Rayeiris Maduro Rondon @Rayeiris: "𝑯𝒐𝒘 𝒕𝒐 𝒅𝒆𝒕𝒆𝒄𝒕 𝒂 𝒃𝒖𝒃𝒃𝒍𝒆..."

Australia

𝑯𝒐𝒘 𝒕𝒐 𝒅𝒆𝒕𝒆𝒄𝒕 𝒂 𝒃𝒖𝒃𝒃𝒍𝒆 🫧 ? First, we need to understand what a bubble is. A bubble is an economic cycle characterized by the rapid escalation of market value, particularly in asset prices. This fast inflation is followed by a sharp decrease in value often referred to as a “crash” or a “bubble burst.” It might sound easy to identify, to know in what moment a bubble is happening, but when something happens for a long period of time, we start thinking “oh well, that’s now the reality”. And that’s when the problem begins, as we saw it in 2008 with the housing bubble. Some of the Biggest Bubbles in History: • 🌷 Tulip Mania (1637) – The first recorded speculative bubble. • ⚫️ Dot-com Bubble (2000) – Overvaluation of internet companies. • 🏠 Housing Bubble (2008) – Led to the global financial crisis. • 👾 GameStop (2021) – A retail-driven short squeeze. But these were major crises. Does that mean bubbles aren’t happening today? Not necessarily. What Constitutes a Bubble? A bubble occurs when prices rise far above the real value of an asset, usually driven by speculation, hype, and unrealistic growth expectations. A clear example of overvaluation is $TSLA (Tesla Motors, Inc.) trading at 253x P/E. What’s the Issue? In 2016, Tesla’s revenue grew by 70%, then 68% in 2017, 82.5% in 2018, and 70% again in 2021 during the first year the company became profitable. This marked the stock’s first all-time high (ATH) at $407. However, by December 2022, sales were lower than expected, and in January 2023, the stock price dropped to $113. Yet, by December 2024, the stock hit another ATH of $436—despite declining sales, lower operating margins, and decreasing net profit. This surge was driven by hype surrounding the U.S. elections, not fundamentals. The issue here was blind belief in an absolute monopoly over electric autonomous vehicles and an unsustainable infinite growth, a classic sign of a bubble. Of course, I could be wrong. But when I see: 1. Excessive euphoria, 🫧 2. Unrealistic expectations, 🫧 3. Ridiculous valuations, 🫧 I prefer to run in the opposite direction and fast. Let me know what you think! 🤔 $BTC $SPX500 $UK100 $AUS200

5 Mentioned

TSLA

Tesla Motors, Inc.

BTC

Bitcoin

SPX500

UK100

AUS200

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