AI boom, meme-stock mania, and record borrowing to buy stocks are fueling talk of a market bubble.
“Are U.S. Stocks in a Bubble? AI boom, meme-stock mania, and record borrowing to buy stocks are fueling talk of a market bubble.” — The Epoch Times quoted us regarding this in a balanced article by Tom Ozimek.
QUOTED EXCERPTS
“Bubbles are easy to identify in hindsight, but not necessarily when you are inside the froth,” Michael Ashley Schulman CFA, chief investment officer for California-based Running Point Capital Advisors, told The Epoch Times via email. “And even when you can identify them at the moment, it is tremendously difficult to know how long they will last.”
Schulman says this “everything rally” feels eerily familiar.
“Today’s everything rally may uncomfortably hint at prior manias,“ Schulman told The Epoch Times. ”Valuations reminiscent of past near-term tops, margin leverage above normal, and retail euphoria straight out of the 2021 Reddit playbook, only this time with a crypto and AI twist.”
As every bubble historian knows, when fundamentals take a back seat to FOMO and clever acronyms, the punch bowl starts sloshing, but when it tips over is anyone’s guess
“As every bubble historian knows, when fundamentals take a back seat to FOMO and clever acronyms, the punch bowl starts sloshing, but when it tips over is anyone’s guess,” Schulman said. “As long as credit markets remain open and lenders are willing to lend, we are likely to stave off a recessionary scenario.”
Speculation is also thriving in the options market. Zero‑day options (0DTE)—contracts that expire the same day they are traded—have surged in popularity, magnifying intraday swings.
Schulman notes these trades have a “distinct time limit to their risk,” as exposures reset daily, yet they can still amplify sudden surges and reversals when speculative momentum builds.
Shiller’s framework doesn’t give a simple yes or no answer. But many symptoms—soaring valuations, narrative‑driven hype, FOMO, heavy borrowing, and media amplification—are flashing.
“Much money can be lost in bubbles—buyer beware—but a lot can also be made on the ride up,” Schulman said.
ALSO QUOTED
🟠 Pierre Dongo-Soria, CFA, principal investment strategist at Russell Investments
🟠 Stephen Callahan at Firstrade
🟠 Callie Cox, chief market strategist at Ritholtz Wealth Management
🟠 Michael W. Landsberg, CFP®, CIMA®, chief investment officer at Bennet Private Wealth Management
🟠 Michael Green, chief strategist at Simplify Asset Management
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