Smith: China will determine what happens next with AI and quantum computing

Market Concerns & Risks - Concerns arise about a potential return to market doldrums reminiscent of March and April, fueled by fears of an AI and tech bubble, with China as a potential black swan event [3] - The market sell-off on Friday raised concerns that the market was priced to perfection, overlooking existing issues like US-China trade tensions [2] - Escalation in US-China tensions could impede the AI revolution, given the reliance of AI on chips and minerals sourced from China [13] - A failure to manage US-China relations could lead to a revisit of market lows seen in March, impacting AI and quantum stocks [14] Investment Strategies & Opportunities - Recommends dollar-cost averaging into Chinese companies for those lacking exposure, citing growth potential and strong demand [5] - Suggests gold as a hedge against international and domestic risks, including deficits and potential government shutdowns, noting its 50% appreciation over the past year [7][8] - Highlights quantum computing stocks as potential growth opportunities, despite broader market concerns [10][11] - Suggests diversifying into rare earth companies operating outside of China, given US-China tensions and government investment in the sector [16] - Identifies Europe as a potential safe haven amid US-China trade tensions, noting historical underweighting by US investors [24][26] Global Market Dynamics - China's actions are signaling its continued presence and influence in the market [2] - The Tel Aviv Stock Exchange has outperformed during wartime, with expectations for continued outperformance [19] - Europe experienced a positive market pickup and could be viewed as a safe haven amid US-China tensions [24]