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Comment by WhitneyLand | Hacker News Reader

All bubbles are not equal in risk, folly, or long term sustainability.

In the case of the Internet Bubble stocks were down 78%, but it was not hard to do well in the end given diversification and a long enough horizon.

In the case of the Dutch Tulip bubble there was no good ending for anyone except those who got out early.

Some bubbles like NFTs generate strong opinions but have yet to have final judgment from history.

I think the quantum computing bubble is different than all three, but closer to the Internet than to Tulips. In which case the conventional strategy would be to diversify and expect a long time horizon.

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> In the case of the Internet Bubble stocks were down 78%, but it was not hard to do well in the end given diversification and a long enough horizon.

This is untrue. If you were invested in what became the stars of that era: Amazon, Red Hat, Cisco, a few others, you eventually made decent money, although far worse than if you had stayed out and bought the dip.

If you had a diversified portfolio of 'new economy' stocks which didn't include a few winners like this, you might have lost over 95% of your money and never got it back. Lots and lots of stocks simply disappeared or were bought for peanuts. Many others, including lots of very very highly rated ones like Yahoo never exceeded their bubble-era peaks.

Let me give an example of why I think it’s true, the difference between our opinions may be based on tightening up the premises for “diversified” and “time horizon”

By diversification I’m assuming a NASDQ index fund, which many of the hot new Internet stocks, as well as larger establishes tech companies benefiting from bubble were part of.

If you invested in NASDAQ everything at the absolute worst peak of the bubble: - The initial crash put you at -78% return - It took 21 years to recover all loses and earn a 300% return.

Why do you think that’s not “doing well” for a index fund closely tracking the bubble?

You could say alternative scenarios would’ve done better but that’s always the case.

The main point is, for someone with a long time horizon who was diversified, this turned out way way better than a lot of other bubbles turned out.

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