Yield curve pioneer Campbell Harvey fears investors have forgotten the dot-com bubble

Are US companies more valuable than they were before the pandemic ripped a hole in the global economy? Investors are treating American stocks as though they are, but not everyone thinks that’s a good idea.

A range of indices set new records this week. The Nasdaq Composite, a benchmark that’s heavy on technology stocks, climbed to the highest close ever, as did the S&P 500 Index of large US companies. The Dow Jones Industrial Average soared through the 30,000 barrier for the first time. There are signs that armchair investors are helping propel the frenzy, with online stock-discussion forums abuzz and trading apps creaking under the strain. Options, a type of derivative that can be used to make lottery-like bets on the stock market, are also on fire.

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