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Mr. Anderson

@TrueCrypto28

Aug 21

AI feels like 1999 all over again.

Everyone senses it’s revolutionary, capital is flooding in, and optimism has temporarily suspended the laws of logic.

Yet today’s AI is less a wise oracle and more a brilliant but unreliable prodigy; fast, articulate, capable, but prone to inventing facts with confidence. Studies estimate LLMs “hallucinate” up to 27% of the time, with factual slips in nearly half of outputs. These aren’t malicious lies; they’re a feature of the design. The model is trained to produce an answer, not necessarily the right one. Think of an eager intern who always wants to impress, even if it means bluffing.

This gets worse when mastery matters. Press an AI, and it may concede one moment… then double down the next. In high-stakes contexts, that’s not quirky, it’s dangerous.

None of this means AI isn’t transformative. Productivity gains are real. Businesses are retooling. Workflows are shifting. But we can’t confuse speed with wisdom or polish with truth.

The Coming Bubble

This brings us to the possibility of an AI bubble. I believe we’re beginning to mirror the 1990s dot-com frenzy, where soaring excitement collided with economic reality. If AI is truly revolutionary, a bubble isn’t just likely, it’s almost inevitable.

Why bubbles form in revolutions (the causal chain):

Narrative outruns numbers → CapEx outruns ROI → Valuations outrun cash flows.

Compute buildouts, power contracts, model training, and headcount scale fast; adoption, reliability, and unit economics mature slower. That mismatch is the bubble’s fuel.

What the next 24–36 months often look like (playbook):

Phase 1 — Installation Frenzy (0–12 months): real productivity wins + parabolic spend; “AI pivot” press releases everywhere; top-line “AI contribution” headlines, thin detail on profits.

Phase 2 — Compression (6–24 months): costs outpace returns, model performance converges, pricing pressure appears, projects slip, margins compress; first guidance cuts; consolidation begins.

Phase 3 — Aftermath (18–36 months): the weak are washed out; survivors re-price, standards emerge, unit economics finally improve, and the next durable leg starts.

Leading indicators of a bubble:

-Parabolic charts + “this time is different” narratives.
-CapEx hockey-sticking while gross profit lags.
-Inference costs stubborn vs. willingness-to-pay.
-Shelfware: pilots “successful,” production “pending.”
-Vendor sprawl + “prompt-washing” in earnings calls.
-Power/compute bottlenecks used to justify any price.

Exhaustion signals (don’t be the bagholder):

-Price keeps rising while KPIs stagnate (users/ARPU/churn).

-Companies pivot to vanity metrics (“AI interactions”).

-Guidance cut + “temporary headwinds” blamed.

-Insiders dump, retail floods in, media tone flips euphoric.

Thesis in one line:

Revolutions compound over decades, but the first ROI wave rarely matches the first CapEx wave; that gap is the bubble.

We’ll see genuine short-term gains that fuel the mania. But when costs outpace returns, the correction arrives. Just as the internet endured a bust before maturing, AI will likely follow the same arc, shakeout first, then durable growth.

The Investor’s Advantage

For investors, traders, or anyone dabbling in markets, stocks, crypto, or otherwise, recognizing this pattern is a massive edge. Most people fear bubbles. But the truth is, bubbles are where fortunes are made and lost.

The key is to understand narrative and trend.

When the narrative is strong and the trend confirms it, explosive gains are possible, and you want to participate. But you can’t let yourself get blinded by the story. Narratives seduce. Trends reverse. And when they do, those who bought the dream instead of watching the data end up holding the bag.

I’ve lived this myself with Bitcoin. I’ve been one of its strongest public supporters for over a decade, yet I’ve called major tops along the way. After initially hitting $20K in 2017, I warned of a drop to $4,300. At $66K in 2021, I said we’d see $20K again, and we fell to $16K. Did I stop believing in Bitcoin’s long-term potential? Not for a second. But I understand: balloons pop, weak hands transfer to strong hands, and only then can the next great run begin.

That’s the beauty of revolutionary bubbles... Internet, Bitcoin, AI. They don’t end the story; they set the stage for the next one. Each cycle shakes out excess, resets expectations, and builds the foundation for greater heights.

So as a trader, the playbook remains:

-Ride the narrative only when the trend confirms.

-Step aside, or flip your bias, when euphoria peaks.

-Stay a believer long-term, but never marry the short-term story.

This is how you both protect and profit in cycles that destroy the undisciplined.

Read 4 tweets

Mr. Anderson

@TrueCrypto28

Mar 5

This could be the most important trading-related post you'll ever read:

The 6 Stages of a Trader

Understanding these stages can show you where you are now and where you need to be.
(Thread👇)

Stage 1: The Mystification Stage

At first, charts appear as random squiggles. You don’t grasp market structure or how the economy impacts prices. Everything feels like magic. Over time and with study, the chaos begins to reveal a pattern.

Stage 2: The Hot Pot Stage

You notice a pattern that seems to work and begin trading it. Initially, you feel excited as it appears promising until your stop-loss gets triggered. Sometimes you win, and sometimes you lose. This stage teaches you that no strategy wins every time. Think of it like testing a hot stove; you learn by getting burned.

Read 8 tweets

Mr. Anderson

@TrueCrypto28

Jul 26, 2024

"6 Stages Of A Trader"

If we are to become great traders, we will experience some variation of all six of these stages.

Being aware of these stages can help you identify where you are now and where you need to eventually be.

(Which stage are you currently at?)

Stage One of the journey to become a Master Trader:

The Mystification Stage

This is where the neophyte trader begins.

He has little or no understanding of market structure. He has no concept of the interrelationship among markets, much less between markets and the economy.

Price charts are a meaningless mish-mash of colored lines and squiggles that look more like a painting from the MOMA than anything that contains information.

Anyone who can make even a guess about price direction based on this tangle must be using black magic, or voodoo.

However, as one begins to observe, read, and study, the mess may begin to resolve itself into something that may make sense. Sort of... 😉

Stage Two of the journey to become a Master Trader:

The Hot Pot Stage

You scan the markets every day. After a while (sometimes a good long while), you notice a particular phenomenon that appears regularly and seems to "work" pretty well.

You focus on this pattern. You begin to find more and more instances of it, and all of them work! Your confidence in the pattern grows, and you decide to take it the next time it appears. You take it, and almost immediately your stop is hit, and you're underwater for the total amount of your stop-loss.

So, you back off and study this pattern further. The very next time it appears, it works. And again. And yet again. So you decide to try again, and you take the full hit on your stop-loss.

Practically everyone goes through this, but few understand this is all part of the win-lose cycle.

They do not yet understand that loss is an inevitable part of any system, strategy, method, or other approach; there is no such thing as a 100% win approach.

When they gauge the success of a particular pattern or setup, they get caught up in the win cycle. They don't wait for the "lose" cycle to see how long it lasts or what the win/lose pattern is.

Instead, they keep touching the pot and getting burned, never understanding that it's not the pot (pattern/setup) that's the problem but their failure to understand that it's the heat from the stove (the market) that they're paying no attention to whatsoever.

So, instead of trying to understand the nature of thermal transfer (the market), they avoid the pot (the pattern), moving on to another pattern/setup without bothering to find out whether or not the stove is on.

Stage Three of the journey to become a Master Trader:

The Cynical Skepticism Stage

You've studied so hard and put so much effort into your trading and this universal failure in the patterns only when you take them causes you to feel betrayed by the market, the books and materials and gurus you tried to learn from.

Everybody claims their ideas lead to profitability, but every time you take a trade, it's a loser, even though the setups all worked perfectly before you played them.

And since one of the most painful experiences is to fail when success looks easy, this embarrassment is transformed into anger: anger at the gurus, anger at the vendors, anger at the writers, the seminars, the courses, the brokers, the market makers, the specialists, the "manipulators".

What's the point in trying to analyze and improve your trading when so many dark forces are out to get you?

This excuse-driven blame game is a dead-end viewpoint, explaining many of the things you find on message boards. Those who can't pull themselves out of it will quit.

Read 7 tweets

Mr. Anderson

@TrueCrypto28

May 29, 2024

"6 Stages Of A Trader"

If we are to become great traders, we will experience some variation of all six of these stages.

Being aware of these stages can help you identify where you are now and where you need to eventually be.

(Which stage are you currently at?)

Stage One: The Mystification Stage

This is where the neophyte trader begins.

He has little or no understanding of market structure. He has no concept of the interrelationship among markets, much less between markets and the economy.

Price charts are a meaningless mish-mash of colored lines and squiggles that look more like a painting from the MOMA than anything that contains information.

Anyone who can make even a guess about price direction based on this tangle must be using black magic, or voodoo.

However, as one begins to observe, read, and study, the mess may begin to resolve itself into something that may make sense. Sort of... 😉

Stage Two: The Hot Pot Stage

You scan the markets every day. After a while (sometimes a good long while), you notice a particular phenomenon that appears regularly and seems to "work" pretty well.

You focus on this pattern. You begin to find more and more instances of it, and all of them work! Your confidence in the pattern grows, and you decide to take it the next time it appears. You take it, and almost immediately your stop is hit, and you're underwater for the total amount of your stop-loss.

So, you back off and study this pattern further. The very next time it appears, it works. And again. And yet again. So you decide to try again, and you take the full hit on your stop-loss.

Practically everyone goes through this, but few understand this is all part of the win-lose cycle.

They do not yet understand that loss is an inevitable part of any system, strategy, method, or other approach; there is no such thing as a 100% win approach.

When they gauge the success of a particular pattern or setup, they get caught up in the win cycle. They don't wait for the "lose" cycle to see how long it lasts or what the win/lose pattern is.

Instead, they keep touching the pot and getting burned, never understanding that it's not the pot (pattern/setup) that's the problem but their failure to understand that it's the heat from the stove (the market) that they're paying no attention to whatsoever.

So, instead of trying to understand the nature of thermal transfer (the market), they avoid the pot (the pattern), moving on to another pattern/setup without bothering to find out whether or not the stove is on.

Stage Three: The Cynical Skepticism Stage

You've studied so hard and put so much effort into your trading and this universal failure in the patterns only when you take them causes you to feel betrayed by the market, the books and materials and gurus you tried to learn from.

Everybody claims their ideas lead to profitability, but every time you take a trade, it's a loser, even though the setups all worked perfectly before you played them.

And since one of the most painful experiences is to fail when success looks easy, this embarrassment is transformed into anger: anger at the gurus, anger at the vendors, anger at the writers, the seminars, the courses, the brokers, the market makers, the specialists, the "manipulators".

What's the point in trying to analyze and improve your trading when so many dark forces are out to get you?

This excuse-driven blame game is a dead-end viewpoint, explaining many of the things you find on message boards. Those who can't pull themselves out of it will quit.

Read 7 tweets

Mr. Anderson

@TrueCrypto28

Feb 10, 2024

So, you want to be a Technical Trader? 👇👇👇

1. Education & Knowledge:

Learn to understand the markets, various trading instruments, and methodologies. However, your ultimate goal must be Mastery.

2. Trading Plan:

Develop a comprehensive trading plan outlining your strategies, goals, risk tolerance, and evaluation criteria.

3. Risk Management:

Only risk a small percentage of your trading capital on a single trade.

Employ stop-loss orders to limit potential losses.

Understand and manage leverage carefully.

Read 14 tweets

Mr. Anderson

@TrueCrypto28

Nov 13, 2023

"6 Stages Of A Trader"

If we are to become a great trader we will go through some variation of all 6 of these stages.

Being aware of these stages can help you identify where you are now and where you need to eventually be.

(Which stage are you currently at?)

Stage One: The Mystification Stage

This is where the neophyte trader begins.

He has little or no understanding of market structure. He has no concept of the interrelationship among markets, much less between markets and the economy.

Price charts are a meaningless mish-mash of colored lines and squiggles that look more like a painting from the MOMA than anything that contains information. Anyone who can make even a guess about price direction based on this tangle must be using black magic, or voodoo.

However, as one begins to observe, read, study, the mess may begin to resolve itself into something that may make sense. Sort of... 😉

Stage Two: The Hot Pot Stage

You scan the markets every day. After a while (sometimes a good long while), you notice a particular phenomenon which pops up regularly and seems to "work" pretty well.

You focus on this pattern. You begin to find more and more instances of it and all of them work! Your confidence in the pattern grows and you decide to take it the very next time it appears. You take it, and almost immediately your stop is hit, and you're underwater for the total amount of your stop-loss.

So you back off and study this pattern further. And the very next time it appears, it works. And again. And yet again. So you decide to try again. And you take the full hit on your stoploss.

Practically everyone goes through this, but few understand that this is all part of the win-lose cycle.

They do not yet understand that loss is an inevitable part of any system/strategy/method/what have you, that is, there is no such thing as a 100% win approach.

When they gauge the success of a particular pattern or setup, they get caught up in the win cycle. They don't wait for the "lose" cycle to see how long it lasts or what the win/lose pattern is.

Instead, they keep touching the pot and getting burned, never understanding that it's not the pot (pattern/setup) that's the problem, but a failure on their part to understand that it's the heat from the stove (the market) that they're paying no attention to whatsoever.

So instead of trying to understand the nature of thermal transfer (the market), they avoid the pot (the pattern), moving on to another pattern/setup without bothering to find out whether or not the stove is on.

Stage Three: The Cynical Skepticism Stage

You've studied so hard and put so much effort into your trading and this universal failure in the patterns only when you take them causes you to feel betrayed by the market, the books and materials and gurus you tried to learn from.

Everybody claims their ideas lead to profitability, but every time you take a trade, it's a loser, even though the setups all worked perfectly before you played them.

And since one of the most painful experiences is to fail when success looks easy, this embarrassment is transformed into anger: anger at the gurus, anger at the vendors, anger at the writers, the seminars, the courses, the brokers, the market makers, the specialists, the "manipulators".

What's the point in trying to analyze and improve your own trading when there are so many dark forces out to get you?

This excuse-driven blame game is a dead-end viewpoint, and explains a lot of what you find on message boards.

Those who can't pull themselves out of it will quit.

Read 6 tweets

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