just frank wrote: ↑Fri Aug 23, 2024 7:49 am
Nathan Drake wrote: ↑Thu Aug 22, 2024 8:55 pm
just frank wrote: ↑Thu Aug 22, 2024 12:32 pm
I am fascinated that that so many individuals suppose that diversifying ex-Tech (or another tilt) might be actually helpful after a ‘AI-hype correction’.Whereas I suppose that some kind of factor may’ve been useful within the tech crash of 2000, its not clear if that instance would apply right here.
Within the tech crash, plenty of small startups obtained worn out. Such wipeouts actually damage returns, and would (I assume) contribute to plenty of index losses. Does anybody right here suppose that the ‘magnificent 7’ or whatnot giant corporations at the moment investing in AI are going to get worn out in some kind of AI hype bubble popping? I do not.
Why cannot I say that projected vitality consumption of AI servers is propping up vitality and uncooked materials demand, and people will endure too?
The magnificent 7 don’t have to get worn out to have a big detrimental impression
They simply have to not develop as a lot as anticipated, with a double whammy of smaller earnings and decrease valuations considerably harming returns
Suppose Cisco or Microsoft within the early 00s
Nonetheless “nice” companies however significantly overvalued resulting in very poor returns for a very long time
You miss my level. I’m asking for justification for the premise that tilting ex-tech is a assured win. If tech in 2024 is such a big a part of the market/economic system (in contrast to 1999) do we actually suppose the opposite sectors are decoupled? Are we assuming that in a bubble popping recession ex-tech shares (and worth) will merely go down much less?
Looks like market timing to me… and we all know that that does not at all times work out properly, even when ‘everybody is aware of’ one thing goes to occur.
Or not less than I believed I heard that someplace round right here as soon as.
No prediction right here, however one risk – and solely a risk! – is that within the subsequent crash, the same old laggards (small caps, worth, and ex-US) may crash onerous, whereas large-cap US tech may do exactly positive… so, a “Matthew Impact”, because it had been, the place these sectors or segments of the market which can be seemingly due for a rotation into management, not solely do not make that rotation, however find yourself doing even worse, than earlier than.
To anyone holding an S&P 500 fund, this rotation or lack of rotation, does not actually matter. However to these holding numerous midcap, smallcap and ex-US, it is likely to be very disagreeable certainly.
