Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.

12 thoughts on “You Buy Bubbles, You Don’t Short Them”

  2. “But if the question’s whether it’s nonsensical that people who allocate capital for a living are buying into assets they readily admit are overvalued and might even constitute a bubble, the answer’s “no.” Particularly not when you consider it’s not their money that’s on the line, but rather other people’s.”

    These days you could rewrite this to say “But if the question’s whether it’s nonsensical that people who run large companies for a living are buying into assets they readily admit are overvalued and might even constitute a bubble, the answer’s “no.” Particularly not when you consider it’s not their money that’s on the line, but rather their shareholders.” It’s almost funny how it is shrugged off when execs at those firms explicitly say as much.

    Poor Bill Lerach died before the greatest payday of his lifetime.

    1. Everyone is caught in some version of a prisoner’s dilemma.

      The contrarian investors are just more tolerant of gruel and beatings, or some of them are masochists and enjoy it.

      The contrarian CEOs . . . can you imagine any of the big techs publicly ceding the AI race? How long would their CEOs, or their personal wealth, last? Tim Cook has gotten some slack, given Apple’s business model, but how much?

      1. I gave that a moment’s thought before hitting send on that post. Then I remembered that we are talking about shareholder capitalism. Not partnerships. After we enjoyed the GFC a few grumbling old-timers questioned if it would have happened back when the Wall Street firms were partnerships, with the partners own money at risk?

        Geez JL, we’re talking about modern business here. Those poor CEOs are more than well protected by golden parachutes. Some of which are explicitly or implicitly backstopped by taxpayers.

  3. Shorting in general is a mug’s game. For most ordinary investors, you’re better off scouting for opportunities on the long side, and you’re less likely to blow up that way too.

  4. “well, have you ever the read the disclaimers on the side of, say, an Advil bottle? If not, and that sort of thing scares you, don’t”

    These are amazing little gems in your writing, and Yes, I am scared!!
    But I am even more scared about the “left-tail” scenario of using highly processed cooking oil. RFK isn’t wrong on this one.

    1. Now that I’m over 80, have narrowly recovered from three close calls with death, and am still chugging along, I fear nothing really. RFK Jr doesn’t actually know anything, btw. I eat what I want, sleep when I want, do nothing when I want. I avoid the HC system as much as I can. I try like hell to avoid stupidity, and stupid people. That alone keeps me busy. I have no bucket list, few friends, many relatives I’ve never actually met. Still, I’ve done what I set out to do, help as many people as I could and chill to the maximum otherwise.

    2. Honestly curious – if you eschew processed cooking oils, which do you use? Long ago I eschewed margarine and went back to butter. But I’d find it difficult to give up olive and canola oil in favor of lard, though lard it is way better for pie crusts, doughnuts and French fries.

      Then there are those pesky vegans to contend with …

      1. The ban is on “used cooking oils.”

        Non-fat is out (it really doesn’t save you from elevated LDL’s); Olive oil is the healthiest, lard not so much, and used cooking oils, well….yum.

        BTW Jan-Aug 2025 UCO imports from China were down to $286 million. China must be cowering…

Monthly Letters

Monthly Letter

Eternity

Monthly Letter

Doomscroll

Monthly Letter

Hope: A Novelette

10th Anniversary Boutique

01/01/26