“If shoe-shine boys are giving stock tips, then it’s time to get out of the market.” These days, everyone is talking about AI. Is it time to get out of the market?
The balance of power between professional and popular opinion is surely variable, and today we seem to live in a world in which popular opinion is more dominant. I think then the key is to ride popular opinion not bet against it. For example, when Musk said he would shortly be making a robotaxi announcement, Tesla rose over 33% even though it was clearly hype. The smart man then is not the one who simply dismisses the hype, it is the one who plays it, e.g. selling instantly when he hears that Musk has postponed the announcement, not before in anticipation of such a postponement, because in that before time the potential for irrational exuberance is limitless.
The balance of power between professional and popular opinion is surely variable, and today we seem to live in a world in which popular opinion is more dominant. I think then the key is to ride popular opinion not bet against it. For example, when Musk said he would shortly be making a robotaxi announcement, Tesla rose over 33% even though it was clearly hype. The smart man then is not the one who simply dismisses the hype, it is the one who plays it, e.g. selling instantly when he hears that Musk has postponed the announcement, not before in anticipation of such a postponement, because in that before time the potential for irrational exuberance is limitless.