Dot-Com Bubble Vs AI Surge: Same Story, Different Ending?

 

Dot Com Boom & Bubble Vs Artificial Intelligence

 

I got an email the other day with a chart. It was from some financial analysts – people who get paid to stare at lines on a screen. And this chart, it’s a good one. It's comparing two of the biggest tech moments in history: Netscape in 1994, and ChatGPT just a couple years ago.

 

You see, back in the 90s, when Netscape came out, everyone thought they were a genius if they bought some internet stock. Then the bubble burst. A lot of people got... well, they got a financial planning lesson they didn’t want.

 

Is this time different?

 

Now, with ChatGPT, the Nasdaq is up 105% in the same amount of time. People are saying, "It's different this time." The money is flowing to companies that actually make money. Like Nvidia. Or Microsoft. Not "Pets.com" with a fancy business plan about selling dog food online.

 

I’m not saying it won’t go down. It's just that last time, it was like a guy who’s never run before trying to sprint a marathon. This time, it's a marathon runner with a new pair of sneakers. Still could trip, but the fundamentals are better.

 

The Importance of Having a Plan

 

The lesson? Just because the technology is new doesn't mean the rules of investing change. We’ve seen this movie before. And if you have a plan, you don't have to worry about whether or not this movie has a happy ending. You just sit back and watch it with a competent financial planner. Then you'll be set for the long run. If we want to get a bit poetic and talk about what a "long run" is, well... that's a conversation for another newsletter.

 

This excerpt was taken from the Charted Territory newsletter. To subscribe to the monthly newsletter, click here.