Jeff Yass: There is no such thing as a stock-market bubble, even in AI (opens the source in a new tab)
- Susquehanna co-founder Jeff Yass argues a high price is not a delusion but the market's best guess: every possible future weighted by its odds, set by people risking their own money.
- His 1999 example: a stock with a 15% shot at a tenfold payoff is a sensible buy even if it ends at zero. The bet was fair; the likelier outcome simply arrived. Even Amazon looked like a bubble after its crash.
- His dare to AI bubble callers: buy put options. If you won't, don't call the market irrational when it falls.
- 15%
- Odds that can justify a long-shot bet
Why it matters If he is right, an AI sell-off would mean long-shot bets missed, not that buyers were fools. That is a useful test for your own portfolio: judge a decision by the odds you faced, not only by how it turned out.
Other side Odds can only be checked after the fact, so 'it was priced in' is hard to disprove. Herding, leverage and fund managers paid to chase rallies can push prices past any sober estimate, and a trading-firm founder is not a neutral judge of markets.