When the AI Bubble Bursts, This Is What I’ll Be Holding

It’s the night of December 5, 1996. Somewhere in America, there’s a guy called Hank who can’t sleep.

Earlier that day, Fed chair Alan Greenspan got on his soapbox and warned the entire country about the market’s “irrational exuberance.”

The Dow has hit 6,600 for the first time. The Nasdaq is up 23% this year alone. And now the most powerful banker in the world is saying what Hank has been thinking for months: This can’t last.

So Hank does what he thinks any rational person would do. He sets an alarm for 9:30 AM, and as soon as the market opens, he calls his broker to sell it all.

He gets rid of his Microsoft shares… his Dell shares… his Apple shares. Once he’s in cash, he feels like a weight has been lifted. Then he waits for the crash. But it never seems to come. Days turn into weeks… which turn into months… which turn into years.

One morning in early 2000, he opens the pages of the Wall Street Journal: The Nasdaq is above 4,500, a new all-time high. He does the math. Three years of sitting in cash, and the market has nearly quadrupled without him. He has no way of knowing the crash is only weeks away.

It wasn’t until March 10, 2000 that the dot-com bubble finally popped. More than three years after Greenspan’s speech. Hank had been right about the bubble. He was just catastrophically early.

Now, before I go on, I should tell you Hank isn’t someone I know. He’s fictional… But there were thousands of Hanks in 1996. Maybe you knew someone like him.

I was too young to be in the markets then. But these days, I think a lot about the Hanks of that bubble era. Because the clues I’m seeing right now tell me it’s not 2000 yet. It’s still 1996.

And I’m determined not to make Hank’s mistake – in either direction.

It’s Still 1996