The Compound

Can it Still Be a Bubble if Everyone Says it's a Bubble?

Name: Can it Still Be a Bubble if Everyone Says it's a Bubble?
Uploaded: 2025-10-31T17:14:01Z
Description: On episode 436 of Animal Spirits, Michael Batnick and Ben Carlson discuss how behavior drives bull markets, how many companies outperform the S&P 500, bubble predictions, 5x ETFs, $20 lunches, surviving the AI capex boom, we need lower

10/31/2025, 5:14:01 PM

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Economic Summary

Historical parallels: 1929, the 2005–06 housing mania, and the late-1990s tech run-up show that broad public awareness doesn't prevent bubbles or crashes.
Media coverage and mainstream reporting can document speculative excess (housing 2005–06), yet prices still fell rapidly once the cycle turned.
Consensus forecasts can be wrong (example: 2022 recession predictions), so timing macro calls and market exits is difficult and risky.
Argument critique: claiming 'it can't be a bubble because everyone thinks it's a bubble' is logically weak and not a reliable market signal.

Bullish

Diversification remains a reason to own stocks despite bubble concerns.
Recent widespread recession warnings (e.g., 2022) were proven wrong, suggesting contrarian calls may miss timing.

Bearish

Many historical episodes (1929, 2005-06 housing, late-90s tech) show bubbles can exist even when widely discussed.
Markets showing speculative behavior and overheated consumer behavior can reverse sharply, implying downside risk to stocks.
Consensus disbelief ('it can't be a bubble because everyone knows it's a bubble') is a poor defense against a real bubble.

People mentioned

Andrew Ross SorkinGeorge Soros