No. of Recommendations: 1
Both 2000 and today were bull markets fueled by enormous enthusiasm around a transformative new technology—the internet then, AI now. The market behavior is nearly identical.
When the music stopped in 2000, money didn't leave the system the way it did in 2008–09. It rotated. Capital moved out of the wildly overvalued technology stocks and into reasonably priced value stocks and other parts of the market.
We've already seen small versions of that rotation during this cycle. If AI ultimately proves to be a bubble, I would expect a much more pronounced version of the same thing—and that's the environment in which Berkshire did exceptionally well in 2000–02. So did many value stocks.
Don't forget that before the music stopped, capital rotated out of old economy stuff like Berkshire somewhat.
What was Berkshire's price to book at the low in 2000? 1.1x?
