The bubble index

Bubbles are another way of saying 'investments with positive price momentum' - perhaps they are worth their own index, Morningstar's John Rekenthaler wonders

John Rekenthaler 5 June, 2019 | 2:00PM


The bubble index

In early 2017, Bloomberg editor Joe Wiesenthal tweeted, “A good ETF would be to take companies/markets that journalists say are in a bubble and then to go long them.” A portfolio manager at the investment firm GAM, Paul McNamara, took up the challenge, and created a hypothetical portfolio of oft-derided securities. Among them were Tesla (TSLA) and Netflix (NFLX), a bitcoin fund, long bonds, a Chinese real estate trust, and an exchange-traded note that shorted U.S. stock volatility.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar Rating
Netflix Inc469.96 USD-0.05
Tesla Inc442.15 USD4.42

About Author

John Rekenthaler

John Rekenthaler  John Rekenthaler is Vice President of Research for Morningstar.

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