Comment by rsynnott
5 months ago
> Yet, no one can actually tell us when, at what prices will it pop, and how long will it take the market to recover
... I mean, yeah, if you could reliably predict _those_, you wouldn't be _telling_ anyone, you'd be busy making billions on options.
"This will break, but we don't know exactly when" is not an unreasonable warning.
> but everyone knows it will go way higher than in the future than in 2025
Does everyone know that?
> People writing these articles think the AI bubble will burst stay down forever. They keep citing dotcom but conveniently leave out the fact that tech is far bigger now than in the peak of dotcom.
I mean, while that is true, it took a very long time (adjusted for inflation, the NASDAQ didn't recover until 2018), and most of the individual companies who were big then are now either gone or obscure (Sun's gone, Yahoo's basically gone, Cisco never recovered, Oracle arguably just about recovered, Amazon did very well). If you'd bought into the NASDAQ the day after dot-com went pop, well, you wouldn't have come out _great_; you'd have been far better off with the S&P500 or another broader index. If you'd bought into any of the dot-com darlings except for Amazon, you'd have been screwed.
And to be clear, not all bubbles recover. Railways never did, say.
Yet, these authors are so confident that there is a bubble and it will burst.
Yes. Everyone. People using dotcom to compare AI bubble. They know how much Nasdaq is worth right now right?
To be clear I mean predicting the timing to any accuracy. That’s notoriously difficult (I’d argue pretty much impossible). A modern economist dropped in 1715 or so would be able to say with certainty that the South Sea Company and associated companies was a bubble, but they would not really be able to predict when it would pop accurately.
RE the Nasdaq, yeah, it recovered in real terms after 18 years. That would be cold comfort to most.
If they can't predict when, then what's the point? What if it happens 5 years from now? You'll miss out on massive gains.