[notepad0x90]

Part of me wonders if a bubble can really pop when everyone keeps calling it a bubble that will pop any minute now. Same as with the recession talk since COVID. Usually, pesky things like lack of actual profits or value would result in a sustained decline in stock prices, but these days, there are so many gamblers involved that despite the lack of any real value, they'll "buy the dip" in such great numbers that it bounces back up. And then FOMO hits and more principlined investors jump in on the action.

So far at least. But is this supposed bubble too big for that effect to save it? It feels like a lot of predictions are being made based on historical events like the dotcom crash, the '08 recession,etc.. and maybe those predictions are right but things have changed since. retail investment is a completely different game. "mob psychology" is also a different game with the internet being adapted at a greater scale. Even the tech driving the "AI bubble" would be scifi for someone in '08.

Certainly the variables have changed. But has the formula/game also changed?

[jonners00]

I think the idea that there's currently an 'index tracker bubble' is fascinating: i.e. that the total value of the S&P 500 is no longer based on a multiple of aggregate earnings but is instead driven by finding the price that needs to be paid to achieve the necessary 'churn' for tracker funds to fulfil their mandates as they allocate the funds that their subscribers place with them each month. This creates a scarcity premium that drives up prices and attracts more subcribers. This has a ratchet effect that never previously applied and that will probably prevail until something goes catastrophically wrong.

[soared]

I think we are in a recession currently if you exclude the AI companies?