannot have the return on investment needed. This can be for a variety of reasons, but my favourite one is just that open source AI models are good enough, cost a fraction of what the frontier ones do (with predictable costs), can be fine tuned, and can be relied upon (no orange tweet banning your acces to the model you've been using). So for me OpenAI and Anthropic will really struggle to merit their valuations.

And then companies like Oracle are just a dumpster on fire. GPU hosting is a commodity business; expensive one, for sure, but there's no way in hell they'll make actual returns on the money burned with zero moat. And things are even worse when you consider the political involvement of the CEO and his nepo baby, which can easily burn good will.

Re: S&P Global has lowered Oracle’s creditworthiness from BBB to BBB-

#215

Post by dboreham »

rich_sasha wrote: post #209
pid-1 wrote: post #171

Earlier quoted context omitted.

Hold short term debt (e.g money market funds or SOFR ETFs). Then you will have cash in hand if either stocks fall or yelds raise. Never buy derivatives as a non institutional investor.

It's worth adding that conventional wisdom says, you can't time the market. On average, people shifting between cash and stocks to time shocks lose out over just holding a fixed portfolio.

Sometimes conventional wisdom stops being wise. Also 90% of the people in charge of conventional wisdom have their personal wealth depend on retail investors not selling.

Re: S&P Global has lowered Oracle’s creditworthiness from BBB to BBB-

#216

Post by magicalist »

fny wrote: post #162
someuser54541 wrote: post #146

Earlier quoted context omitted.

I suppose I'm just a little worried about a 10 year sideways market. The run-up has been absolutely insane the past year...some graphs are just a literal straight line up. I didn't get to participate in much of that and concerned the prevailing wisdom on these larger timescales may no longer hold true.

If you didn't participate in it, what are you hedging?

> If you didn't participate in it

But that's not what they said?

>> I didn't get to participate in much of that

Re: S&P Global has lowered Oracle’s creditworthiness from BBB to BBB-

#217

Post by FuriouslyAdrift »

anon291 wrote: post #30
FuriouslyAdrift wrote: post #28

Earlier quoted context omitted.

AMD Instinct is their direct competitor for compute and they are better per dollar, better per watt, and out competing on raw performance. Only thing holding them back is fab capacity which nVidia keeps buying in bulk to keep them small.

Have you ever actually had anyone work with these chips? Developer ux on amd is terrible.

Yes. We have a quad MI300A server and run several inference models on it. For $107k it has saved us so much money on tokens already and it's a heck of a lot faster than cloud services.

Re: S&P Global has lowered Oracle’s creditworthiness from BBB to BBB-

#218

Post by dmurvihill »

abirch wrote: post #85
pgn674 wrote: post #15

Title is inaccurate. They're BBB- now, not BBB.

I think there's an errant space in between the BBB and the - but yes, the title is wrong with that space

I bet the author submitted "to BBB-, one above junk" and an ignorant editor turned the minus into an em dash

Re: S&P Global has lowered Oracle’s creditworthiness from BBB to BBB-

#219

Post by dboreham »

marojejian wrote: post #207
pid-1 wrote: post #171

Earlier quoted context omitted.

Hold short term debt (e.g money market funds or SOFR ETFs). Then you will have cash in hand if either stocks fall or yelds raise. Never buy derivatives as a non institutional investor.

Why should a retail investor never buy derivatives? spreads?

Not the parent but I'm guessing: a) it's expensive and b) you can shoot your feet off.

Re: S&P Global has lowered Oracle’s creditworthiness from BBB to BBB-

#220

Post by dboreham »

echelon wrote: post #147
lelanthran wrote: post #88

Earlier quoted context omitted.

> Market signals on an impending AI bust are broader than just Oracle’s woes. It's worse than that - I believe that Oracle is one of the (many) companies right now that, if their AI experimentation fails, will stop the music, and everyone will be running for a chair. Oracle is one of a few foundational components in the circular-investing group of AI companies. If they fail to make their commitments they're the first…

Everyone in the tech and media world is dead set on this being a bubble. Yet, even now, Fable is able to do the work of 4-5 engineers when used by a single senior engineer. Teams can and will shrink. Look at all the production and advertising companies switching over to Seedance. I know ad firms bidding 1/4th their typical contract price (pharma, P&G, etc.) and winning contract after contract. This isn't dotcom "dark…

Yes, but all bubbles (except the tulips...) have a real, valuable, new technology at their core. That it's amazing technology doesn't stop the financial side of it being a bubble. In fact it all but ensures it is.
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