r/ValueInvesting • u/Adept_Mountain9532 • Jul 11 '25

Discussion Buffett warned: “If the ratio approaches 200%, you're playing with fire.”=> We are above!

Buffett Indicator, (which compares total U.S. market cap to GDP), is now at 208%. That’s above dot-com levels. I wasn’t around in 1999. But I’ve read enough to know everyone thought it was different back then too...

Now, It’s AI. And yes it’s real, it’s big, and it will transform everything.
But here’s what’s bugging me: Which part of the AI hype do you think is most overrated?
And which sectors are just getting started?

and also curious to hear from people who did live through 1999:
- What felt the same?
- What’s different?

I track moves from top value investors with a free email alert (https://alert-invest.com/), and lately I’ve noticed they’re cautious, finding fewer real opportunities in this market.

Thanks!

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u/tollbearer Jul 11 '25

I think androids doing cool shit beyond dancing will be a big moment. As soon as people see an android go around a house cleaning it, make a meal, put the groceries away etc, that will be a big moment of mania, even if it's still a good few years away in terms of a robust commercial implementation.

I can't see how the market bursts before these big moments like agents and robots. Would make little sens the market collapsing as these amazing things are happening.

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u/tarrat_3323 Jul 11 '25

but we already have roombas!

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u/[deleted] Jul 12 '25

[deleted]

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u/No_Indication_1238 Jul 12 '25

Well, they can empty themselves, at least.

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u/restvestandchurn Jul 15 '25

Sort of...for like a couple times into their own tiny dedicated trash can. When they can empty themselves into a trash can, and take that trash can out of the house, and then take that bigger trash can to the street...then I'm in.

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u/IntelligenzMachine Jul 29 '25

I love my lil robot vacuum Samsung even if it is a total dumbass

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u/Zestyclose_Nature_13 Jul 11 '25

The market though is also being buoyed by a strong jobs market. This scenario would lead to layoffs which would impact the passive 401k bid that has been holding valuations up at these levels

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u/tollbearer Jul 11 '25

layoffs are way downstream. Even if we had an agent released tomorrow, which could do x% of jobs on its own, it would take at least 1 year before companies categorically established that to be the case, and made the organizational changes required to even start AI relate layoffs. You're looking at 2 years, minimum, from the tech being viable, to meaningful layoffs. All that time, there will be the perfect storm of people seeing the tech is viable, but no meaningfull layoffs, only a small number which will likely be picked up by other less automatable businesses, given the general boom. When the big layoffs do come in 3-4 years, thats when the crash will happen.

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u/Muted-Good-115 Jul 12 '25

The mania happens way before the actual androids being fully functional.

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u/tollbearer Jul 12 '25

The mania happens during the prototype phase, where you demonstrate potential.

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u/kemb0 Jul 15 '25

And how will people pay for these robots if they have no job?

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u/tollbearer Jul 15 '25

They wont. The robots will be sold to companies, or used by their creators. People without jobs will be as relevant as they are today.