[harry8]

Transformative tech: cars. If you invested in the early movers you very likely lost your money.

Transformative tech: personal computers. If you invested in early movers you missed microsoft and you very likely lost your money.

Transformative tech: Internet/web, dotcom boom. Google, facebook, twitter were not investable or did not even exist even up to when it popped.

Whether you believe AI is going to be massively transformative to the modern economy on a scale with cars or personal computing is actually not sufficient to start investing in the 'sector' (for want of a better term).

So this is useful as a reverse indicator. Anyone investing buckets in AI is worth betting against in general. Everyone? Maybe not everyone. Maybe.

Likewise even if the blockchain sector is dead. (Is it? No clue) This does not necessarily make the technology dead. (Even if you would like it to be). The web came back and reinvented as a massive distributed surveillance machine. Who would have predicted that in the crash? Who would have wanted it? Well we got it anyway.

[apexalpha]

This seems wrong, though?

For cars the inventor is (Mercedes) Benz, the people who first mass produced it was Ford. Both seem like good investments.

PC: Who is this early mover you talk about? I guess not Apple in your mind, since that would've been a fantastic investment. Hard to think of any better.

Plus, there are hundreds if not thousands of companies along the way you could've invested in that were swallowed up by the bigger fish. That's still a good investment since you either get a good exit or shares in the bigger fish.

[harry8]

Survivor bias is massive here, watch out for it.

Osborne beat apple to personal computing. Facebook did not exist during the dotcom boom. So very many early car companies went broke. "But if you'd only got ford it would have been sweet as." But they weren't first. Panhard et Levassor in 1889, ford in 1901 sayeth wikipedia.[1] So now you're waiting and picking winners in the sector which is very much harder without the time machine to see what worked out in the end.

[1] https://en.wikipedia.org/wiki/History_of_the_automobile#Eras...

[apexalpha]

Of course this is survivor bias, and of course many companies went bust.

But that's what investing is. Even in a mature sector of the economy companies can go bust. That doesn't mean it's always a bad idea to invest in new and upcoming technologies.

[harry8]

>Whether you believe AI is going to be massively transformative to the modern economy on a scale with cars or personal computing is actually not sufficient to start investing in the 'sector'

Note that "not sufficient" does not mean something else and particularly not "never do it." You've still got to pick winners if you want to succeed and that is likely a difficult task if history is any guide. Good luck.

[skybrian]

This is hindsight bias. You know the names of the ones history remembers.

[martindbp]

You can always find some earlier example of a tech that lost. But if you invested in the first company to mass produce a car (Ford) you'd have done well. If you invested in the first of its kind smartphone (Apple) even better. Likewise there's been a lot of early failed AI startups in the past 20 years that you could point to, and now OpenAI is hitting it out of the park, expecting a billion in revenue next year on a pure AI consumer product. I think that shows this time is different.

[eastbound]

But each revolution is a multiplicator. A company making a billion a year is dime a dozen today. If they really were onto AI, then they’d be projected to make a trillion a year.

[harry8]

this is another way of saying "If you invested in the first one to be successful." Well yeah. Obviously. Time machines work great for investment decisions.

edit:

Whether it was first or not the nokia N95 was a smartphone and was definitely before the iphone. Forgotten like every earlier loser I guess.

[olalonde]

The point is that there is no way to tell whether a company will become one of the "early failed companies" vs "the first one to be successful". Your strategy is not actionable.

[harry8]

"Don't throw money at a new sector of transformative tech looking for first mover advantage because you'll lose."

Seems actionable to me, was it not clear?

You've got to do a lot more, you've got to pick ford will win. Even if you're 100% the tech is massively transformstive. The winners to pick may not exist yet.

[veltas]

Isn't a lot of the cash coming from funds? Funds that diversify but still can pump billions into this sector without breaking a sweat. Individual investors don't have a lot of opportunity to buy in anyway, and they usually know the risks. But funds can blindly pump memes alongside modest strategies and still return on investment overall; and they aren't left standing when the music stops.

[tim333]

I guess the time to invest in dot coms would have been around 2002. After the hype wave collapsed and you can see which businesses are hanging in and providing value.

[jtode]

We use the tech the blockchain sector was based on every day. The program is called git.