I’d tend to agree, except that even well-understood markets can change. Heck, in my opinion the entire stock market has been in one massive bubble since 1982. There’s no way the valuations justify the prices.
Yet 35 years of history are pretty much proof that the rule book I grew up with simply no longer applies. (Or perhaps it will, and I’ll be right in the very long term.) The fundamental rules don’t change often, but they do occasionally change. (Hell, I’ve been betting that we’re in a low-interest bubble for 20 years, and I’ve continuously wrong. The rules there seem to have simply changed as well.)
Now, in a well-understood, low-volatility market, I’d certainly agree that your chance of correct prediction is substantially higher, but certainty? No. Also, low volatility markets are the least likely to experience a bubble.
Again, I do think it’s wise to try and defuse bubbles, with the understanding you could well be destroying people’s lives for nothing (the devastating 1980’s recession was partially caused by an attempt to calm a bubble-like exuberance that may not have been existed. Or then again, impoverishing people for years may actually have been the lesser of two evils). But such policy should be kept well away from anyone who believes that it’s a simple problem with clear answers.
