Are We Experiencing Another Dot-Com Bubble?
A “stock fever” is spreading. Should we be concerned?
The stock market is an unpredictable beast.
Why? Because it’s driven by people, and people are emotional by nature. We want to believe that everyone — from individuals to massive firms — acts and invests based on logic and reason. But that’s just not the case.
When enough people invest based on biases and momentum instead of rational assumptions, bubbles can form.
Before we go any further, I want to establish myself as an objective observer. I’m not some contrarian, doom-and-gloom investor — so I’m not hoping for an imminent market crash. But I’m also not a fervent gambler fixed on seeing a bullish rise to the moon.
So, are we in a bubble? Let’s start by defining stock market bubbles to ensure we’re on the same page.
What is a bubble?
A bubble occurs when market prices rapidly increase beyond their intrinsic values — in simpler terms, people pay way more for an asset than it’s actually worth. Bubbles are usually tied to a specific slice of the market rather than the whole pie. For example, the semiconductor industry or cannabis industry could experience a bubble, but that doesn’t mean the entire stock market is…
