4 ms·

No, the crash (that we all know is coming) will do that. Until then, history teaches that we'll just keep going up and up

JumpCrisscross 5mo ago
> the crash (that we all know is coming) will do that. Until then, history teaches that we'll just keep going up and up Stock prices don't have to crash. They can just stagnate while profits catch up and multiples compress. Debt binges, on the other hand, tend to go bust with a bang. But after the recent private-credit scare, the AI build-out has been predominantly financed with stock. (I think.)
- layoric 5mo ago
  Hasn't there been a _lot_ of debt to buy up Nvidia GPUs? I follow this stuff somewhat closely and it feels intentionally confusing, so I've likely lost track.
  - JumpCrisscross 5mo ago
    > Hasn't there been a _lot_ of debt to buy up Nvidia GPUs? I believe that's been concentrated at the hyperscaler layer, and subsided when the aforementioned private-credit scare reared its head. (I haven't heard a big datacenter debt deal announced in a while. Though of course that doesn't mean they aren't being done.)
  - aurareturn 5mo ago
    And we're still extremely compute constrained. We need more Nvidia GPUs, RAM, power.
- hn_throwaway_99 5mo ago
  > Equity bubbles don't have to crash. Prices can just stagnate while profits catch up and multiples compress. Is there is historical evidence for that? As someone who used to follow Jeremy Grantham a lot (he considered himself a "bubble historian"), IIRC every bubble he studied always mean reverted, and it usually (maybe always, can't remember) overshot on the downside during the correction.
  - JumpCrisscross 5mo ago
    > IIRC every bubble he studied always mean reverted This really depends on how we're defining these things. Let's call a stock-market bubble a period of elevated multiples. That can mean revert by prices decreasing while earnings stay constant or by prices staying constant and earnings rising. (Alternatively, both earnings and multiples can rise and fall.)
    - hn_throwaway_99 5mo ago
      Yes, for equity prices in particular he talks about P/E ratios (among some other metrics like corporate profit margins), and so you're right, it would be possible for this to mean revert by prices holding stagnant and earnings catching up. However, as far as I can remember (primarily because a big emphasis of his was how unchecked bubbles can cause a lot of damage on the downside) all the historical bubbles he studied (something like 50) always crashed with a big price drop. Not 100% sure though, which is why I was curious if you had any contrary examples.
irjustin 5mo ago
This is one of those "everyone who dies, breaths air" statements. It's frustrating people who parrot it think they're smart by saying it to others with no basis and finally when it does happen they're like SEE SEE!? > Until then, history teaches that we'll just keep going up and up And this is the more important part. As long as you're <40 you SHOULD always buy SPY or VOO, even at the very top. People have been saying the crash has been coming since 2022. If you believed this and acted on it, you would've missed 3-4 +10%/yr returns. As Buffet says: You can't time the market; be in it.
- aurareturn 5mo ago
  I was old enough to remember the 08 crash. Then the market starting recovering in 2011/2012 and the sentiment was that the system would crash again soon like 08. Turns out, it was an amazing time to invest. Post 08 crash, all sorts of conspiracy websites like Zero Hedge were popular saying how the world economy would keep crashing.
  - cogogo 5mo ago
    I am old enough to have had multiple career changes since starting on a major firm’s rates floor in 2008. These IPOs are tiny compared to the overall stock market and the stock market is absolutely tiny compared to debt markets. People consistently underestimate the size of the world economy or even their local economy. The world may look small from an orion capsule near the moon but almost every aspect of human society is bigger than most people can reason about. It is possible these IPOs have an outsized impact on sentiment for weird reasons. But it won’t be an actual outsized impact on capital markets. Edit: I should add the AI bubble can absolutely burst but there is no reason to believe these IPOs are the end of the ride. If I knew I would be…
    - lompad 5mo ago
      The thing is that the IPOs necessitate a full release of their actual costs for inference and training. This by itself should be enough to pop the bubble, if the occasional bits of it we get are anything to go by. There is a reason anthropic is still hiding those details: > key details typically included in that form about a company’s operations — like potential risks to its business, executive compensation, and other financials — won’t become public until later on in the process Source: https://www.theverge.com/ai-artificial-intelligence/941016/anthropic-has-officially-filed-to-go-public https://www.theverge.com/ai-artificial-intelligence/941016/a... We'll see, maybe they trigger some new rule change to be allowed to keep it hidden. Wouldn't be surprised about that at all.
TechSquidTV 5mo ago
I very much disagree that it's coming. I think we need to completely reset our expectations of how the market works. There's been nearly an entire generation working in this "new" bull market, where things like EPS mean absolutely nothing and speculation no longer requires actual returns.
- 486sx33 5mo ago
  It’s unfortunate, but this exact sentiment precludes every market crash. Just before dotcom burst it was the same thing. Technology will change everything the nasdaq will continue to grow in the technology age, etc etc. eventually the chickens come home to roost as they say
  - TechSquidTV 4mo ago
    It did though. Look at it now. The crash was incredibly short lived, and if you try to point it out on a graph of the last 30 years, you won't be able to find it.
- ElProlactin 5mo ago
  > There's been nearly an entire generation working in this "new" bull market You mean 0DTE babies?
- djeastm 5mo ago
  >I think we need to completely reset our expectations of how the market works. Is this not just "It's different this time" thinking? I remember it being used all the time during the dotcom boom

JumpCrisscross 5mo ago

> the crash (that we all know is coming) will do that. Until then, history teaches that we'll just keep going up and up Stock prices don't have to crash. They can just stagnate while profits catch up and multiples compress. Debt binges, on the other hand, tend to go bust with a bang. But after the recent private-credit scare, the AI build-out has been predominantly financed with stock. (I think.)

layoric 5mo ago
Hasn't there been a _lot_ of debt to buy up Nvidia GPUs? I follow this stuff somewhat closely and it feels intentionally confusing, so I've likely lost track.
- JumpCrisscross 5mo ago
  > Hasn't there been a _lot_ of debt to buy up Nvidia GPUs? I believe that's been concentrated at the hyperscaler layer, and subsided when the aforementioned private-credit scare reared its head. (I haven't heard a big datacenter debt deal announced in a while. Though of course that doesn't mean they aren't being done.)
- aurareturn 5mo ago
  And we're still extremely compute constrained. We need more Nvidia GPUs, RAM, power.
hn_throwaway_99 5mo ago
> Equity bubbles don't have to crash. Prices can just stagnate while profits catch up and multiples compress. Is there is historical evidence for that? As someone who used to follow Jeremy Grantham a lot (he considered himself a "bubble historian"), IIRC every bubble he studied always mean reverted, and it usually (maybe always, can't remember) overshot on the downside during the correction.
- JumpCrisscross 5mo ago
  > IIRC every bubble he studied always mean reverted This really depends on how we're defining these things. Let's call a stock-market bubble a period of elevated multiples. That can mean revert by prices decreasing while earnings stay constant or by prices staying constant and earnings rising. (Alternatively, both earnings and multiples can rise and fall.)
  - hn_throwaway_99 5mo ago
    Yes, for equity prices in particular he talks about P/E ratios (among some other metrics like corporate profit margins), and so you're right, it would be possible for this to mean revert by prices holding stagnant and earnings catching up. However, as far as I can remember (primarily because a big emphasis of his was how unchecked bubbles can cause a lot of damage on the downside) all the historical bubbles he studied (something like 50) always crashed with a big price drop. Not 100% sure though, which is why I was curious if you had any contrary examples.

irjustin 5mo ago

This is one of those "everyone who dies, breaths air" statements. It's frustrating people who parrot it think they're smart by saying it to others with no basis and finally when it does happen they're like SEE SEE!? > Until then, history teaches that we'll just keep going up and up And this is the more important part. As long as you're <40 you SHOULD always buy SPY or VOO, even at the very top. People have been saying the crash has been coming since 2022. If you believed this and acted on it, you would've missed 3-4 +10%/yr returns. As Buffet says: You can't time the market; be in it.

aurareturn 5mo ago
I was old enough to remember the 08 crash. Then the market starting recovering in 2011/2012 and the sentiment was that the system would crash again soon like 08. Turns out, it was an amazing time to invest. Post 08 crash, all sorts of conspiracy websites like Zero Hedge were popular saying how the world economy would keep crashing.
- cogogo 5mo ago
  I am old enough to have had multiple career changes since starting on a major firm’s rates floor in 2008. These IPOs are tiny compared to the overall stock market and the stock market is absolutely tiny compared to debt markets. People consistently underestimate the size of the world economy or even their local economy. The world may look small from an orion capsule near the moon but almost every aspect of human society is bigger than most people can reason about. It is possible these IPOs have an outsized impact on sentiment for weird reasons. But it won’t be an actual outsized impact on capital markets. Edit: I should add the AI bubble can absolutely burst but there is no reason to believe these IPOs are the end of the ride. If I knew I would be…
  - lompad 5mo ago
    The thing is that the IPOs necessitate a full release of their actual costs for inference and training. This by itself should be enough to pop the bubble, if the occasional bits of it we get are anything to go by. There is a reason anthropic is still hiding those details: > key details typically included in that form about a company’s operations — like potential risks to its business, executive compensation, and other financials — won’t become public until later on in the process Source: https://www.theverge.com/ai-artificial-intelligence/941016/anthropic-has-officially-filed-to-go-public https://www.theverge.com/ai-artificial-intelligence/941016/a... We'll see, maybe they trigger some new rule change to be allowed to keep it hidden. Wouldn't be surprised about that at all.

TechSquidTV 5mo ago

I very much disagree that it's coming. I think we need to completely reset our expectations of how the market works. There's been nearly an entire generation working in this "new" bull market, where things like EPS mean absolutely nothing and speculation no longer requires actual returns.

486sx33 5mo ago
It’s unfortunate, but this exact sentiment precludes every market crash. Just before dotcom burst it was the same thing. Technology will change everything the nasdaq will continue to grow in the technology age, etc etc. eventually the chickens come home to roost as they say
- TechSquidTV 4mo ago
  It did though. Look at it now. The crash was incredibly short lived, and if you try to point it out on a graph of the last 30 years, you won't be able to find it.
ElProlactin 5mo ago
> There's been nearly an entire generation working in this "new" bull market You mean 0DTE babies?
djeastm 5mo ago
>I think we need to completely reset our expectations of how the market works. Is this not just "It's different this time" thinking? I remember it being used all the time during the dotcom boom