Jeff Guo

Those were the situations that economists would point to and say that was a bubble.

Oh, so there are some clues.

Yeah.

So they published this paper in 2019, and it immediately made a huge splash.

Because here they were challenging the great Eugene Fama with some evidence that bubbles can maybe sometimes sort of be predicted.

And, okay, here were four of the main clues that they came up with.

Drum roll, please.

Let's have them, Jeff.

Okay.

Clue number one, high valuations.

That's when you see companies with really high stock prices that aren't actually making that much money right now.

Yeah, a really high price earnings ratio is a sign of optimism about the future.

Clue number two is volatility.

That's when you see individual stock prices in an industry just jumping around a lot.

Yeah.

Clue number three is issuance.

That's when you have a lot of new companies going public or a lot of existing companies issuing new shares of stock.

So they're taking more money from public investors, from the public.

Right.

And finally, clue number four is what they call acceleration.