Bubble
Risk & psychologyA period when prices rise far beyond what the underlying economics support.
In plain terms
Built on stories that are genuinely true. The error is the price paid for the story, not the story.
1492 terms
Glossary
Every term is defined twice: once the way a filing would put it, and once the way somebody would explain it to you across a table. The second one is usually the one that sticks.
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Capital preservation
Risk & psychologyPrioritising not losing money over maximising returns.
In plain terms
Reducing exposure in a bubble means underperforming visibly for a long time. There is no version that avoids that.
Chart distortion
Technical analysisA misleading visual impression created by the choice of axis, scale or window.
In plain terms
On a linear axis, steady compounding always looks like a bubble forming at the right edge — which has talked more people out of good holdings than any analysis.
Social proof
Risk & psychologyTaking other people’s behaviour as evidence that something is correct.
In plain terms
Inside a bubble the evidence points the wrong way, because participants keep being proved right.