Stock market bubbles

A stock market bubble occurs when the prices of stocks increase rapidly beyond their intrinsic value, driven by investor enthusiasm, speculation, or hype. People buy stocks expecting prices to keep rising, not necessarily based on the companies' actual performance. This creates a cycle where rising prices attract more buyers, pushing prices even higher—until eventually, confidence wanes, and prices sharply decline, often leading to significant financial losses. Bubbles are often fueled by emotions and herd behavior, and while they can boost markets temporarily, they pose risks when the inflated values are unsustainable.