The greater fool theory of finance says it’s sometimes possible to make money by purchasing overvalued assets (items whose purchase price exceeds their intrinsic value) and reselling them for a higher price later.
This theory states that prices go up when people can sell overvalued securities to the “greater fool,” regardless of whether the securities are overvalued. Suppose one “fool” purchased an overpriced asset, hoping that he could sell it to an even “greater fool” who would profit from it. A system like this can only work if new “greater fools” are willing to purchase the asset at ever-higher prices. Continue reading “The Greater Fool”
I read his blog from beginning to end once and then just his Stock Series a second time. And then when I read the book I didn’t get much new (it was my third time reading the material after all) but the book is better organized (obviously) and is a bit more succinct (Collins tends to be a bit verbose in his blog), so if you read a few of his posts and they “click” then you may want to try and read the book. Also, having the book makes it easier to share with friends that could benefit from the knowledge (kind of part of my idea when I bought it).