(highlight:: Identifying something that can’t go on forever doesn’t mean that thing can’t keep going for years. Years and years and years.
Part of it is emotion. During the Vietnam War Ho Chi Minh said, “You will kill ten of us, and we will kill one of you, but it is you who will tire first.” Emotional trends aren’t beholden to logic, which can keep them going far past any point of reason.)
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The correct price of any asset is what someone else is willing to pay for it, because all asset prices rely on subjective assumptions about the future. And like a blind man who doesn’t know where a wall is until he bumps into it, markets cannot know exactly how much people are willing to pay until they go a little too far and say, “Ah, in hindsight, that was the limit.”
- View Highlight
-

(highlight:: Identifying something that can’t go on forever doesn’t mean that thing can’t keep going for years. Years and years and years.
Part of it is emotion. During the Vietnam War Ho Chi Minh said, “You will kill ten of us, and we will kill one of you, but it is you who will tire first.” Emotional trends aren’t beholden to logic, which can keep them going far past any point of reason.)
- View Highlight
-

The correct price of any asset is what someone else is willing to pay for it, because all asset prices rely on subjective assumptions about the future. And like a blind man who doesn’t know where a wall is until he bumps into it, markets cannot know exactly how much people are willing to pay until they go a little too far and say, “Ah, in hindsight, that was the limit.”
- View Highlight
-