Stock market bubble

A stock market bubble is a type of economic bubble taking place in stock markets, in which a wave of public enthusiasm, evolving into herd behavior, causes an exaggerated bull market . When such a bubble takes place, market prices rise dramatically, making the listed stocks significantly overvalued. Generally stock market bubbles are followed by stock market crashes.

Examples

Some of those bubbles are created because of intense and excessive speculation on a new technology or service. The dot-com boom of the late 1990s is one example. The biotech boom in the 1980s is another. Still other examples of stock market bubbles include Japanese stocks in the late -1980s, Nifty 50 stocks in the early 1970s, and Taiwanese stocks in 1987.

Related Topics:
Speculation - Dot-com - 1990s - Biotech - 1980s - Nifty 50 - Taiwanese

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A stock market bubble may set the stage for a later stock market crash, continuing our example, the Stock Market Crash of 2002.

Related Topics:
Stock market crash - Stock Market Crash of 2002

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