Comment by Libidinalecon
Comment by Libidinalecon 16 hours ago
I got into following the markets around the time of the housing bubble and everything I read at the time said their was a housing bubble.
I think the properties of a true bubble mean that it is not irrational to invest in the bubble and that is a part of what causes the bubble. If your neighbor makes $100k flipping a house and has no special skills above yourself then it is not irrational to also try to flip a house.
This bubble especially has that property. Like Zuckerberg has said there is a big risk of not taking enough risk on something like AGI or super intelligence. That is a perfectly rational position but that is exactly the self reinforcing nature of a speculative bubble.
I also don't think in general a bubble is fundamentally hard to spot. It is hard to profit though from the bubble bursting because of the self reinforcing process at play that you have to bet against.
If I know it's a bubble, what's the risk in waiting?
As long as it could still be far worse to not take a risk, then it's not actually a bubble, right? It's just an early investment. If I have to do something now, to not fall off the track, then the space might not be super clear right now but clearly still on track (because otherwise the correct strategy is waiting for the bubble to burst and maybe then invest).
Or maybe we are just really unclear about what "bubble" actually implies. To me it's the point at which a lot of people have invested a lot of money into something, that will be worth less, than that total amount of money. Is that wrong?