Tuesday, April 28, 2015

Time Horizons: Bubbles

Barry Ritholtz:
stock-market bubbles pull gains into the present from the future. Toward the end of a secular cycle, the crowd becomes aroused and starts paying attention. Collectively, they begin to recognize how much money has been made during the past few years, and how much of the move they missed. So the crowd begins to pile in, somewhat late in the cycle and at somewhat elevated valuations.  Inevitably, they do worse than those who were early to the show.

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