The Biggest Stock Market Rug Pull in History Is Coming.

[00:00:00] Speaker 1: Antropic is rumored to IPO in November at a staggering valuation of $2.2 trillion. That's around $500 billion more than SpaceX IPO just a few months ago. I'd love to hear your perspective, not on the spend, but on the return needed to make those numbers work. They'll never get it. Yeah, they're just shitting away that money. Let me reframe this then. I don't think these companies will survive. And I think that investors are being, they're doing exit liquidity for venture capital. And I think that these are dangerous, unstable companies that have faced basically no real scrutiny. [00:00:35] Speaker 2: This chart is probably showing us one of the most important numbers for investors to watch in 2026. It shows us the combined value of just three companies that are going public in 2026 or in 2027. SpaceX that has already gone public, Anthropic that is likely to go public in 2026, and OpenAI that will probably be doing its IPO in 2027. And together, these three companies could be worth more than $5.2 trillion. Now, to put that in perspective, this bar here shows us the total value of all 3,365 tech companies that went public from 1980 all the way through to 2025. And combined, all of these companies were worth around $4.1 trillion. So yes, you heard that correctly. These three companies alone could be worth more than 3,000 of some of the world's most successful tech companies that went public over the previous 45 years combined. Now, the US stock market has already been melting up over the last few years, even without the help of these three companies. One could think that adding these companies to the public stock market, which is what these IPOs would do, would be a good thing as these companies are at the heart of arguably one of the biggest technological revolutions of the past century, and that these extraordinary valuations are simply a reflection of the enormous opportunities that these companies are creating. But there is something a little bit strange about the context that these IPOs are taking place in. Because just a couple of weeks before Anthropic reportedly filed for its IPO, its CEO, Dario Amadei, publicly called for slowing the pace of AI development. And other AI CEOs, including Elon Musk and Sam Altman, have also supported this call, which creates a very strange contradiction. For most of history, companies usually go public because they want access to more capital to expand their operations, not because they want to slow down their own industry. So we are effectively in a situation where retirement accounts in the US could be forced to buy the single largest IPO boom in history, right when the CEOs of the very companies that are going public seem to be going a little bit crazy on their vision of the future of AI. Investors need to be paying attention very closely to what happens next here, because history is in the making. You see, companies typically don't go public just because they can. Imagine you own a successful company. Your business is growing, you're generating massive revenue, and you believe your company could become significantly more valuable over the next decade. You would probably be hesitant to sell a piece of your own business to a stranger that you don't even know, right? Well, that's basically what an IPO actually is. Even if you need more money to expand, you'd probably prefer to use the cash your own business is generating, or perhaps borrow money from the bank. Selling a piece of your own company would usually be the last of your options. This is a well-documented phenomenon actually called pecking order theory. And that's usually how things work. Most of the time, companies only IPO when those same strangers are suddenly willing to pay a ridiculously high price for your company that you'd be willing to sell a portion of it. For example, let's say you believe your business could be worth $100 billion in the next five years, but then a stranger comes along and offers to buy a piece of your company at as much as $250 billion today, well, of course, that's going to be a deal that you consider. And we can see this exact theory in practice when we look at history. This chart shows us the market value of all the companies going public each year going back to 1990. And as we can see, there are two major spikes on this line. In 1999, the value of companies going public reached as much as 5% of the entire US economy. That's when companies like NVIDIA, Booking.com, and hundreds of other tech companies were going public. In 2021, it spiked again to around 5%. These periods are what many investors call IPO booms. And if we look at market valuations during these periods, we can quickly understand why. Back in 1999, companies were rushing to go public when stock market valuations were at record highs. Investors were willing to pay around 25 times the annual earnings of the average S&P 500 company, which basically means investors were very optimistic and willing to pay ridiculously high prices to be owners of US businesses. And we saw the exact same thing in 2021. The same companies that were not rushing to go public when valuations were lowered during the 2010s suddenly rushed to go public when the P-E ratio rose to 24 times. Because in these two cases, it actually made sense for these companies to go public. Today, the value of the companies that are going public represent 12.5% of the US economy. That is more than twice the level that we saw in 1999 and in 2021. But the pattern seems to be completely upside down. So far this year, stock market valuations have actually corrected significantly. The same P-E ratio now sits closer to 18, which is actually just slightly above the average of the past decade. This is actually as cheap as the market was during the heart of the trade war panic in 2025, and not far off from the cheap valuations that we had in 2022 during the Russian oil shock. And when we look at sentiment indicators like the fear and greed index, investors have actually been leaning more towards fear than greed. This is the very opposite to what you'd normally expect during a historic IPO boom like we're seeing today. So the companies going public today are doing so at a moment where stock market valuations are actually not that crazy. And investor sentiment isn't nearly as euphoric as it was in 2021 and 1999. Now, don't get me wrong, there has been a lot of optimism around AI, but most of this optimism is among corporations that have spent hundreds of billion dollars on AI, not necessarily in financial markets. From the data that we are looking at, investors in public markets haven't been willing to pay exorbitant prices to own AI companies. And against what most people think, this actually applies to the IPOs that we're seeing today. Because if we look more specifically at the biggest IPO that is taking place this year, Anthropic, the numbers don't lie. According to Anthropic's IPO filing data, we can see that the company generated 16 billion dollars in sales during the first half of this year. That's more than 15 times what it generated last year. And in 2028, it is projected to make 200 billion dollars in sales, which is quite extraordinary to say the least. If we compare that to the expected market valuation of 2 trillion dollars, that means investors are expected to pay roughly 10 times its projected sales. Now, that is fairly expensive. It's not exactly something that Warren Buffett would buy, but it's definitely nothing crazy or euphoric. Back in 1999, for example, Cisco was trading at 30 times its sales, and investors were willing to pay as much as 80 to 100 times in sales for Yahoo. Now, of course, you're going to go public when investors are willing to pay that kind of a price. But today, with Anthropic, the company actually isn't ridiculously expensive when you consider where it's going to be in just a year. For instance, Reddit is a public company that is currently trading at the same price-to-sales ratio of roughly 10 as Anthropic. And this is despite Reddit being unprofitable. So why would the CEO of Anthropic, arguably the largest player in AI right now, dominating the large language model market, be willing to sell a good chunk of his company without even making investors pay a big premium on it? Well, that's where the story gets a little bit more concerning. Now, I want to be very clear. This is not a doom and gloom video where I'm going to tell you to sell all your stocks and run for the hills. The S&P 500 index has effectively doubled in price since 2021. And people have been calling for it to crash to zero all the way through, missing out on one of the biggest bull markets in history. But we do think there is a better way to play what's happening right now. And I'm going to show you what that is in this video. This, for example, was the return of our strategy over the same period of time compared to the S&P 500. $100,000 in 2021 would have turned into $616,000 five years later. We were able to achieve this by taking a trade-by-trade approach on the stock market. Every time we enter, we know exactly why, what instrument we're using, and when we'll be exiting. All things that we communicate immediately with our clients on the website. We're not looking to be in the market all the time, but there are moments where you need to be involved in the stock market to take advantage of the upside. And you can even do that with a little bit of leverage. This allowed us to capture the biggest moves up in the market over the last few years while also sidestepping a big chunk of the corrections in 2022 and 2025, where we were sitting in cash almost the entire way through. That is precisely the kind of approach we think is needed in today's environment. And we're going to go through exactly how this is going to play out in the rest of this video. If you want to actually receive the alerts that we send out to our clients at the very moment that we enter or exit the stock market, I strongly suggest that you consider our strategy. We are extremely transparent on every single position that we take. You can see our entire track record of trades year by year by clicking on the link below. And I suggest you book a demo with myself or one of our investment strategists so that you can see exactly how our strategy works and how you can use it yourself. There's zero strings attached, no commitment required. We're doing these completely for free. So why is Anthropic selling a big chunk of its company to the public at a moment where it's not even getting a great deal on it? Well, because in order to achieve this kind of growth that Anthropic is looking for, it also needs to spend enormous amounts of money just to keep the business running. In fact, this year alone, the company reportedly lost around $80 billion, which is roughly five times the sales it generated. And over the next decade, it's planning to spend another $518 billion. So put yourself in Anthropic's shoes for a moment and examine the pecking order theory again. You can't fund all of this spending using your own cash because, well, you're losing money every single year. Now, you could borrow money as a second option. Surely banks would be willing to lend you some money, right? Well, yes, banks have already lent $15 billion to Anthropic, but the problem is that this is just a fraction of what Anthropic needs to survive over the next few years. And it doesn't look like the banking system is willing to continue filling the rest of that gap. You see, the Federal Reserve has recently started to raise interest rates for the first time since this AI boom began. That means that borrowing costs across the economy are becoming more expensive. And as borrowing becomes more expensive, lenders, so banks, become increasingly selective about who they're willing to finance. And so naturally, they're also becoming more selective with AI companies as well. Essentially, asking whether Anthropic or other AI companies will be able to repay their debts as interest costs rise. And because of that, these banks start pulling back on lending. And that's exactly what seems to be happening right now. Something that Elon Musk recently touched on, saying that hundreds of AI companies could go bust as a result. The problem for Anthropic is that if it can't fill that gap and can't find enough capital, it could actually threaten this extremely capital-intensive business. And so that actually only leaves them with the third option, selling a piece of their business to investors. And that's exactly what we're seeing today with these IPOs. For these AI companies, going public might not be a choice anymore. It could be a necessity. The pecking order theory itself has not changed. But instead of these companies going IPO to sell their shares at a premium, they're doing so because they have no alternative. So what does this actually mean for the US stock market here? How does this all play out? Well, to answer that question, we can take a look at what the leaders of these companies that are going public are actually saying. You see, back in 2021, tech CEOs that were going public were hyping up their companies and hyping up their industries. In 1999, the same thing was happening with CEOs talking about the future of the internet. Today, however, we're seeing the polar opposite take place. The CEOs of the biggest AI firms have actually been calling for a slowdown in the AI race. And we actually think this may be one of the biggest hoaxes we've seen in recent financial history. You see, while some AI leaders agree that AI development needs to slow down because of safety risks, there's many other figures in the AI industry that don't really share that view. Many AI firms in Europe, for example, are still pushing ahead in the race to advance AI. Their argument is pretty straightforward. If the technology is creating enormous economic opportunities, why would you voluntarily slow their progress down? We've seen many other AI experts go as far as saying that the risks that these AI CEOs are warning about are overblown. That there's simply no conclusive evidence that AI systems really pose a doomsday safety risk. So clearly, this is not a universal agreement on how serious these risks actually are. But notice who's been sounding the alarm about slowing down AI developments and these potential risks. Amadei, Elon Musk, Sam Altman. All of them are the CEOs of the exact AI companies that are aiming to go public with large valuations. You could argue that they may be using a reverse psychology in order to prop up the valuation of their companies By telling investors that AI development needs to slow down because the technology is becoming too advanced and that government oversight needs to catch up, they're also indirectly telling investors that their technology that they are building is extremely powerful. So powerful, in fact, that it could fundamentally transform society or even take over the internet and threaten humanity if it's not properly regulated. And if investors actually believe this story, they might be looking to pay a higher price for these businesses. In other words, these CEOs recognize that there's not any euphoric sentiment in the stock market today. And so instead of playing on euphoria and greed, they're playing on fear in order to capture as much capital as they can. We've actually seen many other investors call this out, saying that these CEO calls to slow down AI development are simply attempts to generate hype ahead of their IPOs. Now, while this strategy could potentially help prop up their valuations relative to the rest of the market and maximize the potential of these IPOs, which is ultimately the short-term goal of these companies to actually just survive, we think this reverse psychology strategy could create some real problems for these AI companies very soon. Because when some of the most influential people developing AI repeatedly warn that the technology they're producing could become dangerous, eventually governments are going to be paying attention. And in fact, we're already seeing that happen. Regulators have been examining AI-related risks ranging from cybersecurity and consumer protection. Now, imagine what could happen if governments decide these risks require stricter rules. They could, for example, require advanced AI models to undergo extensive safety testing before release, or require additional oversight and compliance procedures. That would, of course, increase costs and delay product launches. Or worse, the government could outright ban certain AI applications or powerful models from reaching mainstream users at all. This would essentially prevent these companies from generating revenue from the very technology that they're currently spending hundreds of billions of dollars developing. In that scenario, these companies would essentially be going public right at the moment when regulation threatens to kill the AI boom itself. And although this may not be the intended effect, this would be the equivalent of a global-scale rug pull. And this will impact the broader stock market. The NASDAQ, which is the exchange where these companies will be traded, changed its rules in May of this year and introduced a fast entry mechanism that allows certain large new listed companies to be included after just 15 trading days. SpaceX, for example, is already on the NASDAQ. Other major index providers like MSCI, FTSE, also changed the rules allowing newly public companies to become eligible for index inclusion after as little as five days of trading. So in other words, even if you personally don't want to buy these IPOs, if you own an index fund, you're going to have exposure to this. And that's actually why we think 2027 could be a particularly challenging year for the stock market. Because when you combine these enormous IPOs with the possibility that these companies might struggle to meet investors' already sky-high expectations, that creates the condition for widespread selling. So what should we actually be doing about this? Well, in the near term, the kind of restrictive AI regulations that we've been discussing haven't actually arrived yet. And more importantly, the AI boom is still supporting strong earnings growth in the stock market. We actually think that the correction that we're seeing in the U.S. stock market right now in the last few months could be the last major opportunity to ride the AI boom into early 2027. We saw multiple of these opportunities in the late stage of the internet bubble in the 1990s. Take October of 1999, for example. Even though there were already plenty of warning signs around the dot-com bubble and excessive optimism, large IPOs, extended valuations, the NASDAQ 100 still almost doubled in value in just a few months before finally peaking in early 2000s. As the saying goes, markets can stay irrational longer than you can remain solvent. And we actually think we are in this exact scenario today. Although we are currently sitting in cash right now during this period of volatility, we're watching very closely for an opportunity to move back into the market. Because we believe the current weakness could actually create a huge buying opportunity heading into the end of the year. If the market regains momentum, we actually think the NASDAQ could hit 34,000 points in the next few months. And if you apply some modest leverage, which is something that we use when market conditions are right, that can lead to some pretty spectacular returns. On the other side of this, however, could come the real pain that all of the things discussed in this video are leading us towards.