It’s a Tech Bubble! Unless You Care About Earnings and Valuations

Earlier this week, Greenlight Capital hedge fund manager David Einhorn reignited the bubble debate that we have spilled so many pixels dissecting. The shorter of Lehman Brothers and the New York Mets fan said in a quarterly letter to clients “we are witnessing our second tech bubble in 15 years.”

The Bubble Chatter is nothing new. Regular readers will recall this has been a n issue I enjoy exploring.  Indeed, it has been accompanying the current bull market since it lifted off its lows. Back in 2011, I even created a checklist of “How to Spot a Bubble in Real Time.” And more recently, in November of last year, I noted we seemingly have a “Bubble in Bubbles.”

There certainly are many anecdotal indications of froth. Secondary issues have increased. Mark Zuckerberg has made some questionable acquisitions at what looks like absurd valuations (but last I checked, Zuck is not the determiner of bubbles). We see that Mom and Pop are slowly coming back into the market. Both TD Ameritrade and E*Trade Report saw a 30% jump in activity in the first quarter; Schwab, which tends to me bore investor than trader focused, saw volume rise 13%.

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