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Comment by randomNumber7 | Hacker News Reader

> Nobody apparently believes that capital is worth investing into anything but AI.

This is the main reason we see this insane investment into AI imo. If you imagine having lots of money, where should you invest that currently?

Housing market: Seems very overvalued (at least in germany). Also with the current uncertainty and inflation its hard to make an investment that pays back over 20-30 years. So building is also difficult.

Stocks are very volatile currently. Not only since Iran. To me it seems since the financial crisis 2008 investors don't enjoy stocks as before.

Gold: Only if you are paranoid about collapse of society. It doesn't make sense to invest into s.th. without interest rates.

Crypto: Same as gold, but better if you like gamling. I would assume most people who are very rich don't gamble with most of their fortune.

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Looking around, and especially forward, it would be military tech, e.g. [1], and its supply chain, e.g. [2] :-\ Valuations are not as crazy, but I bet there'll going to be a lot of demand in the coming decade, unfortunately.

Chip production, too, of course, but it's overflowing with money already, apparently. It's growing though, because there are real actual shortages of stuff like RAM and SSDs, there's money to be made immediately if you can. Chinese RAM manufacturers are building out like crazy.

[1]: https://www.ultimamarkets.com/academy/anduril-stock-price-ho...

[2]: https://www.marketscreener.com/quote/stock/RHEINMETALL-AG-43...

> Looking around, and especially forward, it would be military tech, e.g. [1], and its supply chain, e.g. [2]

Only viable if you’re okay with the ethical implications of funding war.

Would you be fine with the ethical implications of funding the industry to fight WWII? Would you consider funding Ukrainian military unethical? Or Taiwanese?

This is, sadly, not theoretical, and I'm afraid we'll soon see more of such choices, not fewer.

> it would be military tech

Anduril is the only company in this sector in the US that has any promise and they aren't even public. Most of us are not going to get our hands on this.

Traditional defense sector looks more like Jeep, or Kodak...

The demand for more Patriot missiles is large, now that much of the stockpiles have suddenly been spent. Raytheon should do fine just based on that.

this admin will probably source patriots made in china

Anduril has yet to deliver anything of consequence. I hope they shake up the industry but to say they are the next hot thing and write off the primes at this stage is premature.

Invest in the Ukrainian drone producers which proved themselves on the literal battlefield! Some of the Gulf states already did.

> Stocks are very volatile currently. Not only since Iran. To me it seems since the financial crisis 2008 investors don't enjoy stocks as before.

These returns do not qualify as “enjoying stocks”?

https://investor.vanguard.com/investment-products/etfs/profi...

The returns are higher than before 2008, the previous 15 years are unprecedented.

https://www.macrotrends.net/2526/sp-500-historical-annual-re...

> To me it seems since the financial crisis 2008 investors don't enjoy stocks as before

Maybe in Europe. The US stock market has nearly tripled since then. Literally the best period of stock growth in history.

"The Roaring Twenties roared loudest and longest on the New York Stock Exchange. Share prices rose to unprecedented heights. The Dow Jones Industrial Average increased six-fold from sixty-three in August 1921 to 381 in September 1929. After prices peaked, economist Irving Fisher proclaimed, "stock prices have reached 'what looks like a permanently high plateau.'"

https://www.federalreservehistory.org/essays/stock-market-cr...

Ok second best :-) I wasn't alive in the 1920s though

True, but it is close enough in time that we should heed the lessons learned lest we repeat the experience.

Do you know the actual lessons of that crash? Because we don't allow retail investors to go 10:1 on leverage anymore. There are a lot more lessons and none of them apply to this situation (even Glass-Steagall). This is much closer to the dot com crash in 2001 in how it looks, just a lot more concentrated and probably a bit bigger. If all you got is "number go up too much" then you probably shouldn't be investing your own money.

The good news is that its almost all rich folks money on the line here and a small amount of dumb money. That's very different than, 2008 where it was mostly the indexes that got hit and that's more middle class/upper middle class concentrated.

You can argue that current market multiples are higher than 1929 [1] - and they're certainly high - but this also ignores the mechanism that drove that crash, focusing only on the symptoms. We simply aren't doing the kind of consumer margin buying that drove the '29 crash. It isn't even close. Average schlubs were leveraged to the stratosphere to buy shares of boring industrial stocks.

[1] https://www.multpl.com/shiller-pe

> The US stock market has nearly tripled since then. Literally the best period of stock growth in history.

The only thing I meant to point out was that a very high stock price by itself is no guarantee that there isn't a crisis around the corner. We plugged a lot of holes after 2008 and then reversed a lot of those fixes, I hear retail investors talking about their stocks at birthday parties again. Deja vu... of course this time it will be different. Or not. Let's just say that with the proverbial bull in the earthenware goods store on the loose if we only end up with another financial crisis that might actually not be so bad.

I actually calculated wrong. It went up 7.5x, not 3x.

In the roaring twenties stockbrokers allowed clients 10:1 margin. Investors were not as well-informed as they are today. There was no deposit insurance.

The SEC wasn't nearly as powerful as it was in 2024 and there was way more shady shit going on. In that respect, and the repeal of Glass-Steagall we're reverting to the pre-depression era.

you gotta have some of all the above actually.

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