Saturday, February 21, 2015

There's only one 'bubble' in this chart — and you can see it from a mile away

The argument continues to rage about whether the tech sector is in a "bubble." The answer is clear: It isn't. "Bubbles" are rare, extreme events in which investment activity and valuations temporarily deviate wildly from historical trends — and then crash back down to the trend line in a colossal collapse. "Booms," meanwhile, are far more common. They also see ever-increasing investment activity and valuations, and they also end in mean-reversion ("busts.") But the magnitude of the dime-a-dozen...-> read more

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