Intelligent Investment Today - The Warren Buffett Way
Jul 28, 2026 · 21 min · 10 segments
Artificial intelligence is widely viewed as one of the most transformative technologies of our time. But history reminds us that revolutionary innovations and speculative excess often arrive together…
David CoombsHost
[gentle music] Let's take a journey back through history to the decades leading up to 1873.
New financial markets were emerging, and investors became captivated by the possibilities.
To many people at the time, railways represented the future, and of course, in many ways, they were right.
Railways transformed commerce, reduced transportation costs, connected cities, opened new markets, and fundamentally reshaped economic activity.
They were one of the most important technological developments in modern history.
Now I ask, does this sound in any way familiar? Because today, many investors say similar things about artificial intelligence.
AI promises to improve productivity, automate tasks, transform industries, create entirely new business models, and in doing so, potentially reshaping the global economy.
The technology itself may indeed be revolutionary, but of course, that doesn't automatically mean every investment connected to it will be successful.
One of the most important lessons from the period before 1873 is that investors gradually stopped distinguishing between good technology and a good investment.
New lines were proposed constantly, and investors became convinced that demand would continue expanding indefinitely.
And eventually, enormous amounts of capital was allocated to projects that never should have been funded.
Projects that would have been rejected under normal conditions suddenly receive financing, for risk appears less important, and investors begin focusing almost exclusively on potential upside.
The excitement surrounding genuine innovation eventually spills over into less deserving opportunities.
[gentle music] Let's take a journey back through history to the decades leading up to 1873.
New financial markets were emerging, and investors became captivated by the possibilities.
To many people at the time, railways represented the future, and of course, in many ways, they were right.
Railways transformed commerce, reduced transportation costs, connected cities, opened new markets, and fundamentally reshaped economic activity.
They were one of the most important technological developments in modern history.
Now I ask, does this sound in any way familiar? Because today, many investors say similar things about artificial intelligence.
AI promises to improve productivity, automate tasks, transform industries, create entirely new business models, and in doing so, potentially reshaping the global economy.
The technology itself may indeed be revolutionary, but of course, that doesn't automatically mean every investment connected to it will be successful.
One of the most important lessons from the period before 1873 is that investors gradually stopped distinguishing between good technology and a good investment.
New lines were proposed constantly, and investors became convinced that demand would continue expanding indefinitely.
And eventually, enormous amounts of capital was allocated to projects that never should have been funded.
Projects that would have been rejected under normal conditions suddenly receive financing, for risk appears less important, and investors begin focusing almost exclusively on potential upside.
The excitement surrounding genuine innovation eventually spills over into less deserving opportunities.
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