Investing

Professor of finance at NYU’s Stern School of Business

Their wordsI would argue that AI's total addressable market, in the US, cannot be greater than $12.96 trillion, the total employee compensation in 2025

Professor of finance at NYU’s Stern School of Business

Their wordsanyone who claims to have conviction that they know what's coming is being either ignorant or arrogant

Co-founder and co-chairman of Oaktree Capital Management

Their wordsGiven the vast potential of AI but also the large number of enormous unknowns, I think virtually no one can say for sure.

Professor of finance at NYU’s Stern School of Business

Their wordsI will confess that the rumored pricing for both companies ($1.5 to $ 2 trillion) looks rich, but I am open to being surprised

Co-founder and co-chairman of Oaktree Capital Management

Their wordsBubbles are best identified in retrospect.

Co-founder and co-chairman of Oaktree Capital Management

Their wordsIf that enthusiasm doesn’t produce a bubble conforming to the historical pattern, that will be a first.

Co-founder and co-chairman of Oaktree Capital Management

Their wordsThere’s a consistent history of transformational technologies generating excessive enthusiasm and investment, resulting in more infrastructure than is needed and asset prices that prove to have been too high. The excesses accelerate the adoption of the technology in a way that wouldn’t occur in their absence.

Co-founder and co-chairman of Oaktree Capital Management

Their wordsThere can be no way to participate fully in the potential benefits from the new technology without being exposed to the losses that will arise if the enthusiasm and thus investors’ behavior prove to have been excessive.

Co-founder and co-chairman of Oaktree Capital Management

Their wordsDebt is neither a good thing nor a bad thing per se. Likewise, the use of leverage in the AI industry shouldn’t be applauded or feared.

Co-founder and co-chairman of Oaktree Capital Management

Their wordsAI may not be a tool for mankind, but rather something of a replacement.

Professor of finance at NYU’s Stern School of Business

Their wordsIf you are an investor who considers any highly priced company to be overvalued, I hope that this post leads you to reconsider.

Professor of finance at NYU’s Stern School of Business

Their wordsthe delusion comes from the reality that if you aggregated these breakeven revenues across companies, the market is not big enough to sustain all of them

Professor of finance at NYU’s Stern School of Business

Their wordsI think that the pathway that you would need (in terms of revenue growth and profitability) to justify Nvidia's and OpenAI's current pricing is improbable, but that is just my view

Director of institutional asset management at Ritholtz…

Their wordsStock market concentration is a bull market phenomenon.

Director of institutional asset management at Ritholtz…

Their wordsThe market cap weights make sense relative to the fundamentals.

Director of institutional asset management at Ritholtz…

Their wordsEven if AI makes the pie grow bigger, it feels like a better bet that it will only increase the level of concentration in the stock market and economy if the past is a good predictor of the future.

Director of institutional asset management at Ritholtz…

Their wordsOne of the biggest lessons I’ve learned working in wealth management all these years is that portfolio changes in client accounts happen more frequently from life events rather than market events.

Director of institutional asset management at Ritholtz…

Their wordsHow much you save has a far greater impact than your investments early on in your career. But as your portfolio grows, investment returns swamp your savings because of the wonders of compounding.

Director of institutional asset management at Ritholtz…

Their wordsOccasional downturns in the stock market are perfectly normal. You have to get used to losing money if you want to survive the stock market.

Director of institutional asset management at Ritholtz…

Their wordsThere is no such thing as an average experience in the stock market until you’ve been investing for a very long time.

Director of institutional asset management at Ritholtz…

Their wordsBut if you think about this another way, there have only been three non-overlapping 30 year periods in modern stock market history.

Writer of the personal-finance blog Of Dollars And Data…

Their wordsTherefore, the only correct interpretation of the P/S ratio over the last decade is that it doesn’t signal what it used to.

Writer of the personal-finance blog Of Dollars And Data…

Their wordsthe base rate for U.S. stock performance (in aggregate) over one year is that they go up

Writer of the personal-finance blog Of Dollars And Data…

Their wordsBecause if you can’t handle standard market cycles, then you don’t have a portfolio, you have a bet.

Writer of the personal-finance blog Of Dollars And Data…

Their wordsit’s better to have a portfolio that can handle stocks whether they are overvalued or not

Founder of Bridgewater Associates

Their wordsI think everyone’s starting point for investing should be to know and be in the portfolio that is best to have, independent of any tactical views of the markets.

Writer of the personal-finance blog Of Dollars And Data…

Their wordsThe habituation to novel experiences makes spending money earlier in life more valuable than later in life.

Writer of the personal-finance blog Of Dollars And Data…

Their wordsBlowing all your money while young isn’t a smart move, but hoarding money now that you won’t spend later is worse.

Writer of the personal-finance blog Of Dollars And Data…

Their wordsEvery year you spend with options is another year you don’t spend on the thing you eventually commit to.

Writer of the personal-finance blog Of Dollars And Data…

Their wordsIn investing, non-commitment leads to better than average outcomes for the typical investor.

Partner at Collaborative Fund and author of The Psychology of Money

Their wordsCycles are so hard to predict, because it’s easier to forecast in straight lines.

Partner at Collaborative Fund and author of The Psychology of Money

Their wordsBut when a majority of people expect a top 5% outcome the result is guaranteed mass disappointment.

Partner at Collaborative Fund and author of The Psychology of Money

Their wordsI think this is the most practical way to think about debt: As debt increases, you narrow the range of outcomes you can endure in life.

Partner at Collaborative Fund and author of The Psychology of Money

Their wordsyou start to see it as a constraint on the asset that matters most: having options and flexibility

Partner at Collaborative Fund and author of The Psychology of Money

Their wordsIt’s so important to know the difference between the two when attempting to learn from someone. You want to try to emulate skills that are repeatable.

Partner at Collaborative Fund and author of The Psychology of Money

Their wordsyou want to learn the big lessons about why things behave the way they do without assuming the past is a direct guide to the future, because it’s not – most of the details are not repeatable

Partner at Collaborative Fund and author of The Psychology of Money

Their wordsThere are two ways to use money. One is as a tool to live a better life. The other is as a yardstick of status to measure yourself against others.

Partner at Collaborative Fund and author of The Psychology of Money

Their wordsUnspent money buys something intangible but valuable: freedom, independence, autonomy, and control over your time.

Partner at Collaborative Fund and author of The Psychology of Money

Their wordsThere is no such thing as an objective level of wealth. Everything is relative to someone else.

Professor of finance at NYU’s Stern School of Business

Their wordsthere is evidence that the reversal effect has weakened over time, leaving investors who bet on mean reversion and a return to fundamentals in the lurch

Professor of finance at NYU’s Stern School of Business

Their wordsDoomsday stories about how passive investing is making markets less efficient and less inclined to reflect fundamentals strike me as overwrought

Professor of finance at NYU’s Stern School of Business

Their wordsthere is almost no counter to the argument that active investing collectively creates a drag on portfolio performance

Professor of finance at NYU’s Stern School of Business

Their wordsMuch of active investing is built around publicly available information and a belief in the power of mean reversion, not original research and seeking information.

Professor of finance at NYU’s Stern School of Business

Their wordsAny investor or founder who blindly follows the pathway of scaling first and profiting later for every business is using a cookbook approach to business building, and runs the risk of making small failures into big ones.

Professor of finance at NYU’s Stern School of Business

Their wordsVC success is measured based on price at entry and price at exit on an investment, rather than the quality of the business built

Professor of finance at NYU’s Stern School of Business

Their wordsthe median venture capitalist has not been much better at harvesting alpha than the median mutual fund manager or PE investor

Professor of finance at NYU’s Stern School of Business

Their wordsWhile it was routine for companies going public in the 1980s to be profitable (>80% were), less that a quarter of the companies that have gone public in the last decade have been profitable.

Professor of finance at NYU’s Stern School of Business

Their wordsinvestors at many tech companies, including most on the large cap list, have given up their corporate governance rights, often voluntarily (through the acceptance of shares with different voting rights), to founders and top management in these companies