Analysts might argue you can’t have a bubble without a burst. With markets nearing correction territory, some investors might be wondering if the time to sell is nigh—but hedge fund founder Ray Dalio believes there’s no need to panic just yet.
The founder of Bridgewater Associates agrees with the general consensus that stocks are in some form of a bubble right now, arguing there are vulnerabilities in the economy. But that doesn’t mean it’s time to exit the play, he added.
“Don’t sell just because there’s a bubble,” Dalio said in an interview with CNBC aired yesterday. “But if you look at the correlations with the next 10 years’ returns, when you are in that territory, you get very low returns.”
Other prominent figures in the AI and markets space believe that even if the industry is in bubble territory, that’s not necessarily the end of the world. JPMorgan Chase CEO Jamie Dimon, for example, compared today’s AI exuberance to the early days of the internet, calling that “in total, a payoff,” as Google, YouTube, and Meta eventually emerged and proved durable. Speaking at the Fortune Most Powerful Women Summit in October, he said he was somewhat cautious about conditions in the current market, yet he urged people not to simply label all of AI as a speculative frenzy. “You can’t look at AI as a bubble, though some of these things may be in the bubble. In total, it’ll probably pay off.”
