For Medium, I wrote on financial bubbles, with plenty of Bitcoin trolling thrown in.
it is mathematically impossible for all of the bullish investors to get out with a profit. If a stock goes from $10 a share to $100 a share and back down to $5 a share, then on average the shares bought on the way up have to be sold for less than their purchase price on the way down. If you buy into a bubble, then the chances are you will lose.
In terms of financial bubbles, I wish writers focused more on the building of the bubble (say Dotcom 1994 – 1997) than bursting of the bubble that all Monday morning quarterbacks can claim to understand. In thinking about the largest Bubbles, I see the Keynesian ‘Animal Instincts’ dominating the bubble as opposed to blaming the populations and governments. The big bubble as a symptom of success not of failure and Bubbles come across as Diminishing Returns on success. Look at Big bubbles:
1) Probably the largest bubble in terms of the economy, was the 1989 Japan Stock Market which moved to the Housing Market. And wasn’t 1970/1980s Japan Inc. the most productive economy at the time?
2) For all the complaints about Dotcoms, hasn’t the internet grown a lot and still changing the economy?
3) In terms of US Housing Bubble, wan’t it almost 50 – 60 Bull Market to 2006? (Yes I know of the early 80s and early 90s downturns.)
4) And yes Bitcoin is reaching levels that it is probably not wise to invest although at this point, it still is likely (~80%) that people will be buying Bitcoin in 2028.
5) And yes, I still believe that China will have a Financial Crisis not because their society is failing but because they have been successful for so long.
Take the tulip bubble. Consider a very small number of professional horticulturalists in the business who happen to be experimenting with a variety of tulip. This is a very small supply market, they know each other.
The public takes a liking to certain varieties, and bids them up. The horticulture group is small, they know these varieties are easily reproduced, they know this is a bubble. They have no reason for a major disruption of their industry based on some ‘pet rock’ fad. The market is artificially restricted, suppliers in the know better off letting this pass and get back to normal.
How come you wrote that article on Medium instead of here? What advantages does Medium have?