Quotes About Financial bubbles

Once you recognize the break-even effect and the house money effect, it is easy to spot them in everyday life. It occurs whenever there are two salient reference points, for instance where you started and where you are right now. The house money effect—along with a tendency to extrapolate recent returns into the future—facilitates financial bubbles.

The word bubble creates a mental picture of an expanding soap bubble, which is destined to pop suddenly and irrevocably. But speculative bubbles are not so easily ended; indeed, they may deflate somewhat, as the story changes, and then reflate.

Remember that history always repeats itself. Every great bubble in history has broken. There are no exceptions.

Market timing doesn't work. If all the bubbles and all this mispricing really exist, how come so few people see it before it turns out that way?

Capitalism cannot avoid fads and bubbles. Equity bubbles (as in 2000) have proved to be mild; debt bubbles are vicious.

Bubbles have quite a few things in common, but housing bubbles have a spectacular thing in common, and that is every one of them is considered unique and different.

It's like simulating earthquakes: we can over and over study a bubble, crash, bubble, crash. Then we can see mathematically if there's some regular pattern and what's going on in people's brains when prices are going up and before the crash is happening.

perennial truths of financial history. Sooner or later every bubble bursts. Sooner or later the bearish sellers outnumber the bullish buyers. Sooner or later greed turns to fear.