What I’m about to tell you might sound hypocritical. It might even make some of you a little angry. But it’s a warning that you need to hear…

Artificial Intelligence, or “AI,” is overhyped. And it will lose investors a lot of money.

What’s so hypocritical about this statement, you might ask? Well, one of my premium newsletters Maximum Profit, is built around the idea of momentum investing. And right now, there’s an incredible amount of momentum behind AI.

Yet, here I am telling you that AI will lose investors money.

And here’s the irony… over at Maximum Profit, we will likely invest in AI stocks and probably make some nice returns. Assuming you follow the rules (more on this in a moment).

So before we go any further, let me explain myself…

A Revolution That’s Been Underway For A While…

Now, I do think that AI is an incredible technology. It will revolutionize many industries. But the problem is that when an exciting new industry meets a flood of capital from investors — who are willing to pay almost any price just to get in the game — it rarely ends well.

Even worse, most of Wall Street feeds right into this hype. Just look at the smattering of conference calls from the latest quarter as a prime example. The mention of AI in corporate earnings calls was laughable.

Take Wall Street’s AI golden boy, Nvidia (NVDA), as an example. In its latest call, management mentioned AI 90 times. Three years ago, it was mentioned just 20 times. On Amazon’s latest earnings call, AI was mentioned at least 16 times… compared to maybe once just two years ago.

Analysts even asked companies like Wal-Mart (WMT) how they might benefit from AI. Yes, Wal-Mart.

But it was the answer by a Dell executive that was the most telling for the overhype in AI. When prodded by an analyst on AI, Dell’s COO dryly replied, “We’ve had AI in our PCs for years. We’ve been putting AI in our products across our server portfolio, storage portfolio and PC portfolio for many years.”

In short, the Dell exec said that this AI euphoria is really nothing new. And Dell oughta know, as the company has been around the block a time or two…

Of course, investors don’t care. They will continue to pile into the AI hype as they don’t want to miss out on the next great thing.

And you know what, that’s okay if you do jump into some hot AI stocks… so long as you follow the rules.

The Biggest Rule Most Investors Neglect

Stop me if you’ve heard this before, but if you’re going to play around with hot stocks like this, then you need to be setting stops. And don’t ignore them. I’ve harped on how selling is more important than buying plenty of times in the past. But it’s worth telling you again because it might just save you thousands of dollars as this AI wave peaks and then inevitably collapses.

The topic of selling isn’t nearly as “sexy” as buying that next hot stock, so it doesn’t get near the attention it deserves.

But consider this: sell rules can be the key difference between a winning system and a losing one. Not entry price, stock pick, or position size, but when you sell — that’s the key to whether you win or lose in the market.

At some point, we will undoubtedly take part in the massive momentum behind AI. It’s exciting. I have no idea how long the euphoria will last. But I do know that manias can go on longer (and end more quickly) than almost anyone believes possible. We just have to remember to follow our rules and not hesitate to sell when it’s time.

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