1999 is again, and I’ve missed it. Ever since then, I’ve been chasing that subsequent 50-bagger, the sort of life-changing winner that helped me provide you with the down cost for my first property. However he is been elusive.
I nonetheless keep in mind sitting on the worldwide buying and selling flooring at Goldman Sachs at 1 New York Plaza, glued to my display screen as web names like Commerce One and Yahoo soared greater nearly every day. My agency had simply gone public, immediately turning the companions into decamillionaires. The vitality was electrical – optimism in every single place, fortunes being made, CNBC blaring nonstop.
Quick ahead to at present: tech shares are main once more, crypto buyers are shopping for Lambos, and AI is woven into all the pieces – our telephones, portfolios, and every day conversations. San Francisco, as soon as quiet throughout the pandemic, is buzzing once more. Startups are hiring and everybody’s speaking concerning the subsequent huge factor.
And I’ll admit, I’m hyped. Now we have the potential to get extraordinarily wealthy over the subsequent 5 years.
Then the 2000 dot-com crash vaporized trillions in wealth and taught me one of the necessary classes of my life: euphoria at all times feels rational till it doesn’t. Ah, cheers to irrational exuberance.
The Return Of The 1999 Ambiance
I’m investing in public tech shares, personal progress shares, somewhat little bit of Bitcoin, and San Francisco actual property, which all really feel poised for continued progress.
Again in 1999, I promised myself that if the mania ever returned, I’d lean in tougher, however smarter. Now, with buyers as soon as once more betting on infinite progress, that point has come.
So how will we stability greed with knowledge? How will we experience this wave of innovation with out repeating the errors of the previous? Let’s discover what historical past teaches us and how one can navigate this AI-driven rocket responsibly.
As a result of frankly, with way more capital at stake, I don’t wish to lose my shirt once more. However even when I do, I’ve heard the “dad bod” is essentially the most engaging male physique kind, making us really feel approachable, steady, and mature.
What Makes This Time Completely different (and What Doesn’t)
Sure, this time is totally different, and that’s precisely what everybody says earlier than each bubble bursts. However there are some key distinctions price acknowledging.
- AI has tangible productiveness results. In contrast to many dot-com concepts that by no means made cash, AI is already saving corporations billions.
- Stability sheets are stronger. Company debt hundreds are more healthy than in 1999 and 2007, and plenty of corporations are flush with money.
- Robust earnings and money circulation. As well as, the most important tech corporations are producing monumental free money circulation.
- Shoppers are additionally a lot stronger. Family leverage is decrease than in 1999 and 2007 as effectively.
- Financial coverage is popping supportive once more. Amazingly, the Fed is resuming its rate of interest cuts with all the pieces at all-time highs, offering a tailwind for danger belongings.
That mentioned, the psychology of manias by no means adjustments. Folks overestimate short-term beneficial properties and underestimate long-term disruption. AI is actual, however that doesn’t imply each AI inventory is. Some corporations will go to the moon; the overwhelming majority will go to zero.
That’s why perspective and diversification matter greater than ever.
How I’m Positioning for The New Mania
Right here’s how I’m approaching this cycle, and a few recommendations in the event you’re feeling swept up by the hype. As we should always all keep in mind, there are not any ensures in danger belongings. At all times do your due diligence and make investments based on your personal targets and danger tolerance.
1. Keep Invested, However Preserve Publicity Limits
I’m absolutely collaborating on this bull run however will trim particular person positions as soon as they exceed 10% of my portfolio. A concentrated portfolio works, till it doesn’t.
The ten% threshold is considerably arbitrary. You need to provide you with your personal consolation degree. In response to trendy portfolio idea and supporting research, holding round 20 to 30 positions is usually sufficient to realize many of the advantages of diversification alongside the environment friendly frontier, roughly a 3% to five% allocation per place.
It’s not sufficient to simply monitor your funding portfolio’s composition, you additionally have to view it within the context of your total internet price. Take a look at how a lot you may have in money, actual property, alternate options, bonds, and low-risk belongings.
Personally, I purpose to maintain public equities between 25% and 35% of my whole internet price. That allocation offers me the arrogance to remain the course throughout downturns. If the common bear market declines about 35%, that might translate to roughly a ten% hit to my total internet price, which I can comfortably abdomen.
Confirm how a lot of your internet price you are snug shedding.
2. Shift Extra In direction of Actual Property
1999 via 2009 taught me that shares are humorous cash with no actual utility. You possibly can’t drink your shares, dwell in your shares, or bodily take pleasure in them. The one solution to profit is to promote some shares now and again to fund a greater life.
The most effective asset I’ve discovered that provides each potential appreciation and real-world utility is actual property. There’s no higher feeling than watching your house recognize in worth when you truly take pleasure in residing in it. When you have youngsters, that satisfaction multiplies. You’re not simply constructing wealth, you’re offering stability and recollections on your most valuable belongings.
I’m lengthy as a lot San Francisco actual property as I can comfortably deal with, a major residence and three leases. AI corporations are increasing, housing demand is rebounding, and actual property stays one of many few tangible hedges towards each tech volatility and inflation.
3. Rising Personal Firm Publicity
I am investing instantly into AI corporations via varied closed and open-ended enterprise capital funds with as much as 20% of my investable capital. All the closed-end enterprise capital funds cost 2% and 20% of income or extra, and are invite solely. Whereas Fundrise Enterprise is open to everybody and does not cost any cary.
Again in 1999, I had ~$8,000 to take a position after receiving my signing bonus ($5,000 + my current $3,000 from part-time jobs in faculty). So I invested $3,000 in VCSY, a Chinese language web firm that 50Xed. Nevertheless, to make life-changing cash requires a a lot bigger quantity of invested capital. So this time round, I am investing seven figures whereas staying inside my 20% publicity restrict.
Beneath is a chart that ought to each scare and excite you. Each enterprise capital normal associate thinks they’ve invested, or will make investments, within the subsequent AI winner. However as a 20-year restricted associate in enterprise capital, I’ve seen that roughly 90% of investments both go to zero or return solely modest capital.
For that purpose, a normal associate should both have a great observe document or the fund should already personal corporations you strongly consider in earlier than it’s price investing. I am hedged by investing in each varieties of enterprise capital funds.
4. Preserve Liquidity To Purchase The Dip And Survive
After the 1999–2000 and 2008–2009 downturns, I promised myself I’d at all times maintain no less than one 12 months of residing bills in money or money equivalents like Treasury payments, and I nonetheless do. Liquidity buys peace of thoughts. It allows you to each survive and purchase the dip when markets crash.
Fortunately, money and Treasury payments now pay a good-looking ~4% risk-free return. That makes the so-called “money drag” in a 1999-style bull market far much less heavy.
Corrections are inevitable. In the event you don’t have liquidity prepared, you’ll be compelled to sit down in your arms as an alternative of take full benefit.
5. Do Not Purchase Danger Property On Margin
Though the temptation to leverage up in a 1999-style bull market is excessive, don’t do it. If we actually are reliving 1999, keep in mind what got here subsequent: the NASDAQ crashed 39% in 2000 and in the end fell 78% from peak to trough by 2002. Even in the event you had been solely 50% on margin again then, likelihood is you had been worn out.
At this time, loads of buyers are making the identical mistake in cryptocurrencies (altcoins), leveraging 2X to 50X in pursuit of fast riches. Some have made fortunes, however many have additionally misplaced years of hard-earned beneficial properties in a single day. That the majority latest day was October 10, 2025, when widespread liquidations (~$20 billion) erased total portfolios as a consequence of leverage.
In the event you completely can’t resist the urge, restrict your speculative capital. Carve out not more than 10% of your investable belongings for leveraged punts. And go in figuring out the worst-case situation: not solely are you able to lose all the pieces, you may also owe cash to your dealer.
In a flash crash, costs can hole down earlier than your dealer executes a cease restrict sale, leaving you with a destructive stability. Investing on margin long-term is a foul thought. Resist the temptation.
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6. Embrace The Dumbbell Investing Technique
Throughout manias, investing FOMO typically pushes buyers to take extreme danger. You purchase stuff you don’t absolutely perceive just because you possibly can’t stand watching others get wealthy with out you. Most of the time, this sort of investing results in spoil.
One solution to handle that is with a dumbbell technique: cut up your portfolio or new investments between low-risk or risk-free belongings and high-risk, speculative bets. This strategy allows you to seize upside if the mania continues, whereas nonetheless defending your draw back if it fizzles out.
Over the previous a number of years, I have been repeatedly utilizing the dumbbell technique to spend money on each personal AI corporations and in Treasury payments and bonds. This manner, it doesn’t matter what occurs, I am hedged.
7. Spend And Take pleasure in A Portion Of Your Earnings
Yearly throughout a bull market, I attempt to purchase one thing tangible with my “humorous cash” income. This ensures that if, and when, the bear market returns, no less than I’ll have one thing to point out for the beneficial properties.
For instance, in 2003, I used income from VCSY in 2000 to purchase a two-bedroom rental with a park view in Pacific Heights, a property I nonetheless personal at present. It housed my girlfriend and me for 2 years and now generates semi-passive earnings to assist fund our retirement.
You don’t have to take a position your humorous cash in actual property. Nice artwork, uncommon books, historical cash, and even memorable experiences like a household trip or a cruise on your dad and mom all depend. Nice experiences typically recognize in worth in ways in which cash can’t measure, particularly now that we will document them in gorgeous 4K.
So long as you proceed taking income to accumulate significant experiences or materials stuff you worth, a 1999-style bull market can maintain rewarding you lengthy after it’s technically over.
7. Mentally Put together For Monetary Ache & Psychological Anguish
A 1999-style bull market will ultimately finish badly. We may even face one other misplaced decade, the place danger belongings present little to no actual returns. It may actually occur once more, particularly with the S&P 500 buying and selling at 23X ahead earnings.
Nevertheless, when you research historical past and perceive how extreme losses can get, the ache isn’t as surprising once they arrive. Listed here are some key statistics:
- 5% corrections: occur 3–4 instances per 12 months on common.
- 10% corrections: occur about as soon as per 12 months.
- Bear markets (-20%+ declines): from 1928–2025, there have been ~16, averaging one roughly each 5–6 years.
- Common bear market drawdown: ~35%.
- Median post-1946 bear market period: 11 months, with a mean decline of 33–35%.
- Median restoration time to all-time highs: 23 months.
In different phrases, mentally take your fairness publicity and lop off 35% of its worth instantly. Ask your self: are you able to deal with shedding that a lot and ready roughly two years to get again to even? If sure, you’re good to go. If not, you should make changes.
You possibly can even use my FS-SEER system to quantify your danger tolerance when it comes to time, serving to you propose your allocations extra confidently.
7. Revisit your earnings streams.
Your earnings streams are essential for staying afloat throughout a bear market, but they typically get neglected in a bull market. That’s why it’s necessary to record out your varied sources of earnings and rank them by reliability. When the bear market hits, how safe will they be?
If you realize you’ll at all times earn sufficient to cowl your loved ones’s residing bills, you possibly can afford to take extra danger. But when a lot of your earnings streams are more likely to collapse in a downturn, you should regulate your publicity accordingly. Make a practical estimation of how far they could decline.
The hot button is to construct various sources of earnings earlier than you really need them. By the point you do, it could already be too late.
8. Focus On Well being And Life-style
Bull markets could make you overlook what actually issues: well being, buddies, and household.
Again in 2009, my stress ranges had been via the roof as I watched roughly 40% of my internet price vanish in six months that took a decade to construct. My again ache made it nearly inconceivable to drive or sit, and I used to be grinding my enamel relentlessly. My TMJ was so dangerous I couldn’t speak comfortably for greater than 5 minutes at a time. I needed to discover a manner out of dedicating my life to finance.
At this time, I try for stability, a purpose made far simpler with no 60-hour-a-week job. I begin the day with 1-2 hours of writing, then typically play tennis, coach my youngsters, and remind myself that wealth is meaningless in the event you don’t have the vitality to take pleasure in it.
In your pursuit of riches, please don’t neglect your well being! It is going to come to chew you within the arse ultimately.
Don’t Confuse Brains With a Bull Market
It’s intoxicating to really feel good in a rising market. Positive factors reinforce confidence, and confidence feeds risk-taking. However the fact is, in bull markets everybody appears to be like sensible, till the rocket blows up.
When the 2000 crash hit, I I watched multimillionaire colleagues lose all the pieces they’d constructed as a consequence of extreme leverage. The barber on the basement of 1 New York Plaza now not bragged to me about his wins whereas he minimize my hair. In reality, he mentioned he needed to promote his two Mercedes after the crash. Markets giveth, and markets taketh away.
Don’t let a bull market persuade you that you simply’re invincible. Let it remind you that self-discipline is what retains you wealthy when you get there.
The Happiness Hedge
It would sound counterintuitive, however top-of-the-line hedges towards monetary loss is emotional contentment.
Throughout growth instances, it’s simple to maintain elevating the bar – extra money, extra property, extra vehicles, extra partying, extra all the pieces. However in the event you’re already at a 7 or 8 out of 10 on the happiness scale, chasing a ten may truly ship you backward.
Happiness comes from stability: significant work, good well being, household time, buddies, and sufficient cash to regulate your schedule. Every part past that’s gravy over your ego.
So sure, I’m leaning into this AI-driven bull market. However I’m additionally reminding myself that monetary freedom is just price it in the event you’re truly free. We are able to forestall ourselves from being slaves to cash by having a correctly structured portfolio and a monetary plan beneath any situation.
Trip the Wave, However Know A Jagged Shore Could Await
The vitality at present feels electrical, similar to 1999. And I find it irresistible. I wish to see individuals make nice fortunes to allow them to have the liberty to do what they need. Think about telling your micromanaging boss to screw off someday. Wonderful!
Traders may expertise an epic blow off like we 26 years in the past. Simply understand how rapidly the music can cease. Diversify, keep humble, and take some chips off the desk when you possibly can.
Bull markets make you wealthy. Bear markets make you smart. Collectively, they make you full.
So let’s benefit from the experience, however with our eyes open!
For many who’ve been investing since 1999 or earlier, how does at present’s market really feel in comparison with again then? What similarities and variations stand out to you? Does the present AI-driven frenzy remind you of the dot-com growth, or does it really feel like one thing solely new? Are you positioning your self for an additional potential blow-off prime that would make us all so much wealthier or are you bracing for the inevitable hangover? And for youthful buyers who didn’t dwell via 1999, how are you managing your FOMO as everybody round you appears to be getting wealthy once more?
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A recent set of eyes can uncover hidden charges, inefficient allocations, or neglected alternatives to optimize. A 1999-style bull market has a manner of constructing even essentially the most disciplined investor somewhat delusional. That’s when correct danger administration tends to vanish.
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