Three articles caught my attention in the last few days;
Vanguard sells $2.5bn of new ETF on TikTok and Instagram
Launched on 18 August, Vanguard’s latest global index ETF, with the trading ticker VALL, has already sucked in $2.5bn. Its success is down to it going viral on social media – so called ‘Finfluencers’ have coined the mantra “VALL and chill” to promote this ultra-low-cost passive fund with annual costs of 0.07%.
It would appear regulators around the world have lost control of retail investment advice. Germany’s regulator BaFin have flagged a major trend of young retail investors relying entirely on social media for financial tips. Independent audits reveal that over 70% of these creators lack any formal financial qualifications, and up to 80% of videos omit core risk disclaimers while heavily emphasising luxury lifestyles.
It used to be London taxi drivers giving stock tips that marked the top of the market. The world has changed, but the dumbing down of investing and the herd mentality appears to have just found a new channel.
VALL is the fastest growing European ETF of all time, surpassed globally only by Blackrock’s Bitcoin ETF, which raised $49bn in 49 days.
Anthropic IPO warns of existential risk in IPO prospectus
Anthropic’s planned IPO prospectus was leaked last week and Reuters picked out the juiciest headlines. The prospectus reported an operational loss last year of $8bn and an accounting loss of $42bn. The much bigger accounting loss comes from the dilution of existing shareholders by crystallising stock awards to early financiers.
There is an expected price tag of $2trn, bigger than SpaceX, and twice what the company was valued at in May this year. Plus, an eye boggling plan to spend $500bn on infrastructure. But, most bizarrely, according to Reuters the risk warnings in the document state that AI could pose “catastrophic or existential risks to humanity”. This is the first company in history we are being invited to invest in whose directors and lawyers believe there is a risk its product could wipe us all out!
There has been much discussion and some whistle blowing around these risks. Are they real, are the US tech bros looking for a regulatory moat to cut out lower cost (Chinese) competition, or are they all just trying to buy some time before the acid test on return on investment? Only time will tell.
Finally, and perhaps most frivolously:
Zombie companies tendering to buy Tesla Cybercab fleets
This is a story on electric car website Electrek. No idea how reputable it is, but it made my jaw drop and highlights the rush to new unproven technologies as the latest way to inflate your stock.
The article reports that in an attempt to relaunch its share price, failed Nasdaq-listed KIDZ AI (down 99.97% over the last 12 months) has reportedly expressed an interest to buy $15m worth of Tesla autonomous taxis after the Cybercab launch in August.
We are familiar with shell companies such as these turning themselves into Bitcoin hoarders, Strategy Inc being the biggest and most well-known. But, turning themselves into autonomous taxi fleet operators… that’s just crazy. As the article author says:
“Musk has spent seven years telling people that Teslas will make money on their own, and he’s now asking fleet buyers to take on the capital risk of Cybercabs that Tesla doesn’t want to carry itself. When the buyer lining up first is a $2 million kids’ coding school that was a Solana treasury (SIC: crypto hoarder) a year ago, that tells you a lot about who this pitch attracts.
If Tesla’s Robotaxi were truly profitable, Tesla would deploy them itself. It wouldn’t sell them to third-party to take the profits. Only zombie companies like Kidz AI can’t see that or ignore it for a stock pump.”
Collating these pieces last night, I asked Gemini for examples it could see of equity market valuations losing touch with reality. The first response was stuff we knew:
- The Buffet Indicator
This is Warren Buffet’s measure which looks at the market cap of US companies versus US GDP. It reached 163% in 2000 before the dot com crash and is at 233% today.
- The Case Schiller PE ratio
This index, which looks at business values in the US relative to past profits, is sitting at ratio of 40 X. Near record levels and usually associated with poor subsequent returns.
- Price to Sales
According to research by investment manager GMO, a record percentage of the overall stock market currently trades at valuations exceeding 10 times trailing sales.
There are plenty of quite elegant arguments for each of these three indicators why ‘this time it’s different’.
So, I prompted again to get Gemini to look for anything else and two more interesting points were returned.
- The disconnect between the AI build-out and the rest of the economy
According to Pillsbury Law, bankruptcies in the US are up 12% so far in 2026 and are at a 13-year high.
A piece by PWC in February highlighted a chasm between mega-cap tech firms using vast cash reserves and capital market finance to weather high interest rates and feed off the AI build, versus small- and mid-size businesses facing severe credit pressure, weaker consumer spending, weaker commercial and residential real estate markets, and declines in construction and hospitality.
And the one that really made me think:
- Near-Record Insider Exit Spree
According to Gemini, insiders at NVIDIA, Amazon, Meta Platforms, and Palantir, individuals with the most intimate knowledge of these tech and AI corporations, are liquidating their holdings at an unprecedented rate. According to Bloomberg, corporate insiders and executives have sold $77.6 billion worth of equity in the first half of 2026.
Gemini’s example was the controversial software business Palantir Technologies and its equally controversial co-founder Peter Thiel. According to SEC filings, Peter raised approximately $1.5bn from Palantir stock sales in 2025 and as recently as March this year executed a further $280 million stock sale – the largest single insider sale in the enterprise’s history. He has reduced his stock holding from around 10% to around 3%, selling off 70% of his holding.
What does Peter know that retail investors piling into index ETFs don’t?
It’s not as though Peter needs the money, as according to Forbes he is worth c.$36bn. According to Yahoo Finance Palantir is currently valued at an eyewatering 80X sales revenues and 160X profits, suggesting its profit margin is somewhere around 50%!
It is worth noting that legend has it, Warren Buffet never sold a single Berkshire Hathaway share, remaining committed to the company for life.
Tideway’s Investment Committee
We sat yesterday amidst all of this to look at our portfolios and performance. Portfolios have been crabbing sideways and then down a bit in recent days.
The rise in Government debt yields has been one headwind:
Both sourced: Market Watch 2nd October 2026
This has dampened the return on our fixed income holdings but increased the forward return expectation. It’s worth noting that the jump in yields in the UK has been less than in the US. The gap between our debt financing of £3trn has narrowed to the US’s costs on their $40trn of debt.
This jump in US rates has also seen the US Dollar strengthen against the Pound – this too has been a head wind for us on a relative basis versus those whose equities are following world indices, as we have less US exposure.
Given the previous section, I hope you can understand why we won’t be piling more money into US indices. The increase in longer term yields is making us consider adding a bit more duration into our bond portfolios, which will lock in these higher returns and would do well in an equity market sell off.
To further reassure you on all the crazy stuff, our exposure to the extreme high valuations in the US market is small. We have no exposure to Palantir or Tesla, and the average price of our equity portfolio is around 1.1 times historic sales. This should lessen the risk of permanent losses in any big market sell off.
Tideway’s Treasury Service
Some of you have already been using this service to buy low coupon UK Gilts as an alternative to cash deposit accounts. Outside of our tax-exempt wrappers (ISAs, SIPPs and offshore bonds) in our taxed general investment accounts (GIA) we are getting confident to recommend these now for longer term investments. This could be for liability matching when you know you have to pay cash in the future – perhaps for a tax bill, mortgage repayment, or education costs.
The longer-dated gilts are now offering just under 5% after tax and fees. If Capital Gains Tax (CGT) went to 45% this would be the equivalent of earning c.9% in an equity index fund on which you will pay CGT on disposal. If you already have good exposure to equity markets and are looking to invest in a GIA, longer-dated low coupon Gilts are looking like a sensible, diversifying investment.
To find out more and see the rates on offer this week download our newly published guide.