There Is a Risk More Terrifying Than an AI Bubble

No noise. No predictions. Just structured thinking on equity investing.

The obsession with calling bubbles is universal.

Personally, I don’t care if it’s a bubble. And if you’re a long-term investor like me, you shouldn’t either.

In fact, even if you’re a shorter-term investor, you probably shouldn’t either.

Being disinvested is probably the worst solution, and the Dot-Com Bubble is the perfect example.

The Biggest Risk Isn’t Being in the Bubble, It’s Being Out

In the 1990s, the Nasdaq went up 30x.

For comparison, going back to 1871, it took the S&P 500 109 years to achieve a similar 30x performance, which it only reached in 1980.

There is no doubt that this decade was a bubble.

Yet looking back, I’d still tell you that you should have been invested during the Dot-Com Bubble, at least up until 1998.

If you had bought before 1999, you would still be up around 48% at the bottom in 2003:

As you can see, the only years where investing would really have cost you performance were 1999 and 2000, when the bubble finally exploded in March 2000.

The Real Blind Spot in the Bub…