OK, it is mid-August, and I am officially putting investors on warning. Many of the tech-heavy companies leading the S&P 500 Index, AI stocks, and crypto-related names are acting unhinged from reality, in my opinion. Add some extreme moves from recent IPOs and what you have looks like a potential stock market bubble. I am making my call and sending it out for all to see and for history to judge.

Many financial advisors are afraid to put any real insights out there for fear of being wrong and shamed. That may work for them, but not for me. At Hamilton Wealth Management, we manage real money for real people. This is not just theory, charts, and graphs. It is real to our clients, and even more real when it is your money on the line.

I was a financial advisor back in late 1999 and 2000 when the dot-com market bubble burst. Many investors acted surprised that trees do not actually grow to the sky forever. Most investors and even many financial advisors today have no idea what it felt like to live through that time as an investor. But I do. And let me tell you, it really sucked.

If today’s market feels familiar, it should. We have seen this movie before. Last time, it did not end well for the people who showed up late to the party. No two bubbles are ever exactly the same, and no one can predict the exact top. I understand that. But the dot-com bubble of the 1990s and what we are seeing right now look like a remake of an old movie. Not exactly the same, but close enough to be worrying.

Déjà Vu: The Dot-Com Market of the Late 1990s

In the late 1990s, the world became obsessed with the internet. It was going to revolutionize communication, commerce, and life as we knew it. And very importantly, the internet did eventually change the world, maybe even more than people predicted. But the companies leading that charge in 1999 were not always the same ones that survived the crash of 2000 and made investors wealthy later on.

Back then, the Nasdaq Composite Index soared from under 800 in 1995 to over 5,000 by early 2000, representing a sixfold gain in just five years. But when the bubble burst, it was brutal. The Nasdaq crashed by 78 percent, wiping out five trillion dollars in market value over the next 30 months.

To put that in perspective, if you had one million dollars in a Nasdaq index fund at the peak in March 2000 and were depending on it for retirement, it would have been worth just $220,000 by late 2002. You would not have broken even again until late 2015, a full 15 years later.    

Plenty of dot-com companies vanished. Big names like Pets.com and Webvan went bust. Even survivors like Cisco and Intel lost more than 80 percent of their market cap at one point. Many never fully recovered their former highs.

Let me remind you that the idea of the internet transforming our lives did come true. I expect the same may happen with artificial intelligence, and maybe even with crypto. I am less certain on that last one. But the real takeaway here is this: just because a major trend may come true does not guarantee that the hottest companies in that space today will be the winners five or ten years from now. History tells us otherwise.

The parallels to today’s market environment are difficult to ignore.

The Seduction of a Good Story

Markets run on stories. Right now, few stories are more seductive than artificial intelligence and decentralized finance. They promise exponential change, and they may well deliver it in time. But there is a critical difference between the promise of technology and the value of the companies promoting it.

Investors in the dot-com era learned this the hard way. For every Amazon or Google that survived and thrived, dozens of high-flying names went to zero. Hype was not a hedge.

Today’s market has its own sock puppets, including startups with flashy pitch decks, tokens with no utility, and companies that suddenly pivot to AI just to boost their stock price.

FOMO vs. Fundamentals

When markets are hot, fundamentals often get ignored. The fear of missing out is a powerful force. But it is worth asking yourself: are you investing in a transformative future, or are you chasing hype that is already priced in?

Many AI and crypto stocks are already priced for perfection. They are being valued as if they will dominate trillion-dollar industries without competition. But is that reasonable? Has any major emerging industry ever gone unchanged by new competitors and innovations? I do not think so.

Speculation itself is not necessarily bad. But it must be seen for what it is: risky, volatile, and often driven more by crowd behavior than by business reality.

What Smart Investors Are Doing Now

Smart investors are not necessarily avoiding AI or crypto altogether. They are simply avoiding the mania. They are drawing a clear line between narrative and numbers, and between hope and hype.

They are asking questions like:

• What is this company actually doing with AI?
• Does it have a sustainable competitive advantage, or is it just riding the wave?
• Is the valuation based on real earnings, or just investor enthusiasm?

They are also remembering that trees do not grow to the sky, and that no trend, no matter how exciting, moves up in a straight line forever.