Is the FTSE 100 in a stock market bubble? Image source: Getty Images. In a stock market bubble, prices are inflated, fragile, and liable to burst. Investors act irrationally, perhaps manically, and herd together to chase stock prices higher and higher. This is not to say investors buying into a bubble are unintelligent; Sir Issac Newton lost a fortune pilling into the South Sea Bubble in 1720, just before it popped. People seem to get swept up in a mass fear of missing out on the hottest prospect on everyone’s lips. The early 2000s were notable for the bursting of the dot-com bubble. Companies that added ‘.com’ to their names, and some that did not, were trading at extraordinary prices. This, despite having little revenue and zero earnings. Of course, some companies did go on to eventually deliver much of what was expected in the dot-com boom. However, caught up in the mania, investors associated the Internet with success, with little regard given to the fundamentals of the company the .com was attached to.