Group 1 - The recent AI hype has led to significant increases in the stock market, with the S&P 500 index reaching 19 historical closing highs this year, but doubts about the sustainability of this trend are rising [1] - GMO's John Pease expresses concerns that the excitement around AI has inflated overall market valuations to levels that may not provide attractive future returns, with U.S. stock valuations currently at the 90th percentile compared to historical levels [1][2] - Pease and his colleague Ben Inker highlight the "Gorgeous Six" stocks, which have an average P/E ratio of 30, indicating high future expectations and increased risk of earnings falling short, especially as these companies shift investments towards AI infrastructure [2] Group 2 - Given the potential for disappointing future returns from the S&P 500, Pease suggests looking towards international stocks, which may be on the verge of a recovery similar to Japan's, and are currently priced 33% to 55% lower than U.S. stocks [3][4] - Deep value stocks, both domestic and international, are also highlighted as attractive investments, being undervalued compared to the peak of the internet bubble and 2021, with expectations for better performance even without changes in valuation [4]

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