The Market Can Be Irrational

During a bull market, the market often behaves in unpredictable ways. By this, I mean that strange and illogical trends start to dominate, leading to outcomes that defy common sense. Let me give you a few examples.

Take the last bull market, for instance, when the NFT craze took over. Digital artworks, like images of cartoon monkeys, were selling for millions despite having no tangible value. Similarly, obscure cryptocurrencies, often called "shitcoins," saw their prices skyrocket by 100 times in just a few days, even though they were built on nothing substantial.

In the current bull market, we're beginning to see the early signs of this irrational behavior once again. Investors are throwing their money into memecoins that have no real value, yet there's an overwhelming bullish sentiment around them. Some people have even risked their entire portfolios on these speculative assets and are now facing significant losses. Over the past few weeks, I've received numerous messages from individuals who have realized that following the advice of influencers promoting these trendy coins can lead to financial disaster.

This is what I mean when I say the market can become irrational: illogical decisions are made, and foolish investments are rampant. Fortunately, corrections during bull markets serve as a reality check for these overly enthusiastic investors. After suffering significant losses, many start to understand the importance of a more rational approach to investing. It's unfortunate, but often necessary—sometimes it takes a hard lesson to truly appreciate the importance of protecting your capital instead of blindly chasing profits.

I hope some of you will take this advice to heart and approach your investments with caution. Remember, the goal isn't just to make money, but to safeguard what you have.

Thank you for reading and considering this perspective. If you found this post helpful, please like, comment, share, and subscribe—it helps me a lot.

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