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birb_cromble  1d ago (text post)   720 thread views

Weekly Finance Thread

Since a lot of us here have expressed interest in not starving to death in a gutter, I figured I'd start a weekly thread to discuss financial matters.

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Oh, good timing, I just crossed a very large milestone in my portfolio today. A few questions:

  • What do you think the chances are that we are currently in a large (AI related or not AI related) bubble that will pop? It seems like the money printing of the past few years has massive upward pressure on the stock market so I don't know how to unpick the two.
  • I have always been a saver and live fairly frugally. But I am itching to increase my standard of living with some of my invested money. At what number in USD would you personally be comfortable beginning to draw down, say, 4% of your portfolio a year to increase your standard of living sustainably?
  • It seems like I am outpacing the rate of inflation with my investments. For example I have doubled my money in 4 years, whereas I am not paying nearly 2 times as much for gas or groceries or restaurants compared with 2022. And it seems like inflation is much slower at the lower end of prices- for example goods at thrift stores or antique stores seem to be retaining low prices while things like houses and fine art are exploding in valuation. Do you think it's likely to stay this way in the US for a while or do you think the inflation will be coming for lower priced goods as well?
  • Do you think it's too late to buy bitcoin or is it still wise to buy it today? I have only like $2000 worth of bitcoin because I never found it very appealing or interesting but I can see its use in hedging against fiat currency debasement and many people smarter and richer than me are still interested in its success.
  • The older I get, the more I have access to but the less I want. I have already satisfied most of my needs and desires from my youth. How do I generate more desire within myself as I grow older? (I am in my mid thirties if that is relevant.)

What do you think the chances are that we are currently in a large (AI related or not AI related) bubble that will pop?

The last few tech-related meta cycles have both changed everything and not consistently boomed or busted from a stock price perspective. Personal computing in the '80s took over everything, but even Apple's stock has been up and down and looked like a loser before Jobs returned. The Internet around 2000 looked like it would change everything --- and it did --- but my pets.com shares were a bad idea.

I'd bet AI is similar, and picking a specific single winner is improbable. Weak predictions: local models can do most of what people want; big models don't scale much past human abilities, but enough to be game-changing; AI doesn't think truly creatively well enough to replace human cultural achievements, but it's consensus-centering output may be a pragmatic counterbalance to rage-seeking social media algorithms.

I'd bet AI is similar, and picking a specific single winner is improbable

Wasn't that kind of the issue with early railroads? They wound up being transformative, but a great many of the early companies and frontrunners didn't do well?

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