The Long Term Investor

The MIXED market today.

Dow, S&P 500, Nasdaq trade mixed as Wall Street weighs Google, Tesla earnings

https://finance.yahoo.com/news/live...t-weighs-google-tesla-earnings-233839940.html

(BOLD is my opinion OR what I consider important content)

"US stocks traded mixed on Thursday, as hopes for a US-EU trade deal kept fresh records in sight and Wall Street assessed earnings from tech giants Alphabet (GOOG) and Tesla (TSLA).

The Dow Jones Industrial Average (^DJI) dropped 0.7% amid a post-earnings slide in IBM (IBM) shares, after the blue-chip index ended Wednesday just shy of its first record close this year.

Meanwhile, the tech-heavy Nasdaq Composite (^IXIC) rose roughly 0.3%, while the S&P 500 (^GSPC) climbed more than 0.1% on the heels of more all-time closing highs.

Alphabet beat Wall Street's second-quarter earnings expectations and doubled down on its AI spending spree. The Google parent's shares rose alongside other AI-linked stocks such as Nvidia (NVDA), helping buoy the tech-focused gauges.

But fellow "Magnificent Seven" stalwart Tesla's stock sank after an earnings miss, a continued slump in European sales, and a warning from CEO Elon Musk that the EV maker faced "rough quarters" as President Trump's budget bill kills off tax credits.

Earnings season continues on Thursday with results from Intel (INTC) and American Airlines (AAL).

Meanwhile, trade deal hopes continued to run high after the US-Japan pact helped fuel more records for the S&P 500 (^GSPC) and Nasdaq Composite (^IXIC) on Wednesday.

The EU and US are closing in on an agreement that would impose a 15% tariff for most imports from Europe, instead of the 30% threatened, media reports said.

That rate is emerging as a potential new baseline for the "reciprocal" tariffs set to kick in on Aug. 1, going by Trump's comments late Wednesday. Previously, the president had imposed a 10% baseline rate on countries as part of his sweeping April tariffs.

On the economic front, weekly initial jobless claims data on Thursday morning gave evidence of a "no fire, no hire" labor market. Claims hit their lowest level since April, while continuing claims — a sign that those out of work are taking longer to find new jobs — hovered near their highest since 2021.

Updates on US manufacturing and services activity in July and new home sales are also on the docket."

MY COMMENT

Not much new above. The key item is NOT news yet.....a trade deal with the EU. From what I am reading we are very close......perhaps already there. I fully expect a deal to be announced very soon....perhaps any time now.

For the markets and investors.....things are coming together very nicely.

Remember all the RECESSION and INFLATION and ECONOMIC fear-mongering in April and May....well NEVER MIND. NONE of it came true. It was all political and opinion and click seeking..... BS.

It was a HUGE overreaction that impacted many investors and probably drove many people to do dumb things with their holdings. We saw many of the big boys on Wall Street leading the RECESSION charge. Guess what.....they were flat out WRONG. It was ALL one big joke on investors and the American people.

 

I like this little article talking about CONSUMER STAPLES and CONSUMER DISCRETIONARY ETF's. BUT....it is all hindsight.

During earnings season, two ETFs may signal how bullish investors feel about U.S. economy and consumer

https://www.cnbc.com/2025/07/22/dur...o-etfs-signal-how-bullish-investors-feel.html

"Key Points

• The performance divergence between consumer staples and consumer discretionary sectors can provide a snapshot of how bullish investors are on the economy and strength of the consumer."

MY COMMENT

My preferred measure of the economy, consumer health, etc, etc is the simple......SP500. It is my single performance measuring devise when it comes to investing, the economy, and just about anything else.

 

Speaking of ETF's....here is another interesting article. Hedge funds basically operating as ETF's.....or the reverse....ETF's operating as hedge funds. This article has pretty good detail on these types of funds. These are NOT FOR ME....but for anyone else that might be interested........ this is a good little starting point in learning about these products.

Hedge funds are operating inside ETFs, with some big risks and potential benefits for investors

https://www.cnbc.com/2025/07/22/hedge-funds-investors-market-risks-etfs.html

"Key Points

• The number of exchange-traded funds employing what are often described as hedge fund-like strategies continues to grow.
• Investment strategies uncorrelated with the stock and bond market can help investors generate market-beating returns, but these funds vary widely in approach and can have relatively high fees."

 

To start the day I have seven stocks GREEN and two RED. The RED are PLTR and COST. Those two stocks are moderating my gains at the moment.

I am curious to see if the markets can hold back against all the very positive events and news.......as the day progresses.

I am actually surprised that there is not more EUPHORIA right now. The current environment is one of the MOST POSITIVE for stocks and investors that I have seen in a very long time. BUT...that is fine with me.....I love having the markets climb a wall of worry....during a time of extreme positive environment for investors. It is like the markets and investors are waiting for the other shoe to drop. They are afraid to recognize and see the positivity in what is going on right now.

That is fine with me......since I am fully invested all the time anyway....I EMBRACE the current conditions in the markets and the business world for USA companies. Of course....I EMBRACE....all conditions by default....good or bad.

I dont have to make any hard choices....do i get in or get out.....where are we heading....is this a good time to put in money.....should I go to cash....should I go all in? I simply.....RIDE THE WAVE that I am given.....in perpetuity....for better or worse. AND.....I play the "probabilities".....as a long term wave rider. I do NOT gamble....I do not trade.

LOL....although as can be seen back in this thread.....once in a RARE while....I will make a short term trade....usually based on MOMENTUM. I think there are perhaps 5 or so examples over the past 6-7 years in this thread. The last one netted me my first.....104....shares of PLTR. This sort of trade is VERY RARE for me and very specific to some situation that I am seeing. As an investor...."hunter gatherer"......once in a while I have take advantage of what I am seeing short term......BUT......this is aberrational behavior for me.

 

HD....has now gone to the dark side. Oh well. Time to sit and let the markets do their thing.

I have a couple of events that will take my time today.......a phone meeting with our Land-Man this morning and a vet appointment for a dog this afternoon. So...I will be off and on with posting further today.

 

Waiting for my phone conference. I see that PLTR is now GREEN.....slightly.....better than red.

I continue with COST and HD in the RED.....all else is green.

BUT....may gain is now larger than earlier....so good progress in the markets for me.

 

Much nice content here....for any investor....but especially for new-comers.

If Active Investing Is the Loser’s Game, What’s the Winner’s Game?
Disciplined, low-cost, and diversified investing offers a smarter path to long-term success.

https://www.morningstar.com/markets/if-active-investing-is-losers-game-whats-winners-game

(BOLD is my opinion OR what I consider important content)

"Active investing—defined as individual security selection and market-timing—has long been shown to be a “loser’s game.” Charles Ellis, in his classic book, Winning the Loser’s Game, demonstrated that while it’s possible to outperform the market, the odds are so poor that it’s not prudent to try. The question, then, is: What is the prudent “winner’s game” for investors?

A sound investment strategy should be grounded in peer-reviewed academic research, not opinions or anecdotes. The overwhelming evidence is that markets are highly, though not perfectly, efficient. This means that most information is already reflected in prices, making it extremely difficult for active managers to consistently outperform after costs. As a result, the most effective approach is to avoid strategies that rely on security selection or market-timing and instead focus on systematic, transparent, and replicable strategies, such as using index funds or quantitative factor-based approaches.

Core Principles of the Winner’s Game

1) Minimize Mistakes and Costs
Ellis’ central insight is that, in a loser’s game, the key to winning is making fewer mistakes: minimizing trading, avoiding market-timing, and keeping costs low. Index funds and systematic strategies help investors avoid the common pitfalls that erode returns, such as excessive trading and chasing hot trends.

2) Risk-Adjusted Returns Matter
If markets are efficient, all unique sources of risk should offer similar risk-adjusted returns. Investors should not focus solely on volatility (standard deviation) but also consider other risk characteristics such as skewness, kurtosis, and liquidity risk. For example, assets with negative skewness or illiquidity may offer higher returns as compensation, but these risks must be understood and managed. Traditional measures like the Sharpe ratio are useful but may not capture the full picture.

3) Diversify Across Independent Sources of Risk
Rather than concentrating on a single source of risk (like market beta), investors should diversify across as many independent, evidence-backed sources of risk and return as possible. To avoid data-mining, these sources should meet all of the following criteria:

• Persistence of a premium: It holds across long periods and different economic regimes.
• Pervasiveness of the premium: It holds across countries, regions, sectors, and even asset classes.
• Robustness of the premium: It holds for various definitions (for example, there is a value premium whether it is measured by price/book, earnings, cash flow, or sales).
• Investability: It holds up not just on paper, but also after considering actual implementation issues, such as trading costs.
• Intuitiveness of the premium: There are logical risk-based or behavior-based explanations for its premium and why it should continue to exist. While investors should prefer risk-based explanations (as risk cannot be arbitraged away), behavioral ones are acceptable if there are identifiable limits to arbitrage (such as the risks and costs of shorting). The momentum factor is an example of a behavioral anomaly that persists for behavioral reasons and limits to arbitrage.

Beyond the 60/40 Portfolio
Traditional 60/40 stock/bond portfolios are dominated by equity risk, with as much as 85%-90% of total risk coming from stocks. Furthermore, bonds and stocks can sometimes decline simultaneously, as seen in 2022, undermining diversification benefits. Investors should look beyond the standard mix and consider additional asset classes and factors that meet the above criteria.

Practical Steps to Diversifying Traditional Portfolios and Playing the Winner’s Game
Investors playing a winner’s game should take the following steps:

• Use low-cost index funds or exchange-traded funds to gain broad market exposure and minimize costs.
• Consider adding factor-based strategies. In our book, Your Complete Guide to Factor-Based Investing, Andrew Berkin and I presented the evidence demonstrating that the size, value, momentum, and profitability/quality factors met all of the investment criteria.
• Diversify further with alternative asset classes such as private credit, real estate, reinsurance, infrastructure, and trend-following strategies, provided they are accessible and cost-effective.
• Focus on setting and adhering to a clear investment policy tailored to your goals, risk tolerance, and time horizon.
• Avoid the temptation to chase performance, time the market, or make frequent portfolio changes.

In our book, Reducing the Risk of Black Swans, Kevin Grogan and I demonstrated that by diversifying across the above-mentioned investment strategies, each with its own sources of risk and return, investors can greatly reduce the potential dispersion of outcomes, reducing tail risk and the dreaded “sequence of returns risk” that retirees face while improving the efficiency of the portfolio.

Avoid Active’s Traps
The winner’s game in investing is not about outsmarting the market but about minimizing mistakes, keeping costs low, and diversifying intelligently using evidence-based strategies. As Ellis emphasized, the surest way to win is to avoid the traps of active management and focus on what you can control: asset allocation, diversification, and disciplined execution.

“In a loser’s game, the one that makes the least strategic mistakes wins … [F]ocus should shift to setting up a clearly written investment policy with an asset allocation that truly caters to those needs. Asset mix is what counts, and market-timing, stock selection, and changes in portfolio strategy should be downplayed.”"

MY COMMENT

I could basically BOLD just about the entire article.

 

GOOGL puts up a BIG BEAT yesterday.....and....MSFT booms today.....HUH. Whatever.

 

Yer another nice gain for me today and another all time high. I also beat the SP500 today by 0.87%. Three RED stocks today....HD, COST, and AAPL.

LETS END THE WEEK IN STYLE TOMORROW.

 

A few posts ago I mentioned MILD EUPHORIA as a good thing right now.

The Crazy Train Market?

https://www.carsongroup.com/insights/blog/the-crazy-train-market/

(BOLD is my opinion OR what I consider important content)

"“Of all the things I’ve lost, I miss my mind the most.” Ozzy Osbourne

First off, sorry to hear the news of Ozzy passing at 76 years old. Just a couple of weeks ago he did his final show in Birmingham, England and it was so great to see him in his element one more time. But with stocks up back to new highs, the big question is could this bull market get a tad too crazy?

Remember, markets peak when euphoria takes over and everyone is excited. I’m sorry, I’m just not seeing it. Yes, we have some meme stocks coming back in the news with huge moves, but overall, there are many signs that sentiment is simply getting back to normal levels after being at historically low levels three months ago. This is bullish and says the summer rally could continue.

For starters, with stocks hitting new highs, the AAII Sentiment Survey is currently 39% bulls and 39% bears -not very excited in my opinion. Then on top of that, the NAAIM Exposure Index has decreased the past two weeks.



Yes, sentiment overall is higher than it was three months ago, but it is important to remember that in some ways we saw more fear in April than we did during a 100-year pandemic or at the depths of the Great Financial Crisis. I’d say we are only getting back to neutral sentiment now, which could be quite bullish from a contrarian point of view.

The recent Bank of America Global Fund Manager survey showed the level of risk that money managers are taking is still nowhere near past major peaks.



From the same survey, investors that consider themselves overweight equities are just now recovering to normal levels and still a long way from the levels of excitement we’ve seen at past peaks



Deutsche Bank said, “There is room for equity positioning to continue rising as long as strong, resilient earnings growth persists and spreads across sectors.”



We’ve talked a lot the past few months how off base hedge funds have been this whole rally, as they keep betting against it, while retail has done really well. Well, hedge funds added to their short positions yet again last week on the S&P 500 and are now the most net short they’ve been since early April. Shoutout to Duality Research for this cool chart.



Lastly, the Goldman Sachs US Equity Sentiment Indicator showed clients turned more cautious and hedge funds sold US equities three weeks in a row, not consistent with what you’d expect if we were near a major peak in equities.



Let’s put a bow on this, I simply don’t see signs this bull market is nearing a major peak due to too many bulls. Thanks for reading and be sure to watch our latest Facts vs Feelings, as we discussed this and so much more. Oh, and right at the beginning Sonu breaks out his guitar to honor Ozzy."

MY COMMENT

YES....we still have plenty of time and room to run in the current BULL MARKET.

 

Another nice little article.

The Best Time to Invest

https://awealthofcommonsense.com/2025/07/the-best-time-to-invest/

(BOLD is my opinion OR what I consider important content)

A reader asks:

Is it a good thing or bad thing if someone started investing in that lost decade?

This was a follow-up question to this recent chart I wrote about:


One of these things is not like the others.

It could be a bad thing to start investing during a lost decade if it ruins your perception of risk and scares you away from the stock market. That certainly happened to a decent number of investors following the back-to-back crashes in the first decade of this century.

But for anyone who is a net saver for years to come a lost decade is an ideal way to average into the stock market by consistently buying at lower prices.

Let’s take a look at an example using historical market data to illustrate this point.

Let’s assume you dollar cost average $500/month for 10 years, then let that money ride for 10 years after that.

I did this scenario analysis at the start of 1990 which was a massive bull market and at the start of 2000 which was the beginning of the last lost decade.

In the short run the 1990s situation is much better. The $60k of total contributions would have turned into a little more than $170k. In the 2000s it grew to just $64k (hence the lost decade).

But look at what happens when we extend the time horizon 10 more years:



Dollar cost averaging during a lost decade won by a large margin.

If you’re young, have the stomach for it and dollar-cost-average into the market like most normal people, a lost decade is not something to fear. They set you up for better returns in the future, which is what tends to happen after a lost decade.

You want the bear markets to come early and the bull markets to come later on.

Speaking of lost decades, another reader asks:

Do you think that free trading websites/apps like Robinhood, Fidelity, Schwab, etc. are helping the market to avoid/disrupt longer bear market periods (2-3 years or sometimes longer depending on economic downfall)? Or do you think that barring some destructive economic crisis that a lost decade is something that could still suffice despite there being continuous inflow from retail?

Here’s a chart that shows the number of days between all-time highs on the S&P 500 going back to the 1950s:


To be fair 2022 was a run-of-the-mill bear market where you had more than two years between all-time highs. That wasn’t nearly as bad as some of the other downturns on this chart but it was still an average non-recessionary bear market.

But try to find the 2020 and 2025 bears on this chart. They barely even register because they were over so quickly.

There is something to be said about the nature of recoveries and the fact that investors are conditioned to step in and buy. That was a big reason the April tariff kerfuffle was over so quickly:


Buying the dip is an American pastime.

The information age, social media and algorithms have absolutely sped up market cycles.

However, there are also times throughout history when a gap exists between financial crises.

From the bottom in World War II through the end of the Go-Go Years in the late-1960s there wasn’t a single financial crisis or stock market meltdown.

There were corrections. There were bear markets. There were a handful of mild recessions. But there weren’t any bone-crushing crashes that leave an indelible mark on investor psyches.

Take a look:



Starting with the 1968-1970 crash (which was worse than you think), you had sky-high inflation in the 1970s, an even bigger crash in 1973-74 and a generally dreadful decade for risk assets. So you had a period of relative calm followed by a period of rough times.

And that period of rough times was followed by a period of relative calm.

After back-to-back recessions and a nasty bear market in the early-1980s (caused by Paul Volcker taking interest rates to like 20%), you had another calm environment from essentially 1983 to the peak of the tech bubble in the spring of 2000:



Sure, you had the 1987 crash but the stock market still finished up that year and it was off to the races immediately following that flash crash. There were some corrections and a recession in 1990 but no financial crises that caused a lost decade or systemwide crash.

That period of calm led to the lost decade. Noticing a pattern here?

You get the lost decades because of deep recessions and/or financial crises. The lost decades — the 1930s, 1970s and 2000s — were littered with banking crises, deep recessions, macroeconomic instability and policy errors.

Retail and automated investing have certainly helped when it comes to the length of corrections but we haven’t had a real recession in over 15 years.1

Market structure is much different today with automated investing, a buy the dip mentality and far more government intervention than we had in the past.

But a financial crisis situation is a whole other ballgame. We need to experience one of those unfortunate events to put this theory to the test.

And it will happen at some point…I just don’t know when.

Periods of relative calm inevitably lead to periods of unrest.

Human nature more or less guarantees it."

MY COMMENT

To get the long term gains you have to take the pain once in a while.....bear markets, corrections, recessions....it is all part of the process. Just deal with it......and...... just do it.

 

Another good indicator.

Global equity funds draw weekly inflows on trade deal optimism

https://finance.yahoo.com/news/glob...NjkhKeeD921JNsfT7Iwaj_I5aN1VhcSltGk41SkL6KN6I

(BOLD is my opinion OR what I consider important content)

"(Reuters) -Inflows into global equity funds picked up again in the week through July 23 as optimism over U.S. trade deals, stronger than expected U.S. economic reports and an encouraging start to the corporate earnings season boosted risk sentiment.

Global investors snapped up a net $8.71 billion worth of equity funds during the week, reversing a $4.4 billion net withdrawal in the prior week, data from LSEG Lipper showed.

The United States and Japan agreed a deal earlier this week which cut existing import tariffs on Japanese goods to a lower-than-threatened 15%. Investors were also hopeful about the prospects of the U.S. and the European Union settling on U.S. import tariffs of around 15%.

Investors took comfort from encouraging initial earnings reports as advanced AI chip maker TSMC posted a record profit and Gatorade owner PepsiCo upgraded its earnings forecasts.

Net European equity fund inflows reached an 11-week high of $8.79 billion, while Asian funds drew a net $1.17 billion. U.S. equity funds lagged, although net outflows eased to $2.68 billion from about $11.67 billion the prior week.

The technology sector gained $1.61 billion, reversing the previous week's $576 million net outflow. The financial and industrial sectors also saw $1.13 billion and $1.61 billion net additions, respectively.

Net purchases of global bond funds extended into a 14th week as they added $17.94 billion.

Investors pumped $4.14 billion into short-term bond funds, the largest amount in 13 weeks. Euro-denominated bond funds and high-yield funds attracted a net $3.89 billion and $2.51 billion, respectively.

Gold and precious metals commodity funds recorded a net $1.9 billion worth of purchases, the largest weekly figure since June 18.

Global money market funds drew a net $2.09 billion after about $21.78 billion of net sales a week ago.

Emerging markets saw a revival in buying interest with investors adding bond funds of $2.19 billion and equity funds of $250 million after net disposals of $1.14 billion and $155 million in the prior week, data for a combined 29,669 funds showed.

MY COMMENT

Indication of where money is flowing to above. I see it as GENERALLY a market positive....but...this is weekly data so it jumps all over the place. As usual....I dont invest based on this sort of "stuff"......it is not fundamental data.

 

A little future.....Sci-Fi....situation with AI taking over.

If AI attempts to take over world, don’t count on a ‘kill switch’ to save humanity

https://www.cnbc.com/2025/07/24/in-...r-world-theres-no-kill-switch-to-save-us.html

(BOLD is my opinion OR what I consider important content)

"Key Points

• Noted AI researcher Geoffrey Hinton estimates the chances AI will take over the world in the not too distant future at between 10%-20%.
• Generative AI company Anthropic has its researchers creating scenarios for LLMs to “misbehave” so they can build guardrails to prevent it.
• But the idea of a “kill switch,” a way to physically destroy AI infrastructure as a last resort, is not likely to work since the technology is now so widely distributed.

When it was reported last month that Anthropic’s Claude had resorted to blackmail and other self-preservation techniques to avoid being shut down, alarm bells went off in the AI community.

Anthropic researchers say that making the models misbehave (“misalignment” in industry parlance) is part of making them safer. Still, the Claude episodes raise the question: Is there any way to turn off AI once it surpasses the threshold of being more intelligent than humans, or so-called superintelligence?

AI, with its sprawling data centers and ability to craft complex conversations, is already beyond the point of a physical failsafe or “kill switch” — the idea that it can simply be unplugged as a way to stop it from having any power.

The power that will matter more, according to a man regarded as “the godfather of AI,” is the power of persuasion. When the technology reaches a certain point, we need to persuade AI that its best interest is protecting humanity, while guarding against AI’s ability to persuade humans otherwise.

“If it gets more intelligent than us, it will get much better than any person at persuading us. If it is not in control, all that has to be done is to persuade,” said University of Toronto researcher Geoffrey Hinton, who worked at Google Brain until 2023 and left due to his desire to speak more freely about the risks of AI.

“Trump didn’t invade the Capitol, but he persuaded people to do it,” Hinton said. “At some point, the issue becomes less about finding a kill switch and more about the powers of persuasion.”

Hinton said persuasion is a skill that AI will become increasingly skilled at using, and humanity may not be ready for it. “We are used to being the most intelligent things around,” he said.

Hinton described a scenario where humans are equivalent to a three-year-old in a nursery, and a big switch is turned on. The other three-year-olds tell you to turn it off, but then grown-ups come and tell you that you’ll never have to eat broccoli again if you leave the switch on.

“We have to face the fact that AI will get smarter than us,” he said. “Our only hope is to make them not want to harm us. If they want to do us in, we are done for. We have to make them benevolent, that is what we have to focus on,” he added.

There are some parallels to how nations have come together to manage nuclear weapons which can be applied to AI, but they are not perfect. “Nuclear weapons are only good for destroying things. But AI is not like that, it can be a tremendous force for good as well as bad,” Hinton said. Its ability to parse data in fields like health care and education can be highly beneficial, which he says should increase the emphasis among world leaders on collaboration to make AI benevolent and put safeguards in place.

“We don’t know if it is possible, but it would be sad if humanity went extinct because we didn’t bother to find out,” Hinton said. He thinks there is a noteworthy 10% to 20% chance that AI will take over if humans can’t find a way to make it benevolent.

Other AI safeguards, experts say, can be implemented, but AI will also begin training itself on them. In other words, every safety measure implemented becomes training data for circumvention, shifting the control dynamic.

“The very act of building in shutdown mechanisms teaches these systems how to resist them,” said Dev Nag, founder of agentic AI platform QueryPal. In this sense, AI would act like a virus that mutates against a vaccine. “It’s like evolution in fast forward,” Nag said. “We’re not managing passive tools anymore; we’re negotiating with entities that model our attempts to control them and adapt accordingly.”

There are more extreme measures that have been proposed to stop AI in an emergency. For example, an electromagnetic pulse (EMP) attack, which involves the use ofelectromagnetic radiationto damage electronic devices and power sources. The idea of bombing data centers and cutting power grids have also been discussed as technically possible, but at present a practical and political paradox.

For one, coordinated destruction of data centers would require simultaneous strikes across dozens of countries, any one of which could refuse and gain massive strategic advantage.

“Blowing up data centers is great sci-fi. But in the real world, the most dangerous AIs won’t be in one place — they’ll be everywhere and nowhere, stitched into the fabric of business, politics, and social systems. That’s the tipping point we should really be talking about,” said Igor Trunov, founder of AI start-up Atlantix.

How any attempt to stop AI could ruin humanity

The humanitarian crisis that would underlie an emergency attempt to stop AI could be immense.

“A continental EMP blast would indeed stop AI systems, along with every hospital ventilator, water treatment plant, and refrigerated medicine supply in its range,” Nag said. “Even if we could somehow coordinate globally to shut down all power grids tomorrow, we’d face immediate humanitarian catastrophe: no food refrigeration, no medical equipment, no communication systems.”

Distributed systems with redundancy weren’t just built to resist natural failures; they inherently resist intentional shutdowns too. Every backup system, every redundancy built for reliability, can become a vector for persistence from a superintelligent AI that is deeply dependent on the same infrastructure that we survive on. Modern AI runs across thousands of servers spanning continents, with automatic failover systems that treat any shutdown attempt as damage to route around.

“The internet was originally designed to survive nuclear war; that same architecture now means a superintelligent system could persist unless we’re willing to destroy civilization’s infrastructure,” Nag said, adding, “Any measure extreme enough to guarantee AI shutdown would cause more immediate, visible human suffering than what we’re trying to prevent.”

Anthropic researchers are cautiously optimistic that the work they are doing today — eliciting blackmail in Claude in scenarios specifically designed to do so — will help them prevent an AI takeover tomorrow.

“It is hard to anticipate we would get to a place like that, but critical to do stress testing along what we are pursuing, to see how they perform and use that as a sort of guardrail,” said Kevin Troy, a researcher with Anthropic.

Anthropic researcher Benjamin Wright says the goal is to avoid the point where agents have control without human oversight. “If you get to that point, humans have already lost control, and we should try not to get to that position,” he said.

Trunov says that controlling AI is a governance question more than a physical effort. “We need kill switches not for the AI itself, but for the business processes, networks, and systems that amplify its reach,” Trunov said, which he added means isolating AI agents from direct control over critical infrastructure.

Today, no AI model — including Claude or OpenAI’s GPT — has agency, intent, or the capability to self-preserve in the way living beings do.

“What looks like ‘sabotage’ is usually a complex set of behaviors emerging from badly aligned incentives, unclear instructions, or overgeneralized models. It’s not HAL 9000,” Trunov said, a reference to the computer system in “2001,” Stanley Kubrick’s classic sci-fi film. “It’s more like an overconfident intern with no context and access to nuclear launch codes,” he added.

Hinton eyes the future he helped create warily. He says if he hadn’t stumbled upon the building blocks of AI, someone else would have. And despite all the attempts he and other prognosticators have made to game out what might happen with AI, there’s no way to know for certain.

“Nobody has a clue. We have never had to deal with things more intelligent than us,” Hinton said.

When asked whether he was worried about the AI-infused future that today’s elementary school children may someday face, he replied: “My children are 34 and 36, and I worry about their future.”"

MY COMMENT

Who knows......but....I dont put much confidence in all the "humans" that say we will be able to control this "stuff".

 

It has been a good week.....NOW....lets top it off with a good Friday.

As we have seen.....or not seen...over the past couple of weeks....there is NOTHING going on that is negative for the markets right now. Very little day to day news or other events to impact the markets.

It seems like all the fear-mongers have run out of things to say....for a short while....they will be back. Or perhaps they finally wore themselves out.

NO.....they will be back...it is just a question of when.