Taking money off the table - https://news.ycombinator.com/item?id=45763769 - October 2025 (108 comments)
(not investing advice)
(also not investing advice :)
https://finance.yahoo.com/quote/CSCO/
I knew people who purchased their options but didn't sell and based on the AMT (Alternative Minimum Tax) had tax bills of millions of dollars based on the profit IF they sold on the day they purchased it. But then it dropped to $10 and even if they sold everything they couldn't pay the tax bill. They finally changed the law after years but those guys got screwed over.
I was young and thought the dot com boom would go on forever. It didn't. The AI bubble will burst too but whether it is 2026, 27, 28, who knows. Bubble doesn't mean useless, just that the investors will finally start demanding a profit and return on their investment. At that point the bubble will pop and lots of companies will go fail or lose a lot of money. Then it will take a couple of years to sort out and companies have to start showing a profit.
I have quite a few doubts that it'll be a net positive for society though. The internet (for all of its flaws) is still a good thing generally for the public. Users didn't have to be convinced of that, they just needed to be shown what was possible. Nobody had to shove internet access into everything against customer's wishes. "AI" on the other hand isn't something most users want. Users are constantly complaining about it being pushed on them and it's already forced MS to scale back the AI in windows 11.
The mouse didn't become some huge profit center and the economy didn't realign around mouse manufacturers. People sure made a lot of money off it indirectly though. The profits accrued from sales of software that supported it well and delivered productivity improvements. Some of the companies who wrote that software also manufactured mice, some didn't.
I think it'll be the same now. It's far from clear that developing and hosting LLMs will be a great business. They'll transform computing anyway. The actual profits will accrue to whoever delivers software which integrates them in a way that delivers more productivity. On some level I feel like it's already happening, Gemini's well integrated into Google Drive, changes how I use it, and saves me time. ChatGPT is just a thing off on the side that I chat randomly with about my hangover. Github Copilot claims it's going to deliver productivity and sometimes kinda does but man it often sucks. Easy to infer from this info who my money will end up going to in the long run.
On diversification, I think anyone who's not a professional investor should steer away from picking individual stocks and already be diversified... I wouldn't advise anyone to get out of the market or to try and time the market. But a correction will come eventually and being invested in very broad index funds smooths out these bumps. To those of us who invest in the whole market, it's notable that a few big AI/tech companies have become a far larger share of the indices than they used to be, and a fairly sure bet that one day, they won't be anymore.
The revolution already happened. I can't imagine life without AI today. Not just for coding (which I actually lament) but just in general day to day use. Sure it's not perfect but I think it's quite difficult to ignore how the world changed in just 3-4 years.
One of the reasons I told myself I "couldn't" diversify was because if I sold any of the stock to buy different stock I'd pay a lot of capital gains tax and the IRS would take half and now I'd only be half as wealthy.
Another reason was my management telling me I couldn't sell my stock during "quiet" periods (even though they seemed too) and so sometimes when I felt like selling it I "couldn't."
These days, especially with companies that do not have publicly traded stock, that is harder than ever to diversify. The cynic in me says they are structured that way so that employees are always the last to get paid. It can still work though. You just have to find a way to option the stock you are owed on a secondary market. Not surprisingly there are MBA types who really want to have a piece of an AI company and will help you do that.
So now I make sure that not everything I own is in one area. One can do that with mutual funds, and to some extent with index funds.
But the message is if you're feeling "wealthy" and maybe paying your mortgage payments by selling some stock every month, you are much more at risk than you might realize. One friend who worked at JDS Uniphase back in the day just sold their stock and bought their house, another kept their stock so that it could "keep growing" while selling it off in bits to pay their mortgage. When JDSU died they had to sell their house and move because they couldn't afford the mortgage payments on just their salary. But we have a new generation that is getting to make these choices, I encourage people in this situation to be open to the learning.