The Dividend Cafe Keeping an AI Bubble from Hurting You
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Nov 14, 2025 Delve into the AI investing bubble and explore the risks that come with it. Euphoria, not technology, is identified as the key threat to investors. Learn about the extreme volatility seen in companies like NVIDIA and Oracle, and how rapid valuation swings can lead to significant losses. Bahnsen raises critical questions about the sustainability of AI-driven expenditures and geopolitical competition. He emphasizes sticking to sound investment principles rather than succumbing to the allure of quick gains in this overheated market.
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Euphoria Creates The Real AI Risk
- AI-driven market euphoria has created a bubble distinct from AI's technological legitimacy.
- Euphoria, not AI's failure, risks causing poor investor decision-making and losses.
Stick To Core Investment Principles
- Avoid abandoning your core investment principles to chase short-term AI gains.
- Maintain disciplined portfolio rules rather than pivoting for a seasonal opportunity.
Percent Math Makes Recovery Hard
- Large percentage swings make high-valuation stocks mathematically hazardous for recent buyers.
- A small percentage drop requires much larger percent gains to break even for late entrants.