A former Bridgewater executive warns the market has a fundamental misunderstanding of the AI trade — and says stocks could tumble 20% in the next 3-6 months

• Investors are exuberant in anticipation of a Donald Trump presidency.
• However, Bob Elliott, founder of Unlimited Funds, sees plenty of reason for caution.
• Investors are misinterpreting the AI trade and other economic data, Elliott says.

There’s been a growing chorus of market experts warning that stocks are priced for perfection as investors cheer on AI developments and the prospect of a more business-friendly environment under the incoming Trump administration. Some have gone so far as to say that a pullback could be in the cards in the next few months.