5 ms·

It will be worse than the dot com bust. If you believe it will happen in the next 6 months how do you prepare for that?

by nick__m 8mo ago

ars 8mo ago
Almost all the gains in the SNP500 are NVidia, and other huge tech. https://www.investopedia.com/your-s-and-p-500-index-fund-might-not-be-as-diverse-as-you-think-and-you-can-blame-nvidia-for-that-11800715 https://www.investopedia.com/your-s-and-p-500-index-fund-mig... https://www.cnbc.com/2025/10/22/your-portfolio-may-be-more-tech-heavy-than-you-think.html https://www.cnbc.com/2025/10/22/your-portfolio-may-be-more-t...
pc86 8mo ago
If you truly believe this, slowly divest everything into cash, wait for the crash, then buy back in. Even buying in slowly over the course of a crash, on the way down, will save you a ton of money if you're out before it hits. But you're more likely to just cash out early, lose a bunch of gains, then buy back in later at higher prices. If you can time the crash you can make a shitload of money. But you can't, so you'll come out better if you just keep buying in every paycheck and ride it out just like you have been.
- RyanOD 8mo ago
  Yes to this. Take no alternative actions. Just keep investing and don't watch the market for a year or two.
  - ares623 8mo ago
    There is the separate risk that Microsoft, Google, etc. will have a lower value in two years as governments get their migration off their platforms into full gear
- nick__m 8mo ago
  Doing nothing different is the kind of plan I can easily execute !
- wing-_-nuts 8mo ago
  It doesn't have to be 'ride it till it dies' or 'sell everything'. The AI bubble is almost exclusively contained to the US stock market and a few east Asian manufacturers. You're right that selling everything and 'going to cash' would be a mistake, but diversifying away from US large cap growth absolutely wouldn't. I'm 60/40 stocks/bonds. My stocks and bonds are 50/50 us/intl. ~ 10% of my us portfolio is small cap value. What's funny to me is that nobody learns from the past. This is far from the first tech bubble we've had even before the .com crash (canals, railroads, radio...). The answer, every time was diversification.
  - zozbot234 8mo ago
    The east Asian semiconductor manufacturers are selling shovels in the gold rush and being very cautious about expansion given how capital-intensive the whole sector is. It's hard to come up with a scenario where they outright lose, even with the bubble popping.
    - wing-_-nuts 8mo ago
      I mean there's also a cost to not expanding too, in that you're leaving money on the table. I doubt they've really been able to resist the siren call of basically being able to print more money, but if the AI bubble collapses and they're left selling most of their production to consumers, they're gonna have a lot of stranded capital. Here's hoping they're smart enough to build a big war chest to weather the storm, but in my experience, companies rarely do.
- catdog 8mo ago
  “Markets can remain irrational longer than you can remain solvent.” ― John Maynard Keynes
typeofhuman 8mo ago
Buy Puts
marcyb5st 8mo ago
Invest into stuff that people will need regardless of the bubble popping like medicine, food, internet access, energy, ... . Stay away from luxury/travel stuff. Also, during a crash there is the so called "flight for quality" where people cash out from risky assets and invest in stable ones that can weather the storm. So, try to invest in assets that are A or above (https://en.wikipedia.org/wiki/S%26P_Global_Ratings https://en.wikipedia.org/wiki/S%26P_Global_Ratings). The chart is for countries, but analysts grade companies as well in case you want to stay away from treasuries/national bonds. Also diversify geographically. US will likely take the biggest hit if the bubble pops, so perhaps European markets that lagged behind in adopting the technology are safer (IMHO). Personally, I am preparing by moving money from growth items to stable ones a bit at the time. To diversify even further I am using ETFs that, in addition to what mentioned above 1) pay dividends (whether these distributed or reinvested doesn't really matter) 2) are denominated in or hedged in safer currencies (CHF especially, but also Euro) You definitely get smaller returns, but the name of the game is to maintain what you have, not to make heaps of money. Finally, I am not a financial advisor, so do your own valuations/risk assessment analysis.
kd913 8mo ago
Buy gold. Current US debt to gdp is 124%, 38.6 trillion. Japan too at 230-240%. Bond markets in both are looking seriously unhealthy (Japan going via a Liz Truss moment at present). If the AI bubble falls over, the US government is going to have to print 5 trillion to cover the bubble at least. The only option there is inflate away anyone holding cash. If hte AI succeeds and people are replaced, the US government faces a massive fiscal cliff of a loss of tax receipts. They won't be able to service the debt and again will be forced to inflate away. To service current debt projects, AI growth needs to return some 3.2-3.5%, it is currently 0.5%. Bonds, equities, USD, and housing are all risk assets right now.

It will be worse than the dot com bust. If you believe it will happen in the next 6 months how do you prepare for that?

by nick__m 8mo ago

It will be worse than the dot com bust. If you believe it will happen in the next 6 months how do you prepare for that?

ars 8mo ago

Almost all the gains in the SNP500 are NVidia, and other huge tech. https://www.investopedia.com/your-s-and-p-500-index-fund-might-not-be-as-diverse-as-you-think-and-you-can-blame-nvidia-for-that-11800715 https://www.investopedia.com/your-s-and-p-500-index-fund-mig... https://www.cnbc.com/2025/10/22/your-portfolio-may-be-more-tech-heavy-than-you-think.html https://www.cnbc.com/2025/10/22/your-portfolio-may-be-more-t...

pc86 8mo ago

If you truly believe this, slowly divest everything into cash, wait for the crash, then buy back in. Even buying in slowly over the course of a crash, on the way down, will save you a ton of money if you're out before it hits. But you're more likely to just cash out early, lose a bunch of gains, then buy back in later at higher prices. If you can time the crash you can make a shitload of money. But you can't, so you'll come out better if you just keep buying in every paycheck and ride it out just like you have been.

RyanOD 8mo ago
Yes to this. Take no alternative actions. Just keep investing and don't watch the market for a year or two.
- ares623 8mo ago
  There is the separate risk that Microsoft, Google, etc. will have a lower value in two years as governments get their migration off their platforms into full gear
nick__m 8mo ago
Doing nothing different is the kind of plan I can easily execute !
wing-_-nuts 8mo ago
It doesn't have to be 'ride it till it dies' or 'sell everything'. The AI bubble is almost exclusively contained to the US stock market and a few east Asian manufacturers. You're right that selling everything and 'going to cash' would be a mistake, but diversifying away from US large cap growth absolutely wouldn't. I'm 60/40 stocks/bonds. My stocks and bonds are 50/50 us/intl. ~ 10% of my us portfolio is small cap value. What's funny to me is that nobody learns from the past. This is far from the first tech bubble we've had even before the .com crash (canals, railroads, radio...). The answer, every time was diversification.
- zozbot234 8mo ago
  The east Asian semiconductor manufacturers are selling shovels in the gold rush and being very cautious about expansion given how capital-intensive the whole sector is. It's hard to come up with a scenario where they outright lose, even with the bubble popping.
  - wing-_-nuts 8mo ago
    I mean there's also a cost to not expanding too, in that you're leaving money on the table. I doubt they've really been able to resist the siren call of basically being able to print more money, but if the AI bubble collapses and they're left selling most of their production to consumers, they're gonna have a lot of stranded capital. Here's hoping they're smart enough to build a big war chest to weather the storm, but in my experience, companies rarely do.
catdog 8mo ago
“Markets can remain irrational longer than you can remain solvent.” ― John Maynard Keynes

typeofhuman 8mo ago

Buy Puts

marcyb5st 8mo ago

Invest into stuff that people will need regardless of the bubble popping like medicine, food, internet access, energy, ... . Stay away from luxury/travel stuff. Also, during a crash there is the so called "flight for quality" where people cash out from risky assets and invest in stable ones that can weather the storm. So, try to invest in assets that are A or above (https://en.wikipedia.org/wiki/S%26P_Global_Ratings https://en.wikipedia.org/wiki/S%26P_Global_Ratings). The chart is for countries, but analysts grade companies as well in case you want to stay away from treasuries/national bonds. Also diversify geographically. US will likely take the biggest hit if the bubble pops, so perhaps European markets that lagged behind in adopting the technology are safer (IMHO). Personally, I am preparing by moving money from growth items to stable ones a bit at the time. To diversify even further I am using ETFs that, in addition to what mentioned above 1) pay dividends (whether these distributed or reinvested doesn't really matter) 2) are denominated in or hedged in safer currencies (CHF especially, but also Euro) You definitely get smaller returns, but the name of the game is to maintain what you have, not to make heaps of money. Finally, I am not a financial advisor, so do your own valuations/risk assessment analysis.

kd913 8mo ago

Buy gold. Current US debt to gdp is 124%, 38.6 trillion. Japan too at 230-240%. Bond markets in both are looking seriously unhealthy (Japan going via a Liz Truss moment at present). If the AI bubble falls over, the US government is going to have to print 5 trillion to cover the bubble at least. The only option there is inflate away anyone holding cash. If hte AI succeeds and people are replaced, the US government faces a massive fiscal cliff of a loss of tax receipts. They won't be able to service the debt and again will be forced to inflate away. To service current debt projects, AI growth needs to return some 3.2-3.5%, it is currently 0.5%. Bonds, equities, USD, and housing are all risk assets right now.