Do books and articles about financial bubbles mean we are in a bubble?

I’m reading an excellent new academic account of bubbles in the financial markets by two Irish academics, William Quinn and John Turner, Boom and Bust. Their taxonomy of bubbles involves formally identifying them after the fact, though they believe their explanatory model would help forecast as them as well. Still it raises the question, which we all felt in 1999 and some of us feel in 2021, how one identifies a bubble whilst you are in the midst of it. While I was pondering that notion, the latest from the WSJ‘s Streetwise columnist, James Mackintosh, hit my device, “If it looks like a bubble and it swims like a bubble….  And then there are three, yes, three Bloomberg bubble articles greeting me this morning:  “Bubble fears everywhere….”“Goldman Team sees ‘unsustainable excess'”, and “The Stocks Bubble-O-Meter Is Flashing Bright Red”

So, is there a correlation between the use of the term bubble in the financial media and actual bubbles? If so, it might help identify the investment traps prior to them bursting, not just identifying them afterwards.

This shouldn’t be too hard to answer in the age of internet search engines.  I can only go back as far as 2004, but the real test would be to go back to 1719-1720 when the term “bubble” first emerged. I have not had a chance to scan three centuries of media and sort the results and I don’t know whether others have. (A quick search of SSRN and JSTOR is inconclusive.)   Does anyone know of such work? If so, please pass it on.

Three questions come to mind. The first is false positives. The use of the term bubble or froth or excess has become common, perhaps too common, to indicate actual investment risk. Does there need to be a critical mass of such sentiment? If so, what is the “crossover” line that takes a false positive to a true positive.

Second, timing is everything. Calling a bubble a year too early can be an expensive proposition. And referring to it six months later as a burst bubble isn’t particularly useful either. But from the perspective of trying to identify bubbles while you are in them, the former is much more important.

Finally, to what extent is the “bubble” associated with all of the market or just a narrow portion of it. That makes the terminology tricky and the assessment of the media harder to do. There can be no doubt that our current market is being led “narrowly.”  Does that mean it’s not in a bubble, or do we refer to just the leaders as being frothy.

Lots to think about as I consider whether to start positions in G@mest0p and T@s1a …….