Track F · CrisesNode F3
Bubble detection
Layer 1 · Pocket
~ 30s readThe thirty-second answer
What is this?
You can't reliably call the top, but you can size leverage, valuation, and credit growth. Bubbles are visible as risk; the timing is the part that's unknowable.
Why should I care?
The actionable response isn't "sell everything," it's position sizing: less leverage, more cash, shorter duration in risk assets. You give up some upside in exchange for a less catastrophic downside. Over a long horizon this trade is worth making.
Bubble sizing indicators
- Margin debt / GDP
- vs 50y range
- CAPE (Shiller P/E)
- vs 50y range
- Credit growth (3y)
- vs trend
- Cross-asset correlation
- elevated late-cycle