In utopian economics and finance, speculators are assumed to the stabilizing. If prices get too high, speculators come in and drive them down. If prices get too low, speculators drive them up. However, as we have already learned in the real world there are limits to arbitrage. Moreover, herding exists and is a real factor in behavior.

If I am hedge fund managerwhat do you think is the easier path for you to follow: to fight the bubble or to ride the bubble?