You're Telling Me That Circular Financing Can Reduce The Risk Of A Bubble?

Marty Popoff 686 Followers Follow Summary Concerns over AI sector's 'circular financing' are overstated; such practices are common and risk-mitigating across mature industries. I recommend holding S&P 500 ETFs (SPY, IVV, VOO) and advocate diversification, particularly into Small Cap and Value stocks. AI industry scrutiny stems from its immaturity and higher risk concentration, not from the scale or novelty of circular financing. Visible circular financing in AI reflects industry evolution and risk transfer, ultimately supporting specialization and profitability. gremlin/E+ via Getty Images I read a lot about bubbles, so much so that I think a “Bubble Article Bubble” has developed. A few months ago during a period of doom and gloom, I wrote that comparisons of today’s market with the Dot Com This article was written by Marty Popoff 686 Followers Follow Marty Popoff has over 20 years of capital markets experience, as a trader, marketer and in a pinch, structurer, primarily in the fields of Government and Corporate Bonds, Interest Rate Derivatives, Credit Derivatives, and Securitization. He has spoken at many conferences and taught Risk Management at the graduate level. From time to time he writes about topics that interest him. He often feels that investing in the markets takes a leap of faith. Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.