It is when demand drives up the stock price even though the value of the stock itself isnβt... largely due to false perceptions of value. And eventually the bubble pops, and the price crashes.
Example will be 2008 subprime market crash in US. There was a housing bubble. Many felt that housing was a very safe investment hence there was a lot of demand which drove up prices even though there were many risky loans to subprime loaners i.e bad investments
It is when demand drives up the stock price even though the value of the stock itself isnβt... largely due to false perceptions of value. And eventually the bubble pops, and the price crashes.
Example will be 2008 subprime market crash in US. There was a housing bubble. Many felt that housing was a very safe investment hence there was a lot of demand which drove up prices even though there were many risky loans to subprime loaners i.e bad investments