Quotes from Warren Buffett in the book the Snowball

Valuing is not the same as predicting (share price). 

In the short run, the market is a voting machine. In the long run, it's a weighing machine. Weight counts eventually. But votes count in the short term. And it's a very undemocratic way of voting. Unfortunately, they have no literacy tests in therms of voting qualifications, as you've all learned.  

What  you're doing when you invest is deferring consumption and laying money out now to get more money back at a later time. And there are really only two questions. One is how much you're going to get back, and the other is when. 

Quotes from Warren Buffet in the book The Snowball, Warren Buffett and the Business of Life 

History always repeat itself

I must admit, I never liked studying history in school. I will always asked myself "History is always about dates and events of people so long ago, so what's the point of learning them?"

But recently, I have learned to appreciate what it means when people say 'history repeats itself'... particularly in the financial markets where bubbles and fraud occurs.

In the book / documentary the 'Ascent of Money', author and academic Dr Niall Ferguson went through the history of money, loan, bonds, stock market, and insurance. He discussed how financial markets soar and eventually crashed in numerous accounts. If there's a theme I can gather, then it all comes down to greed and fear.

The idea that fear and greed causing chaos in the financial market is common knowledge but here's my take on what I have learned from history. It always start with a couple of guys coming together with a radical idea, they had a go good at it and things took off. Soon they realised the amount of money they are making, they wanted more and pushed it further. At some point, their idea / model became unsustainable and cracks start to appear. At this point, market prices are still going crazy and everybody wants a piece of it. This is where covering up and manipulation happens. For me, this point is the key. When the fundamentals are no longer there, all it takes is a couple of small events and it send a chain of domino effect. Things will go wrong very badly and very quickly.

If history always repeat itself, then I think there must be signs before the next bubble occurs. One just need to know where to look and what to look.

I don't have the answer to this but I can share my own starting point to figuring out the answer:

• Don't reply on your local newspaper for information. By the time local media reports it, I think it is too late. 
• Focus on Fundamentals: I believe that every country, industry, company even individuals can be assessed using fundamentals (i.e. a unique set of financial measures). The key is to figure out what is the Credit Risk. In other words, what's the likelihood of it going into trouble and seeking financial assistance externally. Companies can raised debt or issue equity. Individuals can apply for a personal loan or home loan. Government can issue bonds. 

Most may argue that debt is not necessary a bad thing, but excessive debt is definitely bad because it will  reach a point that things becomes unsustainable.

Niall Ferguson: Empires on the Edge of Chaos

Summary
Throughout history the rise and fall of empires isn't slow or cyclical, as we like to think, but arrhythmic...it mostly happens very, very suddenly. America is a superpower on the edge of chaos, according to economic historian and author Niall Ferguson. U.S. debt levels, he says, and its unwillingness to address the problem, has put it in the same category as other great empires which have collapsed throughout the ages.

Ferguson argues the world is changing. There's the rise of authoritarian China as a super-power; a Keynesian president leading a weakened United States; the re-emergence of democratic India as a great power; the continued decline of Japan; and the probability of continued global economic instability ahead.

Is the rise and fall of empires cyclical or arrhythmic? How does economic profligacy -- whether the result of arrogance or naivety -- contribute to the downfall of civilizations? Not to be missed, the address will offer a timely review of primacy, leadership, and the complex factors behind the rise and fall of great powers and civilizations.

Niall Ferguson: Empires on the Edge of Chaos