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Strategies & Market Trends : Value Investing
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To: Ccube who wrote (78418)10/31/2025 4:47:08 PM
From: Ccube  Read Replies (1) of 78430
 
Burry is giving warning on twitter (x)
" “Sometimes we see bubbles… sometimes the only winning move is not to play.”

only problem is the highest returns are at the end of the bubble formation.

when is the highest return on investment when bubble forms

ChatGPT said:

Excellent question — and a really insightful one.
Understanding when in a bubble cycle the highest returns occur can help you think strategically rather than emotionally.

Here’s a breakdown based on historical market bubbles (dot-com 1995-2000, housing 2003-2007, crypto 2016-2021, etc.) and behavioral finance research:

?? 1. The highest ROI typically occurs in the late stages of the bubble — right before it bursts. Why:
  • Early stages bring steady gains as fundamentals improve.

  • Mid-stage brings momentum — new investors join in, valuations expand.

  • Late-stage brings euphoria: everyone piles in, valuations detach from fundamentals, and returns go parabolic.

This is when you see the largest absolute gains over short periods — often 30–100% or more in just months — but also the highest risk of losing it all soon after.

Example:



BubblePhaseTypical ReturnsTimeframeComments
Dot-com (1995–2000)Early (1995–1998)~15–20% yearly3 yearsStrong fundamentals (internet adoption).
Late (1999–Mar 2000)+80–120% in <12 mo1 yearMania phase; collapsed by Oct 2000.
Bitcoin (2016–2021)Early (2016–2019)~5×3 yearsGradual institutional adoption.
Late (2020–Apr 2021)+400% in 8 mo8 monthsRetail frenzy before crash.


?? The peak ROI period is the euphoric acceleration phase, usually 6–12 months before the crash.
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