You'll Be Right Eventually

From the Wall Street Journal:

In late 1996, Federal Reserve Chairman Alan Greenspan famously warned of “irrational exuberance” in the stock market. Over the following three years, the Nasdaq Composite Index tripled. George Vanderheiden, once a Fidelity portfolio manager with one of Wall Street’s best performance records, shunned tech stocks in the late 1990s in a bet that the bubble would soon burst, loading up on Treasurys instead, hoping to protect his investors. Instead, performance slumped and he retired in February 2000, scribbling a message on his office whiteboard: “Tulip bulbs for sale”—a reminder of 17th-century speculation in the Dutch flower market.

“You try to manage the portfolio for risk,” he told The Wall Street Journal at the time. “But the market hasn’t rewarded you for it. The market has no fear.”

George also said that being early is the same as being wrong. Despite outperforming the Nasdaq by 20 or 30x over the next three years, he was forced out and not around to take the credit. Careful with your convictions.

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^{Source: The AI Trade Hits Overdrive, Powering Stocks to Historic Gains (WSJ)}