Question

some people argue that china is currently experiencing a bubble, especially in real estate. if you agree, what possible problems might you encounter in trying to trade on your opinion?

Answer 1

1. Difficulty in accurately predicting the timing of the bubble bursting: It is difficult to accurately predict when a bubble will burst, and any trades made in anticipation of a bubble bursting may be too early or too late.

2. Difficulty in accurately assessing the magnitude of the bubble: It is difficult to accurately assess the magnitude of the bubble, and any trades made in anticipation of a bubble bursting may be too large or too small.

3. Difficulty in accurately assessing the impact of the bubble: It is difficult to accurately assess the impact of the bubble, and any trades made in anticipation of a bubble bursting may be too risky or too conservative.

4. Difficulty in accurately assessing the underlying fundamentals of the market: It is difficult to accurately assess the underlying fundamentals of the market, and any trades made in anticipation of a bubble bursting may be based on incorrect assumptions.

5. Difficulty in accurately assessing the liquidity of the market: It is difficult to accurately assess the liquidity of the market, and any trades made in anticipation of a bubble bursting may be difficult to execute.