When stock prices go parabolic, it's just a matter
a time before they peak and head to the downside. For instance,
investors and speculators bid up the Vietnam stock market four fold
in just one year as measured by the VN-Index on the Ho Chi Minh
City Securities Trading Center.
Since topping out in 2007, the VN-Index has given back almost all
of those gains.
NOTE: VN-Index price chart is used with permission from VietnamMarkets.com,
a site about business and financial news from Vietnam.
Individual stocks made even more dramatic price bubbles and their
inevitable collapses followed. For example, Refrigeration &
Electrical Engineering Corporation (REE)
made a roundtrip run from to 25 to over 275 and back to 25.
NOTE: REE price chart is used with permission from VietnamMarkets.com.
A near vertical price upside, as seen in both charts, is a certain
visual indicator that a bubble is forming. When you see this type
of price formation, it's time to sell, not time to buy.
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Burst: Speculative Oil Bubble Will Eventually Burst
Posted August 10, 2008.
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