Stock market bubbles don't grow out of thin air. They have a solid basis in reality — but reality as distorted by a misconception. Under normal conditions misconceptions are self-correcting, and the markets tend toward some kind of equilibrium. Occasionally, a misconception is reinforced by a trend prevailing in reality, and that is when a boom-bust process gets under way. Eventually the gap between reality and its false interpretation becomes unsustainable, and the bubble bursts.


BuzzFlash interview (2004)


Stock market bubbles don't grow out of thin air. They have a solid basis in reality — but reality as distorted by a misconception. Under normal...

Stock market bubbles don't grow out of thin air. They have a solid basis in reality — but reality as distorted by a misconception. Under normal...

Stock market bubbles don't grow out of thin air. They have a solid basis in reality — but reality as distorted by a misconception. Under normal...

Stock market bubbles don't grow out of thin air. They have a solid basis in reality — but reality as distorted by a misconception. Under normal...