The market disagrees.
But if you are sure of this, please show your positions. Then we can see how deeply you believe it.
My guess is you’re short the most AI-exposed companies if you think they’re overvalued? Hedged maybe? You’ve found a clever way to invest in bankruptcy law firms that handle tech liquidations?
The thing about bubbles is, you can often easily spot them, but can't so easily say when they'll pop.
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 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?
We can spot a bubble without being able to predict when it’ll pop.
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.
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'll leave shorting to the pros. The whole "double-your-money-or-infinite-losses" aspect of shorting is not a game I'm into.