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September 20, 2010

I still don’t understand. From Wikipedia

“An economic bubble is trade in high volumes at prices that are considerably at variance with intrinsic values”

and following the link

In finance, intrinsic value […] is ordinarily calculated by summing the future income generated by the asset, and discounting it to the present value.

So in order to know if we are in a bubble we just have to examine “the future”. In other words, it’s the opposite of a stopping time! Can someone help me?


From → Economics

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