Bubblespotting is a lot harder than it seems

If identifying a bubble were easy, then we all could do it. And, if we all could do it, then a bubble wouldn’t form in the first place.

It’s easy to misinterpret overpricing for part of the market as an indication that everything is a bubble. 

Owen Lamont, a portfolio manager at Acadian Asset Management in Boston, has written extensively about market extremes.

One definition of a bubble, he jokes, is “when I think the stock market is overpriced and then it doubles,” as in 1999. (That year, the Nasdaq 100 index gained 102%, after returning 85% in 1998.)

The last of what Lamont calls “the four horsemen” of a bubble is a tidal wave of stock issuance.

https://www.acadian-asset.com/investment-insights/owenomics/no-we-are-not-in-a-bubble-yet

The real danger of bubblespotting is believing you can do it.

Jason Zweig Wall Street Journal May 8, 2026

https://www.wsj.com/finance/stocks/why-its-so-hard-to-spot-a-stock-market-bubble-63f40a1c


Private Credit Isn’t a Major Threa - Probably

The question is whether trouble in the sector could spill into the wider economy or—disaster—the wider financial system.

Financial history provides lots of lessons. When lending rises rapidly, watch out. Much of it won’t get repaid. 

When lenders focus on how to get money out the door, rather than whether it will ever come back, watch out. When lenders finance long-dated loans with money that can be taken out sooner, watch out. 

And when the lenders have a lot of leverage, rely on dodgy credit ratings or are influenced to lend by regulatory demands, prepare for serious problems.

Welcome to the world of private credit.

James Mackintosh Wall Street Journal 9 May 2026

https://www.wsj.com/finance/investing/private-credit-financial-system-6039b39e



Wall Street is gearing up for a sales push that could enrich the middlemen and impoverish you.

I’m talking about private or alternative assets—investments outside the public stock and bond markets.  

Jason Zweig Wall Street Journal 20 December 2024

https://englundmacro.blogspot.com/2024/12/youre-invited-to-wall-streets-private.html



Kommentarer

Skicka en kommentar

Populära inlägg i den här bloggen

My blogg short index

Bild
1968 Vojne, vojne, vänsterdårarna kommer AI Artificial intelligence https://englundmacro.blogspot.com/2025/06/ai-artificial-intelligence.html Akvedukten vid Zaghouan, Sven Otto Littorin och Niall Ferguson. Denna vackra betraktelse från 1994 har sedan dess legat i mitt bakhuvud. https://englundmacro.blogspot.com/2024/04/akvedukten-vid-zaghouan-sven-otto.html Alistair Darling, Northern Rock och Royal Bank of Scotland https://englundmacro.blogspot.com/2025/07/alistair-darling.html Bank stress tests https://englundmacro.blogspot.com/2025/06/bank-stress-tests.html Bessent https://englundmacro.blogspot.com/2025/06/bessent.html Gordon Brown https://englundmacro.blogspot.com/2025/07/gordon-brown_5.html Buy the dip https://englundmacro.blogspot.com/2025/07/buy-dip.html Fastighetsbolagen https://englundmacro.blogspot.com/2025/07/fastighetsbolagen.html Tomas Fischer https://englundmacro.blogspot.com/2025/07/tomas-fischer.html James Grant https://englundmacro.blogspot.com/2025/07/james-grant.h...
Läs mer

Pfizer in 2019 sold $20 billion of drugs in the U.S. Its federal tax bill? Zero; Ireland

Trump has already singled out pharma companies and countries like Ireland that reap the benefits of tax-avoidance moves.  Despite its small size, Ireland ran an $87 billion trade surplus with the U.S. last year—larger than any country except China, Mexico and Vietnam. https://www.wsj.com/health/pharma/how-trumps-tariffs-could-upend-pharmas-overseas-tax-strategy-5b8ca758 Is Ireland vulnerable again as the world’s vast shadow banking system starts to crack? Shadow banking is the dog that has not barked during the latest global spasm of financial stress. This is very fortunate, especially for small countries such as Ireland that have bet the farm on this industry. https://englundmacro.blogspot.com/2023/04/is-ireland-vulnerable-again-as-worlds.html Cayman Islands https://en.wikipedia.org/wiki/Cayman_Islands What the heck is happening in the Cayman Islands? A Sunny Place for a Shady Online Business https://englundmacro.blogspot.com/2021/12/a-sunny-place-for-shady-online-business.html Ti...
Läs mer

Cognitive blind spots

Bild
Cognitive blind spots are undermining our ability to see the world as it is, rather than as we would like it to be. At the start of the 21st century, western elites generally assumed that globalisation, democracy and the free market were self-evidently good, and would keep spreading, creating peace. N o longer.  FIS, Swiss Federal Intelligence Service, has published a manual about cognitive blind spots. 18 different cognitive biases that hamper our thinking, such as “group think” (adhering to the cosy assumptions of our tribe), “anchoring” (relying exclusively on whatever information we see first, say on social media),  “confirmation bias” (only seeing data that reinforces pre-existing views),  “mirror imaging” (assuming others think like us),  “absence of evidence” bias (failing to think about the data we lack)  and “survivorship bias” (judging data only with success stories, not failures). Gillian Tett Financial Times 2 January 2026 https://www.ft.com/content/...
Läs mer