The 10 rules that bubbles follow are:
All growth, progress and evolution is exponential, not linear.
All growth is cyclical, not incremental.
Bubbles always burst; there are no exceptions.
The greater the bubble, the greater the burst.
Bubbles tend to go back to where they started or a bit lower.
Financial bubbles tend to get more extreme over time as credit
availability expands along with our incomes and wealth.
Bubbles become so attractive that they eventually suck in even
the skeptics, like a succubus ensnaring unwary men.
No one wants the “high” and easy gains of the bubble to end, so
everyone goes into denial, especially in the latter stages.
Major bubbles occur only about once in a human lifetime, so it is
easy to forget the lessons from the last one. The last bubble of
this magnitude that burst was from 1922 to 1929: the Great
Depression.
Bubbles may seem fruitless and destructive when they burst, but
they actually serve a very essential function in the process of
innovation and human progress. (More on that another day.)
All growth, progress and evolution is exponential, not linear.
All growth is cyclical, not incremental.
Bubbles always burst; there are no exceptions.
The greater the bubble, the greater the burst.
Bubbles tend to go back to where they started or a bit lower.
Financial bubbles tend to get more extreme over time as credit
availability expands along with our incomes and wealth.
Bubbles become so attractive that they eventually suck in even
the skeptics, like a succubus ensnaring unwary men.
No one wants the “high” and easy gains of the bubble to end, so
everyone goes into denial, especially in the latter stages.
Major bubbles occur only about once in a human lifetime, so it is
easy to forget the lessons from the last one. The last bubble of
this magnitude that burst was from 1922 to 1929: the Great
Depression.
Bubbles may seem fruitless and destructive when they burst, but
they actually serve a very essential function in the process of
innovation and human progress. (More on that another day.)