During the Internet bubble (1997-2001) prices went up because of FOMO (e.g. people terrified of having less wealth than their brother in law or neighbor), but prices went down because the companies driving it couldn't generate enough cash which triggered a negative feedback loop.
Eventually the supply of new believers with cash disappears and a drop in price causes HODLers to fear being poorer than their brother in law. Feedback loops caused by FOMO work in both directions and once started follow a path which is impossible to predict with any certainty.
Shorting a phenomenon like a bubble driven by FOMO based on just on valuation creates a massive risk of being right far too early. When in doubt, watch cash and cash flow. Anyone who lived through 2002 and 2003 and was paying attention became a believer in the importance of cash.
I was in tech for many years before the bubble started in 1997. But I found myself right in the middle of it. By 2000 I felt the need to do something. So after spending a week reading and thinking I sold half of everything tech. I wrote about this in my book about Charlie Munger.
