There's a bubble inflating right now. You can go ahead and rack your brain trying to figure out what it is, but I'm almost certain you'll be wrong. Ready?
We are currently experiencing a bubble in bubble predictions.
After the stock market bubble in 2000 that crushed tech-happy investors, the more recent finance and housing bubble, and the even more recent 2008 oil bubble, pundits and experts are looking everywhere for the next bubble set to pop. After all, when you are on the front end of calling a bubble you become famous even if you never really get anything else particularly right. Just look at Nouriel Roubini and Meredith Whitney.
Bubble are being called in China, gold, commodities in general, bonds, alternative energy, rare earths, farmland, social networking, stocks in general, heck JPMorgan Chase even said that with the release of Apple's (Nasdaq: AAPL) iPad 2 there could be a bubble in tablets.
Obviously everybody is nuts. But hey, I can't let them have all of the fun, right? So I figured I'd add a few bubbles of my own to the list.
1. Bubble predictions
The boy that cried wolf has nothing on today's media. This bubble will pop and Robert Shiller will have think of something else to write about. Everyone will forget about what it means to have a massive asset bubble and then, of course, we'll have a gargantuan asset bubble that will knock everyone back on their ... um, assets.
2. Justin Bieber
I can't tell you how many times I've referenced Justin Bieber in my articles, and I write about finance. He sings like an angelic nightingale, has boyish good looks that could melt a unicorn's heart, and somehow convinced Ludacris to be featured in a song about preteen puppy love. But the dream never lasts. I just hope he's set aside plenty of money for therapy.
3. China small-cap short sellers
Have an art-school student whip you up a logo, mash two words with gravitas together ("Verity Quest"), throw up a blog that questions the profitability of a small-cap Chinese company, and you too could be profiting from the environment of abject fear in that murky corner of the market. Granted companies like Rino International and China MediaExpress (Nasdaq: CCME) have shown that all may not be well with all of these companies, but attacks against others, including Advanced Battery Technology (Nasdaq: ABAT) and Yongye International (Nasdaq: YONG) have been a bit more questionable.
4. Cupcakes
Every time I open my Flixster app I'm asked if I love cupcakes. I don't love cupcakes. I hate cupcakes. And yet there are still specialty cupcake shops everywhere. At the end of last year, I highlighted a prediction that 2011 would be the year that pie came back. I'm still waiting.
5. Russell Brand
I'm going to be very early on this call, but ever since playing the wacky musician in Forgetting Sarah Marshall Brand is suddenly everywhere. I don't mind for now -- I still think he's good for a few chuckles. But it's going to get old -- fast. With one character in his repertoire this is a bubble begging for a pin.
6. Dividends
Of all of the financial bubbles that people could be possibly talking about I'm actually pretty surprised that I haven't seen anybody in the media (besides yours truly) talking about a bubble in dividend stocks. To be sure, a "traditional" bubble is tough for dividend stocks since yields go down as prices go up, but investors' rabid interest in anything with significant yield isn't going to last. Let the economy recover a bit more and the stock market continue to run and investors will be falling over themselves to trade in shares of CenturyLink (NYSE: CTL) and its 7% payout for some growth stock with a price-to-earnings ratio of 87.
