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Investments glossary

Irrational Exuberance


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Quotes of the day:

It is especially important to encourage unorthodox thinking when the situation is critical At such moments every new word and fresh thought is more precious than gold. Indeed, people must not be deprived of the right to think their own thoughts.

— Boris Nikolayevich Yeltsin

Irrational exuberance refers to extreme investor enthusiasm that drives asset prices up to and beyond levels that are not supported by fundamentals. The term is believed to have been coined by former Fed chairman Alan Greenspan in a 1996 speech, The Challenge of Central Banking in a Democratic Society. The speech was given near the beginning of the 1990s dot-com bubble, a textbook example of irrational exuberance:


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