History shows how quickly a hot commodity can collapse—from $30,000 per unit to near zero—turning euphoric investors into financial casualties. Human nature drives ordinary investors toward popular trends, but without understanding the source of profits, soaring prices can become deadly traps. Legendary investors avoid such pitfalls not because they are inherently cautious, but because they study past failures and recognize the dangers of trend-following speculation. Their principle of “not knowing, not doing” helps them resist temptation and avoid irreversible losses.
Some argue for riding bubbles to quick profits, but this is deceptively dangerous. Bubbles burst swiftly and ruthlessly, leaving almost no participants unharmed. As Warren Buffett warns, financial markets lack theater-style exits—you can’t simply flee when trouble arises. Selling requires someone willing to buy, and when panic strikes, that someone may vanish. True investing demands discipline, not blind faith in unsustainable trends.
The lesson is clear: chasing bubbles may seem easy, but the risks far outweigh fleeting gains. Sustainable wealth comes from understanding value, not gambling on momentum. Investors who ignore this wisdom risk learning the hardest way—when it’s already too late.
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