The tech bubble was even more troubling, because many observers had warned of a bubble for years before the crash, to no avail. Researchers have developed a large and diverse array of theories about why asset prices suddenly rise and crash. Looking at housing prices during the bubble, they compared US states based on how much they changed their capital gains tax rates. However, when the researchers show people data on recent prices, they start to believe that current trends will continue for the next five years. Obviously, investors do not always expect recent trends to continue forever.

Source: Taipei Times December 28, 2019 15:56 UTC