AI Looks Frothy on a 3-Year Horizon and Like a Discount on a 10-Year One
Insight
Asked whether private markets hold too much cash, Foody answers with an Amara's-law heuristic: the market overestimates in the short term and underestimates the long term. On a three-year horizon today looks frothy and possibly 1996-97; on a ten-year horizon the same businesses look like a discount. It is how he reconciles obvious exuberance with continued aggressive building, and it doubles as his stated investing posture that we are still early, around 96 or 97.
Source Context
"My heuristic for this is the age-old saying that it's probably overestimating in the short term and underestimating the long term. If we're evaluating things on a three-year time horizon, it wouldn't shock me if we feel like things are frothy and it's a crazy time. But if we're evaluating things on a 10-year time horizon, all of these extraordinary businesses being built will look like a discount." ā 33:30(https://www.youtube.com/watch?v=FzftvxA84z8&t=2010s)