---
title: Exuberance, Electricity, and the Edge of Reason
description: Sam Altman’s 17-gigawatt AI data center vision to Jerome Powell’s warning on stretched markets, innovation and speculation often collide.
---

[Investment, Tax & Estate Strategy Insights | Members' Wealth](https://www.memberswealthllc.com/insights)

# [Exuberance, Electricity, and the Edge of Reason](https://www.memberswealthllc.com/insights/exuberance-electricity-and-the-edge-of-reason)

 Written by [Dane Czaplicki](https://www.memberswealthllc.com/insights/author/dane-czaplicki) | Sep 29, 2025

 

**Exuberance, Electricity, and the Edge of Reason** 

Standing on a dusty patch of land in Abilene, Texas, [Sam Altman laid out](https://www.cnbc.com/2025/09/23/sam-altman-openais-850-billion-in-planned-buildouts-bubble-concern.html) a vision unlike anything we’ve seen in the history of the internet: a **17-gigawatt data center buildout**, the equivalent of 17 nuclear plants or nine Hoover Dams. It’s a project so vast it borders on surreal. 

Just days earlier, in Providence, Federal Reserve Chair Jerome Powell [acknowledged that stock](https://www.cnbc.com/2025/09/23/fed-powell-stock-prices-appear-fairly-highly-valued.html) prices look “fairly highly valued.” Two very different leaders: one shaping the future of AI, the other stewarding U.S. monetary policy, both hinting at the same truth: we’re living in extraordinary times. And yet, markets continue to climb. 

We’ve been here before. 

- In December 1996, Alan Greenspan warned about “irrational exuberance.” The market didn’t peak until March 2000. 

- [In the late 1920s](https://www.memberswealthllc.com/insights/august-and-everything-after-part-ii), innovation and speculation set the stage for the crash of 1929 and the birth of the SEC.  

- [In the 1990s](https://www.memberswealthllc.com/insights/lessons-from-the-90s-dot-com-era), telecom firms overbuilt global fiber networks by a decade, bankrupting many, but also laying the foundation for Google, YouTube, and Netflix. 

The lesson is timeless: **timing is impossible, but excess always meets a reckoning.** 

**The Present Tension** 

Altman was candid in Texas: *“Smart people will get overexcited, and people will lose a lot of money. People will make a lot of money.”*   
Powell was candid in Providence: *“Equity prices are fairly highly valued.”* 

And the data is candid too. 

- The historical average CAPE is **17.28**. 

- Readings above 30 have historically signaled big trouble ahead. 

- In the five prior cases CAPE exceeded 30, the S&P 500, Dow, and Nasdaq each eventually fell **20% to 89%**. 

This is not about day-to-day noise. It’s about probabilities, cycles, and history rhyming. 

Yet… stocks still push higher. 

That’s the paradox of markets: 

- Greenspan warned of “irrational exuberance” in 1996, and investors who sold missed three more years of gains. 

- Telecom companies built fiber far ahead of demand, investors lost fortunes, but the overbuild made the internet boom possible. 

- Now, Altman and Powell are practically waving red flags in real time, and yet, exuberance carries markets forward. 

Which begs the question: if valuations are stretched, policy is politicized, and AI infrastructure spending is at unprecedented levels, **where do investors look for real opportunity?** 

**History Rhymes: Small Caps After Rate Cuts** 

One answer may lie in the overlooked corners of the market. 

According to Nasdaq Dorsey Wright, when the Federal Reserve has cut interest rates **spaced more than 100 days apart since 1990**, **small-cap equities** (represented by the iShares Russell 2000 ETF, IWM) have delivered standout forward returns: 

- **Muted** in the near term (1–3 months). 

- **+16% average** at 1 year. 

- **+32.7% average** at 2 years. 

 

In other words, while mega-cap AI names dominate headlines and valuations stretch historic extremes, history shows small caps often thrive in the *second act* of easing cycles. 

This doesn’t mean the ride will be smooth. Small caps can be volatile, cyclical, and sensitive to economic shocks. But for investors aiming to diversify beyond the S&P 500, they may offer exposure to the next phase of the cycle rather than the most crowded trade of the present. 

**Members’ Wealth Takeaways** 

- [**Survive the short term to win the long term**](https://www.memberswealthllc.com/insights/from-nixons-inflation-to-trumps-fed-pressure-can-investors-survive-the-short-term). Markets can stay irrational longer than any one investor can stay patient or solvent. Don’t bet the farm on calling the top. 

- [**Redefine risk**](https://www.memberswealthllc.com/insights/redefining-risk-before-the-next-wave): Volatility is survivable. Permanent capital impairment is not. 

- **Innovation cycles**: Overbuilding leads to pain for some investors, but platforms for the next generation. 

- **Valuations matter**: CAPE near 40 is rare air. History suggests outcomes eventually revert, even if not on schedule. 

- **Diversification matters**: Small caps, despite their volatility, have historically delivered strong returns in similar rate-cut environments. 

Our stance: Don’t chase exuberance. Don’t hide under a mattress either. Build resilient, adaptable portfolios that participate in growth but survive the inevitable reckoning. 

***Markets don’t ring a bell at the top***. Altman is telling us this is extraordinary. Powell is telling us valuations are stretched. The Shiller P/E is screaming caution. And yet, markets climb. 

You don’t need to time the top. You need a portfolio that **endures both exuberance and correction**. 

📩 Let’s talk about how your portfolio is positioned across mega-cap AI, small caps, and everything in between so you’re ready for both sides of the cycle. 

[Schedule a conversations with us today.](https://go.oncehub.com/MeetingwiththeMembersWealthTeam)

*Investment strategies, including rebalancing, do not guarantee improved performance and involve risk, including potential loss of principal. Past performance does not guarantee future results.*

*The information provided is for educational and informational purposes only and does not constitute investment advice and it should not be relied on as such. It should not be considered a solicitation to buy or an offer to sell a security. It does not take into account any investor's particular investment objectives, strategies, tax status or investment horizon.   
All information has been obtained from sources believed to be reliable, but its accuracy is not guaranteed. There is no representation or warranty as to the current accuracy, reliability or completeness of, nor liability for, decisions based on such information and it should not be relied on as such.*

 

### **About the Author**

### **Dane Czaplicki, CFA®**

[Dane Czaplicki](https://www.memberswealthllc.com/dane-czaplicki) is CEO of Members’ Wealth, a boutique wealth management firm that offers a comprehensive approach to serving individuals, families, business owners, and institutions. The firm’s goal is to preserve and grow its clients’ wealth to endure over time, while thoughtfully evolving its strategy to suit an ever-changing world. With over 20 years of wealth management experience, Dane and the Members' Wealth team thrive on bringing clarity and confidence to clients' unique situations. He believes everyone needs sound financial advice from someone whose interests are aligned with theirs, and is determined to put service before all else.

Dane received his MBA from The Wharton School of Business at the University of Pennsylvania and his bachelor’s degree from Bloomsburg University. Outside work, he enjoys spending time with his wife and kids, hiking and camping, reading, running, and playing with his dog. To learn more about Dane, connect with him on [LinkedIn](https://www.linkedin.com/in/danecfa/).

To get in touch with the Members’ Wealth team today, I invite you to email [info@memberswealthllc.com](mailto:info@memberswealthllc.com) or call (267) 367-5453. 

You can learn more about how we serve our clients by tapping the button below.

 

 

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*Members’ Wealth does not provide legal, accounting or tax advice. Please consult your tax or legal advisors before taking any action that may have tax consequences.*

*This commentary reflects the personal opinions, viewpoints and analyses of the Members’ Wealth, LLC employees providing such comments, and should not be regarded as a description of advisory services provided by Members’ Wealth, LLC or performance returns of any Members’ Wealth, LLC client. The views reflected in the commentary are subject to change at any time without notice. Nothing in this commentary constitutes investment advice, performance data or any recommendation that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person. Any mention of a particular security and related performance data is not a recommendation to buy or sell that security. Members’ Wealth, LLC manages its clients’ accounts using a variety of investment techniques and strategies, which are not necessarily discussed in the commentary. Investments in securities involve the risk of loss. Past performance is no guarantee of future results*

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