In re: the Chinese real estate bubble, our hero calculates:
Insofar as prices soared 68 period in one year, 60 percent decline doesn’t sound like much of a worst-case scenario.
Of course, one can't be entirely sure, but I would gladly bet 68% of my life that our hero has grievously misunderstood the mathematics here, and doesn't realize that the value of something that's suffered a 60% decline after appreciating 68% is WAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAY less than the original value.
Does anyone dare dispute that? Bring it on, suckas.
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Yes, and leaving aside his problems with math, there is also the issue that many real estate buyers did not even realize this 68% appreciation. We can assume that many would be buying at the top of the bubble.
ReplyDeleteThat's nothing.
ReplyDeleteOne time yours truly, the Yntern, had an investment go up 500%, after which it declined 100%.
Believe you me, I'm still counting the money.