RE: What is a bubble?

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What is a bubble?

in bubble •  7 years ago 

Indeed beliefs and perception play a big role also in the valuation of other assets, for example stocks. But in that case, there is a fundamental component, since the company promises to pay a dividend each year. People can then have different beliefs about the prospects of that company, but the stock price is usually not driven by beliefs about the value of the stock per se, but instead about the prospects of future profits.

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