U.S. stocks in a bubble? No
An infamous example was the South Sea Bubble in 1720.
Newton reversed course and ploughed his proceeds back in. He doubled down, converting his government bonds into even more South Sea Company stock.
Unfortunately, the bubble burst in the autumn of 1720, wiping out the ageing Newton’s savings.
https://englundmacro.blogspot.com/2024/01/since-its-2022-bottom-s-500-adding-more.html
The lesson for diagnosing a bubble
It seems all so much easier with hindsight: looking back, we can all enjoy a laugh
Tim Harford FT 12 January 2018
https://www.internetional.se/shares.htm#tulip05
From 1792BC onwards
What Triggered the Crash? - Hussman
When the time comes to ask the question – “What triggered the crash?” – remember that this is the least important question. A market crash requires nothing more than a shift in investor psychology from careless speculation to even modest risk-aversion.
With valuations at the most extreme level in history, the one thing that the market simply cannot tolerate is the eager attempt of a substantial number of investors to exit.
When the walls come down, investors will scavenge the news for “catalysts.” Don’t fall into this trap. Undoubtedly, some “catalyst” will be found, but the mistake will be in believing that the collapse is caused by that piece of “bad” news.
The important question to ask is “What drove the bubble?” That’s where the lessons are.
July 2021
https://englundmacro.blogspot.com/2021/07/what-triggered-crash-hussman-funds.html
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