Market Bubble
A market bubble is a price path driven more by narrative, leverage, and new buyers than by discounted cash flow — obvious after, argued during.
Definition
Prices detach from any conservative DCF; leverage and social proof recruit the next buyer; incumbents explain why ‘this time’ the multiple is a platform. Kindleberger’s anatomy (displacement, boom, euphoria, distress) is the reusable map.
Why it matters
Bubbles set the left tail for the next decade of returns and the next set of regulations. Calling one early is lonely; calling one late is expensive.
Case
Dot-com 1999, China property 2020, and parts of crypto 2021 share issuance, leverage, and a story that made cash-flow optional.
How to read it
Leverage, issuance, valuation vs any conservative cash flow, and who the marginal buyer is. A high multiple alone is not a bubble.
Key papers
Landmark references with real publisher or arXiv links — not token-overlap noise.
- Manias, Panics, and CrashesKindleberger · 1978 · BookThe standard anatomy of a bubble.