By James Gruber
Publication Date: 2025-12-17 00:00:00
Howard Marks is a billionaire debt investor and he is the first to admit that he is not active in the stock markets and is far from a tech expert. However, he is a long-time observer of investor psychology and has successfully addressed both the technology bubble of the 1990s and the subprime bubble that preceded the global financial crisis.
Understanding bubbles
In his latest investor memo, Marks goes into detail about what bubbles are, how they develop, their impact, and whether today’s AI boom can be called a bubble.
He says that all bubbles follow similar patterns. A new, seemingly revolutionary development occurs that stimulates people’s imagination. Early investors enjoy phenomenal profits. Others on the fringes become jealous of these gains and eventually pounce on them. They do this regardless of the prices offered or the risks involved. Ultimately, things go downhill and most late-stage investors suffer significant and often irreparable losses.
If the damage is so great, why…
