Note: This post has originally been published in the CFA Institute Enterprising Investor Blog on 12 September. In his book The Great Crash of 1929, John Kenneth Galbraith writes about the bezzle, the total number of embezzlements that grow in a time of rising markets. He notes that when markets collapse, these schemes all blow up and cause large losses to investors. However, as Galbraith writes, there is a sweet spot when the bezzle has been committed but not yet discovered. Or in his own words:
The bezzle
The bezzle
The bezzle
Note: This post has originally been published in the CFA Institute Enterprising Investor Blog on 12 September. In his book The Great Crash of 1929, John Kenneth Galbraith writes about the bezzle, the total number of embezzlements that grow in a time of rising markets. He notes that when markets collapse, these schemes all blow up and cause large losses to investors. However, as Galbraith writes, there is a sweet spot when the bezzle has been committed but not yet discovered. Or in his own words: