Speculative bubbles occur when asset prices rise significantly over their intrinsic value, driven by exuberant market behavior and investor speculation. These bubbles often result in a sharp market correction or crash when the unsustainable price levels become apparent to investors.

Speculative Bubbles

Speculative bubbles

asset prices

Intrinsic value refers to the perceived or calculated true value of an asset, investment, or company, based on fundamental analysis without reference to its market value. It is a critical concept for investors aiming to determine whether an asset is undervalued or overvalued by the market.

intrinsic value

market behavior

investor speculation

A market correction is a short-term decline in stock market prices, typically defined as a drop of 10% or more from a recent peak, which is considered a normal part of market cycles and can offer buying opportunities for investors. It often reflects a re-evaluation of asset prices, driven by changes in economic indicators, investor sentiment, or external events, and is distinct from a bear market, which involves more prolonged declines.

Relevant Degrees

Your Lessons