Bubble

1. An economic cycle characterized by rapid expansion followed by a contraction.

2. A surge in equity prices, often more than warranted by the fundamentals and usually in a particular sector, followed by a drastic drop in prices as a massive selloff occurs.

3. A theory that security prices rise above their true value and will continue to do so until prices go into freefall and the bubble bursts.

Bubbles form in economies, securities, stock markets and business sectors because of a change in the way players conduct business. This can be a real change, as occurred in the bubble economy of Japan in the 1980s when banks were partially deregulated, or a paradigm shift, as happened during the dotcom boom in the late '90s and early 2000s. During the boom people bought tech stocks at high prices, believing they could sell them at a higher price until confidence was lost and a large market correction, or crash, occurs. Bubbles in equities markets and economies cause resources to be transferred to areas of rapid growth. At the end of a bubble, resources are moved again, causing prices to deflate. Thus, there is little long-term return on those assets.


Investment dictionary. . 2012.

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  • Bubble — may refer to:Physical bubbles* Liquid bubble, a globule of one substance encased in another, usually air in a liquid * Soap bubble, a bubble formed by soapy water * Antibubble, a droplet of liquid surrounded by a thin film of gasArts and… …   Wikipedia

  • bubble — bub‧ble [ˈbʌbl] noun [countable] 1. FINANCE when a lot of people buy shares in a company that is financially weak, with the result that the price of the shares becomes much higher than their real value: • A speculative bubble may have been… …   Financial and business terms

  • Bubble — (engl. „Blase“) bezeichnet: Bubble Economy, Bezeichnung für eine Volkswirtschaft, welche durch Spekulation angeheizt wird in Film und Literatur: Bubble Boy, US amerikanische Filmkomödie aus dem Jahr 2001 Bubble Gum (Roman), zweiter Roman von… …   Deutsch Wikipedia

  • Bubble — Bub ble, n. [Cf. D. bobbel, Dan. boble, Sw. bubbla. Cf. {Blob}, n.] 1. A thin film of liquid inflated with air or gas; as, a soap bubble; bubbles on the surface of a river. [1913 Webster] Beads of sweat have stood upon thy brow, Like bubbles in a …   The Collaborative International Dictionary of English

  • Bubble Up — is a lemon lime soda pop brand. It was first made in 1917, by Sweet Valley Products Co. of Sandusky, Ohio. [Marvel, Bill. The tale of Two Bubble Ups. Dallas Morning News . (December 11, 2004). ] In 1978, Bubble Up was purchased by The Monarch… …   Wikipedia

  • bubble — [bub′əl] n. [ME bobel, of echoic orig., as in MDu bubbel] 1. a very thin film of liquid forming a ball around air or gas [soap bubbles] 2. a tiny ball of air or gas in a liquid or solid, as in carbonated water, glass, etc. 3. anything shaped like …   English World dictionary

  • bubble — early 14c. (n.), mid 15c. (v.), perhaps from M.Du. bobbel (n.) and/or M.L.G. bubbeln (v.), all probably of echoic origin. Bubble bath first recorded 1949. Of financial schemes originally in South Sea Bubble (1590s), on notion of fragile and… …   Etymology dictionary

  • bubble — ► NOUN 1) a thin sphere of liquid enclosing air or another gas. 2) an air or gas filled spherical cavity in a liquid or a solidified liquid such as glass. 3) a transparent domed cover. ► VERB 1) (of a liquid) be agitated by rising bubbles of air… …   English terms dictionary

  • Bubble — Bub ble, v. i. [imp. & p. p. {Bubbled}; p. pr. & vb. n. {Bubbling}.] [Cf. D. bobbelen, Dan. boble. See {Bubble}, n.] 1. To rise in bubbles, as liquids when boiling or agitated; to contain bubbles. [1913 Webster] The milk that bubbled in the pail …   The Collaborative International Dictionary of English

  • bubble — [n] globule of air air ball*, balloon, barm, bead, blister, blob, drop, droplet, effervescence, foam, froth, lather, sac, spume, vesicle; concept 437 bubble [v] foam, froth up, especially with sound boil, burble, churn, eddy, effervesce, erupt,… …   New thesaurus

  • bubble — См. глазок. (Источник: «Англо русский толковый словарь генетических терминов». Арефьев В.А., Лисовенко Л.А., Москва: Изд во ВНИРО, 1995 г.) …   Молекулярная биология и генетика. Толковый словарь.

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