Feeling FOMO?
If you’re feeling FOMO, envy and greed about record stock prices, you’re not alone. That’s how market bubbles form.
A market bubble can materialize even when most investors are worried about one. Like now.
A recent Bank of America fund-manager survey found that a record 91% of survey participants believe the stock market is overvalued, and
Google Trends shows a sizable increase in recent weeks in the number of finance-related searches focusing on bubbles
In his 2000 book “Irrational Exuberance,” Shiller wrote that a bubble is self-perpetuating:
“News of price increases spurs investor enthusiasm, which spreads by psychological contagion from person to person, in the process amplifying stories that might justify the price increases and bringing in a larger and larger class of investors.”
Shiller added that these newcomers, “despite doubts about the real value of an investment, are drawn to it partly through envy of others’ successes and partly through a gambler’s excitement.”
It’s true that significant differences exist between the current market and the top of the internet bubble. But no two bubbles are alike, and the existence of differences between today and early 2000 doesn’t mean we’re not in a bubble.
As I recently pointed out, 10 time-tested valuation indicators show today’s stock market to be more overvalued than those at any other time in U.S. history.
Mark Hulbert Aug. 13, 2025
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