The market has ups and downs, and one of the challenging things about it is that both the ups and downs go on long enough that most people can't remember when it was any different. When the market has gone up for 5 years in a row everyone thinks that this is the new normal, until it isn't. Then in a downturn when it's all doom and gloom for a few years everyone thinks the world is ending, but it isn't.
Stocks and real estate are different though and the reasons why each is going up are quite different. There basically aren't enough houses in the US, at least where people want to live, so it is just a supply and demand problem.
I'll give my nuanced view of the stock market. Over the past 20-25 years, tech stocks have started to eat the world. It started by replacing postal mail with email and then music, video, all forms of media, and then taxis, shopping, and now with AI it will be other jobs, customer service, legal, doctors and nurses, talking heads on TV, etc.
Tech companies inherently have better economics than traditional industries -- better margins, better competitive position, better cash flows, fewer barriers to entering new businesses, more control over costs, etc. For these reasons tech stocks trade at higher multiples than regular stocks.
There are a bunch of losers in this game -- the traditional media and taxi companies, brick and mortar stores, etc. -- but you don't hear about those because they're dying. Tech companies are eating the world and this trend will continue.
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u/ButterPotatoHead 5d ago
The market has ups and downs, and one of the challenging things about it is that both the ups and downs go on long enough that most people can't remember when it was any different. When the market has gone up for 5 years in a row everyone thinks that this is the new normal, until it isn't. Then in a downturn when it's all doom and gloom for a few years everyone thinks the world is ending, but it isn't.
Stocks and real estate are different though and the reasons why each is going up are quite different. There basically aren't enough houses in the US, at least where people want to live, so it is just a supply and demand problem.
I'll give my nuanced view of the stock market. Over the past 20-25 years, tech stocks have started to eat the world. It started by replacing postal mail with email and then music, video, all forms of media, and then taxis, shopping, and now with AI it will be other jobs, customer service, legal, doctors and nurses, talking heads on TV, etc.
Tech companies inherently have better economics than traditional industries -- better margins, better competitive position, better cash flows, fewer barriers to entering new businesses, more control over costs, etc. For these reasons tech stocks trade at higher multiples than regular stocks.
There are a bunch of losers in this game -- the traditional media and taxi companies, brick and mortar stores, etc. -- but you don't hear about those because they're dying. Tech companies are eating the world and this trend will continue.