Are We Heading Towards Another Bubble Burst?

Inflate. Peak. Collapse: The Bubble Cycle Explained

Ever wonder why market rallies often end in crashes? It’s a cycle—moving from under-ownership to over-ownership, just as valuations swing from undervalued to overvalued and back again.

Predicting the exact peak of a bubble is extremely difficult. More often than not, it’s an external trigger that bursts the narrative—exposing how fragile even the most promising stories can be.

Spotting Red Flags: Sector Concentration
One major warning sign of a bubble is when a single sector starts dominating a diversified index. Consider the S&P 500: semiconductor stocks now make up around 11%. Historically, this figure hovered between 1–1.5% in the 1970s–80s and 3–4% in more recent decades.

This sudden surge is concerning. It echoes the concentration seen during the Dot-com bubble, which led to a prolonged correction—taking the NASDAQ nearly 20 years to recover.

The NVIDIA Effect: Insiders vs. Institutions
The semiconductor rally led by companies like NVIDIA, now valued at over $4 trillion—has reached extraordinary levels. On the surface, everything looks solid. But behind the scenes, company insiders are selling shares at an aggressive pace, pointing to potential overextension.

Meanwhile, institutional investors and the public remain highly optimistic. This kind of divergence—insiders selling while sentiment stays euphoric—has historically signaled that a correction may be near.

Protecting Your Portfolio: Stay Alert
A downturn, even if it begins in one sector, can pull the broader market down with it. While the boom continues, it’s important to stay prepared for possible global selloffs. Booms rarely end quietly. Use this time to reassess your risk, review portfolio exposure, and stay flexible:

Today’s Daily Byte

Markets bounced back after a weak start, with strong post-noon buying across the board. Mid and small caps joined the recovery, led by gains in real estate and pharma. IT remained under pressure, but overall sentiment improved sharply by the close.

Reading Time : 7 Minutes

Why Stock Prices Often Ignore the Headlines

Stock market reactions aren’t always as straightforward as they seem. A sharp fall in profits doesn’t necessarily mean a drop in share price. While headlines scream decline, the market might already be looking past the data. That’s because price often reflects expectations, not just current results. In many cases, the narrative simply lags behind.

Reading Time : 2 Minutes