On one side, it looks like we're in an **expensive market**. Just look at the **Shiller PE** and the **regular PE** relative to their historical averages. You can also see we're near the top of the credit cycle, with **credit spreads about as tight as they've been**. People look really greedy: they're piling into names like **SPCX** and companies like TSM that trade at high PEs and **very high price-to-FCF.**
On the other side, people still seem prudent. Stocks like ORCL, META, and MSFT are going *down* because the market is paying attention to things like **financial leverage** and **crazy capex**. So you can't really say **the market has completely lost its connection to reality and fundamentals**.
I think the problem is much deeper than that. The real issue is that almost every investor treats profit growth as a given. **Nobody stops to ask who is actually paying for all these tokens**. A lot of that demand is coming from unprofitable startups like Base44, Lovable, and similar companies with no moat. So what happens when (or if) the **money from private credit, private equity, and VCs dries up**? These startups have no profit and no moat, which will make them very hard to sell or take public.
And I'm not even getting into the potential oversupply of data centers.
So maybe the market isn't completely irrational right now, but is it running on some very optimistic assumptions?