Panic in the stock market rarely comes from crazy ideas. It usually comes from taking a perfectly logical premise, drawing a straight line into the future, and entirely forgetting that human beings are involved. Over the weekend, a bearish report by Citrini Research went viral, sending shares of IBM, DoorDash, and Visa plummeting. The thesis was terrifyingly simple: Artificial Intelligence is going to collapse the cost of software to zero. AI agents, powered by what is now being called “vibe coding,” will ruthlessly hunt for the lowest fees, bypassing middlemen instantaneously. In this telling, the entire rent-extraction layer of the U.S. economy goes to zero overnight. It’s a compelling story. Fear always is. To figure out how to navigate this as investors and entrepreneurs, we have to pull apart exactly what this doomer narrative got right, and the massive, glaring blind spot it missed. Market Update📈📉 The tape is currently trying to find its identity—it is a trend market, but we are lacking momentum. Here are the key themes we are tracking: * The Software vs. Hardware Divergence: We have been talking about the AI bifurcation, and the technicals are confirming it. Software stocks have been showing weakness on the charts since last summer, while semiconductor names have largely consolidated and held up well. The market narrative is finally catching up to the price action. We get earnings from both Nvidia and Salesforce on Wednesday, which will be a major tell for this divergence. * 4% of GitHub public commits are being authored by Claude Code right now. At the current trajectory, we believe that Claude Code will be 20%+ of all daily commits by the end of 2026. While you blinked, AI consumed all of software development. * Private Credit Warning Signs: While public credit spreads look fine, the charts for publicly traded private equity firms are looking weak. Because equity is the thinnest slice of the capital structure, they are highly sensitive to underlying balance sheet health. Private equity and private credit are key vulnerabilities to monitor closely. * The Consumer Disconnect: Real GDP looks okay, but if you look under the hood, real incomes (net of transfer payments) are basically flat. Current growth is being driven by consumers drawing down their savings. That is not sustainable long-term without the labor market stepping up to drive incomes higher. * Housing & Rates: Mortgage rates have fallen back to 2022 lows, but housing demand isn’t surging the way you would expect. In fact, if rates keep dropping, it might actually unlock existing resale inventory, creating much stiffer competition for the homebuilders who have been the only game in town. The Giant Pachinko Machine The reason the market spooked is because the foundation of the fear is entirely real. Software creation has fundamentally changed. As Naval Ravikant recently pointed out, we have moved past classical computing. You no longer have to meticulously write highly structured, precise code. AI programming is more like a giant pachinko machine: you pour massive datasets into a structure you’ve tuned, and the system searches for a program that works. This means English is now the hottest programming language in the world. As Naval put it: “Vibe coding is the new product management.” You simply describe an application to an egoless, tireless AI, give it feedback by voice, and it builds the scaffolding, the libraries, and the test harnesses. If your business model is acting as a simple digital tollbooth, you are in trouble. We are entering a Glengarry Glen Ross economy for digital goods. Because anyone can spin up an app, the market will hollow out the middle. The number one app will take all the scale, and a million hyper-niche apps will fill the long tail. But that is where the truth ends, and the static thinking begins. The DoorDash Delusion The greatest flaw in financial forecasting is treating the economy like a physics equation, assuming every variable stays the same while you introduce a massive new technology. This is where the doomer report falls apart, a point brilliantly deconstructed by analyst Ben Thompson. The narrative looks at a company like DoorDash and assumes it is just a digital button that preys on hungry, lazy humans. If you view it that way, of course an AI agent will destroy it by searching twenty alternative apps for a cheaper fee. Habitual app loyalty doesn’t exist for a machine. But this view ignores the dynamic, messy reality of what these businesses actually do. DoorDash isn’t just an app on a home screen. It is a massive, three-sided logistical network that coordinates physical human beings, driving physical cars, to pick up physical food from physical restaurants. The lethal flaw in the doomer mindset is a total lack of belief in human choice, dynamism, and markets. It assumes businesses will just sit still while AI eats their margins. It forgets that incumbent platforms have exclusive data, pre-existing physical infrastructure, and network effects that grant them structural cost advantages. You cannot vibe-code a physical logistics network into existence over a weekend. The Mud and the Metal When you spend your days analyzing durable capital—or managing the gritty reality of deploying mobile boilers and Haglunds out into the frozen fields of Alberta—you quickly realize that a line of code is only as valuable as the real-world action it triggers. You cannot prompt-engineer a barrel of oil out of the ground. The physical world has constraints. It has friction, weather, and capital cycles. The more abundant and frictionless the digital world becomes, the more valuable the scarce, constrained physical world becomes. The Motorcycle for the Mind If you view AI as a competitor for a static job, you will be terrified. But that is the wrong mental model. Steve Jobs famously called the computer a “bicycle for the mind”—a tool that makes human locomotion vastly more efficient. Naval Ravikant recently updated this for the modern era: AI is a “motorcycle for the mind.” It has an engine. It is breathtakingly powerful. But it still requires a human to ride it, steer it, hit the accelerator, and apply the brakes. AI is not alive. It has no desires. It does not live in mortal fear of being turned off. Because it lacks its own internal compass, it fundamentally lacks what makes an entrepreneur an entrepreneur: extreme agency. Because most things we want in business and investing are zero-sum games, freely available AI algorithms will eventually cancel each other out. If every seller has an AI optimizing their pitch, every buyer will have an AI filtering it out. When the algorithms cancel each other out, the remaining alpha goes entirely to the human with the most creativity, judgment, and agency. Action Cures Anxiety: The Playbook So, what do we do when markets panic and headlines turn dark? * Anchor to the Physical and the Personal: The digital layer is getting commoditized. The premium is shifting to physical constraints and deep human trust. At Thiessen Shackleton Wealth Management, the conversations that actually matter aren’t about the algorithmic efficiency of a portfolio. They are about fear, greed, legacy, and trust. AI can optimize a spreadsheet in milliseconds, but it cannot look a client in the eye and give them the confidence to stay the course during a market correction. You cannot vibe-code trust. * Become the Rider: The AI era is a golden age for those with agency. You now have a magic wand. If you want to build a tool, test a thesis, or understand a complex market structure, you have the ultimate, patient tutor that can meet you exactly at the edge of your knowledge. * Look Under the Hood: AI anxiety comes from a lack of understanding. The solution to anxiety is always action. You don’t need to know how to build a neural network, but you should fire up the best models, ask them questions, and figure out where they excel and where they hallucinate. The future will be weird. The middle will get hollowed out. But the world is not static. It will be built by humans with extreme agency, solving physical problems, and adapting exactly as we always have. Stay the course, We’re not AI doomers. “Pessimists sound smart. Optimists make money.” Dispersion is not noise. It’s the opportunity. Podcast & YouTube Recommendations🎙 * Ezra Klein with a really great interview * Secretary Marco Rubio spoke at the Munich Security Conference about the future of the U.S.–Europe alliance. * A unique mental framework to think about Ai from the Naval Podcast Best Links of The Week🔮 * 2028: Intelligence Crisis - Citrini Research * How Does OpenAi Compete? - Bennedict Evans * Xbox Replaces Head of Gaming - WSJ * The Long-term Reality of Hyperscalers: The Good, The Bad, and The Ugly Scenarios - MBI Deep Dives * While AI is tech, not all tech is AI, and tech-heavy indices fall short of capturing the full spectrum of AI beneficiaries. - UBS * Tim Opler’s latest biopharma market update covers industry sentiment, M&A activity, capital markets & more. - Stifel This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit reformedmillennials.substack.com
