Justin Fox: Cleaning Up the Three Types of Financial Bubbles
Fox lists his three types of bubbles: Ponzi, speculative, and the classic that LinkedIn falls into. Fox's advice for the Ponzi is simple: If you knew it was happening, “turn yourself in”. For speculative bubbles—the kind that sunk 1990s dot-commers when share prices bottomed out, he suggests having cash flow when investor funds dry up, and creating a plan for ratcheting down business following the pop. The final bubble involves switching from “expectation market” to “real market”—terms borrowed from Roger Martin—and focusing on a company's actual performance, not on stock price. Fox’s piece flows with the ease and common sense he brings to his keynotes. It’s another must-read from one of America's most trusted business journalists.
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