I am pretty much resigned to watching rather than participating in the rally ( I have to sell some to buy anything, and tough to do it when what I am selling is more than 60-70% down!!!)
But have been closely watching the market to understand how it functions.
It is clear to me that I joined the SAAS and COVID related stocks after the rally had already run its course…and looking back, I see this bubble started in 2018 or so…with 2020 making a killing!!!
So, now we have the AI hype/ mania/ bubble…It doesnt matter what we call them, but the market reaction has been nothing less than stunning!
And the most bewildering thing to me, is that while people are harping about recession…the analysts from the same team are also updating and re-updating theri guidance with eye popping targets!!
I mean, it is one thing to say that Bank of America coming with a $450 target for NVDA in the aftermath of the block buster earnings…but, but, in just a few more days, they have revised it…to $500!
And needless to say, there are some fundamentally sound stocks which seem to be running with NVDA ( but sadly, there are also crap stocks riding the wave!)
So, the question is: How long do bubbles last? If we are in the beginning of the AI bubble, how long does this run for?
And in your experience, have you seen bubbles arising amid expected recession?
I am glad I am not running an active ETF or mutual fund…This is likely driving them crazy!!! They can not afford to sit out, as they will be questioned why they don’t have the years hottest stocks…
This last 2 years have aged me by 20 years!!!