Overconfidence Meets Impatience To Set Up The Crash Of 2021

Commentary on America’s overvalued stock market can be found pretty much everywhere these days. These arguments are compelling, and are becoming more so as stocks keep rising.

The latest clue that we’re in yet another bubble is margin debt, which is money that investors borrow against their existing stocks to buy even more. A spike in its use means two things:

  • First, investors have had some success in the recent past and are now convinced of their own genius.
  • Second, they’re growing impatient and (being infallible) are comfortable using leverage to make a fast killing.

Overconfidence and impatience are a bad combination in most situations.  But they’re frequently deadly in equities. Put another way, when margin debt peaks, so, frequently, does the market. Read more…..


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This talk covered the subjects of value investing and behavioral finance through the lens of a practitioner. Ms. Templeton spoke on the subject with an eye towards both beginners and practitioners, while sharing valuable lessons learned from her great-uncle, Sir John Templeton.

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