Excerpt from Bloomberg article on recent exponential runup (to >70x earnings) recent 20% pull back in Moutai.
When will investors learn that there is zero skill involved in jumping onto a momentum bandwagon. Being up 100% last year is a sign of ineptitude, not skill.
When will investors learn that there is zero skill involved in jumping onto a momentum bandwagon. Being up 100% last year is a sign of ineptitude, not skill.
Same with Cathy Wood, who will suffer a dramatic reversal of fortunes sooner or later, w fawning admiration replaces with scorn. Many people are impressed by her triple digit returns. I'm appalled and think they are a sign of recklessness, inexperience & lack of risk awareness.
It's actually worse than that though because investors like Cathey Wood actually play a large role in creating the bubble in the first place. They use captivating narratives to attract unsophisticated investors en mass & plow that cash into bubble stocks driving them sky high.
While some investors who get in early might fare ok, the vast bulk of the money comes in late and most investors are left with very sizeable losses. In Cathey's case, it will be a lot of unsophisticated retail investors that suffer wipe-out losses. It's irresponsible behaviour.
Late stage bubble markets have an unfortunate "survival of the unfittest" aspect to them. The least competent, experienced, and knowledgeable investors end up with the best returns & large slugs of FUM. There doesn't seem to be any cure. It's a structural feature of markets.
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