"Keep in mind how investment bubbles work. A bubble
always starts with some real factor that takes on increasingly
exaggerated importance in the eyes of investors. The bubble expands not
on facts but on untethered imagination. People imagine that X
will result in ever-increasing prices, and assume that an endless crowd
of buyers is still behind them – dot-com stocks, technology, housing,
“tronics” stocks in the 60’s, the Nifty Fifty in the 70’s, quantitative
easing, tulip bulbs. Regardless of whether the mechanism underlying
that concept is fictional, and regardless of how tenuously it is linked
to reality, a bubble advances as long as the adherents it gains are
more eager than those it loses. What stops the bubble is not the
concept itself hitting a brick wall, but pool of new adherents being
exhausted. Once everyone is in, who’s left to buy from all those
holders with their fingers hovering over the sell button? The question,
once the moment arrives, is always the same: Sell to whom? And that’s
why markets crash." -- John Hussman, Ph.D. Dec. 2, 2013
I see bubbles!
