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Protecting Against An AI Bubble Collapse
Porter's Journal Issue #137, Volume #2
Porter Stansberry
December 01, 2025
A Hedge Designed For 10x Returns… And Peace Of Mind
This is Porter’s Daily Journal, a free e-letter from Porter & Co. that provides unfiltered insights on markets, the economy, and life to help readers become better investors. It includes weekday editions and two weekend editions… and is free to all subscribers.
Out-of-control capex spending… The financial model doesn’t work… Hyperscalers sending the S&P higher and higher… There will be a collapse… Positioning your portfolio… A mixed bag for Black Friday… The tariff bonanza… |
Editor’s note: With the market trading at superinflated valuations – and the potential of a market collapse imminent – Porter turned today’s Daily Journal over to Trading Club analyst Ross Hendricks. Ross explains the dynamics of how the artificial-intelligence (“AI”) boom is driving the overall market higher… and what might happen next. More importantly, though, Ross offers insights into how you can protect yourself from this collapse.
Here’s Ross now…
Table of Contents
An AI bubble and real tech innovation can co-exist… and that is what’s happening right now.
At the heart of any tech revolution that promises to change the world is game-changing innovation – causing investors to go all-in. But inevitably, investors take it too far. As the speculative frenzy builds, too much capital floods into an industry chasing increasingly marginal investments. The boom eventually gives way to a devastating bust – and the good players remain while the marginal ones fade away.
It’s the most familiar pattern in finance.
We saw it in railroads in the 1800s, electrification in the 1920s, and with the internet in the 1990s. Each episode delivered major leaps forward in technology that eventually changed the world. But the promise to make investors rich quickly led to unchecked speculation, with all of the predictable consequences.
Today, we’re seeing the same pattern repeat in the AI boom.
Like all those that preceded it, the AI bubble is rooted in truth: a disruptive new technology that will transform the world as we know it.
The AI Boom Begins
ChatGPT took the world by storm in November 2022, racking up a million users within just five days. Two months later, in January 2023, the number had exploded to over 100 million users. It was the fastest adoption rate of any consumer product in history, exceeding the internet by a wide margin:
With nearly 1 billion ChatGPT users today, there’s no denying the power of this revolutionary new technology. And it has already begun to change the world. But the rampant enthusiasm about the promise of this technology has inspired a full-fledged speculative mania.