Would love all of these people bemoaning investors natural stupidity to trade on it, given their clearly superior understanding of capital allocation.
“Market can stay stupid longer than you can stay solvent.” -> Yeah, that is called cope.
“Market can stay stupid longer than you can stay solvent.” -> Yeah, that is called cope.
You had me at the start but lost me here. That’s not speculation, that’s a fact. Some big shorters of the 2008 crisis almost went broke waiting for the market to catch up.
> Some big shorters of the 2008 crisis almost went broke waiting for the market to catch up.
At what point are you a successful predictor of the 2008 crisis vs. a guy who just shorted the economy in 2006?
[0]: https://www.econlib.org/archives/2015/08/recessions_ofte.htm...
soo now we've moved from "take advantage of investors being stupid by trading against it inidivudally" to "accomplish a FAR HARDER task by modeling the whole market". Cool cool, moving goalposts for days.
Calling certain investors stupid is hardly contradicting the idea that the market as a whole will sort itself out in the end.
But never discount the possibly of spherical cows in a vacuum.
In reality, it's nowhere near this simplistic. You have to time it. Timing is impossible. Manipulation happens.
Like on a linked list, you can only "point" to the next big disaster!
No that is something anyone shorting needs to understand fully and deeply.
e.g. the dotcom bubble was clearly a bubble with most dotcoms absolute garbage investments. People looked at it and correctly saw it as such and decided to short. They were 100% correct and still lost big money because it took too long to be proven so.
Dotcoms as they were in 2000 were ridiculous investments that have gone badly south. You couldn't buy google, you could buy Looksmart, repeat that pattern for basically every company that ended up successful. Social media was not a thing. Internet advertising was an utter joke from every level of analysis (is it still? No clue). The thing was clear and obvious and did pan out as expected but man alive it took some time.
If everyone knew it was clearly a bubble, it would not be a bubble.
At the time people showed the necessary cashflows & growth required for profitless doctcom companies to justify their price and nobody could make it make sense. You'd have to be pretty stupid to think greater fools buying can go on forever.
I'm sure some people in finance "believed" in it and others claimed to. Not many in the circles I moved in even paid lip-service unless they were in the IPO business. Plenty played. Did your experience differ?