Warning signs of a bubble: a practical checklist
No single signal proves a bubble, but certain warning signs tend to appear together. A grouped checklist for judging whether a boom has become dangerous.
11 min read
Insights topic
Finance
66 articles on this topic.
Articles tagged Finance
Bubbles, strong currencies and capital flows
Most bubbles come with a strong currency or a flood of foreign money. Why capital inflows and asset booms reinforce each other, how they reverse, and what it means for importers and exporters.
10 min read
Consistency beats a single great year
Why ten years of steady, rising earnings tell you far more than one record result, and how to separate a business's real earning power from one-off gains.
10 min read
Credit: the fuel behind every bubble
Most damaging bubbles are financed with borrowed money. How lending, new lenders, low real interest rates and rising debt turn a boom into a bubble, and why credit makes the bust worse.
10 min read
Debt as a warning light: what borrowing reveals about a business
How interest costs, long-term debt and the mix of short- and long-term borrowing can reveal whether a business stands on its own or depends on lenders.
10 min read
Depreciation, capital spending and the weight of heavy assets
Why businesses that constantly replace plant and equipment struggle to build wealth, how depreciation and capital spending reveal this, and what it means for manufacturing ventures.
10 min read
Designing a business for durability: a founder's reading of Buffett
Buffett reads financial statements to find durable businesses. Read in reverse, the same signals become a design checklist for anyone building a business from scratch.
10 min read
Durable competitive advantage: the idea behind Buffett's best investments
Why Warren Buffett looks for businesses whose advantage lasts for decades, the three shapes that advantage usually takes, and what it means for anyone building a business.
10 min read
From bargains to quality: how Buffett moved beyond Graham
Benjamin Graham taught Warren Buffett to buy businesses for less than they were worth. Buffett's shift towards owning great businesses for decades offers a lesson that reaches well beyond investing.
10 min read
Gross margin: the quickest test of pricing power
Why gross margin is often the first number to check when judging a business, what high and low margins usually signal, and how founders can design for healthy margins.
10 min read
Housing booms: what drives them and how to read them
Housing is most households' largest asset and a major driver of the economy. What pushes house prices up, how to judge whether a housing boom has become stretched, and what it means for businesses.
10 min read
Borrowing against a boom: leverage, equity withdrawal and risk
Rising asset prices make it easy to borrow against homes and investments. How leverage magnifies gains and losses, why boom-time borrowing is so risky, and how to keep it safe.
10 min read
