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Why? — serious question. A lot of the people I know and/or follow online have been saying that stock markets (and housing) is a bubble since at least 2015 if no
by puszczyk 7y ago
Why? — serious question. A lot of the people I know and/or follow online have been saying that stock markets (and housing) is a bubble since at least 2015 if not earlier. Yet 4–5 years later we’ve seen massive gains. Also, the top companies are making a lot of money, so their valuations are high, but not crazy. On the other hand: startup valuations seem to be through the roof.
So when you say — “we need a real correction” and “not sustainable”. I’m curios — what exactly is not sustainable, and why a correction will make it more sustainable? Why do we “need” a correction?
- oblio 7y agoBecause the economic theory behind bubbles is solid and easy to understand: 1. resources are not infinite 2. human creativity is basically boundless, but it needs time 3. humans tend to think alike and to get excited about the same things at the same time We find a better way to manage resources, everybody hopes it will cure cancer, provide world peace, etc. As a result investment skyrockets, the "new way" develops and helps everyone but inevitably it doesn't do everything people investing a lot of money were hoping it would do. So people pull their money back and get scared when they realize how much they risked. People spend less money and things enter a downward spiral.