First, a little humility.  When we posted our list of ten bubble stocks we were not predicting an imminent collapse.  (Though, in fact, a collapse has occurred.  The ten bubble stocks are now down an average of almost 25%, 30% excluding Tesla.)  What we were saying is that prices appeared to be well above fundamental value.  Assuming that the two are going to converge at some point implies one of two things can happen.  One, future stock returns will be low relative to fair risk-adjusted returns on equity for an extended period.  Two, there will be a sudden collapse that quickly brings price down toward fundamental value.  The fact that the second has occured was not something we could predict, but neither was it a complete surprise.  In the long-run it is fundamental value that matters, it fact it is virtually all that matters.

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