As multiple major market indexes have now recorded solid weekly gains for almost two months, more and more analysts are beginning to sound the alarm bells of bubble warnings.
Brad Lamensdorf, of lmtr.com, pointed to a chart originally published in the Wall Street Journal (below), showing the proportion of Initial Public Offerings (IPOs) that are money-losers.
Noting that the percentage of loser IPOs has reached the crazed peak of the dot-com bubble, Lamensdorf writes “Why does this happen? Generally, because investors have lost their sense of reality. They are willing to buy stocks on hyped stories instead of the facts.
Put another way, investment bankers are willing to stuff the market with over-priced stocks of little value as long as the public is willing to buy them.”