Irrational Exuberance: Shiller's Guide to Bubbles

Stock market bubbles often arise from powerful narratives rather than economic fundamentals, leading to inflated valuations.

The Cyclically Adjusted Price-to-Earnings (CAPE) ratio helps investors determine if market prices are historically high or low.

Recognising the feedback loop of bubbles can help investors avoid getting caught up in market hype.

UK investors should use the CAPE ratio to gauge long-term market returns rather than chasing short-term speculative stories.