When the bubble pops, most will panic. A few will get rich. The difference isn’t luck — it’s discipline.
Folks keep saying AI is the future, and they’re right — but that doesn’t mean every company with “AI” in its name is the future too. The technology is real; the profits are not. That’s how every bubble begins — with a truth that people stretch until it breaks. In 1999 it was “the internet will change everything.” In 2008 it was “housing always goes up.” Today it’s “AI will replace everyone.” Maybe. But before it replaces everyone, it’ll humble quite a few investors.
You can see it in the numbers. The CAPE ratio — a measure that compares stock prices to ten years of average inflation-adjusted profits — is sitting around 40. That’s a polite way of saying investors are paying $40 for every $1 of profit. The last time we saw that was right before the dot-com crash. It’s like paying a hundred bucks for a hamburger just because the cook says it’s made with “AI beef.”
So yes, AI is real. But bubbles are real too, and they don’t burst because the idea was false — they burst because the price was foolish.
You can’t stop the crowd from chasing the next miracle. But you can refuse to join the stampede. Keep your cash steady, your principles close, and your emotions quieter than CNBC at closing bell.
Tape these seven principles where you can see them — right next to your keyboard, above your monitor, or on a sticky note over that “Buy” button:
Core Investment Rules
-
Be an investor, not a speculator.
You’re buying a piece of a business, not a lottery ticket. -
Price ≠ Value.
Stocks are an auction; the crowd decides the price. Value comes from future cash flows. -
Buy when others are fearful.
Crashes are “going-out-of-business” sales for disciplined investors. -
Time in the market beats timing the market.
Dollar-cost average into low-cost ETFs or quality stocks every month — no matter what headlines say. -
Know what you own.
If you can’t explain how a company makes money, don’t buy it. -
Stay calm through chaos.
In the short run, markets are a voting machine; in the long run, a weighing machine. Fundamentals win. -
Patience is your edge.
Crashes are temporary. Value compounds. Discipline outperforms emotion.
Because when the music stops,
the folks with principles still own the chairs.
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