Forget AI spending, the biggest risk to this market is speculation

Chicken and egg? Is there a cart before the horse? Six of one, half a dozen of the other? After a while, you'll realize that there is no simple expression that will capture the connections between alternative investments that obscure money-making opportunities. What kind of alternative investments am I talking about? These could be many things: Attenuated power supplies to meet the demand of data centers, including uranium A handful of quantum companies, all thought to be able to eliminate the need for massive regular computing with all their attenuated power needs, or could get into bitcoin Crypto-related companies like Coinbase, Bullish, Circle, and Robinhood (which has a large cryptocurrency market) Alternative auto parts I want to focus on these for a moment because so much has been written about them. We're seeing the amount of capital expenditures by so-called hyperscalers and how this could be the end of the Magnificent Seven - and not nearly enough on those alternatives, including binary and triple exchange-traded funds, which are leveraged and have very few winners, although the winners are well fed. Let's factor in the zero-day options, and together we have a huge amount of money in a dead end to do nothing with except wander around until it's all over. Before we dive deeper, I would like to point out that one of the reasons I wrote the book "How to Make Money in Any Market" was to point the way to investing in stocks instead of trading in these instruments; I find all of this to be speculative, and so I think it's really very difficult to make a case on an annual, monthly, or even daily basis. I don't want to declare disappointment in the dialogue surrounding the book, but I realize it's too dark to have a real conversation about the role of speculation in this market; this role is just as overwhelming as it was in 2000-2001. Except this one, it's about companies that are both elusive and likely to fail, companies that weren't built for the tasks at hand, but have been around for a long time and typically attract young investors. In the book, I wanted to keep indexes, growth investments, and speculation together by splitting your portfolio into 50% index, 40% growth, and 10% smart speculation (this meant looking for stocks that could be the next Nvidia, not hourly traded alternatives). The radical nature of the text escaped many interviewers. You can do this yourself because, unlike in the past when individual investors did not have the insider tips at their fingertips that the professionals had, today's investors have a wealth of knowledge. Thanks to a combination of Regulation FD (Fair Disclosure), which prevents public companies from selectively disclosing material to certain individuals, and the proliferation of sites and news sources for regular investors. Add in incredible chatbots (at least when requested) and the idea that a person can't pick stocks has become laughable. Those who still only preach index are threatened even by an investor with a 50% index allocation; This is how it is bought and paid for by asset collectors, which shows how dogmatic they are in financial terms. But the index fund's plight stems from the adoption of speculative junk and high-risk options by many young people. Other than saying that these are all related, I find it interesting that no one has really studied serious psychosis or addiction to zero-sum means at best. The question I want to think about is: How are they really connected? How does QuantumScape operate with D-Wave? How can Bloom Energy Direxion keep track of the Daily Uranium Bull 2X ETF so easily? Does anyone really know why Solana is trading with Palantir? I could easily list 50 of these relationships if asked, but I cannot name a single well-traded index that ties them together. But we all accept that they are a group. This is not an assumption; this is a fact. So much energy is spent talking about the supposed ridiculousness of a semiconductor company being the largest company in the world that it has become a toxic cancer on the AI industry, as if there was an industry without Nvidia. I've yet to hear anyone take Nvidia CFO Collette Kress' view that buyers of Nvidia chips are making billions of dollars off them, so the cap-as-dead-weight argument may not hold much water. But the idea that these alternative investments will somehow collectively create something is almost laughable. Namely: The alternative energy powering the data center will most likely be natural gas, which is abundant and can be easily connected to data centers at extremely low cost. Quantum science is best done at the university level or by Alphabet and IBM. Everything related to crypto, this whole damn structure could be brought down by the failure of the Strategy, the old Micro Strategy, and despite the relevant organizations claiming that everyone does, ultimately no one uses crypto transactions in any trade, and that's too much. All these flaws are conveniently ignored by the purveyors of all these tools, and they do so in a condescending manner to those who would oppose or even argue with it. There are zero constituencies that condemn what I see as a much greater threat to the investment landscape than the leveraged balance sheets of Meta Platforms and Amazon. So what should be done to ignore this corruption in the market? Like the big firms that coordinated the destruction of the so-called “little guy” in the infamy of 2000-2001, big firms are promoting every bit of this anti-investment ethos. They sensed what the individual wanted and willingly collected all the leveraged ETFs that connected things that could be connected. They invested in active ETFs, which to me is another way to cover fees that mutual funds no longer do. Its leaders may be skeptical of crypto at all firms, but they are ready to launch any derivatives that include these alternatives, including stocks that represent them. No one is suggesting that these aren't the best ways to grow wealth. They agreed because they generate huge wages, so they can't be mocked for not filling quarters and generously distributing bonuses. We can say that it has always been like this. I come back and say, "That's not right." We had this in 2000-2001 and now there is just as much flirting with clearly illegitimate nonsense, but this time we have no excuse to look the other way because we had it shoved in our faces a long time ago. Or maybe I'm wrong here. Maybe 25 years ago was a long time ago and we are destined to lose another generation of investors like the last investors who were blundered and maimed, and it's all part of a process where the only people who really make money are the issuers and everyone else is at best breaking even, at worst losing it all. (See here for a complete list of stocks in Jim Cramer's Charitable Trust.) When you subscribe to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trading alert before buying or selling a stock in his charitable foundation's portfolio. If Jim talked about a stock on CNBC TV, he waits 72 hours after issuing the trading alert before executing the trade. 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