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Comment by mprovo1 | Hacker News Reader

I wonder if awareness + the experience that we had just 10 years ago is going to limit the size of this bubble. 10 years is a very short time it's the same sector.

I know for one thing, I had my lesson 10 years ago, my dad had his lessons investing in Nortel Networks and most of my friends learned a lot about bubbles in 2000. The pain of losing that much money is still there.

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There are always people that haven't lost enough in the previous bubbles and the allure of getting a huge return in only 1 or 2 years is greater than life. I'm sure a lot of people recognize that evaluations are already inflated, but feel confident that they'll get out before the bubble explodes.

Fully agree.

This discussion came up recently in a Planet Money episode (http://www.npr.org/blogs/money/2011/05/20/136403092/the-tues...).

They interviewed an economist who ran a simple experiment: he created a market for the students in his class with a VERY predictable security (it paid a pre-established dividend N times, and then stopped.) And yet speculative bubbles invariably formed and crashed.

That blew my mind. The professor even told the students it was happening as it was happening and the bubble wouldn't deflate.

It feels like it's similar to the "guess a number between 0 and 100 that's 2/3 of the average person's guess" game. In the real world, you don't win by doing the most rational thing; you win by succesfully modeling the other players.

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