Despite the skyrocketing valuations of the Magnificent Seven and anxiety over massive AI capital expenditures, one top economist argues that the U.S. stock market is missing the most critical ingredient of a financial mania: the exit of the “smart money.”
Owen Lamont, a portfolio manager at Acadian Asset Management and a former University of Chicago finance professor, said that while the market looks and feels frothy, we are not currently in an AI bubble. As he talked to Fortune from his office in Boston, the S&P 500 breached 7,000 for the first time, but he wasn’t dissuaded. To Lamont, the telltale sign of a bubble is equity issuance, when corporate executives, the ultimate insiders, rush to sell overvalued stock to the public.
“Part of the reason I think there’s not a bubble is I don’t see the smart money as acting like there’s a bubble,” he told Fortune. “Maybe I should say there’s not a bubble yet.”
In his view, the smoking gun for a bubble forming would be companies going public and selling equity. That would be a play for the dumb money, he added.
Lamont—who has also taught at Harvard, Yale, and Princeton, and blogs for Acadian under the moniker Owenomics—dialed back to some of the financial history classics to make his point.
