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heelinhell said:
Remember Michael Burry in "The Big Short" ? He was the guy who saw the housing bubble in 2008 and bet against it despite the market enthusiasm before the great recession.

I see he is now betting against the AI bubble. His call in 2008 was laughed at. I imagine this call will be laughed at again.
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The speculative exuberance for AI has outpaced its application by multiples. And this is during a period when “Real” Americans are tightening their belts.
 
pspsps said:
The speculative exuberance for AI has outpaced its application by multiples. And this is during a period when “Real” Americans are tightening their belts.
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I'm not sure how anyone could know this yet. The housing bubble was different. We have a lot of experience in how real estate valuation works. I don't think we have any clue how AI will disrupt the economy (for good or bad), whether and which of the current players will benefit from it, or how future regulation might impact it. I completely agree the valuation of AI companies is largely speculative. Putting a ton of money in those companies is risky as hell. But I don't think we have any way of knowing if those companies are overvalued, undervalued, or if the markets have it right on the nose.
 
lawtig02 said:
I'm not sure how anyone could know this yet. The housing bubble was different. We have a lot of experience in how real estate valuation works. I don't think we have any clue how AI will disrupt the economy (for good or bad), whether and which of the current players will benefit from it, or how future regulation might impact it. I completely agree the valuation of AI companies is largely speculative. Putting a ton of money in those companies is risky as hell. But I don't think we have any way of knowing if those companies are overvalued, undervalued, or if the markets have it right on the nose.
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I don't know anything about economics... but I'll say this. I lived in SF and worked in the internet sector in the late 90s. It was fun, but these guys had no good plan about how to actually make money. They were like "let's get eyeballs and pageviews first and then monetize it"... and the bubble rightfully burst at some point. The AI situation feels very similar to me. At some point the chickens come home to roost -- if there is no profit, there is no stock value.
 
lawtig02 said:
I'm not sure how anyone could know this yet. The housing bubble was different. We have a lot of experience in how real estate valuation works. I don't think we have any clue how AI will disrupt the economy (for good or bad), whether and which of the current players will benefit from it, or how future regulation might impact it. I completely agree the valuation of AI companies is largely speculative. Putting a ton of money in those companies is risky as hell. But I don't think we have any way of knowing if those companies are overvalued, undervalued, or if the markets have it right on the nose.
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Did we know during dot.com?
 
pspsps said:
Did we know during dot.com?
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No, and that's kind of my point. Dot com bubbled, then popped, then grew to something that dwarfs the bubble. If you had invested in Netscape or Intel in 2006, you'd have taken a bath. If you had invested in Apple or Amazon and held through the crash, you'd be living on a beach today. I don't think it would be accurate to say that in 2006, the speculative exuberance for dot coms had outpaced their application. It was just really hard to pick the winners and losers, as it is now for AI companies.
 
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