A Look at Big Technology Waves
In the past 150–200 years, the world has seen many big waves of excitement around new technology. These phases came during the rise of railway telecom, shale oil, and now artificial intelligence. Each time, there was a sudden push of money, fast growth in productivity, and a sharp jump in stock prices. (see the image below)
During these phases, people often feel that this time is special and nothing will go wrong. The general belief becomes that the trend will continue forever.
Why Investors Feel “This Time Is Different”
Whenever a sector grows very fast and shows strong gains, a bubble-like situation forms. At that point, people start thinking that there is no risk ahead. They believe that a big shift is happening and the system is changing for good. This creates a kind of strong confidence that the rise will continue for a long time. This thinking has repeated again and again with every major tech shift in history.
The Current Euphoria Around AI Stocks
Right now, the same excitement can be seen in AI stocks, especially in the US and to some extent in China. In India, there are very few pure AI-related companies. Since 2020, many global AI stocks have gone up nearly 700%. However, the actual improvement in business productivity because of AI is still not very clear. In past bubbles, big corrections of 60–80% have happened before the market stabilised again. If a similar fall happens today, the impact will be huge worldwide.
Why This Can Affect All Global Markets
Some of the world’s biggest companies have very large market values. For example, a company worth five trillion dollars can lose four trillion dollars if it falls by 70–80%. Such a decline can create a strong shock across global markets. When global markets fall together, almost no country can stay safe from the impact. This is why it is important for investors to be alert during times of high excitement.
What Investors Should Keep in Mind
To handle such situations, it is important to know when to exit an investment. This can be based on price behaviour or fundamental analysis, but an exit plan must always exist. Another key point is not to keep all your money only in equities. The current environment in equity markets is risky, so it is better to spread your money across different assets. Proper asset allocation can protect at least some part of your capital if a major correction happens.
Final Thoughts
Understanding risk is as important as understanding growth. Big technology waves can create big opportunities, but they can also create big dangers. A balanced approach helps you stay safe even when markets are filled with excitement. Share your thoughts on this and stay prepared for the next update.
