Bull Markets

A sustained period of rising asset prices that makes it nearly impossible to distinguish real Investing Philosophy from mimetic belief. Mostly Borrowed Ideas (2021): “It is perhaps impossible not to feel like a genius in a bull market.”

The ruse. Young investors who have never experienced a sustained recession cultivate an Investing Philosophy shaped by what has worked recently rather than by independent conviction. The Overton Window of acceptable investing beliefs shifts with the cycle; most investors parrot what has worked without stress-testing whether they would hold the line in a down market. The challenge is separating “what I believe in my veins” from “what the last few years rewarded.”

What gets exposed. The true philosophy surfaces when a portfolio drops 40–50% and takes years to recover. That stress test reveals whether the belief was grounded or mimetic — love of technology stocks and “compounders that are perpetually misunderstood” is easy to hold in a rising market, much harder when those theses stop working for a decade. The companion tension: how much to stick to a philosophy versus how much to update it Bayesian-style when evidence accumulates.

Bear Markets are the correction to this dynamic — where the Market Cycle forces investors to reckon with what they actually believed rather than what they performed believing. See also Self-Criticism for the broader pattern of examining beliefs under pressure.

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