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The US stock market registered a noticeable decline in tech stocks just because a chinese AI company announced their newest generative model was cheaper to operate. Are investors dumb? I maintain my opinion that tech companies are overvalued but that decline felt pretty exaggerated.
I answered this in response to Sean's answer, but apparently nobody read it, so I'll answer it here: @ColorStorm
inhahe · 1d
i imagine there's somewhat of a recursive, self-fueling feature to it. like, it may seem dumb for the price to go down so much just because of that, but investors foresee that that the other investors will foresee that the other investors will foresee, etc. that they'll all be dumb and the price will go down, so they end up being right, and therefore smart.
You are still expecting that stock markets have something to do with educated guessing or evaluation on logical rules or measures. There is no evidence to support that sort of bias. All the available evidence point into a different direction but sensible reasoning. That AI hype is another new pig that get up hopes high to grow fat quickly. But it might be a giraffe. Stocks grew by such a substantial margin that is not reflected by any sort of value or growth by the industry that the bubble exceeds any rationale. Having that in mind, yes, investors are dumb. But because they are dumb the size of the shit that might hit the fan is also on the rise. So what to do? Press the throttle and accelerate to new markets at any cost, so that in case one market crashes you can cover the losses by new speculative "values" and in the end the tax payer will cover everything with everything including their own life.
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