Stock market bubbles occur when stocks head higher in a parabolic fashion with no pull back. A common phrase to describe this type of action is irrational exuberance.
Stock market bubbles frequently produce hot markets in Initial Public Offerings, since investment bankers and their clients see opportunities to float new stock issues at inflated prices.
A Stock market bubble is a type of economic bubble in which an exaggerated bull market where the value of stocks listed on a stock exchange rise dramatically upon a wave of public enthusiasm.
Unlike some stock market bubbles, however, there was actually a net tangible result from all the investment: a vast expansion of the British railway system, though perhaps at an inflated cost.
Many financial experts discussed the possibility of the China Stock Market existing in a massive stock market bubble similar to that of the dotcom boom.
To illustrate, consider the stock market bubble. As stocks rise, stockholders become overjoyed as their wealth increases, which causes them to buy even more.
There have been loads of stock market bubbles in the past when distinct sectors were overvalued simply to come crashing down again.
Interestingly, economists that have later examined the fundamentals from the 1920s believe there was not a stock market bubble ready to burst by 1929. In fact, most of the stock values had merely tracked the rise in expected dividend payments.
In recent years, we've witnessed the boom and consequent bust of two large stock market bubbles that formed around the Internet sector in the early 2000s and the housing market six years later.
Malkiel's work A Random Walk Down Wall Street as an example of stock market bubbles. Minkow tells his story in the book, "They Thought for Themselves", by Sid Roth; published by M V Press, ISBN 0910267022, published 1996.
Recently, the stock market run-up in the late 1990s that ended in 2000 is cited as an example of a stock market bubble. Historically there have been many bubbles, such as the South Sea Bubble and the Dutch Tulip Bubble.
An exaggerated bull market fueled by over-confidence and/or speculation can lead to a stock market bubble.
 See also: Stock, Stock market, Market, Share, Trading
  
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