AI Boom vs. Dot-Com Bubble

+ Rob Arnott, Jim Bianco, Brian Deese, Chris Bloomstran & More

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Do not ride the whirlwind, for it brings only madness and death.”

Owen Lamont

Research

Rob Arnott looks at the parallels between the AI narrative driving the current market and the dot-com bubble of a quarter century ago. He argues the the key to navigating any market narrative is less about adopting a strategy and more about developing an investment philosophy.

 Source: Research Affiliates, based on Bloomberg data. As of March 26, 2025

AQR’s Dan Villalon explains why he believes options-based strategies are a bad deal even though many claim they are a free lunch.

Carta gives an update on the venture capital ecosystem based on data from 2,079 U.S. venture funds. Key highlights:

  • Half of all the funds from the 2018 vintage have not distributed any capital back to their LPs.

  • The number of down rounds has risen from 1 in 15 in Q4 2021 to 1 in 5 in Q4 2024.

Source: Carta. Data as of Q4 2024.

Bonus Content

Brian Deese, former Director of the White House National Economic Council, explains why America struggles to build and how economic policy can remove the barriers to progress. Link

A study of funds that have returned more than 10X to LPs found that big winners and bold concentration may distinguish great venture capital funds from merely good ones. Link

A Boston clarinetist used a middle-class income to build a fortune in the stock market, which allowed him to give away $125 million. Link

Calvin and Hobbes creator Bill Watterson shared timeless advice on life and creative integrity. Link

Podcasts

3/14/2025 - 63 minutes

Freakonomics separates fact from fiction around U.S. tax policy and the national debt.

3/20/2025 - 61 minutes

Chris Bloomstran talks about Warren Buffett & Berkshire Hathaway, return attribution of the S&P 500, the AI arms race, and more.

3/20/2025 - 71 minutes

Jim Bianco breaks down the March Federal Reserve meeting, explains why he thinks tariffs are unlikely to cause a recession, and shares his current asset allocation outlook.

What Else Is Happening

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