zerohedge.com / by Tyler Durden / Jul 27, 2017 3:50 PM
As a portfolio manager, I start each morning by consuming copious amounts of a heavily caffeinated beverage and a data feed from a litany of web and blog sites. Over the last few days, as asset prices have set new records, there have been numerous articles on whether the market is currently in a bubble. Here are a few I grabbed from a Google search:
- Where’s The Next Bubble Forming In The Markets?
- How The ETF Bubble Feeds The Stock Market Bubble
- Market Entering A Bubble Zone
- U.S. Stock Market: Is The Bubble About To Burst
Well, you get the idea. First, like a “watched pot never boils,” bubbles occur when no one is looking for them. Bubbles are a function of greed running rampant combined with a mass hypnotic state the current ride will never end. The shear fact that multitudes of articles are being written about “market bubbles” is a sign that we are likely not there…just yet.
However, as a shot of caffeine hits my brain, I read with interest a WSJ article entitled “Tech Is No Bubble, But The Market Might Be” which I have summarized for you:
- Technology stocks have finally surpassed the 17-year old peak.
- 80% of the gains in the technology sector has come from just 8-companies.
- A measure of dispersion in performance shows little excess from the long-run average.
- While there may be an “everything bubble,” technology stocks don’t look especially frothy.
While these are certainly some interesting arguments, the comparison between now and the turn of the century peak is virtually meaningless. Why? Because no two major market peaks (speculative bubble or otherwise) have ever been the same.