Bubble Beliefs
Christian Stolborg (Copenhagen Bus. School) and Robin Greenwood (Harvard)
October 2025
We study expert beliefs during boom-bust episodes in which highly valued individual US stocks experience a price run-up followed by a crash. As prices surge, analysts forecast exceptional earnings growth and high near-term returns. Short interest stays low. Media coverage rarely mentions the word “bubble”, even as crashes unfold. Optimism portends crashes: the most bullish forecasts predict the highest crash risk. The results are consistent with accounts of bubbles driven by overly optimistic expectations about fundamentals and future prices, with only limited presence of skeptics who recognize the bubble, apart from a few cases where the share lending market offers signals.
Daily Archives: November 14, 2025
Macro Briefing: 14 November 2025
US retail spending rose for a fifth straight month in October, according to data published by the Chicago Federal Reserve. The estimate tracks retail and food services sales excluding motor vehicles & parts and indicates a 0.4% rise last month, up slightly from a 0.3% gain in September, according to the regional Fed bank. The last two monthly advances also mark softer gains vs. the official retail sales data from the Census Bureau, which published numbers through August before the government shutdown paused updates.
