3 ms·

The problem is not identifying bubbles, but knowing when they are going to burst. We have a massive real estate bubble here in Australia, yet I have not the sli

• Joakal 7y ago
  It is bursting gradually. House prices are dropping. Unemployment up, highest personal debt in world, high utility prices, etc. Unlike USA, Australians can't suddenly drop their debt for properties. Maybe under Labor you would get your burst bubble.
  • danieltillett 7y ago
    Yes but with governments playing with things like margin requirements, tax policies or income verification it is a moving target. House prices here are unsustainable in the long term, but prices can stay unsustainable for longer than you can stay solvent betting on crash.
• shuckles 7y ago
  "And as always, even if you have identified a bubble, trading profitably on this is subject to the efficient market hypothesis." Timing is hard in the short run, certainly. However, if you believe you have identified a true bubble, it seems wise to scrutinize long term commitments requiring outsized returns from the underlying asset? Practically, this would mean not tying your career to bubble technologies; not settling down into a bubble-priced home-cum-retirement nest egg; etc.
  • danieltillett 7y ago
    Yes. I own a very overprice home, but I have avoided joining the masses and becoming a part-time landlord (the great Australian dream it seems).
• dmos62 7y ago
  There are analysis strategies oriented around identifying and trading reversals based purely on price movement. For understandable reasons it's often regarded as forest medicine by fundamental traders, but there's a bunch of people using it everyday profitably. It is more art than science though.