I feel like this is dot com 2.0. The dot com's valuations eventually were proven to be true, only way too early. With investing Timing is everything, if you invest in Pets.com you lost, if you invested in chewy.com you won. If you invested in Broadcast.com you lost, if you invested in YouTube.com you won.

AI is going to transform things but these current prices are crazy.

Yeah. This is the whole “market can stay irrational longer than you can stay solvent” thing. I think there’s almost always a plausible bearish case to be made. Hence: permabears.

For how long can the gamble be detached from real life?

It's an honest question. In the real world, resources and people are finite. Things have to make sense, the bills have to be paid.

In the stock market however, a company can be completely worthless in the real life, but if the money blobs all agree to pumo money into it the stock price goes up anyway.

In 2022, Tesla had a P/E of 34 and a growth rate of 50%.

The problem is, the last two decades were marked by extremely low, zero and sometimes outright negative interest rates plus a ton of outright printed money that got blown up the arses of the big banks. Worldwide.

That money sought returns and found them in hypergrowth of increasingly dumber nonsense. First it was Meta (or back then, just Facebook), then Tesla, then during Covid cryptocurrencies and NFTs, and now it's AI... but now, there seems nothing to be the "next big thing" to sink money into when the old thing dies down in growth and expectation and matures. Maybe gambling, but that's not sustainable, the number of whales/marks to make money from is finite.

IMHO, we're headed for a very big worldwide correction to deflate the markets and hand back a lot of the money to the central banks where it can be taken out of circulation, and it will be an event larger than the dotcom bust plus 2007ff combined. But, unfortunately, the markets can stay irrational longer than a good short-seller can stay solvent...

> what happens when an actual set of adults get back into the White House?

Not just White House though, it's all the leaders of various government organisations, and private companies too. Nasdaq didn't need to change the rules for SpaceX IPO, rotten at the top.

Which will trigger even more wealth transfer to the top .1%, which the 99% will blame on the administration, and put the corrupt lot back in a few years later

Eventually though the world moves on and China takes over

Good advice. Ironically most long term folks that just buy low cost index funds and take a nap outperform most of the market stressing out daily on their next move. That’s the cruel reality of investing.

When you factor in the opportunity cost of all that stress and managing an active portfolio the percentage of successful active portfolio managers likely falls down to single digits.

Invest early, invest consistently and often in up or down markets, and the math says you will do very well.

You do, your children will live. Or, if you don't have children, your non-profit does not.

I wish people would stop using this "we all die" slogan when it comes to their financial lives, and think a bit about the people who will be left after you retire.

Holding cash is a terrible strategy, the US dollar is going to get devalued by the end of the Orange Troll's term due to money printing/bond market repression/trade hijinks.

We're in the pump of a pump and dump by the richest people in the world, who are trying to engineer exit liquidity in a way that doesn't immediately crash the market. They're going to cycle their holdings several times before things go to shit to avoid the brunt of it, we'll be able to see the wave on the horizon. I don't think just the SpaceX dumping will trigger a broader loss of confidence, but Anthropic + OpenAI dumping post IPO will ripple through to the neoclouds, which will ripple through to the semis, and probably tank things. In the short term (pre AI IPO) the market is volatile but pretty safe IMO, so just trade techically.

In the medium-long term I'd hold a mix of mining/industrial equipment/etc stocks in Euros, and Chinese AI/renewables stocks in Renminbi. The Euro stocks are safer and a significant portion of their increased valuation will come from currency shifts, and the Chinese stocks are riskier but have a big upside and are likely to benefit from Renminbi revaluation as China onshores "finishing"/final assembly of products (which much of the world is going to push them to do).

Instead of cash, I like debt like mortgage funds. High single-digit returns with low volatility.

If short term is high volatility and the medium term is too unstable, why is the VIX as low as it is? Am I missing something, or is the VIX mispriced?

Fall was upon a remote reservation when the Indian tribe asked their new Chief what the coming winter was going to be like. The modern day Chief had never been taught the secrets of the ancients. When he looked at the sky he couldn't tell what the winter was going to be like.

Better safe than sorry, he said to himself and told his tribe that the winter was indeed expected to be cold and that the members of the village should stock up on firewood to be prepared.

After several days, our modern Chief got an idea. He went to the phone booth, called the National Weather Service and asked, "Is the coming winter going to be cold?"

"It looks like this winter is going to be quite cold," the meteorologist at the weather service responded.

So the Chief went back to his people and told them to collect even more firewood in order to be prepared. A week later he called the National Weather Service again. "Does it still look like it is going to be a very cold winter?"

"Yes," the man at National Weather Service again replied, "It's going to be a very cold winter."

The Chief again went back to his people and ordered them to collect every scrap of firewood they could find. Two weeks later the Chief called the National Weather Service again. "Are you absolutely sure that the winter is going to be very cold?"

"Absolutely," the man replied. "It's looking more and more like it is going to be one of the coldest winters ever."

"How can you be so sure?" the Chief asked.

The weatherman replied, "The Indians are collecting firewood like crazy."

They are one of the best value investors ever to do it. If they see no value, that is actually information about the state of the market.

The information control meta has evolved from suppression to distraction.