Looking back, future financial historians will likely relate the Glassman-Hassett thesis to Irving Fisher's famous proclamation in 1929 that "stock prices have reached a permanent and high plateau." James Grant likes to say that there are three common features of a bubble: one part fundamental (i.e., a technological revolution), one part financial (i.e., a surge in money and credit), and one part psychological (i.e., a suspension of belief in traditional value measures.) All the ingredients would appear to exist in the current bull market.
As is often said, only time will tell. Unfortunately, no theory of cycles or bubbles can tell us precisely when it will end. Maybe twenty years from now, we will be able to definitively state whether these prices were reasonable or whether the boom time of the 1990s ended in a bust. From where I sit, heeding the teachings of the Austrians, I'll place my bet on the latter.
~ Christopher Mayer, 2000
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