Soros – A Rudimentary Theory of Bubbles

by Lance Roberts
Real Investment Advice

Of the last few weeks, I have touched on the impact of valuations and forward returns. However, it is not just valuations that are an issue, but also the surge in corporate debt, balance sheet leverage combined with declining profitability which is a result of weak economic growth. All in all, such a combination of factors have historically been associated with “bear markets” in equities.

However, none of these fundamental concerns seem to be a problem currently. Despite one selloff after another leading to increased volatility, the markets are currently hovering near all-time highs as the “chase for yield” continues. Just recently David Rosenberg made an interesting observation in this regard:

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