A bubble in the stock market like no other?

6.23.23 - A bubble in the stock market like no other?

Gold last traded at $1,921 an ounce. Silver at $22.42 an ounce.

We may be seeing the formation of a bubble in the stock market like no other -The Globe and Mail

Back in 1923, writer and journalist Edwin Lefevre wrote, "Nowhere does history indulge in repetitions so often or so uniformly as in Wall Street. When you read contemporary accounts of booms or panics, the one thing that strikes you most forcibly is how little either stock speculation or stock speculators today differ from yesterday. The game does not change and neither does human nature."

The S&P 500 has been on a tear since the beginning of the year and recently it entered bull-market territory. But if you exclude the U.S.'s seven largest tech stocks, which were up more than 53 per cent year to date, the S&P 500 was mostly flat over the period.

Many wonder whether we have we seen this movie before and whether another bubble is being formed, one that will target the most profitable U.S. tech stocks. For the first time in the last 40 years, we may be witnessing a bubble forming around highly profitable companies, as opposed to prior bubbles that were centred on unprofitable ones. It has happened before, though, involving the 50 large-cap/blue chip stocks on the New York Stock Exchange, which in the 1960s propelled the bull market higher and subsequently crashed and underperformed.