EP 379 Billionaire Investor: Sell Before It’s Too Late

APPLE PODCASTS | SPOTIFY

A few weeks ago, we watched an interview with legendary investor Jeremy Grantham.

If you’ve followed investing for any length of time, you’ve probably heard his name before.

He’s spent more than sixty years managing money.

He’s called some of the biggest market bubbles in history.

And during this interview, he made a statement that immediately caught our attention.

He said he wouldn’t own U.S. technology stocks.

Not the S&P 500.

Not crypto.

Not even companies many people consider untouchable.

His concern?

Artificial intelligence may be creating the largest investment bubble we’ve ever seen.

At first, we thought this episode was going to be about whether he was right.

Instead, it became something much more interesting.

The Best Ideas Often Create The Biggest Bubbles

One thing Jeremy said completely changed the direction of our thinking.

He reminded us that bubbles rarely form around bad ideas.

They form around the best ideas.

Railroads.

The internet.

Artificial intelligence.

Each one changed the world.

Each one attracted enormous amounts of capital.

And that’s exactly where the problem begins.

When an opportunity becomes so obvious that everyone rushes toward it, prices often begin reflecting expectations that reality struggles to meet.

The technology may absolutely change the world.

That doesn’t automatically mean every investment around it will produce extraordinary returns.

History has shown us those aren’t always the same thing.

We Live In A World That Celebrates Overnight Success

One reason bubbles are so powerful is because they tap into something deeply human.

We all want to believe we’re discovering the next big thing before everyone else.

Social media only amplifies that feeling.

It can make success appear almost instant.

But we’ve learned something very different building our own business.

People often celebrate the last chapter without seeing the first twenty years.

Take the founders behind Cursor AI.

Many people saw headlines about a multi-billion-dollar company led by founders in their twenties.

What they didn’t see were the years spent learning to code, building products, failing, improving, and compounding their skills long before anyone knew their names.

From the outside, it looked fast.

From the inside, it took years.

Real wealth usually works the same way.

The Difference Between Excitement And Ownership

This is where our perspective starts to differ slightly.

We completely agree that AI is transformational.

In fact, we believe it’s one of the defining technologies of our generation.

But we also believe something else.

Technology changes quickly.

Ownership compounds slowly.

That’s why we’ve always been drawn toward income-producing real estate.

Not because it’s exciting.

Because it solves a problem that has existed for generations.

People need housing.

That doesn’t mean every property is a great investment.

It doesn’t mean prices only move upward.

But it does mean the underlying demand is rooted in something fundamentally human.

Technology evolves.

People still need somewhere to live.

Markets Move Faster Than Emotions

One of Jeremy’s observations that really resonated with us was his description of bubbles.

He explained that markets aren’t always logical.

They’re emotional.

Momentum attracts more momentum.

Prices rising attract more buyers.

Optimism feeds even greater optimism.

Eventually, many people stop buying because they’ve studied the fundamentals.

They buy because everyone else is buying.

We’ve seen this happen repeatedly throughout history.

And we’ve seen what usually happens next.

Not because the underlying innovation disappears.

But because expectations outrun reality.

The Opportunity Most People Miss

One thing we’ve learned through multiple market cycles is that opportunities rarely feel comfortable while they’re happening.

They usually feel uncertain.

Quiet.

Even unpopular.

Ironically, those moments often become the best entry points.

Not because markets stop moving.

But because fewer people are paying attention.

That’s one reason we’re spending so much time preparing for the next cycle rather than reacting to the current one.

Capital becomes incredibly valuable when everyone else suddenly needs it.

Preparation almost always looks boring before it becomes obvious.

The Real Question Isn’t Whether AI Wins

For us, this conversation was never really about artificial intelligence.

We believe AI will absolutely reshape industries.

The better question is:

Which businesses will still be creating durable value after today’s excitement fades?

History tells us transformative technologies survive.

Not every company does.

Not every investment does.

Not every valuation does.

Understanding that difference may be one of the most important investing skills we can develop.

The Lesson We’re Taking Forward

Jeremy Grantham may or may not be right about the timing.

No one consistently predicts that.

But we think he asked a question every investor should consider:

Are you investing because an idea is exciting… or because the underlying economics are durable?

Those aren’t always the same thing.

And over long periods of time, durable businesses have a way of outlasting exciting headlines.

That’s one reason Nancy and we continue focusing on turning earned income into owned income.

Not because it’s the fastest path.

Because history suggests it’s one of the few paths that continues working long after the excitement has faded.