This is the next installment in our monthly series on the portfolio of our retired author, R Paul Drake (“RPD”). This series is mainly targeted at our retired members to give them a retiree perspective on REIT investing. If you are not a retiree, you may still find value in this series, as it often discusses many of our individual holdings.
My Obsessions this Month
For me, this was a month of obsessions. Much of it was occupied with the dangers of AI.
Artificial Intelligence is a Threat
The investments being made, and worse, the debt being taken on, to support the expansion of data centers and supporting infrastructure, cannot possibly produce reasonable returns. And enough economic activity is now devoted to all this that when people wake up and realize that the emperor has no clothes, the economic fallout will be severe.
Jussi published a note about this threat this past month: “MARKET UPDATE - Stay The Course: Resist AI FOMO And Stick With Your Long-Term Plan.” The only thing that gives me pause is that over the past 6 weeks, a lot of people have emerged to express that same point of view. So perhaps the emperor can ride around naked in his chariot for a while longer.
After a lot of thought took a few actions. With perhaps an excess of caution, I exited three good companies associated with natural gas because of the connection with powering data centers.
In this context, I would really like to see the REIT fraction of my portfolio rise. But I’m not going to chase the market here.
Alexandria Real Estate Implodes
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