Newton, physics and the market bubble

Real Investment Advice/Lance Roberts

“However, in the midst of the ‘mania,’  things like valuation, revenue, or even viable business models didn’t matter. It was the ‘Fear Of Missing Out,’ which sucked investors into the fray without regard for the underlying risk. Though South Sea Company shares were skyrocketing, the company’s profitability was mediocre at best, despite abundant promises of future growth by company directors.”

USAGOLD note: Sound familiar? There is one major difference between the 1720 South Seas Bubble and today.  Only one company’s shares were affected in the 18th-century version. Today hundreds of companies are similarly affected many of them bearing the distinction of zombie companies in the modern parlance. Lance Roberts offers some interesting perspective and background at the link above.

(Click image to enlarge.)

Repost from 9-21-2020

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