The price of a commodity will never go to zero. When you invest in commodities futures, you're not buying a piece of paper that says you own an intangible piece of company that can go bankrupt.
You cannot have an asset that goes up in price 1% every month or 1% every six months or every day without people starting to start thinking it'll do the same tomorrow, so that's why these bubbles form.
One common way of judging whether housing's price is in line with its fundamental value is to consider the ratio of housing prices to rents. This is analogous to the ratio of prices to dividends for stocks.
In essence, the stock market represents three separate categories of business.They are, adjusted for inflation, those with shrinking intrinsic value, those with approximately stable intrinsic value, and those with steadily growing intrinsic value.
One day we're going to look back at $1,700 with nostalgia. People are going to be shocked at how inexpensive gold was when it could be snapped up for such a bargain price.
If the seller has a player that they think is going to have a lot of value, they're aware of it, protect that value. You have to go get it. That's the way the trade market works.
I'd rather buy something that is relatively depressed than something that is relatively high.
My work rarely comes up in secondary market, so it means that my prices stay low.
The 19th-century Continental porcelain plaques that are worth the most money are the pretty ones.
Investors covet past improvements but also always believe pricing unimaginable future creativity and efficiency gains is Pollyannaish. And they're always wrong. Bet on it.
What we define as a bubble is any kind of debt-fueled asset inflation where the cash flow generated by the asset itself - a rental property, office building, condo - does not cover the debt incurred to buy the asset. So you depend on a greater fool, if you will, to come in and buy at a higher price.
