A bubble is a bubble. Yes the Internet is like magic.
But it's still a bubble, which means it has to be burst.
No matter how many intelligent rebuttals Mike Steinhardt
or Steve Einhorn or Ken Fisher gives - and yes they are v intelligent sensible
points made by sensible people - the bubble is going to burst.
People always feel tempted to play the Greater Fool Game.
I am one of them and I succumbed in 2007. Social proof is one,
perverse incentives is another.
But trust me I know and I have seen for myself how impossible
it is to get the timing right. Even Warren Buffett can't get it.
Even George Soros is more often wrong than correct.
I like the Bob Mnuchin adage about how people who sell at the bottom
aren't stupid. I'm one of them.
But I think I may be the exception becos I can be really stupid sometimes.
(It's a personality quirk of mine tt sometimes the brain goes on holiday,
as all who know me can attest)
What I've learnt, and just revised in Rubin's book is this :
It's not worth playing the Greater Fool Game.
Nobody can see the top, nobody can see the bottom.
One useful question I think is "What if I'm wrong?"
Will I be bankrupt? How much will I lose?
Rubin's Example:
Steve and I didn't want GS to cease to exist after 130 years
because something that we agreed was virtually inconceivable
actually happened. (Farmer Mac default on obligations)
For myself : Greed and an (80/20) bias I held towards concentration
propelled me into taking a large stake in C_____, which I have since regretted.
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