Buy low, sell high.

The "greater fool theory" or "bigger fool theory" states you don't have to be the shrewdest person in the market. If there is a bigger fool than yourself in the market, then you're in business.

When buying an investment - e.g. an internet stock in the mid 1990s, or property in London in 2004, one should not worry too much about whether your investment is worth what you paid for it or not, or even if there is any reliable way to measure how much it is worth. Even if you believe it to be overvalued, you need only care about if someone else will buy it from you at a later date at a higher price. If you believe this to be so, then you can profit from the investment.

In short, all you have to do is to find a bigger fool than yourself.

Whether this makes you foolish or clever is debatable. And of course, if the bigger fool finds an even bigger fool, maybe they were also just playing dumb. In a bubble, sooner or later the market runs out of fools, reality finally trumps psychology, and the last fool loses money. There are other theories with more long-term sustainability.

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