The chart below shows us the “classic bubble pattern.”
Most money is made during the latest phases of any bubble, as price goes nearly vertical. When something goes straight up, I tend to get worried. All good things come to an end, eventually. When something goes straight down, I am looking for ways to enter the market, as bad things come to an end as well… eventually.
Imagine you invest in an asset that has a similar pattern as the one above. When do you Sell if you are in a bubble? How do you even know whether you are in a bubble or not?