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Which financial markets are in a bubble, if any?

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AUTHOR: Jonathan Clements on 4/04/2021
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Kurt S
3 years ago

Ask me this question in 10 years. We see bubbles in the rearview mirror.

Scrooge_McDuck88
3 years ago

Crypto is the obvious example. Doge coin that was literally created as a joke now has a market cap larger than Ford and Kraft combined. If that’s not signs of a bubble that else could possibly beat that? Well maybe Baseball cards lately! But at least those you can enjoy 😉

Mike Zaccardi
3 years ago

Tough one! I don’t know. Perhaps we’ll know soon when much of the fiscal and monetary support in the financial markets recede. Perhaps areas of the crypto space or maybe the NFT markets are in bubbles, but the chart of Bitcoin has not been that crazy recently. It’s had its major pullbacks, yet it recovers. Bubbles often burst and never come back, or at least take many years to come back. Is the housing market in a bubble? Again, hard to say, but there are fundamental demographics that support a good amount of demand in the coming 10-15 years, but supply is likely abnormally low due to the pandemic. Prices should slow down soon, I think.

Thomas
3 years ago

If I could answer this question, I would be very wealthy. 😁

Last edited 3 years ago by Thomas
Rick Connor
3 years ago

I struggle to understand how cryptocurrencies can be a currency and an a highly volatile asset at the same time. I’m a little worried about the recent run up in real estate values, although we recently benefited by selling our primary home.

David Powell
3 years ago

Any cryptocurrency not issued and backed in full faith by a government is in my mind valueless and so always in a bubble. As I write this in April 2021, parts of the US stock market are over-valued, mainly NASDAQ-listed companies. The ARKK ETF, which more than doubled in price last year, holds many such companies. Some might use the “B” word to describe parts of the bond market, considering historical measures of value as well as current default and interest rate risk.

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