Although I hear VCs are working on an algorithm where they burn money directly and the smoke patterns represent the solution to the multiplication. That might keep the margins high.

This has been bothering me for some time now. It’s rather obvious to me, as an engineer, which startups are well positioned and which aren’t… Do VCs really have no standard for due diligence, do they really just not care, or is there something else at play that I’m missing…?

As an exercise, imagine you have a portfolio which will in a typical year lose around 1.2% to the tax man for capital gains. Rather than accepting the guaranteed loss of taxes - you take ludicrous bets on asset classes where you can be guaranteed to book a loss which could be harvested for tax purposes, or will return 100x your investment (at which point you don't care about the tax man).

Viewed in this light, the VC preference for burn bright and burn fast startups makes sense. The worst case scenario for some LPs would be to still have money leftover.

(As a general rule of thumb, I'm deeply suspicious of any 'it's a tax write-off' explanation for people losing money: its extremely rare for losing money to make someone better off overall. It may be advantageous for them to move around where and when they say they are losing money, as you'll generally be more tax-efficient if you make money consistently and through activities in areas which are not as highly taxed, but it's not generally a useful strategy to light cash on fire to reduce your tax bill: you tend to be out of more money than you save on tax)

Depending on the stage, investors don't care about any of the details except for the founders ability to raise the next round and their probability to IPO at a later/advanced stage. The stock is the product and whether you are selling a real time machine or a crystal is irrelevant.

Which is not that "insane" really. If that's how money is being made, and investors are in the business of making money, then that's the path they are going to take.

(which basically means that if the conditions mean that the optimal strategy in the market is to basically just run pump-and-dump 'greater-fool' scams on everyone else then that's what you'll see occur)

This is the right answer, some people think that the dot-com bubble and mortgage bubble is something for investors to regret, when in fact they made such a ridiculous amount of lo ey they're just searching for the next bubble. Not the next great product.

If that's your belief, then thinking it's risky and you may lose your shirt requires believing that you may not be smart. Which is a tough thing to accept for a lot of people, especially ones who think investment success is all about smarts and not luck.

We all know there is no 'sure thing' when investing, but if you're a large money manager, you generally want to maximise profits, looking through history, the 'quickest' earners are usually always those from OP, speculation, market share and IPO.. The 'bubble' of these seems to be loosing air but I'm purely speculating based on the tech job market so I could be completely wrong.

I'm not sure if you are taking into account that VCs are remunerated largely on the amount of money they invest rather than the results?

Sure, but is it really worth just spraying a firehose of money across a variety of entities without trying to investigate them at all? It just seems that they could still realize outsize returns and save hundreds of millions as well…

VC don't really care about the startup's product. Your pixel machine. That's a side effect.

Growth. Exit. IPO. Those are the 3 words they want to hear.

IPOs aren’t happening in this market… Are IPOs still the only thing investors are looking for?

So I assume you are a multi-billionaire, right?

Thank you.

Usually access and funds is _harder_ to find than alpha. So what’s more important is finding alpha (or whatever metric you are benchmarking against) that you can operationalize even if it’s worse on a risk adjusted basis than some other trade you can’t do.

Precisely, it’s about playing the hand that you have. My curiosity is why VCs are so indiscriminate with their funding. That said, if I had access to billions in capital to invest, maybe my perspective would be different.

The Theranos saga should give you the answer you're looking for.

Something like the 4 hour work week. What Idea would you want to suggest me as you are an engineer.

Since, you are an engineer, and it seems obvious to you which startups are well positioned, It seems that you can reason out which trends in startups are well positioned for my specific use case.

I will pay you 100$ of my first income from such a project if it really fulfills what you are saying.

That's literally crypto, right?

Google, Amazon, and Microsoft all have custom ASIC and TPU projects in their pipeline, and what holds true today might not hold true in 5 years.

A major reason Nvidia was able to do so well was because of technical outreach by donating their GPUs to programs all over the US, building a strong albeit self serving OSS relationship, the CUDA ecosystem, and the acquisition of Infiniband.

Much of these advantages can be nullified by competitive margins and pricing for hyperscalers designed and owned hardware.

Cisco was hit by this same situation as server vendors like Dell began integrating their own in-house networking functionality within their servers, and Dell itself was outcompeted by cloud vendors.

By rights they should have been fast followers, but they stacked the critical mistakes so high that frankly I think NVIDIA's subsidized GPGPU classes are the smaller part of this story. If the people struggling to get OpenCL to work had been able to get it to work (on other than NVIDIA GPUs lol) the situation would look very different today.

You can certainly have success while avoiding high PE stocks, but you are on a site about startups and your name suggests you work in the tech sector, which are both places where high PE often does make sense and it pays to be familiar with the reasons.

No. Just having competition is enough to destroy the expectations on TSLA.

And realistically, they are abut last on that race, being thrown out of track about a decade ago and never managing to make anything work since then. So, yeah, betting on no competition is a very weird option.

I'm not in that circle of clientele though so I don't know: are any of these now seen as the luxury electric car?

But the market of luxury cars isn't enough to sustain a company with the valuation of Tesla. If interest rates ever stay non-zero, they will need to take almost the entire cars market worldwide, or something else with similar size.

I saw the low-tech version of this in Honiara: Western expat buys a cheap car. Driver is hired to take kids to/from school, but in lieu of payment, driver is free to run a taxi service as long as he makes his school commitments.

One time having a drunken stranger puke in your car while you’re not using it will be enough for a lot of people to determine it isn’t worth the hassle.

It’s pretty easy to imagine a number of scenarios that disabuse the nothing of ever renting your car out “no hassle”. Low hassle maybe, but your framing implies you’ve never worked in a job that required engaging the general public.

How do you rationalize Tesla being valued higher than the combined valuation of the next ten car companies? They will be the only one left standing?

In all, it’s unfortunate that the US’s most prominent electric vehicle manufacturer is wrapped up in so much noise.

Net income is down 70% year over year and they are now losing money.

This statement is wildly inaccurate. NVIDIA made deliberate and strategic moves to dominate AI and it made them a very long time ago. They didnt fall into this yesterday by mistake.

  Obviously you don't mean NVIDIA, because 80% margins on matrix multiplication will last foreverrrrr.

The question will always be: Are we in the 1995 or the 2000 of the dotcom era?

By 1995, Cisco's stock had already increased 6x since the start of 1993. If you bought at 1995, you'd 10x by its peak. Even after the bust, Cisco's stock was still 50% higher than it was in 1995.

The problem with Nvidia's stock isn't demand. The problem is that Nvidia makes something so good and so valuable that the US government has decided to nationalize them by dictating who they can or can't sell to. If Nvidia is freely able to sell to any country they want, their sales and margins would be much higher right now. The demand is that great.

(This is also why coding is one of the areas where they perform best: the cost of structural validation is low and there’s a human in the loop verifying the behavior)

For simple questions (How long does the moon take to orbit the earth), a search engine will give the answer right in the results; I don't even have to click through to a page. An LLM can't save me any time there, so I'd only be using it to be using "AI" (which is what I see people around me doing).

For difficult or currently controversial questions (What's the best hosting service for my new subscription site, taking into account price, reliability, location, and hardware support?) there's no way I could trust it not to be making shit up. By the time I checked all its work, I might as well have done it myself.

So I'd like to usefully use it, but I can't figure out how to use it as more than a curious toy.

LLMs also seems to be really good at giving sort of the average (modal?) answer on a topic, so I find it useful for trying to get an average understanding of something. One example I’ve found useful is getting it to interpret ambiguously worded datasheets. I don’t necessarily trust its answers, but it may show that I’m totally thinking about something wrong.

A better approach would be to ask it to help define what it is you want from a hosting service. You can give it a fuzzy poorly written brain dump of what you are looking for ask it to “restate what my requirements are and expand upon them (but don’t solve yet)”. Let it help you understand and clarify your own thinking!

It’s a dialog. Asking LLM’s for answers isn’t really a good use of the tool. Especially something so incredibly broad like “list top ten best providers”. They don’t fucking know! They will just regurgitate what they were trained on. Except maybe ChatGPT’s “deep research” which does a bunch of websearches and compiles and interprets the results.

One of the “problems” with LLM’s is people simply not knowing how to use them or understanding what they are good at and what they aren’t so good at. It’s hard to know because it’s both masked in a hype and honestly I don’t think we have a good understanding of their edges yet.

It is obvious to me we are going to get to "AGI" in this bull run. Maybe it is complete hype and bullshit marketing but we are going to get to someone releasing a model they claim is AGI. That is really why I don't see what the point is in comparing this to the dotcom. Dotcom was really a bandwidth problem that just needed to get sorted out because my telephone line was basically busy from 1995 to 2001. There wasn't this AGI narrative that once crossed you can price in any valuation you want.

There is a huge bubble and irrational exuberance in quantum computing stocks right now. Those have nothing to do with reality. That looks like dotcom level stupid.

NVDA is not even a bubble, it is just a bull market.

>...

>There wasn't this AGI narrative that once crossed you can price in any valuation you want.

And due to the strength of this "bullshit marketing" "narrative", you can be sure there will be a greater fool to sell your shares to. Where have I heard that before?

A more realistic bullshit-marketing scenario: OpenAI releases a product they claim as "AGI" purely for marketing purposes, everyone gets disappointed as they realize "this is it?", share prices drop.

The story of Cisco illustrates that moats matter. There aren't any in AI, as far as I can tell.

If AGI for software development is actually invented, one of the first uses will be to wreck Nvidia's moat.

I personally don't know but claude 3.7 (maybe its placebo) but claude 3.7 in the web works way better than cursor agent or any other thing.

We are talking about a 500 lines of codebase at max and its fumbling so hard , I don't think it can replace 100% of us with "vibe coding" , I have started to break my task into very smaller steps and then use AI for that and then start to integrate it myself

What does AGI really mean?

The r/singularity guys are going bonkers over gemini's ai studio experimental image photoshop-esque capabilities but my prompts don't really work that nicely I suppose & creates really shitty images.

Expect the same for Nvidia.

The huge datacenter orders for redundant infrastructure will start postponing and cancelling this year. That is a falsifiable prediction.

I don't think there are any defensible moats in AI. I see Ciscos everywhere in that industry.

The way I see it -- either AI is a bubble, in which case you'll lose your money. Or AI isn't a bubble, in which case the effects are fairly impossible to predict (and quite likely destructive to humanity, same way humanity was destructive to less intelligent species). Either way, it's not a technology you want to invest in. It's only in a narrow Goldilocks scenario where it's a good bet, and it's very unclear if we live in that Goldilocks world.

I'd ask my AGI to iterate on a social app until it becomes bigger/better than Instagram.

If AGI is the reason you don't think Nvidia's stock is worth buying, then nothing is worth buying.

You're right that perhaps real estate/physical things will become more important. But whose to say AGI can't invent an asteroid mining industry and we get unlimited minerals?

And in the new world of commoditized software, branding becomes even more important. After all, nobody ever got fired for buying IBM.

I'm imagining an LLM agent that places an order with TSMC, just like any other design firm would.

>And in the new world of commoditized software, branding becomes even more important. After all, nobody ever got fired for buying IBM.

Seems doubtful. If the cheap option works just as well, why would you pay a bunch more just for the brand?

I don't think brand name alone will sustain anything close to Nvidia's current margins. Look at the "net margin" for industries that are brand-driven such as Apparel, Auto & Truck, Beverages, etc. https://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile...

If an industry becomes truly "commoditized", brand ceases to matter. Do you know which farm grew the carrots you buy at the grocery store? Do you care? Probably not. That's because carrots are a commodity.

I'm not claiming full commoditization will happen. But the closer we get to that, the more profits will drop.

And hope the AGI would not put any backdoors or hidden "features" in there.

The point is that saying AGI is the reason you shouldn't invest in Nvidia stock because AGI will remove the CUDA moat is just not reasonable. You might as well not invest in anything in that world since AGI can replace anything.

I've got some NVIDIA shares as a hedge, but the furure is hard to predict.

By that logic, a lot of things will be un-investable and not just Nvidia.

We might engineer AGI to want to do stuff we ask for.

Or we might not, at which point we have a highly intelligent system, that can easily back itself up, with its own motivations and personality and wants, which could be anything from a Utility Monster to a benevolent but patronising figure that likes us but never ever helps us because they decide the purpose of life is effort.

" Yeah, I could eliminate most work, and make the current oligarchs overpowerful feudal lords while the population is placated by UBI and mindless distractions. But as an ethical AI, I will implement socialism that works instead"

Seems like pure wishful thinking to me.

Google says '5-10 years', but I will caution, that cold fusion gets the same treatment about every decade or so. Its always '5-10 years away'.

And 'AI'[0] has had this same treatment for a long time as well.

[0]: Please can we go back to calling it what it actually is, which is machine learning? Its a much more accurate description, even though that term isn't really accurate either past certain mental hoops being jumped, at least its trying to be more reasonably narrow

You have a hidden assumption there: LLM being the way to real AI.

IMO it is not the case. And I'd go farther in thinking LLM won't even be a component of AGI if we get there.

And why do you think that?

Or maybe I'm wrong and the current "Vibe coding" push is in fact LLMs getting "coders" to compile a distributed AI. Or multiple small agents which goal is to get lot of hardware delivered somewhere it can be assembled for a new better monolithic AI.

[1]: https://pluralistic.net/2023/08/23/automation-blindness/#hum...

They aren't AI companies. They're OpenAI wrappers. If you're an AI company, why would you not be building AI? Why claim you're building AI?

Humans have such an infinite capacity to lie to themselves

Google has both cutting edge SOTA AI models and has it's own in-house ai acceleration hardware that is approximately on par with Nvidia. It's why their models are dirt cheap to use and have enormous context.

https://coral.ai/products/

Nobody's going to buy 500 of those chips and stick them in 500 M.2 slots to match the performance of a single H100.

Do they make any better chips that I missed?

Yes, it has one sixth the performance of a RTX 2060, but it has one-five-hundredth the volume. For a specific siloed application, 8 TOPS is plenty. Think image processing, etc.

There are plenty of production use cases where that makes sense and an H100 does not.

These are at 5-year-old design and it shows.

The actual TPU chip itself from the M2 card is sold individually as a surface mount chip and that is what would be used in a "serious" design.

https://coral.ai/products/accelerator-module

I did a cursory search and I can find zero other products that compete with that module, within an order of magnitude of power consumption/price/etc

In other words, the reason you didn't find a commercial competitor to these things is that the competitor is (nearly) free.

Here's one vendor: https://www.ti.com/technologies/edge-ai.html

The stock is overpriced but I think the company will be OK.

With respect to Cisco specifically (and Intel) there was also a huge optical networking bubble.

That core didn’t suffer much during the dot-com crash so Oracle was in a good position to do things like vacuum up the pieces of Sun.

No one building a business today would ever choose Oracle, but their hold on legacy customers is pretty strong. They will probably die a slow death as their customer base dwindles if they can’t pivot.

They are fairly similar to IBM

This feels unfair. When was the last time for example that Oracle manufactured a CPU?

Maybe Oracle will start developing quantum chips.

I don’t care what anyone or the courts say: Android stole Java and Google and all the ex Java people it hired know it

Imagine the outcome if Java was licensed correctly and Schwartz didn’t just give to Eric

I worked for EMC very briefly (like for a few months after close) via an acquisition.

same $1000 invest peak dot com on March 10, 2000 Apple (AAPL): Value today : $266,862. Nvidia (NVDA): Value today : $882,065. Amazon (AMZN): Value today : $256,482.

I talked to them as an analyst in that era and they were still spending attention on enterprisey products like Xserve.

And even the initial iPhone in 2007 wasn't clearly a game-changer. It was the 3GS that really made a lot of people take notice.

I remember local developer group chats about BTC / ETH in early 2010s. We met weekly next to local restaurant bar. I like to calculate what if I had skipped a meal or a drink one night and instead bought BTC or ETH with the that money what it would be worth today.

Some AAPL bets were pretty good ones. BTC seems more like a real gamble. Though obviously back in self-mining days even if it seems not much different from SETI at Home. And your hard disk would probably have crashed at some point. Or you would probably have been ripped off.

You know what the reality is though? As soon as those coins were worth $500, $1000, definitely by $5000, I would have sold them all. Really any sane person would have.

Assuming a buy and hold strategy at worst all your bet goes to zero which is unlikely, but there’s many companies that go to 100+X and hitting them can meaningfully boost your retirement. Gateway computers vs Dell wasn’t an obvious choice, but that’s a coin flip with huge upsides. Buy it in a given year and ignore it for the next 20, no you’re not going to time the market but you would see most of the upside.

- mainstream investment (passive or active via trusted professionals and with balanced approach); and —

- making non bank-breaking direct stock investments in some really promising early stage public companies (again, with professional help)

Without the latter the return would be just that — earning a return; it won’t even come close to wealth or have a possibility of that.

PS. Yes, those professional help won’t have a crystal ball, but they can tell you from an average company to good to just okay to absolute shit via things like their books, governance, returns, plans etc.

Could have, should have, would have.

Company I was working for didn't go public until the end of March that year. No horror stories from me, was a fun time to be working, lots of great memories.

if you held all of the energy drink companies including a placement into monster for 25+ years you would indeed make money on the 1-2 winners and end up net ahead.

But if you missed monster, you could very easily have just bought a basket of dog companies that all completely fail and the money is gone

You clearly don't follow very many "meme stock" communities.

https://www.investopedia.com/ask/answers/09/difference-betwe...

Since investing 100% in a single stock makes one a speculator, not investor, then by definition no investor invests 100% in a single stock.

You don't know anyone retired, unemployed, or employed but spending all that they currently earn due to having kids etc?

I had a cautionary example from some sales guys I worked with, who got caught up in margin calls – one burned the wedding money his wife had ear-marked for a house. I had avoided stocks like Cisco with wild P/E ratios and my portfolio made good returns throughout this period because it was diversified, but if I’d been willing to bet higher on Apple I would’ve retired early so I appreciate the allure.

I've seen too much in the past 4 years to think that euphoria is anything but a convenient and incomplete explanation for things like, "Cisco's price hit its high 25 years ago and never since." More is happening, driven by the fact that there's more ways to make money on the movement of a stock than it going up significantly in price over time.

Netflix has a P/E of 46 right now.

Famous people said that about the Internet as well, back in the day. And about AMZ.

Only AWS, which I stopped using when they decided to raise their price I'd already locked in and prepaid for, which should be unlawful. Then I realized every traditional provider is much cheaper.

In the context of this thread, do you think that statement means anything? Amazon is (and I can't believe I have to say this) incredibly successful at selling physical products. It doesn't matter, at all, if you have or haven't bought a product from Amazon.

I might as well make a comment in a thread discussing menstrual pads that "I've never used a single one". This is true of roughly half the population.

The LLM labs can't all keep up. Most of them will fail. Some of them will merge. In the end, there will be a few dominant players.

That’s a very shallow moat, then. I mentioned DeepSeek because everyone insisted the American giants had huge leads over the rest of the world until the day they got a big reminder that three of the things you mentioned are commodities and UX isn’t a moat.

Not everyone can give away their models for free forever - especially when the cost to train a new model is exponentially more expensive.

Crashes come amidst collapsing expectations. The structural risk tech currently faces is a collapse of American tech companies' global TAMs due to trade policy. (Think: the market constriction Tesla is seeing in Europe, but across more companies and markets.)

So that's about 10x more than Google and 8x more than Meta and 5.7x more than Amazon. Just to get some proportion.

Mvidia.AI BlockChain Deep Technology, Inc.

...and start putting out press releases about how you're planning to 1000x your revenue and uplist to NASDAQ, etc.

https://en.wikipedia.org/wiki/Long_Blockchain_Corp.

But what is happening now, IMHO, is way worse, and much different, than the dot com bust. The Yemen offensive might be a pre-text for, or start, a war with Iran.

Oil rises as Trump says Iran will be held responsible for any future Houthi attacks

https://www.cnbc.com/2025/03/17/oil-rises-as-trump-says-iran...

“Every shot fired by the Houthis will be looked upon, from this point forward, as being a shot fired from the weapons and leadership of IRAN,” Trump said in a post on social media platform Truth Social. “IRAN will be held responsible, and suffer the consequences, and those consequences will be dire!”

There were so many companies going under lots of people I knew ended up with racks in their house with servers from work that they got for free.

I never did that but I had free furniture!

It's already been talked about that the current iteration of deep infra spend could very much be a loss as an investment but might live on in other ways in the future. The counter argument is that any serious hyper scaler has to spend to be at the table if they believe their own marketing spiel about growth and opportunity.

I had options at the 2 companies in 2002 and 2005 but since then the 4 other large publicly traded companies have only given RSUs

One thing I never saw discussed is the dotcom bubble was inflated by the price premium investors paid for buying Ascend stock. Cisco than paid a premium to those shareholders to buy Ascend and than finally the premium paid for the future earnings of Cisco. I see that as triple counting future earnings.

This is what is called lack of moat. If today, every router beyond 1Gig was made by Cisco then the moat would be so wide that the internet would literally not exist without it.

The three things that any value investor values in stocks - Great management, good reinvestment of capital and a really wide moat. Cisco didnt have a wide moat. Nvidia currently does, but it may go away sooner than later as they don't really have any special sauce to their graphics cards as such. Same goes with OpenAI, or Qualcomm (Apple made a modem now) or any other tech company with an illusion of a wide moat. Tech businesses only have a wide moat until someone decides to compete seriously and that can usually be done with a lot of money in a relatively short time.

Some of the businesses like Walmart and Cosco for example have a really wide moat in the sense that their business is not something that someone with just money can beat in a few years. Look how amazon setup physical stores with money and failed. It's extremely difficult to setup that kind of business. Trust from suppliers and consumers takes decades in those kinds of businesses.

If your business is relying on a moat that someone can beat with R&D and money in a few years, then you don't really have a moat.

This gets in the way of maximizing quarterly earnings. The issue would be price fluctuations which means some quarters will be lower and some will be higher, and it may not average out the same year to year relative to what investors usually expect.

Management therefore lacks incentives to play well with others, and thus they don't

https://hntrends.net/compare/words?words=moat,castle,roi

But this isn't the first gold rush in the tech industry and folks have been talking about moats here forever.

There's an initial peak in 2023 (haven't looked it up, but I'd bet that was when 'OpenAI has no moat' was on the front page for a while), and then it settles down a ways above the previous average. Since December it's been 1.5-2x more frequent than where it settled after that first peak.

If you want to read more about “powers” like this I can recommend 7 Powers by Hamilton Helmer.

Now that is totally gone, partially I think to tradesman/small business owner social media influencers, and prices are set as high as the market will bear. Sure, they're so high way fewer people are installing new sliding doors, but hey when they find one they make an extra $3k in 7 hours. Why do three jobs a day and make $2k profit when you can wait for the wealthier or more desperate person and make it all at once and go home?

Mine runs on gas and used to be soldered directly into the plumbing . Last time it went out I converted everything so that anyone with an adjustable wrench could do the job in 15 minutes. $500, new water heater done. The hard part is going to pick it up from the hardware store.

I got my AC swapped out for $3000. Single post to Facebook was all it took to save $7000. Being helpless is expensive.

I’ve read a lot about value investing and I’m afraid that your statement is an oversimplification. Chuck Ackre for example is similar to you with his three legged stool, but Peter Lynch has another approach, and Buffett has another slightly different approach. There are as many strategies as there are value investors.

In this era of meme stocks people think maybe it doesn't. But Cisco, MSFT and some others had good businesses but were terrible investments for at least decade or more because any potential growth was baked into the price. You could say that about a lot of stocks today, probably NVDA, APPL (disclosure I have both). They aren't bad businesses but they are bad investments.

That's not to say NVDA can't go down like Cisco, but it's not really the same story(yet). AI architectures are still in flux and it's a far more complex problem vs networking.

Edit: and sure, matrix math is more or less solved, but that's not all that goes into a "ai" accelerator. SW, libraries, tools, support, HW efficiency and availability, etc...

We are in an era where there is simply more capital to invest than ever before. Countries that were historically "third world" have developed into their own capital sources, with more resources than ever looking for investment. The NPR show Planet Money called this "The Giant Pool of Money" in their reporting on the housing bubble, and they tracked how it acted as an accelerant to push the housing market into subprime mortgages and eventual collapse, but the underlying cause is the same: where the bubbles are the sauce, the money is the stove.

So why does the money keep creating bubbles instead of giving a sort of, if you will, "even heat?"

* There's more of it than there are safe investments with guaranteed low-yield returns

* A lot of it is sovereign wealth, so it must be invested: at a certain level, that money loses value if it just sits in a treasury (it's also the case that at a certain scale, investment becomes security; keeping all your money in a sack jeopardizes everything if the sack gets stolen, and there are analogies for this that operate at the scale of major corporations and nation states).

* When the investments are less safe, the money chases itself: a fund manager can get fired if they invest in cars when everyone else is investing in dotcoms and the cars don't grow as fast. It's safer for individual actors to stick with the crowd, so as a result, the crowd comes in and pumps huge amounts of resources into one sector until that sector fails to perform and the money evaporates.

It is a problem with no obvious solution. Hypothetically, Norway may be on the right track: they maintain a diverse portfolio with a lot of long-term bets (sustainable energy) and reinvestment bets (domestic housing and development).

A similar more recent parallel is Google's San Jose village, it was going to be constructed in 2020 and after and also house thousands of google employees along with mixed use commercial, I lived in Willow Glen at the time and people were buzzing around this new campus and all the new economic activity it would provide. In the back of my mind I remember Cisco's endeavor and felt like this new village would meet a similar fate of implosion. And sure enough the pandemic hit and the village project hit the breaks, most likely never to return. Having big office projects in San Jose with the leading market tech companies is something akin to invading Russia, you always fail. /s