Excluding dividends is a pretty big asterisk, including them you're back to even within 6.5 years.

Dividends are part of the total returns and cant just be ignored. Taking them into account, the break-even point is non-insignificantly earlier.

It’s the total returns that matter, not just stock price.

Well, you aren't necessarily better sitting out entirely.

When the stock market slumps like that, continual investment lowers your average cost basis.

e.g.:

Year 1: Buy 1 stock at $100

Year 2: Buy 1 stock at $50 (post-crash)

Year 3: Buy 1 stock at $60

Year 4: Buy 1 stock at $70

Year 5: Buy 1 stock at $80

If we just look at "Year 1 = $100, Year 5 = $80" then it looks like we lost $20/share.

However, our average cost basis is $72, so we actually made $8 per share.

That’s not really a great return but it’s not horrible considering the circumstances.

That's why DCA and do a good job at work is the best investment for most people.

I was there, and this is why I consider the 2000s a lost decade.

Honestly we only just started to get back into the swing of things from 2012-2016 when Obama's reelection provided enough market confidence for electric cars to reach MVP status in 2013 and solar panels to begin scaling until Trump slapped a 30% tariff on them in 2018. Progress in sustainability is my litmus test for the economic viability of getting real work done in the economy, sort of like grading a steakhouse on how good its least-ordered mushroom appetizer tastes. We could also choose healthcare, education or any other field whose success is determined by the social good it provides.

If it weren't for the arrival of AI, I'd call this a wasted quarter century.

So if you knew in advance about the timing of both the tech bubble and the real estate bubble, you could have made a lot of money trading on that?

This is the definition of survivorship bias. There are a ton of tech stocks that you would have lost your shirt on had you invested in them just prior to the crash.

Even if you invested in a company that ultimately became a winner, you'd need to be able to hold on to it throughout the correction. You put your savings in tech stocks, the tech sector undergoes a significant correction, the stocks dive, you get laid off because you also work in tech and now you have to liquidate your stocks to meet your obligations. (Or you just retire at the wrong time.)

The problem is psychology. People don't HODL while their retirements drop by 20, 30, 40% in a week. High earners might, institutions can, but regular every day people they take the loss, and might never go back into the market again, forgoing those recovery years.

The average recovery is 18 months I think (I'm in a meeting, and can't look it up), but people like my dad watched his retirement fizzle out in the dotcom bubble, because he was all in on tech. Then he moved to safer bond and realestate funds, and his value never recovered, and then 07/08 happened and he watched what he thought were "safe" investments disappear almost immediately. He pulled everything out of the market, and never invested again. He went through 2 crashes on his portfolio, and to this day doesn't trust stocks and bonds.

He was sold an annuity that according to him is supposed to double it's payout every 5 years it is left un touched, so he didn't touch it for 15 years, now that he is drawing it down, it draws from principal before ever touching the growth, and when he dies, only the principal will get passed to my mother. It was basically a scam.

Yeah I made millions by hanging on to my pets.com stock and just riding the wave.

No. If you bought Cisco it never recovered, once you factor in inflation. Almost the same with Intel.

If you invested in XLK (State Street Technology Select Sector SPDR ETF) In March of 2000 (just before the .com bust), you would have underperfomred SPY (S&P 500) until June 2026. As of today, the spread between the two is just over 1%, with good reason to believe that we are in another tech bubble.

https://www.etftimemachine.com/en/compare/XLK-vs-SPY?start=2...

Had you invested in XLK when it opened in 1998, then following the .com crash, it would take until early 2020 to return to parity to the S&P 500.

Held what? A majority of those companies evaporated. You'd have to cut your losses and reinvest.

Yes, if you only invest in winners you'd be very rich! Which companies will be the winners though? Nobody knows.

What about the hundreds of losers that looked good right before the burst? My coworker retells a story where he dumped his life savings in dotcom companies that went to zero.

Survivorship bias.

It took the companies that survived a decade or more to recover.

You still have to pay bills while you endure inflation and the opportunity costs in the meantime.

I was under the impression that if you bought Cisco stock for $1000 during the height of the bubble, you'd have like $1500 now?

> the GPUs are consumables on a timeline of ~3-5 years

When newer GPUs with clearly better perf/$ are released at a yearly cadence, then older GPUs might indeed become _obsolete_ at this pace, meaning that it makes more economic sense to swap them out because datacenter occupancy is extremely limited. Many of these GPUs might themselves still be functional.

The infra and its lifespan isn't what created the value that came out of the Internet. The question I think is how much value will people create with these investments

The usable life of a model is infinite. You can always fine tune it for current events and technology, or distill into a new one with a more efficient architecture.

If Anthropic or OpenAI go bankrupt they will have to auction off all their IP including code and weights. Claude won't disappear just change its name if someone else buys the trademark.

The real AGI is the friends we met along the way (to financial crisis)

Wow, is this Hacker News? Where have you been? Last night I had two agents up autonomously developing and training deep learning models much faster and better than I ever could as a professional. Seems the reddit bubble of "AI doesn't work but also it's somehow evil" has taken over this place as well.

Can you not feel it’s growing presence?

I'm literally replying to you right now while it's chugging away on my work, so yeah?

no, it's very hot, and the fans are loud and obnoxious so they keep putting it in data centers near places that don't really want it, and they install lots of natural gas turbines because the grid isn't enough and that's louder too, and then the cooling often needs a lot of water, and -- really unpopular overall, as it turns out!! huge backlash. and that's before, you know, allll the job impacts, which is when it gets ugly and threatens to complicate the whole consumption-driven structure of the economy.

... but the little dgx spark is in the room with us! it's pretty smart-ish, in a pinch!

Agreed. The "singularitarians" always seem to overlook one simple truth: we don't use the intelligence we already have. The appearance of a 100-fold increase in cognitive resources will have no immediate effect at all.

The value was driven by the size of the user base. We gave each user an arbitrary price but didn’t understand how to turn that into actual money. So if you had a website with 30M users it was valued at $900M. The late 90s early 2000s were wild times in VC, and some lucky people realizing how nonsensical all that was cashed out on time.

Yes, I have no doubt that AI is going to seriously impact the economy over time. I have lots of doubt that it can impact the economy sufficiently quickly and with enough impact to pay out all the very, very, very large bets being made on it. Even as the AI quality curve has been running ahead of most predictions, its actual impact on the economy has been running well behind.

I am watching the dawning realization among the management class that even if coding costs drop to zero, Amdahl's Law means that perhaps productivity doubles for most software engineers, rather than goes to the MOON. AI can help some of the other bottlenecks, but not 100%.

On the positive side, we programmers have been trying to collectively explain to management for decades now that our jobs are not just 100% banging away at code on keyboards, we're not just interchangable code monkeys. Well, they're getting their noses rubbed in it now, complete with metrics and charts and all the other things they value more than the feedback from their employees.

In fact I was just noticing this week... in the past few months I had been really banging away at a lot of code projects. I was doing that whole "3 or 4 streams going on at once" that many of us have talked about, with a variety of mixed feelings. But in the past few weeks that seems to have starved out. I seem to have burned through the things that I was blocked on code for, and had a reasonable business case to pursue. Now my projects are all blocking up on non-code things again... communication with other teams. Review of documents that are irreducibly things humans need to review. Coordination and planning. Applying human attention to cover over the way that even the best frontier models still seem to have huge gaps in their superficially-expansive automated testing code that they write for their own code. I'm still sometimes unblocking multiple things at once and can briefly have multiple projects going, but then I hit a blocker somewhere and I end up unable to continue having multiple simultaneous code projects going at once.

(The document review is a particularly interesting case. The documents in question are something we expect some humans to at least skim, but are going to be basically a meta-program for AIs programming the rest of the company's code. It is important to get it right because every error is going to magnify quite a bit. AIs are helping a lot with that document, yes, I certainly agree we are proceeding more quickly with it than the same project 5 years ago would have gone, but it is also irreducibly sopping up a lot of human attention.)

Point of all this being that the casual presumption that AI will just utterly destroy the entire economy because it is good at coding may prove to be, well, yeah, exactly the same as the assumption that we are going to all be rich by 2002 because we'll just shift the entire economy to be on the internet and everything will multiply by 1000 in just a couple years as a result. But everything can't be shifted on to the internet. I can't eat a web page. AI can't do everything, and as it advances the things it can't do become a larger and larger percent of the remaining pie as a result. It seems to rhyme a lot with the dot com crash.

>The dot.com bubble didn't pop because the web was a bad idea.

The web WAS a bad idea though.

I don't doubt there will be a big crash at some point, but I actually doubt we've reached that point yet. So far stock increases have been driven by earning increases, not speculation. I know an "earnings bubble" can be a thing, but given how useful I know these models to be, and how few use them in the way they can be, I think we have far to go still.

More specifically, the demand for fiber didn't come - but the demand for bandwidth did!

Those companies were building out fiber like it was a legacy telephone network: needing a massive amount of individual wire pairs to carry a massive amount of parallel transmissions. In reality the bandwidth per channel was rapidly increasing due to better tx/rx equipment, and with the rise of WDM it was suddenly possible to carry not one channel per fiber pair but several dozen.

When you were laying fiber on the assumption that a single long-distance pair was going to carry 1Gbps - and therefore laying hundreds of fiber pairs in a trench at once - it is quite a big upheaval when that single pair can now carry 100 channels of 10Gbps each. Your brand-new expensive fiber trunk can suddenly be replaced by a single spare pair some utility company had lying around already.

Turns out laying fiber isn't a great business when the capacity of existing fiber is doubling every year or so!

The demand for AI exists today.

As in OpenAI is at capacity, 6.1 Sol is served at 30 tokens per second and with frequent capacity errors.

Anthropic seems better now but were also working hard on expanding capacity.

I have no crystal ball to see how future demand and capacity will develop, but as of today these data center investments appear to be fully utilized.

Some people anyway seem to think a collapse is inevitable.

More importantly, if the market goes south, they rip up the contracts

I agree there's no low demand.

> The stock prices of 9/10 of the top S&P 500 stocks have significant AI exposure

not true.. only ~2-3% exposure at model layer. rest are at hardware layer..

There's no downside to ordering a machine in 2030 an cancelling it later if it turns out you don't want it.

The further out an order backlog is, the more orders get put in to hold a spot in line.