Comment by deadbabe
14 hours ago
One thing I have come to realize, is that worrying about bubbles will keep you poor.
If everyone is in the bubble and it pops, everyone is in the same boat, so you’re not really going to be poorer than your peers by comparison.
If it’s not a bubble and you are wrong, you will fall way behind everyone else and just watch people get richer and richer doing the exact same thing you should have done.
Also, just because something is a bubble doesn’t mean it has to end in a devastating pop. Sometimes bubbles expand and then just get diffused. The exponential rise stops and prices plateau, but it just becomes a new normal and things stagnate for a while before resuming normal upward growth.
Ask Warren Buffet how concerned he was of "missing" on bubbles... He got richer than pretty much everybody else by just avoiding bubbles and then buying assets at fire sale prices when they inevitably popped.
https://x.com/Mr_Derivatives/status/2022796755621060695
Chamath says Warren Buffett outperformed the $SPX by 2 times pre-2000’s because he used "insider info".
Berkshire Hathaway completely exited its investment in Paytm (One97 Communications) in November 2023. This divestment occurred just two months prior to the Reserve Bank of India (RBI) initiating its strict regulatory and KYC-related crackdowns on Paytm Payments Bank in early 2024.
I think Warren has been doing insider trading.
No, Warren Buffet became so rich because he was making deals to pick up stock at favorable prices the public didn’t have access to. You will not be Warren Buffet just by buying after stocks crash.
> If everyone is in the bubble and it pops, everyone is in the same boat, so you’re not really going to be poorer than your peers by comparison.
> If it’s not a bubble and you are wrong, you will fall way behind everyone else and just watch people get richer and richer doing the exact same thing you should have done.
I don't get? First scenario, you get richer vs. the average and in the second you gt poorer. So in total you average out? I don't see how not participating makes you poorer in average.
> Sometimes bubbles expand and then just get diffused.
That's not what a bubble is. A financial bubble is defined by the "burst" at the end.
Normal people generally won't be able to beat professionals in the "market timing game". So when Joe Sixpack decides to sell off his index funds with intent to buy back in at a lower price, he's usually making a mistake. Staying invested in the market is a better choice for most investors because being in cash is about -2%/year EV whereas being in stocks is about +6%/year EV.