The situation of the market

Many stocks in the market are significantly overvalued—Tesla, Apple, Costco, Palantir, and much of the FMCG and pharmaceutical sectors, considering their sluggish growth. Even Nvidia could see its valuation tumble if China or AMD develop viable alternatives.

Market crashes don’t worry me; they’re necessary and often present great buying opportunities. What truly concerns me is the long-term effect of excess liquidity. Inflation is brewing beneath the surface, and we’ll see its full impact in the years ahead. Over time, the velocity of money has declined while the money supply has surged, artificially propping up asset prices. My real fear isn’t a crash—it’s that inflation-adjusted returns will shrink to irrelevance.

Bonds are effectively useless. Stocks are outrageously priced, making it difficult to generate meaningful returns. This isn’t a market for investors—it’s a market for those looking to cash out. Genuine opportunities are scarce.

If inflation accelerates, cash will erode, bonds will remain dead weight, and overpriced stocks will have no room for growth. In the end, nobody wins. After years of zero interest rates and relentless quantitative easing, my biggest concern is that when the real downturn hits, the Fed will have little ammunition left to respond.