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A situation in which prices for securities, especially stocks, rise far above their actual value. This trend continues until investors realize just how far prices have risen, usually, but not always, resulting in a sharp decline. Bubbles usually occur when investors, for any number of reasons, believe that demand for the stocks will continue to rise or that the stocks will become profitable in short order. Both of these scenarios result in increased prices.

A famous example of a bubble is the dot-com bubble of the 1990s. Dot-com companies were hugely popular investments at the time, with IPOs of hundreds of dollars per share, even if a company had never produced a profit, and, in some cases, had never earned any revenue. This came from the theory that Internet companies needed to expand their customer bases as much as possible and thus corner the largest possible market share, even if this meant massive losses. NASDAQ, on which many dot-coms traded, rose to record highs. This continued until 2000, when the bubble burst and NASDAQ quickly lost more than half of its value.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved


A price level that is much higher than warranted by the fundamentals. Bubbles occur when prices continue to rise simply because enough investors believe investments bought at the current price can subsequently be sold at even higher prices. They can occur in virtually any commodity including stocks, real estate, and even tulips.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.


A period of rapid expansion and price increases, followed by a market slowdown and contraction.Many analysts claim a real estate bubble exists in some cities characterized by a price growth of more than 30 percent per year.Other analysts disagree.(For housing cost information in various states and cities, see the Office of Federal Housing Oversight Web site at www.ofheo.gov, and click on House Price Index.)

The Complete Real Estate Encyclopedia by Denise L. Evans, JD & O. William Evans, JD. Copyright © 2007 by The McGraw-Hill Companies, Inc.
References in periodicals archive ?
Summary: Mumbai (Maharashtra) [India] July 20 (ANI/NewsVoir): Bubble tea, which is also known as pearl milk tea, Boba juice or Boba tea is gaining immense popularity across the world, driven by rising demand for non-alcoholic and non-carbonated drinks.
American tech giants are down on average 25 per cent from recent peaks, and it appears the big global bubble of the 2010s is bursting.
In this article, I offer some thoughts on why there is such a gap between policymakers and researchers when it comes to asset bubbles. I argue that existing theoretical models of bubbles have yet to effectively address the questions that policymakers are most interested in.
"As I blew them towards him some were hitting the mesh and bursting so next time I'm going to try using a bubble machine to produce piles and piles of smaller bubbles.
Renfrewshire Leisure organised a packed schedule of fun at Paisley Arts Centre including a bubble making workshop, facepainting, a live theatre show called The Worm, Bookbug sessions and drama workshops.
The jet flow produced by bubble collapse impact on fuel could make it much more dispersed and form a finely atomized spray.
A bubble must promise real-world returns at some distant date.
Bubble Playground is open every day, Monday through Friday, from 1:00 PM to 7:00 PM, and Saturday and Sunday, from 11:00 AM to 8:00 PM.
When the bubbles move upward from the bottom under the action of gravity, the channel which contracted suddenly will affect the speed of the bubbles, and this effect is primarily influenced by Eo and Re.
A BUBBLE festival will be held at the Vaynol Estate in Gwynedd.
The performers are Masters of Soap Bubbles from the globally acclaimed Gazillion Bubble Show who will offer a unique entertainment experience by creating incredible shapes and bubble fun, with laser shows and stunts.
Summary: Children can be enchanted by The Bubble Man's bubble making sessions that is taking place throughout the 11-day festival.