Bond Panic. Software Pileup. Borrowed AI Earnings. Are You Pricing the Wrong Risk?

Rising bond yields reflect fundamental shifts in nominal growth, federal deficits, and global fiscal stimulus rather than mere market instability. Private equity firms, functioning as three-year lagged momentum investors, have heavily concentrated capital in software assets at inflated valuations, mirroring historical cycles of over-allocation. Simultaneously, the massive AI infrastructure build-out creates an earnings bubble; immediate revenue recognition for hardware suppliers masks long-term amortization costs, creating a disconnect that may trigger price corrections before earnings growth falters. Distinguishing between good, great, and "GOAT" investors requires evaluating long-term performance consistency and the ability to innovate by applying underutilized skill sets. These dynamics underscore the necessity of skepticism toward "sure bets" and the importance of understanding the underlying accounting and philosophical motivations driving current market behavior.