Bubble

A bubble is an asset price inflated far beyond underlying value. It begins the moment the reason for rising becomes the fact that it is rising.

The pattern repeats. A new technology or story appears, prices rise, media coverage follows, people who never invest join in, and buying with borrowed money starts.

This time is different always accompanies it. Tulips, railways, the internet, property — each came with reasons why that asset would change the world. Often the technology genuinely did; the price was a separate question.

Timing the burst is effectively impossible. Bubbles run far longer and far higher than expected, so even those who correctly identify one and exit early often lose out.

The practical response is structure rather than prediction. Not concentrating in one asset, not buying with debt, and keeping the position to a size you can absorb makes recovery possible when it bursts. Those who bought with debt are hurt most, because being liquidated before prices recover means missing the recovery entirely.