The greater fool theory states that the price of an asset is determined by whether or not you can sell it for a higher price.
It doesn’t matter how high that price goes, or how irrational it becomes – it’s only about the higher price.
The greater fool is deemed as the person who buys an asset down the road for a much higher, and arguably irrational, price.
With so much rampant speculation going on, I think it’s fair to say that there are a lot of potential greater fools out there right now.
For more on how to avoid becoming the greater fool, check out our latest video HERE.
What do you think? Did you enjoy this video? Are you making sure that you won’t become the greater fool?
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