speculative bubble
Prices outpace reality
A speculative bubble is a rapid rise in asset prices driven by enthusiasm and expectation rather than underlying value, followed by a sharp collapse when confidence evaporates.
The pattern recurs throughout financial history—tulip mania in 17th-century Holland, the dot-com boom, housing markets before 2008.
Everyone could see it was a speculative bubble except those caught up in it.
- overvaluationAppraising too highly
- herd mentalityTendency to follow crowds
- fear of missing outAnxiety over exclusion
- greater fool theoryProfit needs stupider buyer
- irrational exuberanceUnjustified collective market optimism
smart money · margin calls · financial regulation · burst · house of cards · economic cycles · financial instability · confirmation bias · systemic risk · pump and dump · irrational · madness · greed · easy money · euphoria · froth · exuberance · fever
speculative bubbleintrinsic value
Worth independent of circumstance
fair value · organic growth · value investing · sustainable growth · book value
speculative bubblemarket crash
Sudden market decline
market bottom · market collapse · bust · bear market · depression