Investors should rotate away from high-multiple software stocks like Microsoft (MSFT) and Amazon (AMZN), as AI disruption and rising inflation are expected to compress their valuations. Instead, overweight the "scarcity" sector by building positions in Silver and energy leaders like ExxonMobil (XOM) to hedge against a projected CPI rise to 4-6%. Within the AI space, focus exclusively on hardware and infrastructure providers like Micron (MU) and ASML, specifically targeting entry points during market pullbacks. Avoid private credit funds and firms like Blue Owl or Apollo due to increasing liquidity risks and potential valuation write-downs. Monitor the S&P 500 for a total drawdown of 15% to 25%, using this volatility to transition from "abundance" assets into physical commodities and data center infrastructure.

Based on the podcast transcript with Jordi Visser, the market is undergoing a fundamental "Regime Shift." The era of low inflation and dominant software growth (2007–2023) is ending, replaced by a volatile environment defined by scarcity, high energy costs, and hardware-led AI development.

The "Scarcity" Sector (Energy & Commodities)

The analyst argues that we are in a structural commodity bull market. Unlike previous cycles, this is driven by the massive power requirements of AI and geopolitical hoarding.

• Energy/Oil: Bearish on the consensus that oil will drop to $40–$50. Visser suggests oil could hit $100–$150 due to Asian shortages and supply chain disruptions.
• Silver: Highly bullish. Visser identifies Silver as his top current conviction for both the physical commodity and mining stocks.
• Agriculture: Bullish on Fertilizer and companies involved in food packaging (due to rising plastics/polyethylene costs).

Takeaways

• Overweight Scarcity: Shift portfolio weightings toward energy, materials, and chemicals.
• Silver Opportunity: Look for entry points in silver miners as a hedge against the "inflation reality."
• Inflation Target: Prepare for CPI to hit 4% to 6%; the market has not yet fully priced this in.

AI Hardware & Infrastructure

Visser distinguishes between "AI Software" (which he dislikes) and "AI Hardware" (which he favors). He believes the "Agentic" phase of AI requires massive physical build-outs.

• Key Themes: Focus on Semiconductors, Advanced Packaging, Optical Fiber, and Energy Infrastructure.
• Micron (MU): Bullish. Despite recent volatility, he prefers Micron at a low PE (3.8x for 2027) over software companies like Salesforce.
• The "98 Stock" Model Portfolio: Visser mentions a curated list of 98 names (including ExxonMobil, Eli Lilly, and ASML) that focus on hardware and "the rack" (data center infrastructure).

Takeaways

• Buy the Dips in Hardware: Use technical analysis to find entry points in hardware-related AI names during the current 15-20% market correction.
• Avoid "Edge AI" Laggards: Be cautious of cloud-only plays as "Edge AI" (running models locally on phones/devices) may reduce long-term cloud compute demand.

Big Tech & Software (The "Abundance" Short)

The transcript presents a heavily bearish outlook on traditional "Growth" assets, particularly software and the "Hyperscalers."

• Microsoft (MSFT): Bearish. Visser claims he "wouldn't touch Microsoft Copilot with a 10-foot pole" and notes the stock has closed below its 200-week moving average for the first time in 13 years.
• Meta (META) & Amazon (AMZN): Bearish/Neutral. Cites "horrible" charts and structural re-ratings. Notes Amazon has been effectively flat for five years.
• Software Sector: Bearish. Believes AI disrupts software's business model. If a company can't guarantee it will exist in three years due to AI disruption, its high valuation multiple must compress.

Takeaways

• Short "Abundance": Reduce exposure to high-multiple software companies that face AI disruption.
• Multiple Compression: Expect "Magnificent 7" names to continue re-rating lower as interest rates stay "higher for longer."

Private Credit & Financials

A significant "Credit Cycle" downturn is underway, which Visser compares to the early stages of previous financial crises.

• Private Credit: Bearish. Mentions liquidity issues and withdrawal limits at firms like Aries, Apollo, UBS, and Blue Owl.
• Banks: Cites SoFi and general financials as being at risk. While earnings look solid now, he expects "marks" (valuation write-downs) on bad loans to eventually hit balance sheets.

Takeaways

• Liquidity Risk: Be wary of private credit funds or "alts" that are limiting redemptions.
• Watch Credit Spreads: If credit spreads widen significantly, it will signal the next leg down for the S&P 500.

Bitcoin (BTC)

• Sentiment: Neutral/Wait-and-See.
• Context: Bitcoin is currently trading in a range and behaving like a "software" asset (highly sensitive to liquidity).
• Strategy: Visser is not interested in buying Bitcoin until "recession fears" peak. He believes that once the government is forced to print money to save the private credit market, Bitcoin will become the "pain trade" to the upside.

Summary of Market Targets

• S&P 500: Expects a total drawdown of 15% to 20% (or up to 25% if inflation hits 6%).
• Recession: Does not expect a US recession in 2024 due to high household net worth and the AI CapEx boom, but expects "recession fears" to drive the market bottom.
• Rotation: This is not a "Bear Market" for everything—it is a rotation from Growth/Software into Value/Commodities/Hardware.