Why You Should Be Wary of Claims That the Stock Market Is in a Bubble

Why You Should Be Wary of Claims That the Stock Market Is in a Bubble

Bubbles, bubbles everywhere. So say an increasing number of Wall Street professionals, who see the lofty prices of everything from equities to Bitcoin, new homes to the soaring value of newly public companies as clear signs that the financial system is again on the verge of a major reset similar to what happened in 2000 and 2008. Legendary money manager Jeremy Grantham thinks that it's even worse than that, with a high likelihood that the next move will rival the crash of 1929 in severity, while Ray Dalio, head of the world's largest private fund manager Bridgewater Associates, says that their proprietary indicators show that while we are not yet at levels seen just before the 2000 and 2008-2009 crashes, we are getting perilously close. And with the pull back this week, along with the sharp sell-off in many of the high flying companies that have doubled or more over the past pandemic year, there's a rising chorus saying the bursting is upon us.











But is it true? The fact that stocks have run up in aggregate 80% since they dove in the first weeks of the pandemic in March, or that bitcoin has