Have you ever heard that "the market can stay irrational longer that you can stay solvent"?

The thing about bubbles is, you can often easily spot them, but can't so easily say when they'll pop.

No. Then you haven’t spotted a bubble.

You’ve just made a comment that “wow, things are going up!” That’s not spotting bubble, that’s my non-technical uncle commenting at a dinner party, “wow this bitcoin thing sure is crazy huh?”

Talk is cheap. You learn what someone really believes by what they put their money in. If you really believe we’re in a bubble, truly believe it based on your deep understanding of the market, then you surely have invested that way.

If not, it’s just idle talk.

I truly believe we are in a bubble. I truly believe that AI will exist on the other side of that bubble, just as internet companies and banks existed on the other side of the dotcom crash and the housing crisis.

I don't know how to invest to avoid this bubble. My money is where my mouth is. My investments are conservative and long-term. Most in equity index funds, some bonds, Vanguard mutual funds, a few hand-picked stocks.

No interest in shorting the market or trying to time the crash. I would say I 90% believe a correction of 25% or more will happen in the next 12 months. No idea where my money might be safe. Palantir? Northrup Grumman?

Surely you can spot a bubble if you see that it is rapidly expanding and ultimately unsustainable. Being able to predict when it finally pops would be equivalent to winning a lottery and people would be able to make a lot of money from that, but ultimately no-one can reliably predict when a bubble will pop - doesn't mean that they weren't bubbles.

That’s silly. I can spot a crashing plane (engines on fire, wings torn half off) without being able to predict where and exactly when it’ll crash.

We can spot a bubble without being able to predict when it’ll pop.

One can be skeptical about the overall value of various technologies while also being conservative about specific bets in specific timeframes against them.

I think you’re making my point without realizing it.

If you are skeptical but also not willing to place a bet, you shouldn’t say “AI is overvalued” because you don’t actually believe it. You should say, “I think it might be overvalued, but I’m not really sure? And I don’t have enough experience in markets or confidence to make a bet on it, so I will go with everyone else’s sentiment and make the ‘safe’ bet of being long the market. But like… something feels weird to me about how much money is being poured into this? But I can’t say for sure whether it is overvalued or not.”

Those are two wildly different things.

Not at all. I may think $TECH is overvalued but some companies may well make it out the other side, some aspects of the $TECH may play out (or not), and the bubble may pop in 1 year or 5. So the sensible process may be to invest in broader indexes and let things play out at the more micro level (that may not be possible to invest in anyway).

I certainly had unease about the dot-com market and should have shifted more investments to the conservative side. But I made the "‘safe’ bet of being long the market" even after things started going south.

FWIW, I do think AI is overvalued for the relatively near term. But I'm not sure what to do about that other than being fairly conservatively invested which makes sense for me at this point anyway.

I generally buy index funds but I put some into AMD a while back as the "less-AI-part-of-tech". Will probably get out of that as they've been sucked into that vortex and shift more into global indexes instead of CAN/USA.

I'll leave shorting to the pros. The whole "double-your-money-or-infinite-losses" aspect of shorting is not a game I'm into.

You could just buy put options.