January 2024, Chicken Little Portfolio Performance

AI boom or speculative mania?

The stock market goes up every day; Nvidia, Google, Meta, and the rest of the magnificent seven except struggling Tesla. Meanwhile, financial excesses pile up - historic levels of government deficit and debts. Are financial markets anticipating technological improvements or going up because of simple speculation? 

Technological boom or speculative mania? 

January 2024 performance

The Dow Jones Industrial Average rose 1.25% in January 2024. The Chicken Little Portfolio gained 0.97% from its short-term treasuries, and being long a bit of crypto. 

	Jan '24	YTD
Chicken Little	0.97%	0.97%
Dow Jones Industrials	1.25%	1.25%

January 2024 was an unspectacular month for broad asset classes. US stocks went up a bit, non-US stocks declined slightly, and the safety trades of gold and long-term US Treasuries slipped a bit. More speculative stocks did better than the broad asset classes; Nvidia was up more than 25% in January.   

Asset	Symbol	Jan '24	YTD
Dow Jones Industrials	DIA	1.25%	1.25%
Non-US Stocks	EFA	-0.45%	-0.45%
Emerging Market Stocks	EEM	-4.53%	-4.53%
US Long-Term Bonds	TLT	-2.25%	-2.25%
Gold	GLD	-1.42%	-1.42%
Bitcoin	BTC	1.83%	1.83%

The Bull Market keeps going

While January itself was unspectacular, the bull market in US stocks continues with new, all-time highs in the Dow and S&P 500 happening on a regular basis. I have been focused for more than a decade on fiscal and monetary mistakes. Running historic government deficits and e-printing large amounts of currency. 

Robots to the rescue?

Is there a 'rational' explanation for rising equity markets in the face of government incompetence and malfeasance? Yes, the most obvious is technological innovation including AI. 

If we are all going to get much, much richer because robots (both physical and software) are going to do more work, then, perhaps, the stock market is simply reflecting future gains.  

We can't know for sure if the robots will make us richer in future explanation is true. The productivity figures, however, are clear. 

US productivity has been increasing at a rate of about 1.5% per year going back to 2007.  Current productivity growth is below the post WWII average, and below that recorded in 1990-2007 period. In short, looking at official figures provides no hint of an AI/tech productivity boom - at least not yet.   

February 2024 portfolio position

The Chicken Little portfolio remains positioned for collapse. One trade in January 2024 - increased the modest position in ethereum.

Previous month's report          Subsequent Month's report

	Chicken Little	Dow Jones Industrials
2024 (through January)	0.97%	1.25%
2023	2.05%	15.80%
2022	-5.88%	-7.06%
2021	5.11%	20.69%
2020	8.04%	9.27%
2019	9.03%	24.82%
2018	1.27%	-3.63%
2017	4.57%	27.72%
2016	-1.92%	16.08%
2015 (April through Dec)	-2.49%	-0.27%
since inception (3/31/15)	21.61%	155.59%