Comment by dvt
5 days ago
You could make the converse argument, too: why don't you borrow and leverage and bet and short these AI companies, if you so vehemently think it's a bubble?
The bottom line is that markets are complicated, useful technologies are often accompanied by bubbles, investors are not always rational, and people generally try to make the best decision with the information they have available. The answer is likely somewhere in the middle, but that's a lot more boring and a lot less inflammatory.
> You could make the converse argument, too: why don't you borrow and leverage and bet and short these AI companies, if you so vehemently think it's a bubble?
Because going long and going short are very different. For successfully shorting something you need to have a pretty precise estimate of when the crash will happen. Being a comparatively short time off can cost you everything.
Also, the volatility of leveraging positions often costs more than any gain over the long term.
Most look forward to picking up the assets at a heavy discount. =3
https://www.youtube.com/watch?v=rE75WvOtcu8
Yeah, but that applies to the argument in the original comment too. It's supposedly directed at someone who denies we're in an AI bubble, telling them to put their money where their mouth is. But then suddenly they're supposed to risk literally everything they have on "creating a business with infinite growth and value" before their "unlimited" leveraged loans are called in.
Obviously there's some hyperbole there, and I'm not really sure what serious point was being made, but it does seem to depend on the anti-bubble guy having some very confident and specific beliefs...
My point was rather that it is an asymmetric situation from an investment perspective. I am not taking any sides regarding bubble or not.
You mean for companies that make -$2.50 for every $1 of revenue, and bury their groups $2Tn debt in a footnote?
It is not a question of if the bubble will go, but when... but you are right that Bears or Bulls always get it wrong predicting the future (if they are a legal investor.)
https://www.youtube.com/watch?v=wTiYaWFP59Q
Personally, Shrek movie release correlation with market corrections is funny, and a new film is due June 2027. Please hedge your bets with a diversified portfolio. =3
Good point. There is too much inflammatory rhetoric on here about AI, too many opinions masquerading as facts, too much black-or-white thinking.