For those that have experienced atleast one market cycle, you build an instinct to be wary of price appreciation that greatly outpaces the historical rate. Seeing the Dot Com bubble, 2008 GFC, all the crypto boom and busts builds pattern recognition warning alarms in your brain. You don't want to enter the market because its too high or want to sell what you have.
It's important to recognize that we are at one of the most profoundly unique asymmetric moments in history. The only move right now is to lengthen your time horizon and abandon short-termism entirely.
Being overly concerned about bubbles is foolish. Trying to time the market is foolish. Short term fluctuations and corrections will always happen but are entirely noise since we're in such close reach to the singularity. We are going to have runaway growth in AI/Robotics/Energy/innovation. We will have billions (or more) of AI agent workers, humanoid robots, data centers in space, multiplanetary colonization, vastly better medical therapies and fundamentally change the development speed and throughput of the number of technological breakthroughs across all domains within the next decade. We will compress more technological progress and economic growth in the next 2 decades than in the entire history of civilization combined.
We are already on the steep part of the J curve but it's hard to see when we zoom in to the day to day or week to week. 100% of Anthropic product code is now written by Claude. PMs have a team of virtual SWEs that almost transmute time. Companies that efficiently utilize AI have been increasing their product iteration speed not by single digit %, not double digit %, but triple digit %. And the capabilities of these tools are still improving at an ever faster rate. Whether we officially hit ASI in 2027 or 2029 doesn't really matter. It WILL happen. By the time it's officially declared, asset prices of the things you want to own will be many many times higher.
Quite feasibly, the next 3-10 years of real economic growth could register as 20-sigma events under any historical distribution. Growth that was previously considered near impossible, driven by second- and third-order changes that have no precedent. Traditional valuation models are unequipped to price these changes. The potential for runaway upside is so vast that it's very difficult to capture them with conventional present value calculations.
The velocity of wealth appreciation will be extremely startling just like it was when crypto first minted many billionaires and centimillionaires in a short period of time, but orders of magnitude more extreme. If not exposed, it will be very hard to buy into prices that are appreciating so quickly, but unlike previous bubbles, real economic value creation will be able to keep much better pace with vertical asset appreciation. Those that have operated with the understanding of the exponential horizon over the last 3 years have benefited greatly. If you have not adopted this understanding, it's not too late.
It's essential to always think about downside risk, but this is the largest upside risk the world has ever seen. Learn how to stomach risks for longer. This is not the time to trade. Investing generally outperforms trading for the vast majority of the population but the gap between the EV of trading vs investing will grow larger than ever. How much is the embedded call option of the singularity worth?
