Something that stood out from our guest speaker's lecture was the idea of a "Bubble Market". Ms. Efrat defined it as a market with "a peak, then it ultimately tanked."
To get a better look at this phenomena (or maybe psychology?), I added a graph below.
This led me to research a little bit more as to add further clarification as to what a "Bubble Market" was and what are some industries that could be approaching this phenomena.
DEFINITION (as defined by Investopedia)
- An economic cycle characterized by rapid expansion followed by contraction.
- A surge in equity prices, often more than warranted by the fundamentals and usually in a particular sector, followed by a drastic drop in prices as a massive selloff occurs.
- A theory that security prices rise above their true value and will continue to do so until prices go into free fall and the bubble bursts.
What do these all have in common? They all stem from the idea of great rise, then fall (or pop)
BUBBLE MARKET INDUSTRIES:
- Japanese Bubble Economy 80s
- Stock market fueled by corporate intervention
- Investors purchasing stock
- Dotcom Boom in the late 90s/early 2000s
- Individuals buying tech items/believing they could greater profit; crash
(MY) PREDICTIONS?
- Bitcoin? Other forms of online money?
- Value falling?
- Print industry?
- Its been decreasing
Hi Kimberly,
ReplyDeleteI actually found this post to be very informative, mostly because I don't know much about "bubbles" or how they're created. When Kasznik mentioned this, I didn't quite understand what she meant and your post makes that very clear. I think the inclusion of the graph works really well. I am curious - what actually is the initial cause behind the build up a bubble?
Kimberly,
ReplyDeleteI like that you added the graphic to help your viewers visualize the bubble bust concept. I'm so glad you added examples of markets that followed this bubble trend. It's interesting that you think Bitcoin will be a Bubble Market. Why do you believe that?
Sasha