A lot of smart people have lost money on the belief that trends that seem unsustainable must reverse or that history must always repeat, when there are factors that can cause wildly diverging outcomes even when there are many similarities between the past and present. You can have a situation where the past matches the present with 99% accuracy, but that 1% makes a huge difference in outcomes. This is related to chaos theory, where small perturbations in the initial conditions can cause the evolution of the system to change dramatically. Many people lost money shorting Amazon and Facebook stock between 2012-2015 on the belief that we are in another tech bubble, and while there are many similarities between 2000 and now (such as high stock prices) there are some subtle differences, too, such as better fundamentals. And those subtleties make the difference between a profitable trade and losing your shirt. Or another example, may people got burned betting against the stock market recovery, since 2009, believing that there would be a double dip recession, that there would be a 'Great Depression', or that America would become Japan 2.0, when, in fact, neither happened despite the many similarities. These short-sellers grievously underestimated the propensity of the consumer, undaunted by the doom and gloom in the news, to keep consuming and the unimpeded ability of S&P 500 companies to keep generating record profits and earnings.

Maybe they didn't underestimate the consumer as much as the Federal Reserve's desire and ability to inflate stock market valuations and other asset prices.[1] Certainly helped Silicon Valley and the unicorns, but we will see how it plays out over the next couple years.

http://globaleconomicanalysis.blogspot.com/2016/01/former-da...

> Many otherwise very successful traders have lost a lot of money on false positives.

I think you are confusing false positives for "this is a bubble" and false positives for "this bubble is about to burst".

Or maybe it's just a very radical definition of "losing money": is it really lost money when an investor leaves an already successful investment before it is getting even more successful? Sure, you could argue that the lost opportunity is a cost, when the replacement investment is less successful than the continuation of the previous one would have been, but if you follow that path some more then you will see that any investment is a massive loss, compared to the benchmark of buying winning lottery tickets every week.

its not as hard to determine if we are in a bubble as people try to imply. Perhaps its hard to admit we are in a bubble, and even harder to know when said bubble will pop.

you can read the comments above and think you were back in 1999.

To me, we are not in a bubble, we are in THE bubble. The early signs with retail sales starting to flag aren't enough information to say when it will pop. Auto sales continue to be strong, I think as long as that continues things will continue to chop along.

This bubble should be interesting, I cant think of one in previous history happening with so much cash sitting around.