Zinger Key Points
- 'Cow Guy' Shellady likens Fitch Ratings' U.S. debt downgrade to a fantasy football magazine pick: It doesn't matter.
- Shellady wouldn't invest a hypothetical $5 million windfall in today's market.
Scott Shellady, the finance veteran widely known as the "Cow Guy," spoke candidly with Benzinga on Wednesday about his market perceptions, potential investment opportunities, and his thoughts on artificial intelligence (AI). Here's what investors need to know.
Skepticism: Reacting to Fitch Ratings’ Tuesday downgrade of U.S. debt from AAA to AA+, Shellady voiced disbelief in the power of rating agencies to influence the economy, likening them to “a magazine on the shelf for your fantasy football draft pick.”
Though many investors are optimistic, Shellady is watching for economic warning signs. He said, “I can’t ignore all the small little indicators that nobody’s really talking about that are telling me, man, you should be very careful here now.”
Citing increasing corporate bankruptcies, auto loan delinquencies, foreclosures, and a rise in layoffs compared to last year, the Cow Guy indicated caution towards the current market situation.
“If you had a grandmother that died and gave you five million bucks right now, I’m not putting it in the market, I’m just not,” Shellady stressed.
Read Also: US Private Sector Adds 324,000 Jobs In July, Surpassing Expectations: Job Market Demonstrates Strong Resilience
AI Bubble on the Horizon?
In the face of a potential AI bubble, Shellady provided a straightforward analogy to pinpoint when it might burst. Recalling the dotcom era, he believes the bubble might pop when even the most hesitant investorsenter the market.
“When the next time you get an Uber, and if that guy’s getting into AI, sell,” he humorously quipped.
Spotting Investment Opportunities
Despite his overall bearish stance, Shellady sees a silver lining in AI, though he cautioned for prudence rather than pioneering.
“I want to be like the fourth guy there. Let all these people go out there and waste their money with some of these stocks,” he advised.
Stable tech like Microsoft Corporation MSFT and Alphabet Inc GOOG GOOGL are the better opportunities in the AI realm, Shellady mentioned.
The Cow Guy emphasized that the consumer is the key to the economy right now, noting that consumers are currently “spending on fumes” with record-low savings rates and high credit card balances, warning a potential tipping point.
“When the consumer finally breaks, then this whole thing falls apart,” Shellady said.
Check out the interview below.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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