The writer is an adjunct lecturer in economics at William & Mary and the author of ‘The Confidence Map: Charting a Path from Chaos to Clarity’
Two years ago, investors were dreaming big. From SPACs to NFTs, to start-ups in space, electric vehicles and cryptocurrencies, extreme, fantasy-filled possibility was front and centre. The crowd was behaving like gamblers at a racetrack, betting on spring foals. With a forecast of blue skies ahead, no one needed a track record of demonstrated success. Instead, investors bet on the most exciting-looking stable owners and promoters, certain that every wager would pay off handsomely.
While it is easy to look back at the obvious nags that investors put their money into and laugh, this recent history matters. It is a striking contrast to this year’s AI mania. Today, investors are betting on the sure things — the Triple-Crown-winning, Secretariat stallions who look like they will triumph ahead, given that they have done so before. There is, of course, a name for this grouping: “The Magnificent Seven”, encompassing Apple, Microsoft, Alphabet, Amazon, Nvidia, Tesla and Meta Platforms.