The Intelligence from The Economist Stock options: how to hedge an AI bubble
19 snips
Feb 13, 2026 
Jon Fasman, senior culture correspondent, recalls literary agent Georges Borchardt’s life and knack for spotting giants. Piotr Zalewski, Turkey correspondent, maps Erdogan’s longevity and likely successors. Josh Roberts, capital markets correspondent, breaks down AI-driven market risks and practical hedges investors consider.
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AI Spending May Be Inflating A Tech Bubble
- Stock prices for AI-heavy tech firms may be bid up like past tech bubbles, disconnecting from current profits.
- Historical booms show investors often pick the wrong winners and suffer large losses despite the technology ultimately transforming industries.
Don't Sell During Hype-Driven Wobbles
- Avoid panic-selling stocks because timing exits during booms often leads to missing strong overall gains.
- Invest slowly and hold for the long term to ride out bubbles and crashes.
Hedge With Bonds — But Mind Inflation Risk
- Use bonds historically as a classic hedge because they tended to rise when stocks fell and cushion losses.
- But recognise bonds can fail as hedges when inflation fears hit both asset classes simultaneously.
