>the private market can't possibly go any higher

Can public markets go higher? Shiller P/E is closing in on the peak of the dot-com bubble:

https://www.multpl.com/shiller-pe

This is already close to being the frothiest market in US history.

Consider two competing forecasts for AI: it's a "normal technology", or it will be superintelligent.

If it's a "normal technology", where's the moat? Why won't this turn into a boring commodity business, like telecom after the bubble? Sure, railroads transformed the US, but that didn't prevent investors from losing a bunch of money first: https://news.ycombinator.com/item?id=47900502

If it's superintelligence, we're most likely either all dead (in which case you helped cause human extinction by investing, congratulations) or else we're living on generous UBI: https://www.astralcodexten.com/p/you-have-only-x-years-to-es...

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zipy124 3 hours ago | parent | next [-]

P/E is not an indicator of available to deployed capital. Just in the EU alone there is about €12 trillion in bank deposits which could be invested. There is no lack of liquid capital to be invested.

	▲	pjc50 3 hours ago \| parent \| next [-]
		Basel capital rules are supposed to mitigate against the insane idea of banks deploying all their capital in a single high risk stock. If you think you can get all the _public_ to pull their short term bank deposits into stock .. well, (a) you've not met the Germans, and (b) that is how the economy of Albania collapsed in a pyramid scheme.
	▲	0xDEAFBEAD 3 hours ago \| parent \| prev [-]
		There is the amount of capital which is technically available, and the amount of capital which is available in practice. If EU depositors want exposure to US AI firms, why didn't they already withdraw their money to invest in Microsoft/Google/etc.? I'm a bit doubtful that an OpenAI IPO is going to trigger major shifts in asset allocation.

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pkaeding 3 hours ago | parent | prev | next [-]

The M2 money supply is ~4x higher now than in 1999. Does that indicate there is a lot more runway now, than then, at least on that metric?

	▲	0xDEAFBEAD an hour ago \| parent \| next [-]
		The P/E ratio references "price" and "earnings". Both "price" and "earnings" are denominated using money. So it's not obvious to me how an increase in the money supply should affect this ratio. BTW, in Shiller's book which was published right as the dot-com bubble popped, he has a chapter listing out similar late 90s structural factors, many of which could lead to permanently higher stock prices in theory.
	▲	pama 2 hours ago \| parent \| prev [-]
		Nasdaq is about 8x higher now than then, so 4x higher M2 is tight. Ofc there is always a chance that this time is different and that the markets are genuinely much more efficient :-)

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staticman2 4 hours ago | parent | prev [-]

> Can public markets go higher? Shiller P/E is closing in on the peak of the dot-com bubble:

Shiller PE is near 44. Japan had an equivalent price to earnings ratio of over 70 during their 1989 bubble.

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0xDEAFBEAD 3 hours ago | parent [-]

Hm, wasn't Japan's bubble in part due to easy credit? Are we going to see easy credit in the US given recent memories of inflation?

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pjc50 3 hours ago | parent [-]

Quite possible that there will be a Trump effort to drive down rates and abandon inflation control for political reasons.

	▲	staticman2 19 minutes ago \| parent [-]
		There already was such an effort but Trump lacks enough federal reserve votes to succeed at present.