Good morning!

It's Friday, time to ponder things.

In my view, we are now in the final, manic, euphoric phase of a bull market. It feels *exactly* like 1999 to me. That means there's lots of money to be made, on mad speculations, and it's going to end really badly. Maybe not for a while though, nobody knows. In this type of market, my thoughts on company fundamentals just become irrelevant, as the hot money chases the increasingly silly speculations. Facts & figures go out of the window, as people chase stories.

There are two key things to remember in this type of market - (1) don't believe in the speculative stories, just sell them on for a profit to the greater fool, and (2) cash out of all the speculative junk before the crash happens, then walk away & don't look back.

When things are going well, it's worth pondering, how much money do you actually need? A word of warning here. I was sitting on about £x millions in 2007. Here I am 14 years later, and I'm still not quite back to flat. Why didn't I just cash out in 2007? Greed, and hubris. Simple as that. A big run of luck & success, in a bull market, led to me risking money I needed, to make more money I didn't need. A very harsh lesson. Let's not do that again. It's so difficult, and time consuming, to rebuild from a disastrous downturn.

Bitcoin is the mania of the moment. It's an absolutely classic financial bubble, hiding in plain sight. It ticks all the boxes that previous manias over centuries have done. Here is a brilliant demolition of it by Nouriel Roubini -

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What he says is just brilliant, and it's quite obvious to me that sooner or later, Bitcoin & all the rest of these things, are likely to collapse. The danger is what damage that inevitable collapse does to the financial system, which is likely to end up containing a lot of leverage that fed the boom.

Or does it all just end up being picked up by the taxpayer, via QE? Who knows. This could all run & run, for many years. Nobody knows, the rules have all changed.

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Jack's section

Focusrite (LON:TUNE)

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