Using Cute Kittens to Understand Market Bubbles
One of my investing axioms is "never underestimate the short term stupidity of market". A good example is the market bubble: Speculators buy assets they think are bad investments hoping to sell to those who don't see the bad investment. This is known as the greater fool theory of investing. Mostly they sell to those who agree that an asset is overvalued but who are hoping to do the same thing. This scenario is repeated throughout history: ...