Comment by cheema33
2 days ago
> Why is anything going to be catastrophic?
Many believe, including myself, that the market is currently propped by a massive AI bubble. Nearly a US $1 trillion is being spent this year, and more is planned for next year. All of this is for a "build up". There is no pay out. The major AI companies are taking in massive losses in the hopes that they will eventually be able to cash out.
The math is not looking good to me. The effect will be like the dotcom bubble. But much much bigger. Because the numbers are so much bigger.
Well, the dotcom bust wasn't all that bad for the wider economy. No financial crisis. A shallow recession (and even that could have been avoided.)
Btw, the dotcom bust was real, but there was no dotcom bubble. Skeptics back then said that the valuations only made sense if tech companies were to dominate the economy in the future. Well, that future arrived more than a decade ago.
(More formally, if you had invested in a broad index of tech companies throughout the dotcom boom years, and had held this, you would have done reasonably well over the next twenty years.)