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> The problem is when you are in the business of making predictions, if you just scream "Bear" long enough, eventually you'll be right and then you can write a book subtitled, "By the man who called the 2021 (or 2022 or 2023 or 2024 ...) stock crash" and people think you're some sort of genius. I think the point the article is making is that successful Bears, even though they can't call the peak accurately, are able to say "I am reasonably certain that if I exit the market now and wait for the bubble to go higher and then burst, the correction will drive prices below the current high, and I will have made money overall, even though I'll miss out on the tail end of the bubble rising." If you call the bubble too early (and if you are always screaming "Bear", you are by definition always too early) , the prices after the crash will still be higher than when you exited, you're completely screwed, and so is anyone who listened to you. It isn't particularly difficult to say that the next crash, even if it happens a year or two from now, will probably drive the market below the current level. You would experience major FOMO by exiting now and watching the market continue to climb, but you won't actually lose money. If it happens sooner than a year from now, it will certainly dip significantly below current valuations, and you'll be ahead by quite a bit. In this particular game of Chicken, opinions will differ as to whether it is time to lock in your gains yet, but it shouldn't be too controversial that it is definitely time to start thinking about it. If I were currently in the market, I would keep an eye out for large and quirky M&A activity along the lines of AOL+Time-Warner. Eg. Tesla decides to buy a consumer appliance, rideshare, or financial services company. Or all of the above). |