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Since The Dot-Com Bubble…
Guess what? It's been a good year for US tech stocks. Especially large US tech stocks.
Maybe you heard. Maybe you enjoyed it. Or maybe, on the implicit advice of sundry soothsayers and click-chasing doom tabloids, you fought the "good" fight by refusing to participate in a narrow market high on its own supply of AI hype.
If you fall into that latter camp allow me to apologize for the simple figure below, which is a testament to why you shouldn't try to reason with irrational equities.
After
When reddit (and other social media) frothiness and tech frothiness have strong correlations, it’s best to stay off that roller coaster.
Looking at the charts above, and noting that NASDAQ & tech haven’t gone truly parabolic (yet) this time around…and that history tends to rhyme, at least – then perhaps 2023 was more 1998, not -99, and the best (craziest, most irrational, peak bubble) is yet to come? In ‘9?8-9 I made more $ doing (many irrational) deals and in the markets than cumulatively in my lifetime prior…but came to believe my own BS…until hubris and reality made it all vanish nearly as quickly, requiring a start from scratch in ’03. So I continue to take profits here & there, write a lot of covered calls (many of which likely will be exercised) maintain some modest (albeit losing) short positions and keep healthy positions in long Treasuries and money markets…while keeping enough skin in the game to smile if parabolic happens. But…try to stay wary and alert for signs of the next bubble-bursting, 9/11, Enron, housing crash, GFC, pandemic, Ukraine…or…..what rhymes with any of them?