A Random Walk Down Wall Street - Chapter 2 ~ 4

The madness of crowds in history has been mentioned in the book.

-Dutch Tulips craze

-South Sea bubble

-Wall street 1929 crash

-The soaring sixties: growth stock with -tronics appendix/new-issue craze

-Synergy generates energy...

-Japanese Yen for land and stocks

-Internet bubble of early 2000s

-US housing bubble: Remember that the average home price index is between 100 and 125 in history.

The key to investing is not how much an industry will affect society or even how much it will grow, but rather its ability to make and sustain profits. And history tells us that eventually all excessively exuberant markets succumb to the laws of gravity. The consistent losers in the market, from my personal experience, are those who are unable to resist being swept up in some kind of tulip-bulb craze. It is not hard, really, to make money in the market. As we shall see later, an investor who simply buys and holds a broad-based portfolio of stocks can make reasonably generous long-run returns. What is hard to avoid is the alluring temptation to throw your money away on short, get-rich-quick speculative binges.

Only from my own experience since last year, I have observed 3 speculative investing events and I have personally participate 2 of them.

Weed stock

I bought TSX:CGC at 3.96 in June 2016. It stays at this price for around 2 month and suddenly starts to soar. I told one my colleague to buy it around 8 and it just kept go up and up. I have several friends in the company who also do investing. At that time, when I talked with my friends, I found that almost every one knows that CGC is the hottest stock in the market. Moreover, I read one article on Fool that the valuation of the CGC is over-estimated than the dotcom stock at 2000. I knew that it's the time to sell the stock. I made a good profit from the transaction.




*I have bought it when it was still not popular.
*I sold it when I feel it's too high.
*But then I bought it again when the government has passed the law to legislate its usage in Canada.
*I sold it when I was too scared of the total loss of its value.

-Toronto house bubble
*I bought a house when it's already high but I can still afford it.
*I didn't buy a presale because I don't want to waste too many transactions on buying house and I thought current house is enough for me to live
*I worried about I can never catch up with the rate of increasing
*I have seen 2 guys bought at the wrong time
*My current thought on the house market

-Bitcoin craze
*2012 the hype
*2017 hype again