Bull market could continue for weeks, if not months, without so much as even a little reversal. But bubble warnings are starting to blare from every corner.
Like a slot machine paying off on every pull, the stock market’s most reliable bets lately have often been its riskiest. Go long a company that sounds like something Elon Musk mentioned in a tweet (but wasn’t)? Signal Advance just soared 12-fold. Lend money to a software maker to buy Bitcoin? A Microstrategy convertible bond is up 50 per cent in four weeks (its option is in the money). Throw a dart, hit a winner, so it has lately seemed. Emboldened by Federal Reserve stimulus, vaccines and the psychological conditioning that arises when no bad patch lasts, everyone from retail newbies to institutional managers is rushing to cash in on the 10-month-old meltup. Predicting exactly when such fevers will break is a near impossible task. But bubble warnings are starting to blare from every corner.