“I think we are certainly in bubble territory,” Jonathan Bell, chief investment officer at Stanhope Capital, told CNBC’s “Street Signs Europe” on Monday. Bell suggested there had been “so many good reasons” for investors to own the likes of Google-parent company Alphabet, Amazon, Apple, Microsoft and Facebook, pointing to their combined outperformance in the wake of the pandemic as something “everyone is talking about.”
When discussing whether the tech bubble he had described could burst in the near future, Bell drew a comparison to comments made by former Federal Reserve Chair Alan Greenspan in 1996. Greenspan, in a now-iconic observation, warned at the time that there were signs of “irrational exuberance” in financial markets.
Stocks continued to rise for some time after Greenspan delivered his speech, but the line is often cited as a warning shot for the dot-com bust that would occur toward the end of that decade. “I would be saying to people that this is a bubble-type territory, but it doesn’t mean that it is going to deflate now. What we have seen in the last week or so is only an unwinding of the rise of the previous two weeks,” Stanhope Capital’s Bell said.