Five Ways I’m Seeing Investors React to This Market

As the market heat continues to build with a few massive exits, and a bunch recent rounds at eye-popping valuations, I’ve watched a lot of smart people behave differently. These are experienced investors so naturally I take it all in.

Here’s what I am seeing/hearing …

1) Panic FOMO.

Investing aggressively so as to not miss the next Anthropic, OpenAI etc.

2) Throw the book out.

Disregard price or ownership targets, or invest at different stages than the stated strategy.

3) Lament with humor or maybe whiskey 😉

Michael Dempsey wrote a very funny version of this as satire a few weeks back saying just to get out while you can, which leads to #4…

4) Exit the business.

Move to Florida. 😉 Or just slow investing and wait for a calmer market.

5) Stay the course.

Usually my preferred MO but admittedly hard in this moment.

I passed on Hugging Face in January 2017, when it was a chatbot for teenagers. Nvidia is paying $12.93B for it. The pivot was hard to predict, but the sting is still there.

Ho Nam and Dan Gray have been arguing the discipline side of this on X and I mostly agree with them, but it’s hard in a moment like this to stay sane.

A handful of data points, some real exits, some are just marks, but there’s no question we’re in an insane moment of value creation. That’s not enough to throw the book out. Most of an investor’s bets needed to be made 5-15+ years ago to ride this current wave.

That said, I do think its important to test previously held assumptions from time to time, even if the fateful words of “this time is different” ring hollow in my head.

Which of the these are you doing? Or are there others?