My personal take? It probably doesn’t matter—at least not in the short term.
Markets Can Stay Irrational (Much) Longer Than Expected
If there’s one lesson the markets have taught me over the years, it’s that rationality doesn’t pay well in the near term. I’ve been there before: trying to bet against valuations that didn’t make sense, expecting gravity to kick in, only to watch prices climb higher and higher. The old saying still rings true—the market can stay irrational longer than you can stay solvent.
So while valuations are stretched and sentiment feels euphoric, history has shown that bubbles don’t pop just because they “should.” They end when liquidity runs out or when the narrative finally shifts—and timing that is nearly impossible.
The IPO Wave: A Warning Sign?
What’s catching my attention more than the price action itself is the surge in IPOs. Billions of dollars are flowing into newly listed companies, many of which are quick to align themselves with the AI narrative. It’s classic late-cycle behavior: companies rushing to capitalize on hot valuations while investor appetite is still strong.
When great companies can afford to stay private longer—as many do today—it’s worth asking why so many are suddenly choosing to go public. Often, that timing signals one thing: insiders see an opportunity to sell into strength while valuations remain frothy.
Retail Access and Overexposure
Another interesting dynamic is how retail investors are being drawn into this wave. Modern trading apps and new investment platforms have made IPO participation easier than ever, giving individuals access to offerings that were once reserved for institutions. That sounds great in theory, but it also means that retail traders are increasingly the exit liquidity for these newly issued shares.
The combination of high valuations, aggressive issuance, and enthusiastic retail participation has all the hallmarks of a market getting a bit too comfortable.
Proceeding with Caution
To be clear, I’m not calling a top—because, frankly, I’ve been wrong about that before. But I am cautious. Whenever I see a flood of new listings, lofty narratives, and a sense of invincibility in the air, I start paying closer attention to what the “smart money” might be doing quietly in the background.
Maybe this AI revolution really does justify higher multiples and permanent transformation. Or maybe it’s just another chapter in the long history of markets overshooting fair value before coming back to earth.
Either way, I’ll be keeping a close eye on how this unfolds—while resisting the temptation to fight the irrationality head-on. Experience has taught me that sometimes the best trade is simply patience.
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