[simsla]

It looks more similar to the 1929 crash to me, where "too big to fail" blue chip stocks were overinvested and overvalued, and the value adjustments rippled through the rest of the economy. If NVIDIA does get a meaningful value adjustment downwards, it'll probably survive, but it'll impact the S&P500. People will need to sell off other stocks to cover the losses, etc. etc.

[mschuster91]

> It looks more similar to the 1929 crash to me, where "too big to fail" blue chip stocks were overinvested and overvalued, and the value adjustments rippled through the rest of the economy.

Yup. Add to that the decade worth of ZIRP following the 2007ff crash and Covid... all that money has to exit the system again eventually.

[montyanderson]

nvidia's forward p/e is 24. walmart's is 39.

[leonidasrup]

That is exactly the point. These circular deals artificially increase the earnings of company and as a result artificially decrease price–earnings ratio.

[janderson215]

What kind of sources do you like to read? Do you have a blog or publish anything? I keep on thinking about this comment and want to hear more of your perspective.

[Der_Einzige]

The amount of coping, seething etc at the fact that Nvidia is hilariously profitable leads to some of the funniest cognitive dissonance I’ve seen on the internet.

[mschuster91]

The problem is - what happens when the AI bubble bursts for whatever reason, and suddenly NVIDIA has to deal with a lot of its high-margin business going away? With its outsized weight amongst most indices and consequently ETFs, even a small percentage of value correction will wipe out a lot of wealth.

We've seen that with the dot-com bubble in the past, a lot of the "dark fiber" that we use and rely on today was gotten for incredibly cheap after the collapse of debt-fueled customers and, subsequently, the collapse of the ISPs.

That scenario is what I am afraid of repeating, partially because a lot of the market (especially at the tail end, such as datacenter companies investing into buildouts, and consequently construction companies investing in machinery and staff) is fueled by debt and a domino-level collapse can trigger another cascading debt default crisis that can then send off banks into failure.

[psvv]

That seems to indicate the market is more confident in walmart's earnings than nvidia's.