In the event you’ve ever discovered your self caught up within the pleasure of a booming market, you would possibly simply be one of many “better fools” we’re about to debate. However don’t fear, you’re in good firm!
The Better Idiot Theory is a fascinating idea within the funding world, usually likened to a recreation of sizzling potato. The core thought is to buy an overpriced asset and swiftly promote it to the following “better idiot” earlier than the market collapses, leaving you with a nugatory funding.
Think about a bustling market the place everyone seems to be eagerly shopping for and promoting items at inflated costs. The joy continues till somebody realizes the costs are unsustainable, sparking a frantic rush to promote earlier than the bubble bursts.
Traders on this state of affairs resemble buyers at a clearance sale, grabbing objects with out checking their high quality. They don’t seem to be involved with the precise worth of the products; their sole goal is to flip the asset for a fast revenue.
This technique works so long as there are “better fools” keen to purchase the overpriced belongings. Nonetheless, as soon as {the marketplace} frenzy ends and the fools run out, costs crash, and the final particular person…
