A tokenized stock is a digital token, recorded on a blockchain ledger, that represents a share of a company. They already exist to some degree, mainly overseas. The allure is 24/7 trading directly between investors on a blockchain, rather than through a market maker on a regulated stock exchange. In other words, it’s something representing actual ownership in a company that trades like crypto all the time. As they should, companies are opting out. They run actual businesses and want their shares owned by real investors who want a claim on the company's success over time, not by unknown actors trading the price seven days a week. Tokenizing does nothing productive for the company, adds a veil of ownership for shady characters to use, and opens a host of other risks. I could go on, but suffice it to say I am with McDonald's (and the twenty other major companies like Goldman Sachs and Microsoft) in opting out.

I appreciate the thoughtfulness in the question's setup. Could there be overinvestment in building data centers to serve future data and compute needs for AI that don't materialize as much as hoped? Yes, indeed. Would it be akin to what we saw in China, where government-sponsored real estate development and infrastructure accounted for a third of the total economy? No, there are broad differences. The latter was born from government spending rather than actual demand. At one point, 70% of household net worth was tied to it. Without demand, bridges and apartment buildings sat empty. It was also funded largely by an expansive state-sponsored debt load that couldn't be reallocated to the rest of the economy. By comparison, while the data center buildout is the largest infrastructure project the US has ever seen, it accounts for roughly 3% of total economic activity. The economy and household net worth picture are also both larger and more diversified by comparison. The project has been funded largely by cash flows from the Hyperscalers in the private market.

It is true, though, that capex is far outrunning those cash flows, and it's now being debt-financed at a growing rate. If the AI and data center experiment completely disappoints, it would be an expensive misallocation of capital and yes, likely a systemic economic downturn in the short run. The difference is the ability of the private market to reallocate within an otherwise structurally sound economic framework. Booms and busts can be painful, but creative destruction cleanses. The overall analogy does have some similarities but differs structurally and by degree.

I understand how it may seem that way, but energy is one of the most globally traded commodities on planet Earth. Yes, the US technically produces more oil than it consumes, but of light sweet crude, not the heavy sour crude most of our refineries were built on. We still import the latter. Oil majors compete against one another globally, and the commodity price of one of the most important resources on Earth is tenuously traded based on supply and demand. Uniformity in price gouging across borders would be virtually impossible.

It’s a very fair question, and one many people would answer incorrectly. First of all, we have to remember that for every share of stock sold there was a share of stock bought, so the question can also be “who were the buyers?” whenever there is a “sell-off.” What makes a rally and what makes a sell-off is not that there were investors (of any category) selling OR buying, but by definition, investors doing BOTH. The issue is one of price: when sellers outnumber buyers, prices have to drop to meet the market-clearing price (in other words, buyers will materialize, but at a lower price). Each and every day in the market there are traders doing what they do, there are speculators doing what they do, there are index funds buying to meet their buy demand and selling to meet their sell demand; and yes, there are long-term players being active around selective opportunities (this includes wealth advisory firms like ours, pension funds, and more).

There is, always and forever, a wide array of categories that “make a market.” And they all have different objectives, different timelines, different points of view, different fears, different liquidity needs, and so forth and so on. And on any given day, whether it be a sell-off day or not, market action reflects the aggregate, complex, multi-faceted, multi-causal sum of parts of all these categories of investors acting. This is, always and forever, what markets are … humans acting.