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As someone who's completely ignorant about this sort of thing, and about whether it's a bubble: If it is indeed a bubble, is there anything positive that will
by sndean 10y ago
As someone who's completely ignorant about this sort of thing, and about whether it's a bubble:
If it is indeed a bubble, is there anything positive that will result from it bursting?
- gozur88 10y agoI think there's a case to be made that bubbles result in malinvestment, that is, you end up building capability to produce goods and services for which there isn't enough demand to support that capability. It's inefficient. When a bubble bursts we collectively look around and think "What is it that we really need?"
- sndean 10y ago> you end up building capability to produce goods and services for which there isn't enough demand to support that capability. It's inefficient. Ohh, makes sense. Thanks for putting that in a clear way. So, while it's painful, you could say bubbles bursting is healthy... Whenever I try to say that around friends I come off as malevolent. I'll use your words next time.
- damptowel 10y agoNote that overleveraged companies tend to outcompete more conservative ones in the short term, they just have more weight to throw. And if enough of them go down at the same time, the resulting slump won't do decent investors any good either.
- damptowel 10y agoNote that overleveraged companies tend to outcompete more conservative ones in the short term, they just have more weight to throw. And if enough of them go down at the same time, the resulting slump won't do decent investors any good either.