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 give you the down cost for my first property. However he is been elusive.
I nonetheless bear in mind sitting on the worldwide buying and selling ground at Goldman Sachs at 1 New York Plaza, glued to my display 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 vitality was electrical – optimism in all places, fortunes being made, CNBC blaring nonstop.
Quick ahead to at this time: tech shares are main once more, crypto buyers are shopping for Lambos, and AI is woven into all the things – 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 huge factor.
And I’ll admit, I’m hyped. Now we have the potential to get extraordinarily wealthy over the following 5 years.
Then the 2000 dot-com crash vaporized trillions in wealth and taught me one of the vital vital classes of my life: euphoria all the time feels rational till it doesn’t. Ah, cheers to irrational exuberance.
The Return Of The 1999 Ambiance
I’m investing in public tech shares, non-public development shares, a bit of little bit of Bitcoin, and San Francisco actual property, which all really feel poised for continued development.
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 development, that point has come.
So how can we stability greed with knowledge? How can we experience this wave of innovation with out repeating the errors of the previous? Let’s discover what historical past teaches us and navigate this AI-driven rocket responsibly.
As a result of frankly, with way more capital at stake, I don’t need to lose my shirt once more. However even when I do, I’ve heard the “dad bod” is probably the most engaging male physique sort, 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. Not like many dot-com concepts that by no means made cash, AI is already saving firms billions.
- Stability sheets are stronger. Company debt masses are more healthy than in 1999 and 2007, and lots of companies are flush with money.
- Sturdy revenue and money stream. As well as, the most important tech firms are producing monumental free money stream.
- Customers are additionally a lot stronger. Family leverage is decrease than in 1999 and 2007 as nicely.
- Financial coverage is popping supportive once more. Amazingly, the Fed is resuming its rate of interest cuts and quantitative easing with all the things at all-time highs, offering a tailwind for danger belongings.
That mentioned, the psychology of manias by no means adjustments. Individuals overestimate short-term positive factors 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 ideas in case you’re feeling swept up by the hype. As we must always all bear in mind, there aren’t any ensures in danger belongings. At all times do your due diligence and make investments in accordance with your individual targets and danger tolerance.
1. Keep Invested, However Keep 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 must give you your individual consolation degree. In accordance with fashionable portfolio idea and supporting research, holding round 20 to 30 positions is often 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 only monitor your funding portfolio’s composition, you additionally must view it within the context of your total web value. Have a look at how a lot you may have in money, actual property, alternate options, bonds, and low-risk belongings.
Personally, I goal to maintain public equities between 25% and 35% of my whole web value. That allocation provides me the boldness to remain the course throughout downturns. If the typical bear market declines about 35%, that might 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 snug shedding.
2. Shift Extra In the direction of Actual Property
1999 by 2009 taught me that shares are humorous cash with no actual utility. You’ll be able to’t drink your shares, dwell in your shares, or bodily take pleasure in them. The one solution to profit is to promote some shares on occasion to fund a greater life.
The perfect asset I’ve discovered that gives each potential appreciation and real-world utility is actual property. There’s no higher feeling than watching your own home respect in worth when you truly take pleasure in residing in it. When you have kids, that satisfaction multiplies. You’re not simply constructing wealth, you’re offering stability and recollections on your most treasured belongings.
I’m lengthy as a lot San Francisco actual property as I can comfortably deal with, a major 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 straight into AI firms by 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. It owns the names I actually need to personal: OpenAI, Anthropic, Databricks, and Anduril.
Again in 1999, I had ~$8,000 to take a position after receiving my signing bonus ($5,000 + my present $3,000 from part-time jobs in school). 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 common accomplice thinks they’ve invested, or will make investments, within the subsequent AI winner. However as a 20-year restricted accomplice in enterprise capital, I’ve seen that roughly 90% of investments both go to zero or return solely modest capital.
For that motive, a common accomplice should both have a great monitor report or the fund should already personal firms you strongly imagine in earlier than it’s value investing. I am hedged by investing in each varieties of enterprise capital funds.
4. Keep Liquidity To Purchase The Dip And Survive
After the 1999–2000 and 2008–2009 downturns, I promised myself I’d all the time hold at the least one 12 months of residing bills in money or money equivalents like Treasury payments, and I nonetheless do. Liquidity buys peace of thoughts. It permits 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 pressured to sit down in your palms 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, bear 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 case you had been solely 50% on margin again then, chances are high you had been worn out.
In the present day, 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 positive factors in a single day. That the majority latest day was October 10, 2025, when widespread liquidations (~$20 billion) erased total portfolios as a result 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 realizing the worst-case situation: not solely are you able to lose all the things, 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 detrimental stability. Investing on margin long-term is a foul thought. The danger / reward to leverage up at this level of the cycle is unsuitable.
6. Embrace The Dumbbell Investing Technique
Throughout manias, investing FOMO typically pushes buyers to take extreme danger. You purchase belongings you don’t absolutely perceive just because you possibly can’t stand watching others get wealthy with out you. Most of the time, one of these investing results in wreck.
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 method permits 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 non-public AI firms and in Treasury payments and bonds. This fashion, it doesn’t matter what occurs, I am good.
7. Spend And Get pleasure from 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, at the least I’ll have one thing to point out for the positive factors.
For instance, in 2003, I used earnings from VCSY in 2000 to purchase a two-bedroom condominium with a park view in Pacific Heights, a property I nonetheless personal at this time. 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 take a position your humorous cash in actual property. Fantastic artwork, uncommon books, historical cash, and even memorable experiences like a household trip or a cruise on your dad and mom all rely. 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 amass significant experiences or materials belongings 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 finally finish badly. We might even face one other misplaced decade, the place danger belongings present little to no actual returns. It might definitely occur once more, particularly with the S&P 500 buying and selling at 23X ahead earnings.
Nevertheless, when you examine historical past and perceive how extreme losses can get, the ache isn’t as surprising once they arrive. Listed below 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 length: 11 months, with a median 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’ll want to make changes.
You’ll be able to even use my FS-SEER components to quantify your danger tolerance by way of time, serving to you intend 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 checklist out your numerous sources of revenue and rank them by reliability. When the bear market hits, how safe will they be?
If you realize you’ll all the time earn sufficient to cowl your loved ones’s residing bills, you possibly can afford to take extra danger. But when lots of your revenue streams are prone to collapse in a downturn, you’ll want to regulate your publicity accordingly. Make a sensible estimation of how far they could decline.
The bottom line is to construct numerous sources of revenue earlier than you really want 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 neglect what actually issues: well being, associates, and household.
Again in 2009, my stress ranges had been by 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 inconceivable to drive or sit, and I used to be grinding my enamel relentlessly. My TMJ was so unhealthy I couldn’t speak comfortably for greater than 5 minutes at a time. I needed to discover a method out of dedicating my life to finance.
In the present day, I attempt for stability, a objective made far simpler with out a 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 in case 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 finally.
Don’t Confuse Brains With a Bull Market
It’s intoxicating to really feel good in a rising market. Features reinforce confidence, and confidence feeds risk-taking. However the fact is, in bull markets everybody seems to be sensible, till the rocket blows up.
When the 2000 crash hit, I I watched multimillionaire colleagues lose all the things they’d constructed as a result of extreme leverage. The barber on the basement of 1 New York Plaza not bragged to me about his wins whereas he lower my hair. Actually, 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 just’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 probably the greatest hedges towards monetary loss is emotional contentment.
Throughout growth instances, it’s straightforward to maintain elevating the bar – extra money, extra property, extra automobiles, extra partying, extra all the things. However in case you’re already at a 7 or 8 out of 10 on the happiness scale, chasing a ten would possibly truly ship you backward.
Happiness comes from stability: significant work, good well being, household time, associates, and sufficient cash to manage your schedule. The whole lot 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 value it in case you’re truly free. We will stop ourselves from being slaves to cash by having a correctly structured portfolio and a monetary plan below any situation.
Experience the Wave, However Know A Jagged Shore Might Await
The vitality at this time feels electrical, identical to 1999. And I adore it. I need 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 someday. Wonderful!
Traders might expertise an epic blow off like we 26 years in the past. Simply know the way shortly 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 sensible. Collectively, they make you full.
So let’s benefit from the experience, however with our eyes open!
For individuals who’ve been investing since 1999 or earlier, how does at this time’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 totally new? Are you positioning your self for an additional potential blow-off prime that might make us all loads wealthier or are you bracing for the inevitable hangover? And for youthful buyers who didn’t dwell by 1999, how are you managing your FOMO as everybody round you appears to be getting wealthy once more?
If You Need To Make investments In The AI Growth
In the event you imagine in the way forward for AI, check out Fundrise Enterprise. It has publicity to main non-public AI firms like OpenAI, Anthropic, Databricks, Anduril, and extra. With a minimal funding of simply $10 and no efficiency carry, it’s one of many best and most accountable methods to achieve entry to AI and different high-growth non-public firms.
I’ve personally invested round $500,000 throughout three accounts in Fundrise Enterprise – considered one of which I’ve earmarked for my two younger kids as a hedge towards an unsure job market future. Fundrise has been a long-time sponsor of Monetary Samurai, and I’m proud to work with them as a result of our funding philosophies align intently.
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A recent set of eyes can uncover hidden charges, inefficient allocations, or ignored alternatives to optimize. A 1999-style bull market has a method of creating even probably the most disciplined investor a bit of delusional. That’s when correct danger administration tends to vanish.
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