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Spotting Bubbles? No. React to Moves

Psychology | March 19th, 2011

You can’t spot ‘bubbles’, you can only be react to trends:

He is trying to apply fundamentals to something irrational — bubbles. Is he right about Gold? Most likely, but so what. Knowledge of a bubble doesn’t allow you to profit from said bubble.

  • Trader Joe

    If a market is likely in a bubble, doesn’t that suggest there might be a lot of money from new people rushing in with the desire to get rich?

    If so, then that market might be a good one to investigate for trend following opportunities (both on the way up before the bubble pops and on the way down after it pops).

  • Michael David Rubin

    Isn’t “bubble” irrelevant, as a label?
    Don’t we look at price movement, open interest, volume, & correlation, to select a market to trade?
    Having also defined our risk tolerance for position size, don’t we then just follow our entry/exit signals?

  • Bertrand

    A lot of hot air coming out of his mouth. If he knows so much about bubble:
    1. why does not he put all his money where is mouth is and go short gold?
    2. how much money has he made in the markets with all this incredible knowledge?
    3. If he knew how to make money in the markets, he would not be promoting a book to make a living.


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