The thing about bubbles is that you need to have an exit plan
and watch it closely, get out when you think it's done. Also
sometimes bubbles are like musical chairs, you better have a seat
when it pops!
now pure capital investments are easy to unload in most cases,
it's when you have hard assets where you can get stuck. For
example, take the housing bubble/bust in the US, it was far better
to have sold your houses 6 months or a year before the bubble burst
than trying to time the exact top. Because in real estate,
once you miss the top, it's hard to sell and a lot of people got
stuck, so it was better to sell early, even way early.
Yes the idea way to play a bubble is to recognize that it's a
bubble (unlike the masses who can't) ride the 80% or so of the
move, then try to exit in the late stages before it actually
ends. It's easier said than done of course.
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The thing about bubbles is
China's Housing Bubble
Posted by matt on 17th of Mar 2010 at 09:46 pm
The thing about bubbles is that you need to have an exit plan and watch it closely, get out when you think it's done. Also sometimes bubbles are like musical chairs, you better have a seat when it pops!
now pure capital investments are easy to unload in most cases, it's when you have hard assets where you can get stuck. For example, take the housing bubble/bust in the US, it was far better to have sold your houses 6 months or a year before the bubble burst than trying to time the exact top. Because in real estate, once you miss the top, it's hard to sell and a lot of people got stuck, so it was better to sell early, even way early.
Yes the idea way to play a bubble is to recognize that it's a bubble (unlike the masses who can't) ride the 80% or so of the move, then try to exit in the late stages before it actually ends. It's easier said than done of course.