One year ago, Bitcoin and other speculations tied to “blockchain” techniques were all the rage. That was then, of course. Today, Bitcoin prices have plummeted—from over $20,000 last December to less than $5,000 last month. …Frankly, virtually any serious student of markets should have seen the unmistakable signs of a bubble. Bubbles have to end, of course, but the exact timing cannot be determined by rational analysis—because the investment “justifications” aren’t rational in the first place. There will always be bubbles, and they will seem to make sense to many investors at the time, but the laws of economics will not be repealed. High—and accelerating—popularity, whether it be for a particular stock, category of stocks, or style of investing (indexing comes to mind) simply cannot be sustained indefinitely.
Dec 2018