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Market bubble

As explained in Investing for Programmers

A market bubble is a period in which asset prices rise to unsustainable levels because of speculative demand and expectations.

A market bubble occurs when speculative demand and irrational expectations push asset prices beyond sustainable levels. For financial research, the practical challenge is distinguishing durable trends from temporary exuberance, especially when company strategies and reported numbers change over time. section 8.1.3

Cisco during the dot-com bubble

Cisco’s stock price exceeded $77 at its 2000 peak and never reached that level again. The episode illustrates why historical price increases alone cannot establish sustainability and why models should flag possible irrational exuberance rather than treat every trend as durable. section 8.1.3

How Investing for Programmers covers it

How deep it goes
Defines irrational exuberance and illustrates it historically, but stops short of specifying detection features, models, or implementation steps.
Examples
Uses Cisco’s 2000 peak above $77 and the dot-com bubble as a historical example.
What you can do after
Evaluate whether an observed price trend may reflect unsustainable exuberance rather than durable market fundamentals.
How it connects
Connects market bubbles with speculative demand, irrational behavior, machine learning, trend detection, and accounting strategy changes.
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Related concepts

This explainer was generated by Manning's knowledge graph from the text of Investing for Programmers. The section links point to the parts of the book it draws on.