During stock bubbles, market participants abandon bargains to chase the hottest trends. And this bubble is no different.

For example, during periods of relative equanimity, there may not be much of a difference between the pursuit of high-flying momentum and the pursuit of deep discount stocks. When the greed of crowds takes over, however, it bears witness to monstrous momentum spikes.

It happened in 2000. It happened in 2008. And it has gone ballistic here in 2020.

Surprisingly, the 2020 stock bubble is taking place despite one of the worst recessions in American history. Even the most optimistic, vaccine-friendly estimates of economic recovery largely ignore the depth of the hole.

For example, how much more electronic money printing by the Fed will be necessary to fix the imbalances at the state level? (Never mind the federal level, corporate level or household level.)

Again, even if one surmises that the economy will have healed itself by the end of 2020, full year gross domestic product (GDP) would be fortunate to come in at the lowest decile of growth. Yet stock valuations will be sitting at the highest decile of overpriced madness.

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