I used to be pretty good at blowing bubbles, a bit out of practice now...

*** This is not intended as financial advice. This is just the musing of an old nutter.

What is a Bubble

In my own words, I would say a bubble is an event where the value of a certain commody continues to reach a point where it is no longer teniable. Once the tipping point is reached and the bubble bursts, the subsecquent price correction is usually quick, painful and extended.

Some History

The first bubble that comes to mind was the tulip bubble in the 1600's. Yes we are indeed talking about flowers, or more precisely the bulb that will yield the plant that will produce the flower! Basically tulips became a coveted status symbol. Can you imagine, and this is from Wikipedia that the value of a single, yes one, tulip bulb was worth 10 TIMES! the annual wage earned by a skilled craftsman!!!

Recent History

The most recent bubble many of us will remember (at least in the US) was the housing bubble starting in about 2007 or so. It was an era of liar loans where seemingly no request to borrow an astronomical amount of money based on no, or at best shaky collateral, was too much. Banks and then the government through Fannie Mae were on the hook for loans that never had a chance of being repaid. The house would be repossessed and sold into an already falling market for a huge loss that only compounded the problem more!

Back in the Day

Many moons ago in my previous life as a stock broker, I remember well the dot com bubble. Right around 2000, any stock of a technology company was flying. Even better if it was internet related like Amazon or Yahoo! They would trade higher by 10 or more dollars per day __every__ day! It didnt matter that these companies had never earned one penny of profit, there market caps were insane! Its was totally nuts!

Is This a Crypto Bubble?

I don't know. The funny thing about the previously mentioned bubbles is they keep going, and going until they don't! The point is they go long past the point of making sense. So who knows when it will stop.

Advice

I personally have no advice to share. However there is a neat saying that seems to make a lot of sense to me. "Be greedy when others are fearful, and be fearful when others are greedy". Those are the words of a man I highly admire and knows a thing or two about investing...Warren Buffett.

Steem On My Friends!

Thanks for stopping by!

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