One of the fascinating observations in Carlota Perez's "Technological Revolutions and Financial Capital: The Dynamics of Bubbles and Golden Ages" [1] is that outdated technological industries continued to provide superior returns even after they'd been supplanted. You'd have more money today if you'd invested in Exxon in the mid 1970s than if you'd put the money in IBM, even though Exxon has slipped from the top 10 to something like 40th place in the S&P. Meanwhile, railroads peaked at 60% of the US stock market around 1860, shrinking to less 2%, yet continued to beat the market for the next 120 years. Discussed recently on the Rational Reminder [2] podcast.

[1] https://www.amazon.com/Technological-Revolutions-Financial-C...

[2] https://www.youtube.com/watch?v=vEwwtjDo1dU

I would recommend the book Technological Revolutions and Financial Capital: The Dynamics of Bubbles and Golden Ages [0] by scholar Carlotta Perez. She studies longer cycles though (~50 years) but the mechanism she describes seems pretty sound for the matter at hand.

It goes more or less like this:

- capital in search for long term returns goes to early moves of a big technological shift

- as successes from the new technology get more and more apparent, it attracts a much larger slice of capital available, and eventually gets over-funded (the real opportunity of this technology is limited)

- a bubble forms, most capital is in for a quick speculative return

- back to square one with a new technology (and former bubble bursts)

[0] https://www.amazon.com/Technological-Revolutions-Financial-C...

This is the Perez book I mentioned: http://www.amazon.com/Technological-Revolutions-Financial-Ca...

If you follow Marc Andreeson, Chris Dixon, Fred Wilson, etc, you'll see they are all very fond of her work too.

Thiel is just one of many people listed in the acknowledgements of The Great Stagnation. I've previously watched the interview you linked, and was quite surprised by Cowen's acknowledgment of Thiel as "one of the greatest and most important public intellectuals of our entire time."

However, as the Salon article notes, Cowen himself was a latecomer to the debate (The Great Stagnation was published in 2011). Technological Revolutions and Financial Capital[0], by Carlota Perez, was published in 2003, while Robert J. Gordon has been writing about the topic since at least 2000[1].

During the early 2000s, Thiel and Clarium Capital were incorrectly fixated on peak oil, rather than on the real estate bubble (relevant in the short term) or general stagnation (relevant in the long term)[2]:

> [B]y February 2009 oil prices had temporarily fallen back to almost $40 again. And though Thiel had foreseen the real estate bubble, he still underestimated it. “We didn’t fully believe our own theories about how bad things were,” he admits.

This misunderstanding of the macro picture cost Thiel dearly, with Clarium shrinking 90% from 2008-2010[3], as investors withdrew their money from what was clearly a losing strategy.

0: http://www.amazon.com/dp/1843763311

1: http://www.nber.org/papers/w7833

2: http://fortune.com/2014/09/04/peter-thiels-contrarian-strate...

3: http://www.bloomberg.com/news/articles/2011-01-12/clarium-he...