Updated: Jun 3
Hoping that that something will happen based off your emotions will surely land you in trouble especially with money because after all hope is not a strategy so just trying to will something to happen won’t make it so and this is the wrong way to invest.
Take for example Real Estate or Bitcoin, when you mention these two particular asset classes being in a bubble to people that are fully invested and hoping for a return you will see their eyes turn to flames for even suggesting it.
Believe it or not this is a sign of a bubble.
Take the shoe shine boy story for example, the Wall Street banker is getting his shoes shined in the late 1920’s and the boy begins advising him about which stocks are a hot pick right now. The Wall Street banker returns to the office and advises his clients to sell everything. Not long after the DOW Jones topped and had a 98% crash over a 3 – 4 year period.
When Bitcoin was publicised in the media in 2017 I knew it was a top because my mother told me about it. My mother had no idea about cryptocurrency at the time until she heard it on the radio.
A man walks into a precious metal dealer in 2011 and dumps a suitcase of money on the counter and demands silver. Right before it topped.
These are the signs and when you learn to pay attention to the signs you will have a rough idea about the social mood behind the thing that is currently trending and is a hot topic at that moment. At the moment I see many examples of this for almost every class of asset so beware.
Nothing wrong with having hope but just knowing the waves completely takes away this problem. It is also a sign that you aren’t gambling and like to do your due diligence.
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