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 ground at Goldman Sachs at 1 New York Plaza, glued to my display screen as web names like Commerce One and Yahoo soared greater virtually each day. My agency had simply gone public, immediately turning the companions into decamillionaires. The power was electrical – optimism all over the place, fortunes being made, CNBC blaring nonstop.
Quick ahead to in the present day: tech shares are main once more, crypto buyers are shopping for Lambos, and AI is woven into all the pieces – our telephones, portfolios, and each day conversations. San Francisco, as soon as quiet through the pandemic, is buzzing once more. Startups are hiring and everybody’s speaking in regards to the subsequent large factor.
And I’ll admit, I’m hyped. We now 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 vital 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, a bit of 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 more durable, 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 journey this wave of innovation with out repeating the errors of the previous? Let’s discover what historical past teaches us and the best way to navigate this AI-driven rocket responsibly.
As a result of frankly, with much 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 enticing male physique kind, making us really feel approachable, steady, and mature.
What Makes This Time Totally 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 value acknowledging.
AI has tangible productiveness results. In contrast to many dot-com concepts that by no means made cash, AI is already saving firms billions.
Steadiness sheets are stronger. Company debt hundreds are more healthy than in 1999 and 2007, and plenty of corporations are flush with money.
Sturdy revenue and money move. As well as, the most important tech firms are producing huge free money move.
Customers 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 property.
That stated, the psychology of manias by no means modifications. Individuals overestimate short-term beneficial properties and underestimate long-term disruption. AI is actual, however that doesn’t imply each AI inventory is. Some firms 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 solutions if you happen to’re feeling swept up by the hype. As we must always all keep in mind, there are not any ensures in danger property. At all times do your due diligence and make investments based on your personal objectives 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. It’s best to provide you with your personal consolation stage. In response to fashionable portfolio principle and supporting research, holding round 20 to 30 positions is usually sufficient to attain many of the advantages of diversification alongside the environment friendly frontier, roughly a 3% to five% allocation per place.
It’s not sufficient to only monitor your funding portfolio’s composition, you additionally have to view it within the context of your total web value. Take a look at how a lot you’ve got in money, actual property, alternate options, bonds, and low-risk property.
Personally, I intention to maintain public equities between 25% and 35% of my complete web value. That allocation provides me the arrogance to remain the course throughout downturns. If the typical bear market declines about 35%, that may translate to roughly a ten% hit to my total web value, which I can comfortably abdomen.
Confirm how a lot of your web value you are comfy dropping.
2. Shift Extra In the direction of Actual Property
1999 by way of 2009 taught me that shares are humorous cash with no actual utility. You may’t drink your shares, dwell in your shares, or bodily take pleasure in them. The one approach to profit is to promote some shares now and again to fund a greater life.
One of the best 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 respect in worth whilst you truly take pleasure in dwelling in it. If in case you have youngsters, that satisfaction multiplies. You’re not simply constructing wealth, you’re offering stability and reminiscences to your most treasured property.
I’m lengthy as a lot San Francisco actual property as I can comfortably deal with, a main residence and three leases. AI firms 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 immediately into AI firms by way of numerous closed and open-ended enterprise capital funds with as much as 20% of my investable capital. The entire closed-end enterprise capital funds cost 2% and 20% of earnings or extra, and are invite solely. Whereas Fundrise Enterprise is open to everybody and would not cost any cary.
Again in 1999, I had ~$8,000 to speculate after receiving my signing bonus ($5,000 + my present $3,000 from part-time jobs in faculty). So I invested $3,000 in VCSY, a Chinese language web firm that 50Xed. Nonetheless, 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.
Under is a chart that ought to each scare and excite you. Each enterprise capital common companion thinks they’ve invested, or will make investments, within the subsequent AI winner. However as a 20-year restricted companion in enterprise capital, I’ve seen that roughly 90% of investments both go to zero or return solely modest capital.
For that cause, a common companion should both have a great monitor report or the fund should already personal firms you strongly consider in earlier than it’s value investing. I am hedged by investing in each kinds 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 hold a minimum of one 12 months of dwelling bills in money or money equivalents like Treasury payments, and I nonetheless do. Liquidity buys peace of thoughts. It helps 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. Should you don’t have liquidity prepared, you’ll be compelled to take a seat in your fingers as an alternative of take full benefit.
5. Do Not Purchase Threat 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 if you happen to have been solely 50% on margin again then, chances are high you have been worn out.
Right now, 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 almost all current day was October 10, 2025, when widespread liquidations (~$20 billion) erased complete portfolios resulting from leverage.
Should you completely can’t resist the urge, restrict your speculative capital. Carve out not more than 10% of your investable property for leveraged punts. And go in understanding the worst-case state of affairs: not solely are you able to lose all the pieces, you may additionally 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 adverse stability. Investing on margin long-term is a nasty concept. Resist the temptation.
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 may’t stand watching others get wealthy with out you. As a rule, such a investing results in smash.
One approach to handle that is with a dumbbell technique: cut up your portfolio or new investments between low-risk or risk-free property and high-risk, speculative bets. This method helps 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 commonly utilizing the dumbbell technique to spend money on each personal AI firms and in Treasury payments and bonds. This fashion, it doesn’t matter what occurs, I am hedged.
7. Spend And Take pleasure in A Portion Of Your Income
Yearly throughout a bull market, I attempt to purchase one thing tangible with my “humorous cash” earnings. This ensures that if, and when, the bear market returns, a minimum of I’ll have one thing to point out for the beneficial properties.
For instance, in 2003, I used earnings from VCSY in 2000 to purchase a two-bedroom apartment with a park view in Pacific Heights, a property I nonetheless personal in the present day. It housed my girlfriend and me for 2 years and now generates semi-passive revenue to assist fund our retirement.
You don’t have to speculate your humorous cash in actual property. High-quality artwork, uncommon books, historic cash, and even memorable experiences like a household trip or a cruise to your mother and father all depend. Nice experiences typically respect in worth in ways in which cash can’t measure, particularly now that we will report them in beautiful 4K.
So long as you proceed taking earnings to accumulate significant experiences or materials stuff you worth, a 1999-style bull market can hold 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 might even face one other misplaced decade, the place danger property present little to no actual returns. It might actually occur once more, particularly with the S&P 500 buying and selling at 23X ahead earnings.
Nonetheless, when you examine historical past and perceive how extreme losses can get, the ache isn’t as stunning after they arrive. Listed here are some key statistics:
5% corrections: occur 3–4 occasions 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 dropping that a lot and ready roughly two years to get again to even? If sure, you’re good to go. If not, it is advisable to make changes.
You may even use my FS-SEER method to quantify your danger tolerance by way of time, serving to you propose your allocations extra confidently.
7. Revisit your revenue streams.
Your revenue streams are essential for staying afloat throughout a bear market, but they typically get ignored in a bull market. That’s why it’s vital to record out your numerous sources of revenue and rank them by reliability. When the bear market hits, how safe will they be?
If you understand you’ll at all times earn sufficient to cowl your loved ones’s dwelling bills, you may afford to take extra danger. But when a lot of your revenue streams are prone to collapse in a downturn, it is advisable to regulate your publicity accordingly. Make a sensible estimation of how far they could decline.
The hot button is to construct various sources of revenue earlier than you really need them. By the point you do, it might already be too late.
8. Focus On Well being And Way of life
Bull markets could make you overlook what actually issues: well being, pals, and household.
Again in 2009, my stress ranges have been by way of the roof as I watched roughly 40% of my web value vanish in six months that took a decade to construct. My again ache made it virtually unattainable to drive or sit, and I used to be grinding my tooth relentlessly. My TMJ was so dangerous I couldn’t speak comfortably for greater than 5 minutes at a time. I needed to discover a approach out of dedicating my life to finance.
Right now, 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 children, and remind myself that wealth is meaningless if you happen to don’t have the power to take pleasure in it.
In your pursuit of riches, please don’t neglect your well being! It should come to chew you within the arse ultimately.
Don’t Confuse Brains With a Bull Market
It’s intoxicating to really feel sensible in a rising market. Features reinforce confidence, and confidence feeds risk-taking. However the reality is, in bull markets everybody appears sensible, till the rocket blows up.
When the 2000 crash hit, I I watched multimillionaire colleagues lose all the pieces they’d constructed resulting from extreme leverage. The barber on the basement of 1 New York Plaza not bragged to me about his wins whereas he minimize my hair. In reality, he stated 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 just’re invincible. Let it remind you that self-discipline is what retains you wealthy when you get there.
The Happiness Hedge
It’d sound counterintuitive, however among the finest hedges towards monetary loss is emotional contentment.
Throughout increase occasions, it’s simple to maintain elevating the bar – extra money, extra property, extra automobiles, extra partying, extra all the pieces. However if you happen to’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, pals, and sufficient cash to manage your schedule. Every thing 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 barely value it if you happen to’re truly free. We will stop ourselves from being slaves to cash by having a correctly structured portfolio and a monetary plan below any state of affairs.
Journey the Wave, However Know A Jagged Shore Might Await
The power in the present day feels electrical, identical to 1999. And I find it irresistible. I wish to see folks make nice fortunes to allow them to have the liberty to do what they need. Think about telling your micromanaging boss to screw off sooner or later. Wonderful!
Traders might 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 may.
Bull markets make you wealthy. Bear markets make you sensible. Collectively, they make you full.
So let’s benefit from the journey, however with our eyes open!
For individuals who’ve been investing since 1999 or earlier, how does in the present day’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 increase, or does it really feel like one thing totally new? Are you positioning your self for one more potential blow-off high that might make us all loads wealthier or are you bracing for the inevitable hangover? And for youthful buyers who didn’t dwell by way of 1999, how are you managing your FOMO as everybody round you appears to be getting wealthy once more?
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A contemporary set of eyes can uncover hidden charges, inefficient allocations, or ignored alternatives to optimize. A 1999-style bull market has a approach of creating even essentially the most disciplined investor a bit of delusional. That’s when correct danger administration tends to vanish.
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